"Our goal this year is to drive more revenue from our existing customers. How do we do this?"
This question, while posed in several forms, has been asked to me a lot over the past few months. It's not entirely surprising as Boards of Directors and C-level executives appear to be focusing more on new ways to leverage existing relationships than in years past. So, we dedicate our newsletter to this question.
There are many operational initiatives that have the potential to deliver a significant return on investment. Success revolves heavily on employee engagement, accountability, communication and measurement. Businesses need not execute flawlessly in all areas to realize the economic benefits, but moving your organization along the customer service continuum will undoubtedly lead to creating more advocates and increasing share-of-wallet from existing customers.
The Employee's Role in a Best-in-Class Service Organization
Engage employees in building customer loyalty
Employees play a pivotal role in building an atmosphere of trust, confidence, and loyalty among your customers. Every member of the team has an opportunity to contribute to creating a compelling customer experience, or one that fails to deliver on your brand promise. Few would argue that staff on the front line greatly influence the customer experience, but the reality is all employees play a role in reinforcing your company's commitment to the customer.
Consider each individual touchpoint along your customer lifecycle. It begins when the customer first hears about your organization. It continues as long as your products or services are used or even considered by the company. Think about all of the people that support the tools, processes, data, systems, communication, etc. for each interaction. It's easy to see how nearly every employee plays a part in the experience a customer has with your company.
To ensure employees are continuously focused on improving the customer experience, your customer-centric management philosophy must flow down forcefully from senior leadership through middle management and directly to employees. A clear and cohesive vision communicates to employees that the customer experience is not an isolated initiative or expectation for them alone, but that the entire organization is focused on building customer loyalty. Our recommendation:
- Set clear expectations and hold employees accountable to a high standard of service. Reinforce how they contribute to satisfying customers, and thus generating profits.
- Recognize success, both on a company and individual employee level. When an employee does something extraordinary, use it as an opportunity to celebrate achievement.
- Understand factors that contribute to employee turnover. Uncover the root cause of employee frustrations so they can be quickly addressed.
- Provide ongoing coaching, training, and education. Give employees the tools to make decisions that are beneficial for the company and each individual customer.
- Use metrics to measure and track both customer and employee satisfaction and retention.
- Communicate effectively. Keep your employees 'in the loop' when you implement any changes that stem from their feedback.
- Finally, empower employees. Give them the knowledge and resources to be successful; your customers will have a better experience because of it.
All employees need to know that customer loyalty is paramount and customer oriented goals should guide their actions and behaviors. Hitting on the points above will help these values become embedded in your organizational DNA, setting the tone for a customer-oriented culture.
|Customer-Related Key Performance Indicators Every Organization Should Track|
Measure the effectiveness of your Voice-of-Customer programs
|As any growth company will tell you, there is a high correlation between strong customer relationships and financial performance. This is why creating a business strategy that revolves around customer performance metrics is not only a smart thing to do - it's also profitable. Unfortunately, measuring the link between customer sentiment and operational performance isn't always easy. It requires senior executive buy-in, the right stakeholders, a systematic collection of customer feedback data, and a disciplined approach to mining the data. |
There are several customer metrics that have been shown to correlate with financial performance. What are the top metrics every customer-centric organization should track to validate the company is headed in the right direction?
Net Promoter Score�
Many of the world's leading customer-focused organizations gauge loyalty using the Net Promoter Score� (NPS) discipline. This customer loyalty metric enables business leaders to monitor how enthusiastic customers are about the service provided. It also helps to identify pain-points and where to focus improvement initiatives most likely to enhance the customer experience.
Research shows that just a five percent improvement in customer retention can lead to an increase in profitability between twenty-five and eighty-five percent. That same research indicates that the longer a company retains a customer, the cost to service that customer decreases and the more likely they are to purchase additional products and services. Some customer churn is inevitable and, if handled properly, may be beneficial. Understand how retention is trending in your business and the factors that contribute to defections in order to uncover opportunities to strengthen relationships.
Growing Stable of Reference Accounts
Identifying the number of customers willing to serve as enthusiastic references is a good indicator of your company's success at improving customer loyalty. We recommend validating references regularly using an unbiased party to ensure those speaking on your behalf are truly "Promoters."
Sales Close Rates
The challenges associated with winning new business have increased. Sales cycles are longer and the desperation of some competitors has led to more aggressive sales tactics. Knowing why deals remain in the pipeline or why your company wasn't selected is more important than ever. Use that knowledge to refine the sales pitch or modify the way you approach a new business opportunity. Also, demonstrating a real commitment to service excellence can serve as a key differentiator. Share high level details about your customer feedback programs to improve your chances of closing more deals.
Tracking the percentage of your customer's spend is a good way to ascertain how they feel about the service and value you provide. Visibility into this metric can sometimes be difficult to obtain so instead, many B2B firms track the number of products or services purchased by each customer and closely watch how it changes over time. If your customers are happy with your organization and feel you are easy to do business with, they will look to consolidate more services with your company.
When properly leveraged, regular use of Voice-of-Customer programs can help remove product and service pain points and strengthen client relationships. Focusing your attention on customer metrics that directly contribute to financial growth is key to your success in 2012.
Satrix Solutions Update
|It's hard to believe we are nearing the end of the second month in 2012. For Satrix Solutions, this past year was filled with exciting challenges, wonderful opportunities and impressive growth. And the customer feedback industry, like our company, remains strong. I invite you to take a look at our recent press release for a full rundown on our success in 2011.|
Since our founding we have been committed to implementing customer feedback programs that maximize customer lifetime value, fuel business growth and help our clients establish a true customer-centric culture. I'm proud to say that this operating principle, and your support, has helped us increase our client base and expand existing relationships year after year.
In our last newsletter update I told you about our pending Net Promoter Loyalty Partner certification with Satmetrix Systems, co-developer of the Net Promoter methodology. I'm happy to report that we have completed certification and are now one of only a handful of US-based customer experience consulting firms officially recognized by Satmetrix Systems (See the announcement here
). Net Promoter Score (NPS) continues to see increased interest thanks to the growing list of companies sharing compelling stories regarding the impact it has had on their business.
We are also pleased to announce that Rob Davis
has joined Satrix Solutions as an Account Manager. Rob has a Masters Degree from Arizona State University, with an emphasis in Statistics. His knowledge and experience will undoubtedly play a significant role in our continuous effort to elevate the insights and recommendations we provide to our clients.
There is so much to look forward to in 2012. So, stay tuned as we'll have more exciting news to share throughout the calendar year. Here's to 2012, may it be your best year yet!
Founder & President
�Net Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld
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