IS CUSTOMER FOCUS A PART OF YOUR ORGANIZATIONS STRATEGY?
In collaboration with Klaus Lund
Is customer focus a natural part of your organizational strategy? If not, you might want to reconsider your strategical areas of focus. Most organizations luckily have customer focus on a strategic agenda, which is almost reasonable. Customer focus should be a top priority in all organizations is they want to increase loyalty – and income.
GREAT RELATIONS PAY OFF
Everybody knows that losing customers is expensive. That is why most companies have a systematic focus on reducing the number of unsatisfied and disloyal customers – and derived from that, customer flight. This demands customer focus. Unsatisfied and disloyal customers are defined as customers scoring 0-6 on a 10-point scale. Most people also know that very satisfied customers, those scoring 9-10, are more profitable than those scoring 7-8, making them rank as satisfied. Still very few organizations do business cases about lifting customers who score 7-8 to 9-10, as part of their strategical work. There are loads of business cases and larger general analyses that show the positive profitable coherence, as for example the analysis from Temkin Group that you can see further down. The analysis reviles that very satisfied customers are more willing to repurchase, forgive mistakes and try new products from the same organization compared to just satisfied or unsatisfied customers. At the same time the analysis also shows that it pays off to maintain a good relation to those customers that yields a high NPS score – and that it therefore pays off to maintain a loyal customer instead of attracting new ones.
OUTSIDE-IN CUSTOMER FOCUS IN YOUR STARTEGY WORK
Even though analyses say one thing, the organizations often do something else. Most companies focus a lot on bringing down the number of unsatisfied customers when working with customer experiences. The overall customer focus strategy should, however, be more concerned about knowledge and actions that can move satisfied customers into the category of very satisfied customers with an NPS score of 9-10 – the category that within the NPS-method is called promoters – and who are your most loyal customers. Regarding to customer focus in the strategy process, it is important to have a clear overview of to what degree your organization is saturated by an outside-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
These questions are not comprehensive but are meant as an inspiration to get started with the right outside-in focus and create a strategy that embraces integrating customer focus internally in the organization. We hope that you think this article is interesting and that it has given you usable perspectives to working with your organizational strategy so that customer focus becomes an integrated part of your company. Are you interested in knowing more about how an increased customer focus with NPS can create value for your organization? HERE you can read about how CFO’s can create an advantage by involving in the companies activities regarding customer satisfaction and loyalty.
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.