Strategic Imperative of ‘Business of the Future’


What business today isn’t constantly thinking about how to create value and develop new business? What business today isn’t thinking about innovative ways to improve and transform the organisation? What business today isn’t thinking about the ‘business of tomorrow?’

A strategic imperative of the ‘business of the future’ is customer centricity. Our market place is characterized by increasingly competitive pressures and escalating commoditization. It’s characterised, sadly, by more of the same and generally, by increasing levels of mediocrity. It’s characterised by meaningless statements made by untouchable (in terms of access to) executives who ‘gush’ about their commitment to customer service and differentiated customer experience, with very little operationalisation of the stated intent and promise. Too often, nothing more than lip-service.

Competitive differentials within industries in most cases are limited to new product releases and price, special offers to ‘new’ customers and in many cases a total disregard of existing customers. Don’t get me wrong – product and price (or should we rather say ‘value’) are extremely important but rarely sufficient for true customer commitment and sustainable competitive advantage.

Modern business is complex and making decisions in today’s world extremely challenging. To deliver a differentiated customer experience requires an ‘interconnectedness’ – a shared understanding of the business model – an alignment around strategy and leadership, people and organisation, understanding customers, customer information , customer management planning process, customer propositions, channels, delivering the intended customer experience, customer value enhancement, measurement, governance, risk, competition, regulatory requirements and responsibility

To do this requires both meaningful conversation as well as a framework, within which to develop the future. These frameworks are decisioning criteria, they are reference tools that validate the reality, drive clarity of what the future will be, provide benchmarks to compare and enable measurement of progress. This is the foundation of the 21st century organisation.

Customer-Centric Transformation: What Good Looks Like – Retention – Retention through Business-as-Usual – Part 11b of 14


Designing and executing a customer-centric business model requires end to end organisational alignment. Customer-centric capability development cannot take place in isolation to the rest of the business. The customer-centric journey requires a clear quantified understanding of current organisational capability across all 14 capability areas of the SCHEMA® Customer Management framework in the centre of the REAP Customer-Centric Blueprint below. As important as an understanding of current customer management capability is, so too is an understanding of the capability to which the organisation aspires.

Each week I’ll address another single capability area, sharing with you the Transformation Intent to which your organisation should commit to, as well as ‘What Good Looks Like’ for those organisations that have achieved a fairly high level of maturity in the respective capability area.

The REAP Customer-Centric Organisation Blueprint®

REAP CCOB for Blog

This week we are dealing with Retention which is one of the four Execution capability areas represented. The Execution layer relates to the capabilities and control levers needed to optimise customer value and include Retention, Efficiency (understanding cost to serve), Acquisition and Penetration (customer development, cross-sell and up-sell) – collectively referred to as REAP. These are capabilities and initiatives that can be optimised in the short term.

These capabilities support your ability to implement your chosen customer strategies and rely on the fundamental building blocks (Foundations) as well as the Enabling capabilities already discussed in Part 1 to 10 of this series of blog posts.

Each of the four Execution capability areas is made up of sub-components. In developing Retention capabilities it is important to understand the drivers that create and maintain loyalty as well as the factors that destroy it, important to consider how to retain through business as usual, important to consider pro-active retention activity and how to best manage dissatisfaction. Each of these areas is addressed in separate, individual blog posts.

Transformation Intent – Retention

“Retention is all about understanding your customer base and the drivers that create and maintain loyalty as well as the factors that destroy it. Coupled with this is the need to consistently deliver on your promise while ensuring that over-delivery is balanced against the overriding goal of doing just enough to ensure repurchase. A retention strategy also demands that you are pro-active with your customers, monitoring them for signs of defection and implementing constructive plans to generate customer commitment to repurchase. Should customers become dissatisfied, the right flows of communication alert you so that the issues can be addressed promptly and consistently, whilst solving the problem at a root cause level.”

What Good Looks Like – Retention through Business-as-Usual

  • The organisation collects the customer data and attitudes it needs to get to know early phase customers recognising data that it had already collected during the acquisition process and may have from a previous relationship. It also makes it easy for the customers to do the same about the organisation.
  • The scope ‘basic’ service delivery is defined and the effect of over/under-delivering against this is understood in terms of business value and customer attitude. This understanding is communicated internally, along with the performance of competitors in the same areas.
  • The level of business-as-usual contact with customers is planned and managed to ensure it matches their needs in terms of media and frequency.
  • Customer-facing (by any channel) staff are encouraged and recognised for delivering great experiences in terms of tone as well as process accuracy and actively encouraged / enabled to solve as many customer issues as possible at the first contact.
  • Pricing, customer inertia and other possible exit barriers are carefully used as part of the organisation’s on-going retention activity.

