How to bring the customer into the heart of the business

Most businesses want the benefits of higher customer loyalty: higher revenues, lower operating costs and higher profits.  Put differently, customer loyalty enables the business to operate as a monopoly supplier.  The problem is that in a competitive landscape customer loyalty has to be earned.  It is earned by creating value for customers; value is created when needs/wants are are met in a way that exceeds the customer’s expectations.

Over the last ten years or so, organisations have, collectively, spent billions on CRM systems and programmes.  The vast majority of these investments failed to deliver.  They failed to deliver increases in customer loyalty and the associated benefits.  Some would argue that the CRM investments – mainly in technology and process change – resulted in a poorer experience for front line employees and the customers.

Out of the ashes of CRM arose Customer Experience.  The purpose of Customer Experience programmes is to improve the customer’s experience of the organisation.  A fundamental part of customer experience programmes is to get access to the Voice of the Customer – to get the customer’s view.  The access to the customer’s view is typically gained through some kind of questionnaire – an example is the Net Promoter Score (NPS) questionnaire.

Whilst Customer Experience programmes are a step in the right direction, they are not enough.  By definition programmes have a start and end date – typically because they are seen as a one of fix, not part of day to day operations.   Also there are several problems with the conventional approach to getting access to the customers voice.  Specifically:

  • the questionnaire is only carried out periodically – typically once or twice a year;
  • the questions are determined by the organisation and/or its agents (research agency) and so may not get at what matters to customers;
  • the findings of the research are often summarised so that all connection with individual customers is lost and the findings can be shaped to fit internal biasses;
  • executives (and employees) are insulated from the customer voice – they get access to summarised, abstract, reports;
  • there is no feedback loop back to the customer – he/she does not know if he/she has been heard by the organisation.

A much better way of getting access to the Voice of the Customer, engaging customers, orienting the entire organisation towards customers and generating customer loyalty is to create a cafe where customers are always invited and they can talk with the employees of the organisation.  I am thinking of a on online cafe which is open to all customers and all employees of the organisation.  It is special type of cafe.  It is a cafe where the customer orders take the form of:

  • Compliments – this is what I alike about you, I thank you for x,y,z;
  • Ideas – here is an idea that I have on new products, new services, what you can do differently etc;
  • Complaints – this is what I am not happy about and I am looking for you to do something about it.

Now imagine all these orders (conversations) are aggregated and displayed as a giant tag cloud.  What customers like appears in green.  What fails to meet customers expectations appears in red.  And areas of opportunity (the ideas) appear say in orange.    I am thinking that this always on Voice of the Customer is displayed on every laptop, every office, every floor – so that the Voice of the Customer is always present.

Clearly the the company will have to take part in the conversation.  It will get back to the customer and let him/her know what it is doing or intends to do on what the customer has shared.  Some of the conversations would be one to one.  Other conversations could be more like announcements.  For example, identifying all the customers that have complained about delivery and letting them know what steps are being taken to fix the issues and when the customers can expect to see results on the ground.

Whilst this is a bold step, I am confident that it is a useful and even necessary step to building customer centred organisations.

The spark of this post was ignited by a conversation with a colleague that I had not seen for 7 years.

Most of what passes of as CRM is not CRM

CRM as practiced is not CRM.

CRM is about taking the seed of the initial enquiry, inital order, intial sale and turning this into a mutually beneficial relationship through hard work.  Work that creates value for the customer AND which allows the supplier to take a share of this value and put it into his revenue, profit margin and profit buckets.  This kind of work is best thought of as applied R&D –  an iterative process that requires investment now to create valuable profit streams over the longer term.

CRM requires considerable interaction and dialogue between the supplier and his customers.  It involves closing the physical and emotional distance between the company and the customers.  This is best done by allowing these customers voice  on products, marketing communications, retail stores, website, customer services, billing etc.  And by seeking out customers and getting them to submit ideas and vote on changes that are being considered by the company – a radical extension of this train of thought is the introduction of prediction markets in which customers are invited to participate.  All the listening has to result in changes that create value for customers.

CRM rewards the customers engagement – interaction and dialogue – by intelligently acting on what has been learned from customers.  Action that leads to changes in the way that the company does business.  Changes that address the needs of customers. Changes that create value for the customer – in some way making the life of the customer better.

Most of what passes for CRM are efforts to make the Marketing, Sales and Customer Services functions more effective and efficient – usually through changes enabled or driven by information technology.    In short, CRM as practiced is often about either operational effectiveness or/and operational efficiency.  And efficient and effective operations  may or may not lead to compelling customer experiences that build customer engagement and customer loyalty.  Often they don’t as optimising the parts often degrades the performance of the whole.  And the customer experiences the whole.  This may explain why customer’s satisfaction, engagement, loyalty towards big businesses continues to be less than great despite the money, time and effort spent on CRM projects and programmes

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