Defining “Customer-Focused Strategy”

 My blogging friend Glenn Ross has put forth the following challenge to some of his fellow Customer Service bloggers (including me): How do you define “Customer-Focused Strategy?”  Great question, Glenn!  Glenn has posted his definition of a customer-focused strategy, and has included ideas and definitions from other excellent customer service bloggers, including ServiceUntitled, CustomersAreAlways, and CustServ.  There are many good ideas there, and I encourage you to check them out.

Customer strategy is the main focus of this blog as well as what I do (and have been doing) for a living.  I still like the paragraph I wrote on customer strategy last year at about this time; here is the excerpt from the post Rockin’ Our Customer’s Experience Online:

Customer Strategy

Does your organization have a customer strategy?  Most companies have a product strategy and a marketing strategy.  Customer-centric organizations also have a customer strategy.  Put simply, a customer strategy is a proactive plan for how we want to acquire, retain, and grow our customers!  Too many organizations leave it to chance when it comes to retention and growth of customers, focusing most of their resources on customer acquisition.  Why would we want to leave the management of our most valuable asset, our customers, to chance?

In order to align our customer experience with our customer strategy, we need to consider how we have created that strategy.  A strong customer strategy is built around the interactions we have with our customers, and we are able to maximize the value of every customer touch.  In other words,  we make each impression with the customer count.  Customer service and support may have several opportunities to make customer impressions, and it is often where the rubber meets the road.  How do we handle our customers when there is a problem or a question?  The goal of all these interactions is to increase customer retention and loyalty, which ultimately leads to repeat business and referrals.  Done right, a customer strategy will also build customer trust, strengthen the relationship, and add value to both the customer and the company.

In other words, a customer-focused strategy is a planned approach to how we handle our customers at every touch point.  It is more than just giving great customer service.  It is more than marketing with certain customer buzzwords.  It is more than a great customer experience.  It requires a strategic plan to be put in place to address all of those areas, plus the metrics to ensure the success of the strategy. 

I have been part of creating a customer-focused strategy for several clients, and this is no small undertaking.  It requires agreement and consistency across all functional areas in order to be most effective.  No silos allowed!  The customer doesn’t look at a company as individual departments, so we need to be “one brand” to the customer.  The customer-focused strategy helps make that happen.

Great Examples

Glenn also asked for examples of companies who do this well.  There are a few competitions out there for this type of award; a great one is coming up from the team at Peppers and Rogers Group and Gartner.  Called the Gartner and 1to1 Customer Excellence Awards, it will be showcasing those companies that “get” customer strategy – and how to execute it.  (By the way, the contest is open until May 23, so if you are reading this and want to submit your company, you can go here and enter.)

At this blog, I have listed several examples of companies that are doing customer strategy well.  They include FreshBooks and their customer roadtrip, Bungie and the way they are fans of their customers, Element Fusion and their web concierge, Disney and customer delight, and Xerox and their dedication to customer experience, among others.  I don’t think any one of them is perfect, but each of them do many things well across several areas. 

OK, out to you, readers!  How would you define “customer-focused strategy”?  Do you agree with me or am I missing something?  Who is doing it well?

(Photo credit: redbaron)

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New Year’s Musings 2008

 What are your goals for your business in 2008?  Last year at this time, I discussed some suggested Customer Service New Year’s Resolutions.  The customer has become much more front-and-center in this past year, but it is about more than just marketing.  We need to make sure all aspect of our organizations are customer-focused.  I think the resolutions I suggested last year are still valid for this year, so I wanted to share them with you again! 

Here are my suggested Customer Service New Year’s Resolutions.

• Create a customer strategy for the customer service organization.

While most organizations have a product or marketing strategy, many do not have a customer strategy. A customer strategy addresses who our customers are, how we can differentiate them from one another both in value and needs, and how we will treat them.  This strategy should be built around the interactions and relationship that the customer has with your organization. The right customer strategy in your service organization lays the groundwork for the rest of the journey.

