Customer-focused businesses are outperforming and disrupting their competitors. 2018 is the year to get on board or fall behind the curve. Discover three ways to transform your business into a customer-focused one.
There is an irreversible trend in business today that is impacting all markets: Customer-focused businesses are outperforming and disrupting their competitors. 2018 is the year to get on board or fall behind the curve.
Putting the customer first isn't just lip service or for brand appeal – it's a business growth strategy. Data shows that 86 percent of buyers will pay more for a better customer experience, while only 1 percent of customers feel that vendors consistently meet their expectations (Forbes).
A recurring topic of discussion among chief information officers and product leaders at the largest software companies is that 2018 is the year of customer service innovation. To engage clients and earn their loyalty, you must anticipate their needs and exceed their expectations.
Customer-focused business transformation
A focus on customer service and customer experience is non-negotiable. Since 80 to 90 percent of a company's revenue is generated from existing customers, creating brand affinity is a requirement for sustainability. Prioritize your customer experience to protect your base, foster brand promoters and increase customer lifetime value.
To achieve a sustainable customer-focused business transformation, there are three things you must recognize today.
1. Commit to a low-cost or high-end experience.
Customers are seeking value, which can be realized via low prices or high-end experiences. Essentially, you need to be better at being cheaper, or be a premium service that gives customers more than your competitors.
What's driving this change? Companies are increasingly commoditizing their offerings and lowering costs by cutting out the middleman. Think of Amazon, Casper Mattress, Uber and other disruptors. These A-list companies benefit from disintermediation, wherein sellers connect directly with buyers rather than depend on a network of intermediaries. The only way to compete, if you can't follow a disintermediation model, is to create a high-touch, high-end experience.
Why is this distinction, and commitment to one approach or the other, so important? Because customer retention is unquestionably the most significant factor in business sustainability and growth. At the same time, the subscription economy and self-service experiences allow customers to have more control and higher expectations than ever before.
Offer the most competitive price or create premium, high-touch interactions with your brand. Whichever way you go, low-cost or high-end, the common thread is customer-realized value.
2. Customer success is overtaking support.
Customer success has been ramping up at leading organizations and proving to be more valuable than support. Traditional support metrics, like customer satisfaction and first call resolution, are now lagging indicators for the key performance indicators (KPIs) that matter most. Customer success metrics, such as customer lifetime value, renewals, upsells, extensions, and expansions, all directly impact company health and the bottom line. Reactive metrics are being replaced by proactive measures.
Why does it matter? Customer-focused KPIs change how you think about the relationship and interactions. For example, if you're measuring revenue, the speed with which you get off the phone with the customer becomes less important.
Reporting on actual revenue and leading indicators of revenue will be the new norm for leaders of customer-interfacing teams. Revenue metrics are why some companies are gaining popularity. Customer support leaders must widen their focus to include customer success metrics. Otherwise, support will find themselves with a new structure in 2018, reporting to the newly appointed head of customer success.
3. Marketing and customer success need each other.
While customer success has matured in a way that is overtaking support, customer success functions are now looking to another key discipline –marketing – to make an even bigger impact on revenue. It's a symbiotic relationship, because marketing needs customer success tactics to get the most return on investment for their efforts.
Marketing needs customer success intelligence to understand customer lifetime value and customer maturity status. Customer success needs tools and channels used by marketing teams for automation and growth campaigns. By coordinating, these teams are able to perform better, with stronger referral programs and more actionable customer insights.
This new relationship between marketing and customer success has actually created a new discipline called customer advocacy or advocacy marketing.
Moreover, the product roadmaps of the largest software vendors will start blending marketing tools with success and support tools. Merging functionality across these previously distinct disciplines will only accelerate in 2018 as artificial intelligence becomes a more accessible connective technology.
Customer service innovation in 2018
These three unstoppable aspects of customer-focused business transformation have bolstered the third wave of customer service innovation.
The first wave of innovation occurred 20 years ago with the introduction of business process automation to make the support representative's job more efficient. The second wave moved operations to the cloud so it was no longer necessary to buy hardware or maintain software on-premises. This third wave of innovation is distinct.
Today, learning systems allow customers to self-educate without even being aware of the process, because the right information becomes seamless with the customer experience. Micromoments of learning are injected in-product and throughout a customer journey that's optimized and personalized with machine learning.
Human-assisted interactions will receive less focus, because the low volume doesn't offer enough data. High-volume self-service interactions provide analytics for exactly how customers achieve success, allowing companies to create deep understanding and improve customer outcomes.
As a result, self-service will become the primary driver for how companies engage their clients and identify product opportunities to increase market share.
Customer-focused business strategy impacts all operational teams at all levels:
Leaders across disciplines, including the C-suite, need to treat self-service content as a key business asset that builds customer relationships and creates competitive advantage.
Support leaders should take on broader responsibility for the customer relationship. Even time to onboard and engagement are becoming KPIs for support teams.
When the majority of company growth comes from current customers, customer advocacy is a critical business focus.
Customers expect value and individual control through subscriptions models. Commit to offering the most valuable low-cost or high-end experience and become the best at it – consider it a new year's resolution for your business in 2018.