For more insight into customer-centric business model innovation as well as more insight into this particular area of the REAP Customer-Centric Blueprint, please see my book “The Customer-Centric Blueprint’ – http://amzn.to/ZILg4y

Customer-Centric Transformation: What Good Looks Like – Retention – Pro-Active Retention Activity – Part 11c of 14


Designing and executing a customer-centric business model requires end to end organisational alignment. Customer-centric capability development cannot take place in isolation to the rest of the business. The customer-centric journey requires a clear quantified understanding of current organisational capability across all 14 capability areas of the SCHEMA® Customer Management framework in the centre of the REAP Customer-Centric Blueprint below. As important as an understanding of current customer management capability is, so too is an understanding of the capability to which the organisation aspires.

Each week I’ll address another single capability area, sharing with you the Transformation Intent to which your organisation should commit to, as well as ‘What Good Looks Like’ for those organisations that have achieved a fairly high level of maturity in the respective capability area.

The REAP Customer-Centric Organisation Blueprint®

REAP CCOB for Blog

 

 

 

 

 

 

This week we are dealing with Retention which is one of the four Execution capability areas represented. The Execution layer relates to the capabilities and control levers needed to optimise customer value and include Retention, Efficiency (understanding cost to serve), Acquisition and Penetration (customer development, cross-sell and up-sell) – collectively referred to as REAP. These are capabilities and initiatives that can be optimised in the short term.

These capabilities support your ability to implement your chosen customer strategies and rely on the fundamental building blocks (Foundations) as well as the Enabling capabilities already discussed in Part 1 to 10 of this series of blog posts.

Each of the four Execution capability areas is made up of sub-components. In developing Retention capabilities it is important to understand the drivers that create and maintain loyalty as well as the factors that destroy it, important to consider how to retain through business as usual, important to consider pro-active retention activity and how to best manage dissatisfaction. Each of these areas is addressed in separate, individual blog posts.

Transformation Intent – Retention

“Retention is all about understanding your customer base and the drivers that create and maintain loyalty as well as the factors that destroy it. Coupled with this is the need to consistently deliver on your promise while ensuring that over-delivery is balanced against the overriding goal of doing just enough to ensure repurchase. A retention strategy also demands that you are pro-active with your customers, monitoring them for signs of defection and implementing constructive plans to generate customer commitment to repurchase. Should customers become dissatisfied, the right flows of communication alert you so that the issues can be addressed promptly and consistently, whilst solving the problem at a root cause level.”

What Good Looks Like – Pro-active Retention Activity

  • Customer involvement at both the ‘content contribution’ and at deeper levels (both on-line and off-line) is enabled and actively encouraged.
  • Explicit retention messages are fed into on-going communication activity as well as forming the basis of specific retention activity where it is known to be most needed.
  • The way that customers want their loyalty recognised has been researched and reward schemes developed that consider experiential as well as product rewards. Alternatively, a clear, strategic decision has been made not to reward loyalty.
  • Customers are scored for their likelihood to leave and are constantly monitored for signs that they may do so. Mechanisms are in place to pre-empt and prevent an exit decision. Where this fails an effective ‘Save’ process is in place with the highest quality staff and realistic incentives in place to prevent loss.
  • The management of customers voluntarily leaving actively minimizes any collateral risks and looks to increase the chances of future return or winback.

 

For more insight into customer-centric business model innovation as well as more insight into this particular area of the REAP Customer-Centric Blueprint, please see my book “The Customer-Centric Blueprint’ – http://amzn.to/ZILg4y

Customer-Centric Transformation: What Good Looks Like – Retention – Understanding Retention – Part 11a of 14


Designing and executing a customer-centric business model requires end to end organisational alignment. Customer-centric capability development cannot take place in isolation to the rest of the business. The customer-centric journey requires a clear quantified understanding of current organisational capability across all 14 capability areas of the SCHEMA® Customer Management framework in the centre of the REAP Customer-Centric Blueprint below. As important as an understanding of current customer management capability is, so too is an understanding of the capability to which the organisation aspires.

Each week I’ll address another single capability area, sharing with you the Transformation Intent to which your organisation should commit to, as well as ‘What Good Looks Like’ for those organisations that have achieved a fairly high level of maturity in the respective capability area.

