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Volume 1.3 Table Of Contents
- Don't Get Blindsided When Changing Customer Focus
- Trend Watch: Fine Tuning Customer Loyalty
- Speaking of Success:
Don't Get Blindsided When Changing Customer Focus
Are all customers good for your company? Increasingly, companies are grappling with how to balance loyalty with profitability. One solution may be changing the focus of your customer base to emphasize your best customers, and "deselect" those that are unprofitable. (see "Trend Watch" below). On the surface, this would seem to be a straight forward transition, since your company has already been serving these customers. However, as with all changes in strategy, unexpected and persistent problems (strategic gridlock) can occur if you've set goals, timetables and costs while overlooking or underestimating your organization's capability and willingness to support the new focus.
For example, will new systems be required to better serve these customers? What individual and organizational competencies must be improved? Will this result in the need for layoffs and reorganization? What resistance might you encounter as jobs change? How will your organization's culture advance or block this shift?
Using customer loyalty data correctly and consistently can help you identify what your organization will need to do differently or better to make this strategy succeed
It's also important to seek the views of employees, alliance partners, outsource providers and other stakeholders as early as possible during strategic thinking and planning so that you can more fully undertand the challenge your company faces, and adjust plans accordingly.
Note: Business Advancement Inc is part of the Business Authors Leadership Alliance. This team of experienced and skilled consultant-authors helps executives and senior managers innovate and deliver "Strategic Customer Centricity". This approach is designed to improve business performance, increase customer loyalty, and maximize profitability.
Trend Watch: Fine Tuning Customer Loyalty
According to "The Loyalty Guide 2004", published by internationally renowned Wise Market Research, Ltd: "Leading companies are now putting as much energy into de-selecting their most unprofitable customers as they are putting into maximizing the loyalty of their profitable ones. Even in the supermarket sector, US research has found, seven out of every ten customers cost more to serve than they provide in profits."
The full report to be released in May 2004, will also include a quote from me in the "Loyalty Opinions" chapter.
Quote: "Do what you say you will do" (DWYSYWD)
-- Source: "Credibility" by Kouzes and Posner