We all know that customer landscape is changing quickly. Over 90% of customers have higher expectations than they did last year and 64% of consumers switch some service providers every year (source: Accenture research).
Customers aren’t your only problem. Your costs are rising faster than your revenue, putting pressure on margins.
You’re also faced with new competitors at every turn. These new competitors are more agile, and they don’t have your imbedded cost structures to deal with, so they can “adjust” to changing market conditions more easily.
So… with fickle consumers, rising costs, tight budgets and agile competitors, how does the CEO get ahead of the curve to help drive growth?
What can I do now?
What are the 7 steps to driving growth?
- Understand and grow your customer base-focus on your most profitable
- Build customer trust by consistently delivering on your brand promise.
- Develop new products and services, new business models and pricing to help you maximize the value of your assets and your customer relationships.
- Reduce your costs on things that customers don’t value.
- Align the organization around your growth vision.
- Measure and test –reinforce the value of testing and failing.
- Help employees increase their productivity by providing them with the tools and knowledge to contribute to the future of your growth.
How can you do this in manageable increments?
Step 1 – Understand your customers
Of course this sounds easy but this will require you actually get involved with your customers and do some journey mapping. You can’t understand what your customers expect and want by sitting in your office.
To speed up the process it may make sense to hire an outside consulting firm which can help walk you through the journey mapping process and teach your team what needs to be done. The first time is the hardest, so get some help. Of course you want your current analytics team to be contributing so you can maximize what you already know and socialize it across the company.
Once you have completed the journey mapping, it’s time to prioritize what your best (most profitable) customer segments want. It’s not just about “fixing” what is broken, it’s also about ‘reinventing “ the experience to make it better for the customer and for the employees.
“The root causes of poor customer experience always stem from the inside, often from cross-functional disconnects. Only by getting cross-functional teams together to see problems for themselves and design solutions as a group can companies hope to make fixes that stick.”
Harvard Business Review-The Truth about customer experience – Rawson, Duncan and Jones
Journey mapping is an on going exercise, so plan for a team which can continue to collect relevant data on an ongoing basis.
McKinsey research finds that customer journeys are significantly more strongly correlated with business outcomes than are touch points, so be sure to focus on the end-to-end journey (McKinsey CEO Guide To Customer Experience.)
Step 2 – Deliver on the brand promise
It’s probably been a while since you thought about your brand promise. What are you doing that is building your brand value and what are you doing that is detracting from it?
How consistent is the brand experience across channels? What can be done to make it more consistent?
Are your partners in line with your brand promise? Have you talked to them about how they are helping you deliver? Do they know what your expectations are? Are they incentivized to work with you?
Use some customer research to really understand how well you and your partners deliver so you know what is “broken” and needs to be improved.
“Companies whose advertising inspires their customers with the power and appeal of their brand or generates word of mouth deliver 30 to 40 percentage points more satisfaction than their peers.”
McKinsey – Four Pillars of Distinctive Customer Journeys
Step 3 – Develop new products/services
The customer research and the journey mapping will give you clear indications of what customers want that you are not providing. Now is the time to use some design thinking to help you come up with a series of experiments that you can test with real customers to see if you have understood their needs. Don’t be afraid of showing customers ideas that aren’t fully baked. Customers are happy to provide you with feedback if they think you will listen and adjust.
The goal is not to hit a home run, it’s to keep trying to make improvements and better understand customer needs.
“67% of large companies rate themselves as being good at soliciting customer feedback, but only 26% rate themselves as being good about making changes based on the insights.”
State of VoC Programs 2015, Temkin Group
Step 4 – Reduce your costs on things customers don’t value
Look at how you are spending your money now. Are you spending money on technology you don’t use? Can you consolidate communications through other lower cost channels? Can you gain efficiencies through better supply chain management? Can you use your customer data to stop sending irrelevant communications?
Are you duplicating services with more than one vendor?
Which customers want to use self-service?
Each customer journey will identify activities that customers don’t value. This is the time to stop doing things you do now and reallocate the money and time to more valuable activities.
“Analytical tools and big data sources from operations and finance can help organizations parse the factors driving what customers say satisfies them and also the actual customer behavior that creates economic value. Sometimes your assumptions will be overturned.”
McKinsey CEO Guide to Customer Experience
Step 5 – Organize around your growth vision
Most organizations were built around products. We have marketing, sales, HR, operations etc. This means you have valuable data and insights about your customers that sit in organizational silos and is not shared. Find ways to share information by creating “scrum teams” which can look into problems and solutions across the organization to come up with solutions. Focus on agile development –not a year to get something done but incremental improvement that can be delivered in weeks and days.
Be sure to change the emphasis so employees are willing to try and fail, without ending their careers. This starts at the top of the organization, and will impact your culture.
“Armed with advanced analytics, customer-experience leaders gain rapid insights to build customer loyalty, make employees happier, achieve revenue gains of 5 to 10 percent, and reduce costs by 15 to 25 percent within two or three years. But it takes patience and guts to train an organization to see the world through the customer’s eyes and to redesign functions to create value in a customer-centric way.”
McKinsey CEO Guide to Customer Experience
Step 6 – Measure and Test
Focus the organization on creating a series of tests to see what works and what doesn’t. This is related to the design thinking process. Customers are constantly changing so getting it “right” will take some time and patience. Once you are going in the right direction you will need to continue to test and learn, as customers keep changing based on the environment and won’t stay in the same place.
Keep validating your data, and interacting with customers to find out the “what is driving behavior”, not just observing the behavior itself.
Step 7 – Help Employees increase their productivity and understand what you are trying to deliver
We all know that you need happy employees to deliver on a great customer experience. So be sure that the employees understand what you are trying to accomplish and are on board. This will require training and support. You also need to align employees around the customer needs, despite the functional boundaries.
Survey employees to find out what they need to deliver the new experience and do your best to begin to provide them with the tools, training and new processes to deliver on the new customer experience.
Reinforce the employees’ new behaviors with incentives, customer feedback stories and senior management recognition.
With hard work and focus you can do this. If you need more help –get an outside firm like The East Bay Group to help you get started.
Here is to a growth oriented 2017!
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