The REAP Customer-Centric Organisation Blueprint®

REAP CCOB for Blog

 

 

 

 

 

 

 

This week we are dealing with Retention which is one of the four Execution capability areas represented. The Execution layer relates to the capabilities and control levers needed to optimise customer value and include Retention, Efficiency (understanding cost to serve), Acquisition and Penetration (customer development, cross-sell and up-sell) – collectively referred to as REAP. These are capabilities and initiatives that can be optimised in the short term.

These capabilities support your ability to implement your chosen customer strategies and rely on the fundamental building blocks (Foundations) as well as the Enabling capabilities already discussed in Part 1 to 10 of this series of blog posts.

Each of the four Execution capability areas is made up of sub-components. In developing Retention capabilities it is important to understand the drivers that create and maintain loyalty as well as the factors that destroy it, important to consider how to retain through business as usual, important to consider pro-active retention activity and how to best manage dissatisfaction. Each of these areas is addressed in separate, individual blog posts.

Transformation Intent – Retention

“Retention is all about understanding your customer base and the drivers that create and maintain loyalty as well as the factors that destroy it. Coupled with this is the need to consistently deliver on your promise while ensuring that over-delivery is balanced against the overriding goal of doing just enough to ensure repurchase. A retention strategy also demands that you are pro-active with your customers, monitoring them for signs of defection and implementing constructive plans to generate customer commitment to repurchase. Should customers become dissatisfied, the right flows of communication alert you so that the issues can be addressed promptly and consistently, whilst solving the problem at a root cause level.”

What Good Looks Like – Understanding Retention

  • The nature of customers who stay for longer than average is understood along with the balance of what drives this loyalty between brand affinity and more tangible market / physical factors. The correlation between stated satisfaction and demonstrated transaction loyalty is also fully understood.
  • Customer (as opposed to product) loss is defined and always detected as soon as it is possible to do so. The reasons why customers leave and the stages of their relationship at which they are most likely to leave are understood.
  • Clear definitions and monitoring are also in place around value decay / dormancy, why these customers have not left completely and why some of them re-activate at a later stage.

 

For more insight into customer-centric business model innovation as well as more insight into this particular area of the REAP Customer-Centric Blueprint, please see my book “The Customer-Centric Blueprint’ – http://amzn.to/ZILg4y

Customer-Centric Transformation: What Good Looks Like – Measurement – Part 10 of 14


Designing and executing a customer-centric business model requires end to end organisational alignment. Customer-centric capability development cannot take place in isolation to the rest of the business. The customer-centric journey requires a clear quantified understanding of current organisational capability across all 14 capability areas of the SCHEMA® Customer Management framework in the centre of the REAP Customer-Centric Blueprint below. As important as an understanding of current customer management capability is, so too is an understanding of the capability to which the organisation aspires.

Each week I’ll address another single capability area, sharing with you the Transformation Intent to which your organisation should commit to, as well as ‘What Good Looks Like’ for those organisations that have achieved a fairly high level of maturity in the respective capability area.

The REAP Customer-Centric Organisation Blueprint®

REAP CCOB for Blog

 

 

 

 

 

 

This week we are dealing with Measurement which is one of the six Enabling capability areas represented. The Enablers explore the components needed to energise your transformation and will invariably involve changes that can be planned for within the current business cycle, for implementation in the next budgetary or operating period. These components support your capability to implement your chosen customer strategies and rely on the fundamental building blocks (Foundations) already discussed in Part 1 to 4 of this series of blog posts.

Transformation Intent – Measurement

“While customer-centricity does not change the importance of organisational performance measurement, it does change what, when and how you measure business performance. In order to measure the right information about your customers at the right time you need to create “line of light” measurement that connects your customer measures and the profitability improvements, driven by a clear focus on your customer value drivers.”

What Good Looks Like – Measurement

  • The management team regularly reviews a balanced set of measures that describe performance against the core customer value drivers. These cascade down the organisation so that each part has a line-of-sight from their customer-focussed measures to overall profitability.

 

  • Channels and media (both owned and earned) are measured consistently in terms of the impact they have on customer value drivers.

 

  • All staff have, understand, and are committed to, their own customer metrics and these drive the correct behaviours for the role that they are there to perform.

 

  • Wide-ranging campaign measures are increasingly real-time and are stored and used to influence future campaign plans.

 

  • Customer engagement (and what it means to the organisation) has been defined,  is being measured and includes emotional indicators as well as behavioural indicators.

 

For more insight into customer-centric business model innovation as well as more insight into this particular area of the REAP Customer-Centric Blueprint, please see my book “The Customer-Centric Blueprint’ – http://amzn.to/ZILg4y