Getting to Know the Customer Redux

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Do you remember a few years ago (or was it decades?) when management gurus were preaching the inverted pyramid? You remember, instead of the CEO at the apex and the base of the organization interfaced with the market. When inverted, the CEO was to be in constant contact with the customer in the way that helped to define where the market was going and what changing needs might be taking place. Well, as globalization, multiculturalism and increasing competition is demanding more innovation and excellence, it’s time to revisit the importance of the inverted pyramid, particularly in light of recent advances in technology and social media. Indeed, customers are taking control and are bypassing marketing and sales hype.

Getting to Know the Customer Redux

Here is an example of what I mean. Mark H., Director of Sales and Marketing for a large pharmaceutical company, looks at his computer screen. The dashboard is displaying some troublesome information. Sales for two major products has triggered a downtrend warning signal. He clicks and drills down into the information and finds out that customers see the two products in question as no longer their first choices. He clicks again and sees that a check of the competition reveals new lower price points for competing over-the counter items. He clicks again and sees that the past two weeks revenues for each product has decreased significantly.

Mark H. takes immediate action. First, he notifies his advertising manager to rethink the scheduled advertising budget for those products. Secondly, he notifies his production manager to see if this will effect production scheduling and inventory ordering. Next, he notifies regional sales managers to have field reps check out the competing brands prices and any changes to their product packaging or advertising. Now, there is only one thing wrong with this scenario. What do you think it is?

You guessed it. The CEO should have been the one to discover the changes in the market. Most managers think that revenues, profits and stock price shows how the marketplace judges the success or failure of products and services. Financial reports usually trigger management actions they usually they need to show a trend. Point being, waiting for three months to take action is too slow in today’s globally competitive markets. The argument is customer behavior rather than stock price is every bit as important as waiting for delayed and massaged financial data.

Loyal, repeat clients and customers are the real bread and butter of a company’s success. If financial reports are showing decreasing revenues what does that really tell us? It tells us that something has changed in customer behavior. The usual course of action is to investigate and analyze what is causing the changes. It could be increased competition. Maybe not. It could mean a change in customer preferences. Maybe not. It could be a myriad of factors that usually wait for insights from management. And, what if those management insights are wrong?

If you, as the CEO, saw things heading south, what is the first thing you think of? But whatever you may decide is the reason for things turning down, it’s only from your perspective or that of your team. Why not go where the real action is: the client or customer. They are the ones cutting the checks and paying your bills. Indeed, does it really matter what management thinks? It’s a much better thing to know than surmise.

Today, we can stay in constant contact with all of our customers almost instantaneously ….anytime, anyplace. E-mail, mobile and social media can create a real-time bridge between company and client. It’s just a matter of realizing how important developing and keeping loyal clients is for the company.

importance of loyalty

There have are many studies that support the fact that it cost much more to acquire a new customer than to keep an existing one. It’s a no-brainer but there seems to be much more focus on growth than on retention. Both are important but how many companies have a retention budget or loyalty programs?

Here is a key point to consider: If you really know your clients and their needs, you can design an effective loyalty program and not just copy the latest rewards program.

How to get close to clients

OK, we all suffer from spam and solicitation fatigue but there are ways to develop a connection with customers. Nowadays, there are new SaaS applications that provide digital survey and client data collection. They integrate with a company’s CRM program and can provide immediate data about the client experience and other client input. Now the question is how to recruit a cross section of clients to provide sample data.

Loyalty Club

We are all familiar with rewards programs but those are aimed mainly on purchasing behavior. However, most loyal customers like what you do….otherwise they wouldn’t be loyal, right? So, why not recruit and reward them as the important people they are: invite them to sign up for a quid-pro-quo of information for discounts. If you properly design your queries to be short and valid they won’t be intrusive once you opt-in and only ping them after a buying experience or occasionally. Offer prizes for customer input for improvements and send them emails or a call of appreciation from PR to reinforce their participation. Indeed, maybe a better name would be the CEO’s club. Turn the pyramid on its head and bond the important clients to the highest levels of management. Indeed, do the same things with key vendors. They have valuable market and competitor information.

We all agree that clients and customers are the most essential component to a business. Get next to them and make them not only a valued part of the business but part of the team. As an offshoot of those building relationships will be a cadre of genuine brand ambassadors.

 

Additional Reading

The Demise of the Customer Support Experience

Customer Experience Management (CEM)-The New Necessity?

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