Adapt or Die

Customer Experience
Customer Experience
Companies that fail to bolster their customer strategies risk extinction

Like the meteorite might have been to the dinosaur, the current economic crisis threatens the very existence of many organizations. Proponents of customer centricity assert that increasing customer focus is integral to business success and sustainability, not only through the recession, but also over the long term.

"At the risk of stating the obvious, there has never been a more critical time to delight customers and exceed their expectations," says Hilton Barbour, group account director at Banner. "Shoddy delivery, be it in services or products, will doom the organization."Barbour is not alone in his opinion. According to a recent 1to1 Media survey, 62 percent of respondents said that customer engagement is a high priority for 2009. Similarly, 88 percent of executives said customer engagement is important or essential to their organization in E-consultancy and cScape's "Online Engagement Report 2009."

Knowing that customer centricity is essential, the question then becomes, What aspect of customer strategy will be the most useful in the severely weakened economy? The most common recommendation is to act as a true partner. Other advice includes increasing retention efforts, listening to customers, improving the relevancy of communications, focusing on metrics and accountability, and demonstrating customer value to the CEO.

Put Customers First

Experts counsel companies to treat customers as the valuable assets they are, regardless of economic conditions.

"The best way to thrive now is the same as it was 'then.' You must always put the customer first," says Chris Mann, owner and CEO of Woodhouse Day Spa. "These days getting a customer to spend money with you is tough. By focusing on them you give them a reason to spend with you, rather than with your competitor." For Mann this means continuing to add rose petals to the spa's aromatherapy baths, offering free drinks and snacks, and continuing to take care of customers the way the spa did when times were good. "Cut out these perks now and your loyal customers will be gone by the time the economy recovers."

Mann's conviction that putting the customer first is a must is echoed by many industry strategists, who also encourage adding value to the customer experience without requiring them to make a purchase. For example, meet with and listen to customers to learn how to help them manage any financial challenges they may be facing at this time. This may mean offering pro bono strategic consulting to help them improve operations, or extending payment terms, or even connecting customers so they can share strategies or discover new opportunities.

Recognizing that customers may be loyal but unable to buy in the short term, the challenge becomes how to continue to add value until their purchasing power improves. "[We try to] thoroughly understand what their current needs are and help out in any way we can," says Colin Thom, a technical sales professional. "If they're moving, help them move; if they have operational challenges, offer guidance or resources. What they need right now may not be our product, sowe have to address the current problems they face. This dedication and loyalty won't go unrewarded when business picks up again."

Adds Roy Daya, CEO of Digital-Clay: "It is not just about giving the best price, but more important, really listening to customers and being a friend for them in this time of uncertainty. Ask them how you can help them, take the time to really understand what they are going through, and give them the best advice you can. Not as a salesman looking for a quick buck, but as a friend."

Putting customers first includes acting as a trusted advisor. This means finding ways to help customers succeed in their business and with their customers, as well as helping customers to improve their use of your products and services. "Work in partnership with your clients and put their interests first," says Jonathan Treiber, cofounder and CEO of RevTrax. "This will build trust and create a stronger long-term relationship once the economy improves."

Another tip for tough times is to help customers grow their network so they can uncover or create new business. "Finding ways to connect your customers for the advancement of each of them is not only selfless, it is the way [business] has always worked," says Thom Monahan, owner of The Life Purpose Center of Montgomery. "People still do business with and refer business to those they know, like, and trust. So far this is working, so we aren't going to change, regardless of economic conditions."

Now Hear This

Listening to customers-integral to the trusted advisor role-is another must. During face-to-face meetings and phone calls or via social networks and online communities, organizations need to have meaningful dialog with customers and harness customer insight. Then they must use that information not only to provide better service, processes, and products, but also to further improve communication and transparency. "It's our challenge as customer advocates to make sure the voice of our best customers is heard," says Bill Burris, advertising manager for Toyota Motor Sales, USA, and a 1to1 Customer Champion.

Experts suggest that social media is the top choice for interacting with customers today. "Staying close to customers and understanding their needs are critical in any economy," says Domenick Cilea, president of Springboard PR. "Implementing a social media strategy as part of your overall marketing initiatives is imperative and offers an excellent way to engage customers, attract new ones, and stay close to the nuances of your market."

The strategy is an effective way of learning about customer needs, expectations, and concerns. Consider the online experience as an example. "Ninety percent of all purchases begin on the Internet," says Steven Roll, senior state tax law editor at BNA Tax Management. "How do you know if these people like or dislike what they're paying for? More likely than not, they're probably blogging about how great it is or tweeting about how much they hate it."

Social media can also help to aggregate customer feedback with commentary from other valuable constituencies to create a more holistic view of concerns and opportunities. "We have an amazing wealth of knowledge that touches us each and every day: customers who can help us continually improve our solutions; shareholders who have led Fortune 500s through difficult economic times; and our own employees who can help us identify ways to cut costs and improve efficiencies," says Kristi Grigsby, senior director of marketing for Neighborhood America. "[Companies should] build networks to collect all of this intelligence in a way that can help drive true business value. It's these types of connections that are going to be pivotal in getting through our economic downturn."

