We talk a lot about the benefits to organisations in articulating and embedding their vision, purpose (or mission) and values.
Too many organisations have an excessive internal focus and do not spend sufficient time considering and gaining feedback in relation to the external environment, competitors and from their customers or potential customers. Likewise, the boards, CEOs and senior executives of many organisations do not know what their customers really think of their products and services.
Our research into the seven habits that drive high performance shows that high performance organisations are acutely aware of the needs and desires of all the main segments of their customers, and design their business to meet their needs. They also use customer input and feedback to help them improve productivity and to innovate.
Understand your customers
High performance organisations have a better understanding of their strategic goals (habit 2) and how they are different from their competitors. They use their differentiation to appeal to the customer segments that best match that differentiation. They understand what types of customers are the most profitable for them and where they have a competitive advantage. High performance organisations build deep customer relationships with their most strategic customers and develop and leverage their specialisations and areas where they have core competencies. High performance organisations are also more customer-centric than low performance organisations.
Build strong and ongoing customer relationships
The ultimate goal of most customer initiatives is to build strong and ongoing relationships that will result in customer loyalty and advocacy where customers not only keep coming back but recommend your organisations to others. This is very different to the mindset that treats new customers as purely a potential one-off transaction with little regard for building an ongoing relationship and ongoing transactions over time. Many organisations find that by calculating the lifetime value of a single customer they can add extra focus to not only gaining new customers but to building strong relationships that ensure those new customers are retained for a lifetime.
Move from satisfaction to loyalty to advocacy
More than three quarters of employees in high performance organisations believe that their organisations consistently show a commitment to achieving long term customer loyalty, compared to less than half of employees in low performance organisations.
The commitment of high performance organisations is much greater, more structured and more thoughtful than low performance organisations. High performance organisations take a longer term view of customer loyalty and are more likely to partner with their clients by getting to know them and how they can serve them better. They understand that, as they demonstrate they truly understand their customers’ needs and deliver services to meet those needs, they build loyalty and eventually build advocacy. Those customers become vocal supporters which brings new customers and further success.
Actions for building relationships, not transactions
- Determine which customer segments and which products and services are the most profitable, and leverage that knowledge.
- Ensure your organisation has actionable customer-related metrics and efficient processes for gathering, analysing and acting on customer feedback.
- Recognise that it is engaged employees that are best able to engage well with your customers so ensure you are doing all you can to engage your employees.
- Systematically build your organisation’s service capabilities by recruiting front line employees with good customer service attitudes, providing them with the right systems and resources, training them and empowering them to solve customer problems efficiently.
- Make it easy for customers to do business with you by defining value from their point of view, mapping your processes and eliminating any processes that do not add value to customers.
- Make it your organisation’s objective to move customers from being satisfied to loyal, and then to being great advocates for our organisation, its products, services and people.