Customer-Focused Success One Account At A Time
Becoming a customer-focused, one-to-one enterprise is not something that will ever be fully “achieved.” Being customer-focused is not a destination for a company, but a direction in which to point the business. And you’d be in good company, customer focused companies make up some of the largest companies around the globe. According to Talk desk, if you want to join the ranks customer-focused success like Amazon, Apple, USAA, Hilton, and Marriot one day you’ve got to “Start putting practices into place, like these companies, that will help propel your company to the top and you just might earn a spot.”
Account development is driven by improvement in customer loyalty.
But it’s still good for your bottom line. Some business-to-consumer sites, notably Amazon.com (AMZN)and eBay (EBAY), made headlines by launching high-profile, customer-focused marketing initiatives. But business-to-business companies may have the most to win from programs organized around accounts and clients instead of products and processes. Success to a B-to-B company means much more than how many new customers it can acquire, but how deeply it can penetrate its current customer accounts. So it is important to remember the difference between market penetration and account development. The former is a product-centric process, often driven by price competition. The latter is a customer-centric process, driven primarily by an improvement in customer loyalty. These distinctions are critical, because account development strategies are designed to produce steady, predictable streams of profit from individual customers.
Prioritize a system for determining which accounts are worth going after.
Convergys, a Cincinnati-based supplier of outsourced customer-care services, developed an elegant system for doing just that. It created six weighted indexes to rank each of its clients by value. So, in addition to considering the total sales revenue generated by each client, Convergys also factored in such things as a client’s level of technology “entanglement.” And it weighed clients’ potential for partnering with Convergys in a strategic alliance or new business venture.
One year after implementing the strategy, revenues at the company’s customer management group were up 28 percent from the previous year. Nearly all that growth was generated by the group’s top 100 clients, validating the value-ranking system.
Examples of Customer-focused Behavior
Developing accounts is inherently more important than customer acquisition. That means a customer-focused B-to-B site will need a sales force that is differently trained, structured, and compensated. The sales force must orient itself around the goal of finding products for its customers, not finding customers for its products.
Bentley Systems exemplifies how such a plan works. The Exton, Pa., engineering software firm developed a system of 11 account scenarios to help its sales force match the firm’s 85 products with specific clients. It created a three- to five-page document for each of the 11 scenarios. Each document begins with a brief description of the environment, needs, and objectives of a customer within the particular scenario.
Each capsule description is followed by a more detailed overview, including job titles of decision-makers and a menu of challenges facing a customer. Each document includes a portfolio of products matching the needs of users. There is a list of likely follow-up projects and tasks that could require additional software or services from Bentley. The scenario documents also include lists of similar accounts that can be used as references, and recommendations for the most effective ways to present sales proposals. Thanks to its system, Bentley reduced its total marketing budget by one-third and applied the savings to a new customer-focused Web initiative.
Another example: Dell (DELL) Computer uses its Web-based Premier Dell.com service to create customized bundles of products and services for big clients. An end user can log onto his organization’s Premier site and shop for desktops, notebooks, servers, storage, and related services. The end user can view his company’s contracted prices for Dell products, see a list of pre-approved components and accessories for his company, review past purchases, and find contact information for Dell sales and service reps.
Dell won’t say how much sales revenue currently flows through its 58,000 Premier sites. But consider that every day Dell generates $50 million in online sales, and that the bulk of Dell’s sales revenues are generated by its Relationship Group customers, all of whom are large businesses.
Premier Dell.com reveals the customer-centric aspect of Dell’s corporate culture. Dell routinely trades access to information for access to people. By making life easier for its larger customers, Dell gets the opportunity to establish one-to-one relationships with the people who actually use its products and services.
When organizations shift their priorities from products to customers, they are not just setting up a new method for doing business-they are managing change. And that means they are avoiding mistakes that can trip up the best of companies.
Concentrate first on relationships with a few, very-high-value clients. We call this a “picket fence” approach. To be successful, a company must “fence off” these accounts from the rest of them.
As a business owner, you’ve got to understand that your primary asset is not your innovative product or service, as valuable as that is, but rather the customers who love it. And as your customers continue to have more options, pressure is mounting to leverage that customer base in ways that stimulate new revenue streams and stoke your company’s growth. Keeping the customer-not the products-at the center of the company mission is critical to maintaining an edge over competitors.
Why customer focus matters
Investing in an exemplary service is worth the effort for both the customer and your bottom line. In a Nielsen’s Global Trust in Advertising report, “Recommendations from people I know” beaten every other medium for ‘level of trust’.
Success will come from being further along the path toward managing customer relationships than your rivals are. And it will come one customer at a time, as you lock in one large customer, then another, and another.