Jeanne Bliss,the founder of CustomerBLISS, wrote this blog entry which is oh so pertinent.
Despite a new understanding of the power and reach of customers, customer service continues to be a challenge for companies—even those who consider it their primary mission. Sometimes, the solutions seem confusing, bombarding the C-suite with duct-tape style solutions rather than proactive approaches.
The customer service front line can get caught in the middle of this frenzy. At one highly regarded financial services company, for example, an up-sell/cross-sell program was added to the customer service workflow. The program had an incentive to reduce call time; but followed on the heels of another initiative—one that encouraged agents to build personal relationships. The result? Agents trying to splice the two ideas together would try to build rapport and then, as their alloted time ran out, make rapid-fire offers to up-sell and cross-sell, alienating some of their best customers in the process.
Organic Growth Drives Customer Profitability
Since customer growth drives long-term profitability, it should be considered as important as quarterly sales goals. The customer commitment typically falls apart because easily understood and well-defined quarterly sales goals are more visible and immediately tangible. But these metrics don’t always line up with what’s good for customers.
Take the example of the B2B company that counted only the number of customer accounts, but not the quality. The sales team was led by an ex-fighter pilot who sent the sales force on “speed missions” to get as many customers as possible, as quickly as possible. Did they track the customer value? No, customers had become tote board checkmarks, all with equal importance. That year, there were an excess of new accounts, far beyond goals—but profits declined.
Progressive leaders understand the customer landscape and act on that understanding. Caesars Entertainment Corp, the casino and hotel company, has become a model for how to integrate metrics and increase profitability through customer service. They use a consistent set of “guerrilla metrics”—measurements that propel profitability. These include customer segment growth, successful host contacts (people who serve priority customers), first-year return on investment (by property), and overall priority customer (VIP) growth. They know that all customers are not created equal. They know who their VIP customers are and what they need to do to keep them loyal. Unfortunately, this level of enlightenment remains the exception and not the rule.
Customer Focus Questions
These five questions are for CEOs who want to place the customer front and center on the agenda:
1.How many new customers are you attracting—and what is their value? Track the volume and value of incoming customers as closely as sales figures. Understanding the quality of customers is critically important as the pool of profitable customers shrinks.
2.How many customers are you losing, why are you losing them, and what is their value? In addition to knowing which customers left, you need to know why they left, so you can find ways to retain them. Without this information, your team is running blind.
3.Why are your continuing customers loyal to you? Define customer behaviors that constitute a commitment to your brand. Without this metric, you won’t be aware when these reasons change, veer, or begin to erode. Once you have this information you can take a leadership role in demanding focused actions—even temporary point solutions—and create a strategic and focused customer service environment.
4.What is the profitability of each customer group? Understand customer migration from one profitability group to another so you can set a customer agenda. Concentrate on reducing cost and growing profitable segments. Demand accountability. The role of customers in your success justifies the attention.
5.Are your customers becoming evangelists and advocates? Customers can become key (and unpaid) members of your marketing team. Track referrals; gather information on these high-value customers. Once you understand them, you can meet them on their preferred channels and make it easy for them to increase your profitability.
Despite a new understanding of the power and reach of customers, customer service continues to be a challenge for companies—even those who consider it their primary mission. Sometimes, the solutions seem confusing, bombarding the C-suite with duct-tape style solutions rather than proactive approaches.
The customer service front line can get caught in the middle of this frenzy. At one highly regarded financial services company, for example, an up-sell/cross-sell program was added to the customer service workflow. The program had an incentive to reduce call time; but followed on the heels of another initiative—one that encouraged agents to build personal relationships. The result? Agents trying to splice the two ideas together would try to build rapport and then, as their alloted time ran out, make rapid-fire offers to up-sell and cross-sell, alienating some of their best customers in the process.
Organic Growth Drives Customer Profitability
Since customer growth drives long-term profitability, it should be considered as important as quarterly sales goals. The customer commitment typically falls apart because easily understood and well-defined quarterly sales goals are more visible and immediately tangible. But these metrics don’t always line up with what’s good for customers.
Take the example of the B2B company that counted only the number of customer accounts, but not the quality. The sales team was led by an ex-fighter pilot who sent the sales force on “speed missions” to get as many customers as possible, as quickly as possible. Did they track the customer value? No, customers had become tote board checkmarks, all with equal importance. That year, there were an excess of new accounts, far beyond goals—but profits declined.
Progressive leaders understand the customer landscape and act on that understanding. Caesars Entertainment Corp, the casino and hotel company, has become a model for how to integrate metrics and increase profitability through customer service. They use a consistent set of “guerrilla metrics”—measurements that propel profitability. These include customer segment growth, successful host contacts (people who serve priority customers), first-year return on investment (by property), and overall priority customer (VIP) growth. They know that all customers are not created equal. They know who their VIP customers are and what they need to do to keep them loyal. Unfortunately, this level of enlightenment remains the exception and not the rule.
Customer Focus Questions
These five questions are for CEOs who want to place the customer front and center on the agenda:
1.How many new customers are you attracting—and what is their value? Track the volume and value of incoming customers as closely as sales figures. Understanding the quality of customers is critically important as the pool of profitable customers shrinks.
2.How many customers are you losing, why are you losing them, and what is their value? In addition to knowing which customers left, you need to know why they left, so you can find ways to retain them. Without this information, your team is running blind.
3.Why are your continuing customers loyal to you? Define customer behaviors that constitute a commitment to your brand. Without this metric, you won’t be aware when these reasons change, veer, or begin to erode. Once you have this information you can take a leadership role in demanding focused actions—even temporary point solutions—and create a strategic and focused customer service environment.
4.What is the profitability of each customer group? Understand customer migration from one profitability group to another so you can set a customer agenda. Concentrate on reducing cost and growing profitable segments. Demand accountability. The role of customers in your success justifies the attention.
5.Are your customers becoming evangelists and advocates? Customers can become key (and unpaid) members of your marketing team. Track referrals; gather information on these high-value customers. Once you understand them, you can meet them on their preferred channels and make it easy for them to increase your profitability.
No comments:
Post a Comment