• Proactively “manage” the customer experience. 

The customer experience takes place through all touch points with a customer, including agents, web sites, newsletters, and automated systems. We can think about each interaction as an opportunity to either increase or decrease a customer’s value to us. Example: I recently moved to a new house and needed to contact multiple utility companies.  In the first instance, I called the customer service line and waited on hold for nearly 30 minutes in order to tell an agent I would not be able to make the installation appointment that was previously scheduled. At the end of that half-hour period, I was not having a very good experience! The next day, the second instance but with a different utility, I called to cancel the service at our old residence. Wait times again were high, but in this case I was given the choice of receiving a call-back from an agent.  An agent called me 25 minutes later, exactly as they had predicted, and a recording of my own voice validated the call.  My elapsed time to deal with that call was 3 minutes as opposed to 30 minutes the day before. In both cases, the contact center was scheduling agents to take calls as they come in; however, in the second case my experience was optimized to make the interaction as convenient for me as possible. Which one built a stronger customer relationship and increased customer value? 

• Formally link rewards with customer-centric behavior. 

A hard look at customer-based metrics is necessary in order to retain a balance between customer focus and cost reduction, especially in areas such as the contact center. Activity in the contact center should be reviewed based on measures of both efficiency such as call handle time, and measures of effectiveness such as first contact resolution, the number of repeat contacts, and the share of customer data. These measures have the greatest impact when they are linked to performance improvement opportunities including coaching plans and training as well as root cause analysis activities. The wrong measures can cause behaviors which reduce cost but also reduce customer value. For example, if an agent is measured solely on average talk time but not on how well the customer’s concern is resolved, that agent won’t care that the customer has to contact the organization again.   In addition, these customer-based measures need to roll up the management chain so the success of all members of the contact center organization is tied closely to customer success.

(Photo credit: lacreme)

‘Tis the Season: Holiday Giving

 At this time of year, companies think about their customers with a holiday card, and for some customers even a gift.  But customer service isn’t a once-a-year phenomenon.  It is year-round. 

What message is sent to the customer that only hears from a company once per year?  Put another way, what do you think about those holiday cards that are the only communication you receive all year (other than bills)?  Customer relationships require ongoing care and feeding in order to be maintained or to grow.  The same can be said for mentoring junior staff, employee reviews, and many other things.  They should not be once per year events but a continual process.

Here are a few tips for creating a customer contact plan for existing customers.

1. Be sure to understand your customers’ preferences.  How do they want to be communicated with?  Email?  Print?  Phone?  Facebook?  Utilize their preferred method of interaction; it is probably different for different customers.
2. Understand what business your customers are doing with your company.  Have they been customers for a long time?  Is this their first 30 days of doing business with you?  Have they just referred new business to you?  Communications should be adjusted accordingly and should acknowledge that level of business.  Most customers want to know you see them as more than just a number/name in an email list.
3. Intersperse up-sell and cross-sell communications with “just because” communications.  At least quarterly, call or contact customers to see how things are going and check in on their satisfaction levels.  Customers are usually happy that you want to know how they are doing.

Go ahead and send out those holiday greetings.  As you put together the finishing touches on your plans for this upcoming year, however, make sure you are creating a plan for how you want to contact your customers throughout the months that follow.

(Photo: zocky)

How to Take Care of Existing Customers

 Business is tough to juggle sometimes.  We have to focus on two main areas when it comes to our customers: bringing new customers in and taking care of existing customers.  The old idiom, “A bird in the hand is worth two in the bush,” comes to mind here.  I like this definition from the New Dictionary of Cultural Literacy (Third Edition, 2002). 

The things we already have are more valuable than the things we only hope to get.

From my experience, many companies spend most of their time and budget focusing on the sale to new customers and end up neglecting their existing ones.  This works in the short-term, but eventually these companies find themselves losing more customers out the back door than they bring in the front door. 

