Tuesday, 19 April 2011

How Customer Focused are you?

We all like to think that our businesses are customer-centric, just as we are all convinced we are good drivers. Yet the numbers of dissatisfied customers, like the number of accidents on the roads, points to the story being a little different

Customers are always right; they are the ones with the budget, the choice and a world full of connected information. And because their choices determine the success of our businesses, it pays to focus on what the customer wants. And needs. And is prepared to pay for.

But how do we know whether we are customer focused? Or whether our business is customer focused? What metrics determine our ability to focus on what the customer wants? As always in business, actions speak louder than words:
  • Customer lifetime value (rather than one year, or the typical but arbitrary three years)

  • Revenue by product/service (if they don’t like it, they won’t buy)

  • Repeat purchases (you might get ‘em once, but dreadful service or lousy products don’t create fans who come back time and time again)

  • Number of complaints & number of customers won back from problems

  • Number of recommendations

  • Number of unsolicited letters of delight

  • Time since last purchase

  • Time since last meaningful discussion
Metrics are arguably the most difficult part of defining how to implement a customer-focused strategy. Metrics define the strategy because they are what people focus on when trying to do a good job.

What do you think defines a business that is truly customer focused? What would you measure if you were CEO of Barclays bank, Coca-Cola or the Virgin empire?

1 comment:

  1. Caroline
    A very good thought and one I found it hard to answer from a business perspective. Maybe its what others say about us, do people come back, whats the competitions perspective, how do we feel about our business. I worry the usual customer satisfaction metrics are not enough. Robert