Customer centricity, rich thoughts poorly executed
I would have loved to have the word “Centricity” in our business name as is at the centre of our thinking regarding customer focus, customer retention and customer retention strategy.
As a word, “Centricity” is strong, meaningful and capable of strong positioning but it comes with baggage or hyperbole as big business and IT suppliers over-talk it and the majority of medium to small businesses don’t get the concept or practice it.
The popularity of the term “customer centricity” over the past 10 years, due in part to the advent of CRM systems, made it impossible to register a business or URL. In some ways I am pleased as Retain and Gain offers so much more as a philosophy and process.
We at Retain and Gain prefer to push the retention process than the hype as we believe that the customer should be at the heart of every business. Customer centricity and retention are intrinsically linked and should be at one in any strategy document. Sustainable business growth is achieved through bringing the customer to the very core of your business strategy and planning process.
It was refreshing recently to read some of Peter Fader’s second edition of his book Customer Centricity as he summed things up wonderfully by saying ” the aim of Customer Centricity: Focus on the right customers for strategic advantage”. In my mind strategic or competitive advantage is all about bottom line dollars in the long term. Joseph Jaffe in his book ZERO states that “Retention, as an acquisition driver, becomes the consummate way to grow a business from the inside by focusing – or even obsessing – on real customers above potential ones. “Customer centricity (as opposed to consumer centricity) is really a combination of a renewed focus on service and experience, with an equal prioritisation and shift (mind and body) toward a retention- based approach. “ I like his approach when he says that “It costs nothing to remember your customers”. Our approach, we believe, guides businesses to achieve its goal of increased profitability through focusing on the right customers.
There is a need to think differently and perhaps in a more radical way about business structures, key performance indicators and product range in the way of finding better processes of serving the most valuable customers.
No longer can we consider that all customers are equal but more around the fact that the majority of customers perhaps don’t deserve the current level of treatment. A definitive segmentation strategy will identify the businesses that generate the majority of revenue, the most valuable customers that need to be feted. Other customer segments will fall out of the process such as high potential, seasonal buyers and others that lead to defining the “long tail.”
R & G sees retention as a strategy and the team has developed a seven step approach. Working with our clients we develop a better understanding of the customers so as to unlock the hidden profitability. The steps are
- Identify customer drivers and business imperatives.
- Create a clear picture as to the full potential customer database.
- Customer evaluation and prioritisation analysis.
- Audit the ability to meet customer expectations.
- Describe customer profiles through active research, which supports the building of enduring relationships through customer intimacy.
- Create a customer engagement strategy setting objectives, initiatives and resources necessary to acquire and retain the identified customers.
- Prioritise customer engagement strategy using a customer business case identifying the As Peter Fader put it: “The customer is not always right. Rather the right customers are always right. And yes there is a difference.”