Example

Here is a hypothetical example.   Company A, a business-to-business  manufacturer, is growing rapidly and has had a big year-end push on getting new customers to purchase their product.  During their latest promotion, Company A saw a lot of interest in their product and was able to acquire several new business customers.  As the promotion drew to a close, the focus remained on bringing in those last few customers who had expressed interest but weren’t yet “in the fold”.  Company A succeeded in beating their promotion goals by bringing in additional business for the year.

Was Company A successful?  Yes, with their goal of bringing in new customers.  Were they successful in taking care of existing customers?  Yes.  They didn’t lose sight of those that had already purchased before and during this big push because Company A has a team of people that focus on keeping and growing existing business.

Five Tips

Here are a few tips for companies to ensure they aren’t letting go of the “bird in the hand” while pursuing those in the bush:

• Be sure to thank customers when they buy from you.  Whether products or services, you want customers to know you appreciate their business!  If possible, a personal thank-you card is best when you have a small or targetted group of customers. 

• Recognize a return customer.  If a customer has purchased from you before, acknowledge that in your thank-you note.  A customer doesn’t feel valued when they get a note saying “Thanks for trying us.” when they have been buying from you for 5 years!

• Properly welcome a new customer.  This could be a customer who is new to you altogether, or they may be new to this part of your company.  Best practice organizations provide “welcome kits” to help customers navigate the system or get started.  It could be as simple as the name of their account manager along with that person’s phone number.  The kit is usually sent after the “thank you” note goes out.

• Follow up with existing customers on a regular basis.  This could be an email or note to customers (especially useful if you have a lot of customers, as many consumer-focused companies do) or a quick phone call to see how things are going.   Use whichever interaction approach your customer prefers.  NOTE: This is not a sales call!  The best way to turn off existing customers is to constantly pressure them for business (see Seth Godin’s post today on Spam for examples of how not to do it, especially his Dell example). 

• Look for ways to improve the relationship.  Let your customers know you truly value their relationship with you by asking them how it could be made better.  Needs change.  Budgets shrink and grow.  By keeping in touch with your customers and understanding their needs and preferences, you will be aware of these changes and can react to meet those new needs.

Taking care of existing customers can’t be left to random chance.  It also can’t be left only to great customer service personnel who react when there is a problem.  Taking care of customers needs to be an ongoing, proactive part of the business.  This will take time and budget. 

But it’s worth it: just ask Harley-Davidson!  They were the subject of one of my first blog posts here at Customers Rock!, and they have legendary customer loyalty.  They are truly a great Customers Rock! company.

(Picture credit: Erika Aoyama, November 16, 2002)

Consistency of experience counts

 When it comes to customer experience, there are a lot of factors that contribute to positive word of mouth.  In particular, a consistent experience is critical, whether it be across visits or across locations.  Doug Meacham of NextUp has recently joined the ranks of road warrior (ie. consultant – welcome, Doug!) and shares with us his story about the Hertz Gold program.  Doug loves the convenience of the service (so do I).

Unfortunately, some of the comments on Doug’s blog indicate the Hertz Gold experience is not consistent across Hertz locations.  Doug responds to the comments:

Clearly, the quality of a company’s customer experience is determined by its ability to execute the great experience CONSISTENTLY over time.

Once customer expectations are set, it is important to ensure they can be met each time, in each location.  This is a key area where many customer loyalty programs fall down.  Travel customer loyalty programs have become so popular, nearly everyone is “gold”.  It used to be a great day when you could board the plane early or get the choice cars.  Now, there are so many people using these services, it can sometimes be more the rule than the exception.  What happens when a frequent flyer/driver/stayer is one of many and there isn’t enough capacity for the “special treatment”?  Expectations are not met, and deep customer dissatisfaction occurs.

