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 definitely have a skilled sales department that contributes to an increased customer satisfaction, but your proactive contribution can create an even higher customer loyalty and a profitable business development. Let us first establish that a high customer loyalty does not necessarily mean a solid bottom line – and especially not if your company is groping in the dark and does not know the objectives and your final destination to increase customer loyalty. Then maybe it is worth challenging yourself in your role as CFO and your economy function one more time, about how much knowledge you really have about the customer loyalty creating activities. How proactive do you contribute in creating business cases and key figures that creates a better foundation for decisions to see an increase 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 economical connections across your organization is determining for the total customer experience. Theoretically everybody knows that the higher the customer loyalty (amongst profitable customers) the better the bottom line. We also all know that the very satisfied customers versus the satisfied customers, purchase more and are willing to recommend us to others so that we save sales and marketing costs. In practice things work so that it is the key figures and business cases that we can navigate from, that are crucial to the decisions we make. The challenge for many organizations is that they have limited insights in the key figures about the economic bottom line effect of increased customer loyalty. Often, typically what happens is that the cost savings and the streamlining overshadow actions that is strengthening the customer maintenance. We will claim the postulate that it happens to a great extent because too few calculations are made about what bottom line effects an improved customer loyalty can cause. And this is exactly where the CFO and the economy function step into the picture with insights and competencies to do those calculations. Does your organizations for example have a business case or key figures for what reducing your annual customer departure by 50% would mean? Do you have a business case or key figures for how much more satisfied customers purchase for compared to those customers who are just regularly satisfied?
IDENTIFY YOUR CUSTOMERS’S TOUCHPOINTS
IDENTIFY YOUR CUSTOMERS’S TOUCHPOINTS As CFO you can advantageously identify the areas of contact that your customers engage during a purchase process. You customers are actually not just in touch with your sales departments. They might also be in touch with your service department or your warranty department. This means that the total customer experience is under pressure if you underperform in one or several touchpoints. Therefore, it is of great importance that the different touchpoints are being identified, optimized and made profitable. We suggest that you map your customers journey and investigate how you as the CFO can contribute to that the journey meets the customer’s expectations while you optimize the costs.
JUMP ABOARD CFO – START WITH 3 QUESTIONS
We will not let you navigate without a compass and that is why you can read more about what questions you can ask yourself and how you can reflect on your role additionally, when you ignite your customer loyalty. We have 3 questions that you, as the CFO, can reflect upon when you ask yourself: “Am I contributing to the customer loyalty of my company?”
- 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.
- It the economy function’s contribution proactive? Are they reaching out to the organization about what they can contribute with or does that only happen on request from the business units that they contribute with calculations etc?
About Klaus Lund
Klaus Lund is the director and owner of the consultancy firm Klaus Lund & Partners. Through 25 years he has counseled and solved assignments for big Danish companies regarding strategy implementation and organizational development. Klaus Lund is furthermore the author of 9 books about customer orientation. Besides working as a consultant, Klaus is an active NPS debater and blogger on Børsen.dk. Here he shares his experiences and guides as well as provide food for thoughts about customer experience and customer loyalty.