Hold Tight

Listening to customers and going "above and beyond" for them are two great retention strategies-another area of focus for success in an uncertain economy. "The key to survival is to build stronger relationships with current customers," says Brent Leary, partner of CRM Essentials. He recommends finding creative ways to further existing relationships and build closer partnerships, including building trust.

Others who cite retention as a focus area suggest building engagement by exceeding customers' expectations. "We approach every project and prospect as the most important one that we will ever do," says John K. Thompson, CEO, U.S. Operations, for Kognitio. "We are supremely focused on customer success and satisfactionwith a zealous commitment that we will help [customers] succeed beyond the level that was envisioned."

Some companies are reallocating budgets to support greater retention efforts. "We see our smarter client companies shifting budget from acquisition to retention," says Mark Klein, Ph.D., CEO of Loyalty Builders. "There is less branding spend and more direct marketing to existing customers...for example, win-back campaigns and early warning systems to spot potential defectors are high on client wish lists."

Placing customer retention over acquisition is "an understandable focus, but it must be done properly," says Colin Shearer, senior vice president, strategic analytics, at SPSS. "You must focus on getting more value out of your excellent customers, not just [on] retaining blindly, but keeping the ones that are most valuable." Shearer suggests profiling high-value and highly loyal customers and presenting them with targeted cross- and upsell offers, which are "conducive to making [customers] even more loyal."

Industry proponents urge companies to improve the relevance of communication to ensure customer retention. "Recognizing and respecting your existing customers with targeted communications based on their needs, not ours, is the most useful customer strategy, because this will yield the greatest return on investment both in dollars and human resource," says Toyota's Burris. "When times are good, marketing mistakes are easy to bury.Tough times call for critical thinking and letting go of pet programs that have outlived their usefulness."

The current economy also calls for communications that demonstrate a commitment to partnering with customers. Paul Greenberg, author of CRM at the Speed of Light, says, "Ask 'What can we do for you?' or [say] 'Dear specifically targeted customer, here is some information, practical tips, or valuable advice that might be useful to you during these times.' In other words, you're taking a measure of business leadership, not just being the company that they are getting discounts from."
The challenge is to balance cost with reaching out to customers in a way that maintains the relationship.

"The most important thing marketers can do in this economic climate is avoid the temptation to cut and run. Making adjustments is appropriate but we must continue marketing," says JoeStanhope, vice president of platform strategy for Alterian. "It's a great opportunity to identify the programs that are working and give them priority. Marketing during a downturn will ensure that companies come out on the other side in the best possible position."

ROI and the CEO

Customer relationship initiatives are vital for thriving in the current economy, but they come at a cost. Consequently, executives who are also the lead customer strategist must demonstrate the strategic value of these customer-centric activities.

The first step, some experts say, is to think like the CEO. Successful sales and marketing executives focus on metrics that the CEO will find most relevant and valuable. "Talking about [how customer strategy] impacts revenues, profits, and other quantifiable numbers is the bedrock requirement," says Richard Vancil, vice president of the executive advisory group at IDC.
"You should put on both the CEO's hat and the customer's hat," adds consultant Robert Donnelly. "Underscore that business is aboutprofitable customers. What customer buying what combination of products represents your greatest profitability? Share that with the CEO."

This means, of course, knowing an organization's most valuable customers. The second step experts suggest is to gain a deep understanding of customer profitability. "One thing [customer strategists] can do-and for some strange reason don't-is to make sure they're privy to the reams of information on customers that a given company has," Donnelly says. "They should know more about their customers than anyone else in the company. Predicting, detecting, and acting on patterns in transactions help [companies] sell more stuff."

No matter what your approach, the first step "is to actually have a customer strategy," says Malcolm Wicks, director of SimplePlans. "The majority of businesses do not have one. They have fine words and sometimes fine deeds, but rarely is a consistent customer strategy understood and implemented throughout the organization. It requires a joined up way of thinking about every key aspect of customers, from who they are and the customer experiences that they desire, to shaping all business strategy and major decisions around the customers. The companies that really get this will be the ones that survive and thrive."

Weathering the Storm

Even in the worst possible downturn, there will still be some customers who are buying, some who remain profitable and loyal. So one very useful aspect of customer strategy in a recession is customer data and analytics-simply having enough insight to tell one customer from another.

However, there are many elements of customer service that can be delivered at very little cost, even when times are tight.Smiles and courtesy cost nothing. Send a hand-written thank-you note to a good customer.Call a customer to ask if everything was delivered properly, or if there's anything you should do differently next time.As a bonus, these kinds of actions are likely to improve employee morale in a difficult situation.

And remember: Business is a competitive sport. It might be snowing on the ball field, but that doesn't mean there won't still be a winner. It just requires perseverance and a different set of skills to play through a blizzard.

-Don Peppers, founding partner, Peppers & Rogers Group

Additional reporting by Kevin Zimmerman