NB The article is originally produced in Danish
Is customer focus a part of your organizations strategy?
Is customer focus a natural part of your business strategy? If not, you might want to reconsider your strategic focus areas.
Fortunately, most companies have a customer focus on the strategic agenda, and that makes a lot of sense. Customer focus should be a top priority in all organizations if you want to increase loyalty – and earnings.
Great relations pay off
Everyone knows it is expensive to lose customers. Therefore, most companies have a systematic focus on reducing the number of dissatisfied and disloyal customers – and derived customer departures from this. It requires customer focus.
We define dissatisfied and disloyal customers as customers who score 0-6 on a 10-point scale. Most people also know that very satisfied customers, ie. those who score 9-10 are more profitable than those customers who score 7-8, and who are thus simply satisfied. It is still the fewest companies that, as part of their strategy work, count on a business case around lifting customers from score 7-8 to score 9-10. There are plenty of both company cases and major general analyzes that show the positive profitable correlation, e.g. below analysis from Temkin Group.
The analysis shows that the very satisfied customers are more willing to repurchase, forgive mistakes and test new products from the same company compared to satisfied and dissatisfied customers.
At the same time, the analysis also shows that it pays to maintain a good relationship with the customers who give a high NPS score – and that it therefore pays to retain a loyal customer rather than attract new ones.
Outside-in customer focus in your strategy work
Although analyzes say one thing, companies often do something else. In their work with customer experiences, most companies focus mostly on reducing the number of dissatisfied customers.
However, the overall customer focus strategy should be more interested in knowledge and efforts that can move the satisfied customers up into the category of very satisfied customers with an NPS score of 9-10 – namely the category that within the NPS methodology is called promoters – and who are your most loyal customers. In connection with customer focus in the strategy process, it is important to have a clear overview of the extent to which your company is permeated by an outside-and-in customer focus.
Get the organization on board
To define this focus, you can take a starting point based on the questions below and get closer to an integrated focus on customer loyalty in the entire organization.
- “How close are we as a management to our customers and their needs?”
- “How proactive are we in on-goingly following the development in the customers needs?”
- “Are we capitalising enough on the knowledge our customer surveys provide us, this including the written commentaries of the customers?”
- “To what extent are we actively encouraging our customers to supply their feedback – both positively and negatively – or to add their inputs for brand new ideas for products and service improvements?”
- “To what extent is it easy for our customers to use their warranty on things that does not function?”
- “To what extent is our customer focus integrated in our organization?”
- “Is our customer focus an integrated part of the staff development interviews, recruiting interviews and bonus and incitement structures?”
- “Do we have a clear common language that we use in working to create good customer relations and very satisfied customers (score 9-10)?”
- “Do we have a clear internal communication about customer focus?”
- “Do our employees know how they can actively create and improve good customer experiences?”
Good luck on your customer focus
The questions are not exhaustive, but intended as inspiration to get started with the right outside-and-in focus and create a strategy that embraces customer focus internally within the organization.
We hope that you found the article interesting and that it has given you useful perspectives for working with your business strategy, so that customer focus becomes an integral part of your business.
Are you interested in knowing more about how increasing customer focus with NPS can create value for your business? Then you can read HERE about how you as a CFO can get involved with the company’s activities around customer satisfaction and loyalty.