Customer centric culture and a common blueprint of customer value management

A common blueprint and shared understanding of the elements of how to manage value for and of the customer doesn’t necessarily mean that all activities and responsibilities need to be within one function or group.

But it needs to be visualized, managed and reported as one business driver or as the new customer centric culture.


A bold baseline to protect and grow the bottom line

Customer centric organizations should start out with three key considerations that respond to the growth and protection of the company’s bottom line long term:

  • Are we serving the right customers?
  • Do we invest into the right relationships?
  • Is it understood how to retain the right customers and do we retain the right ones?


Right Customer Relationships

  • Do the customers fit the business model? 
  • Do they expect services that can’t be offered or a company does not want to offer?

For example: Fiat can never and won’t ever try to have a customer relationship with an owner of a Maybach high end luxury limousine. The products and services don’t fit the expectations of the customer. 

Acquiring that customer’s business would require a totally new product. Keeping the customer loyal and satisfied would focus enormous resources on that one customer. Fiat’s business model is not positioned to deliver the expected customer values.

So, in order to build the customer relationships with the right customers, it needs to be known which customer holds which expectations for the products and services and whether they can be sold to that customer for her price expectations.

Customer value curves can visualize the various types of expected values and how to serve them. A thorough customer understanding would help to assign the customers or customer groups to the various value types or service levels.

When customer satisfaction is measured repeatedly one outcome of that measurement can feed into the determination of general customer loyalty patterns. They help to understand which services and deliverables to repeat so the customer will gladly return.

In order to test the hypothesis from data and anecdotal feedback from sales personnel a reality check with customers themselves can help to tighten the understanding of the most important value drivers for their satisfaction and consequently their loyalty.


Right Customer Retention

  • What needs to improve to retain the customer?
  • How does a customer centric organization need to respond to failures?
  • Which communication and collaborative approach motivates the customer to stay?

Continuous improvement programs as a result from customer satisfaction measurement need to convince the customer that he is in the center of the attention. In good days and not so good days (whereas not so good days are dealt with rigorously and sustainably).

Bid/win/loss analysis provide further evidence whether a company hits the mark or improvements are required to keep winning customers trust and business.

What motivates the customer to come back or stay away as a result of the direct interaction and experience with the product and staff requires thorough investigation and communication internally.

Only when those motivators are known can proper value propositions be crafted for each and every customer (or customer segment in larger, fragmented businesses) to convince them that the company delivers the most satisfying individual value and keeps improving to do so.

It should be duly noted that many companies fail to transfer this knowledge deeper down into the organization. When customers interact with staff outside the commercial comfort area it is a common fact that many operational or technical folks are not enabled to deliver directly into the value concept of that customer.

The simple reason is a mediocre internal customer intelligence flow. Competitors who do a better job in this respect can quite easily achieve a stronger and more sustainable customer retention. 

It is the equivalent of the chef in the kitchen knowing exactly how you want your breakfast egg prepared without even interacting with you that morning.


The Right Customers

  • What does it cost to acquire a customer?
  • Which value ends up on the bottom line throughout the lifetime of a customer relation?

Based on the available service levels customers are acquired into a certain customer segment. When the customer acquisition cost is known, a customer profitability break even point is calculated and delivered against.

Any value beyond that break even point is a result of the company’s passionate customer value management which strives to prolong the customer life time value as much as possible.

The better the various activities in this model are internally aligned and the more the customer focus capabilities are supported with simple but effective tools, the easier it is to establish and sustain a true customer centric culture that will outperform the competition, increase customer retention and improve the customer relationship.

At the end of the day though it all comes down to how the management sings the gospel of customer excellence and how they walk the talk. A truly customer centered executive would ask some of the questions above to his commercial teams and ask for evidence on continuous improvements along those lines.


Marketing EffectivenessMarketing Mix StrategyCustomer Focus & RetentionExperience & Excellence ManagementCustomer & Consumer Loyalty