46. Customer Strategies

“People have become relatively immune to messages targeted at them. The way to reach your customers is to create an experience with them.”

Successful companies have strong, focused customer strategies for retaining and growing the customer base they worked so hard to build. As we discussed previously, the best way to know if you are satisfying customers’ needs, wants, and expectations is to ask them. Ongoing periodic surveys, advisory group discussions, and other means of engaging customers in a dialogue will help you stay on top of customer preferences.

Data analysis will help you understand the frequency and total value of customer purchases, customer retention rate, percentage of customer “wallet share,” customer delight (are they satisfied enough to refer others to you?), and customer mind share (is your company the first to come to mind in a category when making a purchasing decision?). It will also help you spot buyer trends over time, as well as identify customers who are at risk of defecting to a competitor. As you become more accustomed to acquiring and analyzing this type of information, it will enable you to continuously innovate and improve your customer strategies.

Customer Loyalty Objectives and Strategies

The key to creating successful customer relationship management strategies is to understand what you want to achieve. Customer retention is critical to the profitability and long term success of your business. The objectives and strategies you develop in this area will generate both short-term revenue and long-term success for your business. Here are a few to consider:

• Increase Customer Retention. As discussed previously, it is five times more cost effective and profitable to retain customers than it is to find new customers. The profitability of a customer increases over time, so one of your strategies should be customer retention.

• Reward Loyal “A” Customers. It would be wise to create strategies and programs that reward your best customers. Consider offering increasingly higher levels of rewards to customers who achieve a certain level of spending. For example, Nordstrom gives customers cash-back rewards based on what they spend. Hotels reward customers for their loyalty by awarding them free nights, double points during off-peak days, and upgrades.

• Encourage Frequency. A membership program can provide special benefits to its members. For B2B companies, the benefits can include access to research, informative newsletters, mentoring, and networking. For Business-to-Customer (B2C) companies, incentives and upgrades can keep customers engaged. Airlines do this by increasing benefits and rewards for frequent flyers.

• Improve Customer Insight. If you want to learn about the wants and needs of individual customers, or segments of customers, establish the mechanisms to gather this information fluidly and directly from customers. Develop communication programs and mechanisms that can be executed dynamically using your website, email marketing program, customer forums, and regular meetings that salespeople have with customers. Reward salespeople who create a closed loop feedback system to the marketing department, and reward customers by sharing the information you have learned with them—and of course, by taking action on the feedback they give to you.

• Organize to Focus on Customers, Not Products. This is a big goal if your company is currently organized around products. It could mean a restructuring of product teams and entire divisions. The first priority is to focus on sales and service to major customer accounts and valuable market segments. This may require a restructuring of the sales force to allow salespeople to spend more time with customers. Or it could mean switching from VAR or distributor relationships to a company sales force.

• Deliver Knowledge and Expertise. If a company differentiates itself from competitors based upon knowledge and service, then training programs and processes should be developed for the different audiences that interact with customers, including salespeople, marketing professionals, customer service, and operations teams. Don’t forget to plan and budget training for suppliers, distributors, and partners that sell and work with customers. This needs to be done for each new partner, and on an ongoing basis to all partners, to increase knowledge of your solutions and stimulate sales.

• Improve Service Delivery and Fulfillment. When Wal-Mart initially introduced their inventory and supply chain requirements to vendors several years ago, suppliers scrambled to meet their needs. While most customers are not the size of Wal-Mart, you will have service delivery issues to fulfill. If delivery preferences, process integration, or logistics is a priority for customers, business processes may need to be redesigned to fulfill customer requirements. A customer that demands reliability and responsiveness may require an around-the-clock help line or reassurance that security and back-up systems are in place.

• Implement Customer Segment Marketing Programs. Refer back to Chapter 14, “Micro Perspective: Focus on High-Value Customers,” where you completed the A, B, C, and Deadbeat Customer exercise. In the third and fourth parts of the exercise, you noted how service should be unique and delivered at increasingly higher levels for your best customers. You also noted that marketing programs should be unique for different customer segments. How will you service and market to different customer segments so you focus investments on your best customers? What is your strategy to migrate customers to a higher level?

• Measure Customer Delight. Create a system to gather ongoing customer feedback to continuously learn and make improvements across several areas of your business. You can implement the Net Promoter Score (explained in Chapter 15, “Love Your Loyal Customers”), implement polls and surveys on your website and social media, implement real-time focus groups to improve products or quickly adjust marketing messages and marketing programs, or use a combination of several methods.

• Improve Customer Experience. Customer experience has become an important way that company’s differentiate and compete in commodity markets. What experiences can you create that will inspire customers to return again and again...and even pay more for? The Wynn and Encore hotels in Las Vegas stand out from the other hotels on the strip. The hotel’s beautiful and unexpected visual elements captivate you the moment you enter. Intimate chill music enhances the experience and draws you into an environment you never want to leave. If you can create experiences like this, your customers will pay more for them.

• Create a Customer-Focused Culture. A great customer experience starts with great employee experience. Implementing strategies to nurture a healthy vibrant culture is the catalyst for creating great customer experiences. The Excellence Playa Mujeres creates a different and unexpected experience with their five-star all-inclusive resort. The lavish spa and fitness center and eight gourmet restaurants are luxuries usually not found in an all-inclusive resort. The best part of the experience however is the exceptional service from friendly, attentive staff. The world-class service and luxury surroundings are a first-class experience at an all-inclusive price.

You have learned about the importance of customer strategies throughout the book. As you develop your own strategies, give particular attention to those that will improve your culture and customer service.