Why Bother with Customer Centricity?
March 20, 2009 Leave a comment
CRM Magazine asked their subscribers “What is the number one concern that keeps you up at night?”.
I found it interesting that none of the responses resembled anything like: “My kid is failing out of school”, or “My spouse works too much”, or “I can’t make the mortgage payment”. Oddly enough, all of the responses were CRM related. Go figure.
Nonetheless, the results were as follows:
Creating and Maintaining Customer Satisfaction: 27%
Providing a Return on Investment: 27%
Maintaining User buy-in and enthusiasm 16%
Cementing Customer Loyalty 15%
Finding the right CRM Tool 6%
Keeping up with CRM Innovation 4%
Respondants who sleep soundly 5%
Today, I’d like to focus on the number one reason that people are not sleeping at night, “Creating and Maintaining Customer Satisfaction”. We’ll talk about the other number one, ROI, in a few weeks. But, first, I’d like to take a step back and observe some findings from another study.
In a survey conducted by CRMGuru.com, it was discovered that having a Customer-Centric Strategy was the most important driver of success of any CRM implementation. In a future post, I’ll take the time to illustrate that Customer Loyalty has significant impacts on both the top and bottom lines.
So how do each of these pieces of the puzzle fit together? What is the relationship between Customer Satisfaction, Customer Loyalty, and implementing a Customer Centric Strategy?
Customer Satisfaction and Customer Loyalty are two golden keys to giving your company competitive advantage. Building and implementing a Customer-Centric Business Strategy is created with the intention of increasing both your customer satisfaction, and customer loyalty.
The first step in implementing a customer centric business strategy, (or any other initiative) is to take a snapshot of where you currently are. This makes it possible to measure your progress along the way. The two main benchmarks that can help measure the success of your initiative are:
1. WHAT ARE YOUR CUSTOMER SATISFACTION LEVELS?
How many of your customers are satisfied with the products and services you are providing to them?
2. WHAT IS YOUR CUSTOMER ATTRITION RATE?
In other words, how many of your customers are defecting and choosing your competitor’s products and services.
The second step is looking at 5 key areas in developing your customer centric strategy. I have listed a few things to consider in each area:
1. Overall Business Strategy
– What are your customer’s needs? Spend more time understanding this, as opposed to trying to get your customer to interact the way you want them to
– Focus new product development around customer feedback
2. Organizational Issues
– Senior management committed to leading company through organizational changes
– Sales, Customer Service, and Technical Support given incentives to work together to provide outstanding customer service
– Move majority of CRM technology selection authority from IT to “business” decision makers
3. Work Processes
– Build and modify work processes around servicing the customer better
– Work hard at increasing efficiencies, streamlining processes
– Seek to be the Low-Cost producer in your industry
– Consolidate all customer related data into one repository
– Integrate key front-office, back office, and web office systems to interact with each other
– Choose leading technology with capable vendors to assist in the process
5. Training and Support
– Provide your staff with excellent training
– Budget time and resources to make sure they are confident with the new system
– Adjust compensation incentives to encourage use of new systems, and transition sales focus from new customer acquisition to retention
“Being customer centric focuses your business decision-making processes on the impact that those decisions will have on your customers. The real trick is making the “right” decisions that result in a positive impact. In order to do that, the organization needs to understand who its customers are, where they are going and how can the customer’s needs be met. That type of understanding requires information, and information comes from data.” says Kevin Murtha of Greenbrier & Russel’s, in an article in the September, 2002 edition of DM Review. http://www.dmreview.com/
It is essential for your company to be able to have the systems in place to be able to capture, analyze, and share the information about your customers so that you can be more responsive to their needs, provide them with unparalleled service, and keep them as customers for life. But it all starts with strategy.