For this reason, customer experience isn’t just about giving employees incentives to treat customers nicely or to deliver great customer service.  It is about creating a strategy for how customers will be treated, across all touchpoints, and for the extent of the customer’s lifecycle.

Does your company have a customer strategy?  Tell me about it, and I will feature you and your company on the Customers Rock! blog.

BrandingWire: Helping a Consulting Business

 For this month’s BrandingWire installment, the posse of pundits (including me) is tackling how to help a consulting firm.  Here is the challenge:

The ideal client/customer for the consulting firm looks like:

Revenues: $1 million to $25 million

Employees: 150 or fewer

Verticals: High-tech and health care

Location: North America

The challenges facing these client/customers: consumers and other businesses have so many choices, that high-tech businesses (as well as their other target audience made up of clinics and hospitals) are experiencing stagnant growth, or even losing market share. Many of these clients don’t know how to differentiate themselves from their competition.

The consulting firm’s challenge: as a small marketing firm, they are losing contracts to lower pricing and to bigger firms. The consultancy after three years has stopped growing and most of its clients buy one project and don’t return for more assistance for several years, if at all. How do they position and brand themselves in order to return to greater marketplace success?

In a nutshell: Business growth has slowed or stopped, clients are not likely to return, and the firm is being under-cut in price by larger consulting firms.  This same scenario could apply to many businesses, but there is something unique about a consulting firm.  This is a service business.  The marketing of services is often a challenge for companies, as there is not a tangible product to sell.

In this month’s case, marketing may not solve the problem up front.  There looks to be more legwork to do before we attempt any slick re-branding or marketing campaigns.  We need to understand what has gone wrong.

Here are some suggestions on how this ABC Consulting could proceed at this point.

• Talk to current clients about existing projects.  We want to make sure the firm’s current clients are completely satisfied with the work being done for them.  Are they satisfied with the work done so far?  Is there anything that could be done to better meet their needs?  Would they consider continuing with this consulting firm for follow-on work?  If not, why not?
• Build relationships with the clients on multiple levels.  People come and go, both from clients as well as from consulting firms.  Building relationships at many levels helps insulate the consulting firm from being ousted when the “new guy” comes along.  Additionally, a strong client/consultant relationship will help keep those lower-priced competitors at bay!
• Make sure all project work is adding value for the client.  Do we truly understand each client’s needs?  Do we know how the results of this work will be used after we leave?  Binders full of research and “consulting speak” that sit on a shelf or complicated marketing plans that no one buys into will never see the light of day.  Often times, consultants are not re-hired to do follow-on work because the last “consulting deliverable” wasn’t something that the client could use to take action and make a difference for their company.  Every work product delivered to a client needs to count!
• Look for the next project from this client before the current one is finished.  It is always easier and more cost effective to get business from an existing client than from a new one.  Consultants should keep their eyes open for others areas where the consulting firm’s services can help the client.  It could be to assist the client in taking further action from this project.  It could be in a completely different area. 
• Quickly put a process in place to capture end-of-project results.  A good project manager always does a “post mortem review” on the project.  What worked?  What didn’t?  What could have been done differently?  Be sure to get feedback from the client during this review process!  Take what is learned from the review and immediately apply it to other existing projects; immediate action is required to keep from making the same mistakes.
• Talk to former clients, if possible, to find out why they did not continue working with the firm.  Too many firms that lose the sale don’t go back and ask why.  Many times, clients are willing to share what their issues are, if any.  By doing this, the firm may find out that the way they are approaching their projects doesn’t leave room for future work.  Of course, this should only be done with clients that the firm is still on good terms with! 

Putting some of these suggestions into play will help this consulting firm to understand their mistakes, and it will also help set them up for the future.  Now go talk to those clients!

Check out these other posts from the BrandingWire posse for more insight and perspective!

Lewis Green

Drew McLellan

Martin Jelsema

Patrick Schaber

Olivier Blanchard

Steve Woodruff

Valeria Maltoni

Kevin Dugan

Gavin Heaton