Customer management is one of the only real areas of sustainable competitive advantage available to businesses today. That’s according to Doug Leather of REAP Consulting, which specialises in customer management assessment and optimisation. It’s a true enough statement, yet the majority of businesses fail dismally when it comes to making use of the competitive advantage that proper customer management can afford them. “The brutal reality,” says Leather, “is that most organisations have no idea what customer management means. It’s not enabled on any kind of strategic level.”
REAP’s approach to customer management is underpinned by research and methodology that has been used by 740 organisations across multiple industries around the world. Its local clients include Woolworths, Nedbank, Volkswagen, Standard Bank and MTN. REAP looks at customer management across an entire business, with the aim of creating a consistent experience for customers at each and every touch point. Getting this right requires commitment from leadership to the strategic implementation of a customer management plan, something that few organisations have. As Leather says, “If organisations even have a published customer value proposition, it’s been developed by the marketing department with no real cognisance taken of what is important to clients. It’s a series of flowery words that are absolutely meaningless to the customer and their experience of the organisation.” The point is to build loyal customers. “A committed customer is very different to a merely satisfied customer,” Leather adds. This is interesting, considering that most organisations’ customer management efforts focus on customer satisfaction. “A satisfied customer is not committed to your brand – they will still buy an alternative product. But a committed customer selects a brand irrespective of price. They become brand advocates, refer others to your company and tell great stories about your brand.”
He adds that customer satisfaction is only one part of customer management. And because customer satisfaction surveys usually deliver an aggregate satisfaction score across a random sample of customers, they assume that all customers are the same. “They are not,” says Leather emphatically. “Customers are different and segmentation of your customer base is critical.” Looking at different categories allows you to assess loss and retention ratios and implement specific strategies to increase customer spend, commitment and satisfaction in each group. “You need to be able to influence customer behaviour,” says Leather. “You want your customers to be more open and susceptible to your message, to use more of your products and services. To achieve this, you have to build committed customers by creating a unique and consistent customer experience at all touch points. This experience needs to be both physical and emotional – that is what makes people say ‘I want this brand only’,” he explains. Employees are a vital component of this “line of sight” approach from customer influence to customer commitment to customer experience, as Leather defines it. “You cannot be customer-centric if you aren’t employee-centric,” he adds. It’s incumbent on employees to deliver your customer promise but, as Leather points out, apart from an initial training and induction programme, few organisations take the time to engage employees on how to deliver to customers. Employees need to be familiarised with the design and delivery of the customer value proposition – their buy-in is critical to the success of building committed customers. It’s also important to get their input on what the business requires to deliver a consistent customer experience. Employees – especially those who interact daily with customers such as call centre agents – are a power-house of information about where the gaps are, yet so few organisations use this information. “Costly, broad based market research can be greatly enriched by simply listening to what employees have to say,” he says.
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