Who says people won't pay more for a better customer experience?
October 29, 2010#1 of 10 ways to build a culture of innovation and creativity
November 2, 2010
In a recent post, Small business can and will win the race to focus on the customer I talked about a recent survey from IBM (IBM Global CEO Study), which identified that CEOs and business leaders believe that their ability to outperform their market and peers will be driven, primarily, by their ability to get closer to their customers.
Over the last few weeks I’ve been thinking and talking to lots of people about what this means and depending on who you talk to and what area of business they are in, it can mean very different things.
As some of you may know, I am a great lover of keeping things simple. So, here’s my boiled down, back to basics, 8 things that, I believe, any business can do to build better relationships with its customers:
- Really get to know them – Too often do I see situations where businesses have little idea about who their customers really are……as people, that is. Not just how old or how much money they make…but who they are, how they communicate, what do they prefer, what they like, what they don’t like, and their opinions on how you could be better…..
- Build your experience to fit round their journey – There is often a difference between what a business thinks a customer will do or wants and what the customer really needs. Make sure that your whole customer experience is informed by your customers true journey and not what you think it is.
- You are only as good as the team around you – Building a great team around that shares the same values and standards is a fundamental cornerstone of being able to deliver to your customers, whether you run a small or large team.
- Put people into groups – In order to manage efficiency and effectiveness, find similarities between different customers and put them into groups to make things easier. Before you do this, it’s important to decide what issue you are trying to solve. For example, if you are running an IT support company then maybe segmenting your customers around how technically savvy or what type of technology they use may be a good place to start.
- Tailor your approach – Create specific content or an approach depending on your their needs. We’re all different and have different preferences. So, be careful to assume that everyone likes a broadcast update email or that everyone is happy to deal with someone on the phone rather than face to face.
- It’s ok to prune – This is where reality and tough choices kick in. Not all customers are going to be a good fit for your business so choose which customers will work and be very clear about which ones will not. If you can spot the customer that you know will be disappointed with your customer experience as it does not fit with their needs or requirements and you choose not to do business with them (in the nicest possible way) then you will have saved yourself a lot of time and energy and brand equity in the process. They’ll appreciate the honesty. Refer them onto someone who will be able to fill their needs and you’ll create an advocate for your business without them having spent any money with you.
- Develop a memory – Unless, you’ve got a memory like Ray Babbitt in Rainman, or Kim Peek in real life, then having a way of gathering and storing information you and your team have about the relationship with your customer then you will forget things and lose out on opportunities to connect and build your relationship with your customers. This is where technology like Customer Relationship Management (CRM) can be effective. However, don’t be lead by the technology, think about your customers, your team and what you want ‘your memory’ to allow you to do now and in the future.
- Tune and optimise as you go – Set targets, monitor and measure how you get on. It’s probably not going to be perfect first time but you will improve and your relationships with your customers should get better. However, realise that improvement can take time and will depend on the nature of your business and current relationships with your customers.
I’m sure that I’ve probably missed something. What would you add to the list?
Thanks to wbd for the image.
16 Comments
8 steps to building better relationships with your customers http://bit.ly/9TGdyZ
Hi Adrian
I’d add two things:
Build an extended culture right across your own suppliers, through your own activities and out into your customers. Authentic is about having and sharing one message.
The second point is related – establish a community of interest around the topic – for example, on Linkedin if it is pretty “businessy”, on Facebook if it is more generalist a consumer offering.
Malcolm
Hi Malcolm,
Thanks for your comments. They are great and extend the list really well. I particularly the points about integrating with your suppliers and, also, building a community of interest……great way to engage and start and build a conversation.
Thanks for extending and building on my ideas,
Adrian
Hi Adrian, great tips as always.
I’ve recently started using http://www.zoho.com/crm/ which is a free software tool to help you manage your relationships with customers. However, as you say the technology should never get in the way.
One thing I’d add about building relationships, I know of a number of business who simply don’t want any relationship with the suppliers, consequently this can make things difficult. Although, you may wish to adopt a liberal dose of your point 6 and fire them!
Matthew
Hi Matthew,
Thanks as always for a great comment and tip on the software. You know businesses that don’t want a relationship with their suppliers are really missing a trick. Or, there could be a couple of things going on here:
1. It’s a reflection on how they want to treat their suppliers and is how they treat their customers too. Hmmmm
or 2. Perhaps their scared of that type of relationship as that would imply a loss of control.
Do you think it’s one of these?
Adrian
Building relationships with customers is a very fundamental part of business, and it is surprising how many times we needed to be reminded how effective it can ultimately be. Great blog with excellent tips.
Hi Lynn,
Thanks for dropping by and leaving a comment and I am really pleased that you like the blog.
I think you are right. We often forget to do the obvious things and get caught up too much in the day to day of doing stuff. We should be aiming for less process and more relationship, don’t you agree?
Adrian
I do agree, however it is often a big challenge for the self-employed and consultant who are often the only team.
Agreed. It is a challenge but just something that we need to find a way of handling. Freelancers and consultants often have a lot of flexibility when it comes to delivering their work so they should be able to find a way of accomplishing it. It may require a few more hours or catching up in the evening or on the weekend but that may be the price they need to pay.
Question is, I guess: Is it worth paying?
Oh yes it’s worth the pain. The benefits of consultancy mean there’s loads of flexibility.
RT @adrianswinscoe: 8 steps to building better relationships with your customers http://bit.ly/aaFM6A
Hi Adrian,
Points 4, 5 and 6 remind me that we need to give ourselves permission to differentiate amongst our customers. Blanket marketing and reaching out to all customers in exactly the same way misses the opportunity to leverage what we know about our customers. As my colleague Mark Price has shown in his blog, CultivatingYourCustomers, it is our Best Customers (those who spend the most and shop with us most frequently) who may only be 15% of the customer base, but generate 55% of revenue. Another 35% of customers might be thought of as ‘high potential customers’ as they generate 35% of revenue. The other 50% of customers only generate 10% of revenue, as they are truly transactional in the relationship they have and want with your business.
The implications is this:
1. Deepen, invest and see where it makes sense to cross-sell your Best Customers as they truly value the relationship you are offering to them.
2. Maintain the relationship with your high potential customers and monitor for signals that they might want to deepen that relationships. Also experiment with innovative tactics that lead them to want to become Best Customers.
3. Manage the relationship with others – don’t ignore them, but don’t expect the same ROI on customer relationship efforts as you will see with your Best Customers and your High Potential Customers.
Hi Marc,
Thank you for adding those stats and thinking about best customers….great insight and very useful to know.
I think an area that we need to be conscious of when thinking about best customers is not just their revenue value but their overall value to the company so we get a more complete picture of who our customers and advocates are. Some customers may be low revenue generators but have great referral or advocacy value and we should be mindful to include this into our thinking and approach.
Adrian
Agreed, we should be mindful how to leverage referrals. From my perspective the same framework can help: those who have the most frequent interaction and experience with your business, products and services have the best sense of brand-in-action and, even if not high revenue generators, can provide a robust referral. Those who are purely transactional and infrequent or one-time customers are less likely to be of high referral value. If I have a budget to invest in soliciting referrals, I’d try to focus on the group having more frequent interaction with my business.
I agree with you that further segmentation on frequency of contact and referral likelihood is a great way of focusing one’s activities and the mind on where the value levers are in our business.
I feel there is a customer value, frequency of contact and referral tendency map or matrix or framework in this. I’ll think about it some more emerge as a blog post 🙂
Adrian