NB The article is originally produced in Danish
Do you have the right toolbox?
Have you figured out how it can pay off that you, as the CFO, are getting involved in the activities about loyalty and customer satisfaction in your organization, and thereby create a stronger bottom line for your company?
You certainly have a skilled sales department that contributes to increased customer satisfaction, but your proactive contribution can create even higher customer loyalty and profitable business development.
Let us first state that a high level of customer loyalty does not necessarily mean a good bottom line – and especially not if your company is sailing blindly and does not know the goals and your final destination for increasing customer loyalty.
So it may be worth challenging yourself, in your role as CFO and your finance function, an extra time on how much knowledge you actually have about the customer loyalty-creating activities.
How proactively do you contribute to creating business cases and key figures that create a better decision basis for being able to see increased customer focus as an activity that increases your bottom line?
Spot the connections and optimize across the organization
Your role as a leader and your ability to see the financial contexts across your organization are paramount to the overall customer experience. Theoretically, everyone knows that the higher the customer loyalty (among profitable customers) the better the bottom line. We also know that the very satisfied customers versus just the satisfied customers buy more from us and are more willing to recommend us to others, thus saving sales and marketing costs. In practice, the world is such that it is the key figures and business cases we have to steer by that are crucial to the decisions we make. The challenge for many companies is that they have too little insight into key figures about the financial bottom line effect of increased customer loyalty. It often happens that cost savings and efficiencies win over measures to strengthen customer retention. We would postulate here that this is largely happening because too few calculations have been made of what the bottom line effect an improved customer loyalty can entail. And it is precisely here that the CFO and the finance function come into the picture with insights and competencies to make these calculations. For example, does your company have a business case / key figure for what halving your annual customer turnover will mean? Do you have business case / key figures for how much more the very satisfied customers buy for compared to those who are just satisfied?
Identify your customer's touchpoints
As a CFO, you can advantageously identify the interfaces that your customers are in contact with during a purchase process. Your customers are not only in contact with your sales department. They may also have contact with your customer service or complaints department. This means that the overall customer experience comes under pressure if one performs poorly in one or more touchpoints.
Therefore, it is very important that the various touchpoints are identified, optimized and made profitable. Therefore, map your customers’ journey and look at where you as CFO can help the journey live up to the customer’s expectations while optimizing costs.
Jump aboard CFO - Start with 3 questions
We do not let you sail out without a compass, and therefore you can read more here about what questions you can ask yourself and how you can further reflect on your role when you put power to your customer loyalty.
We have 3 questions that you as a CFO can reflect on when you ask yourself: “Do I contribute to my company’s customer loyalty?”.
- How is the economy function involved in calculating how profitable it is to have satisfied customers?
- To what extent is the management and the employees of the economy function aware of the profit view of the customer loyalty theory, for example focusing on lifetime value of a customer.
- Is the contribution of the finance function proactive? Do they reach out to the organization about what they can contribute, or is it at the request of the business units that they contribute with calculations, etc.?