For some companies, it has taken a global pandemic to realise that customer-centricity is something that should be higher up the list of priorities. But putting the needs of customers resolutely before the needs of the company may not always be a good thing either.
Our Customer Experience Typology Framework uses two axis to determine where a company’s people, teams and even board sits in relation to balancing the needs of customers and the organisation’s goals.
There is a CX type that we have called Customer Champion. This type is very customer-centric, but at what cost?
Long Term versus Short Term
From a strategic viewpoint, it is easy to say that ‘The customer is always right’ and that a customer’s happiness or satisfaction should be delivered at any cost.
The argument is that this kind of behaviour will lead to better Net Promoter Scores (NPS), increase customer loyalty and lifetime value. But these things can take time to deliver results. There is a tension between long term brand building and short-term cash-flow.
The Problem with Customer Champions…
Is that they may not know the costs of their actions. Imagine a scenario:
An existing customer is about to churn (no longer be a customer). The company has not created enough perceived value. So the customer is asking for a large discount.
A Customer Champion will agree to the discount to keep the customer.
A CX Star on the other hand will weigh the discount against other factors. Does it set a precedent that will be shared with other customers? What is the lifetime value of the customer? What is the underlying reason for the customer’s dissatisfaction? Is there something else that could be offered to the customer that would keep them as a customer, but not cost the company money?
Turning Customer Champions into CX Stars.
Customer Champions are people that you want in your business. They are idealists who can be used as a catalyst for change within an organisation.
The culture of the organisation will need to change so that Customer Champions don’t have to break the rules to satisfy the customer. Their energy and evangelism for customer experience should be harnessed before they are disillusioned.
You are going to need data. You will need to know your cost of acquisition. You will need to understand the lifetime value of your customers. You’re going to want to identify bonus hunters – customers who switch from one company to the other in search of introductory offers.
You need the data that will allow you to predict when customers may be about to churn so that you can pro-actively incentivise them to stay on your terms.
Armed with all of this information, a Customer Champion can become a CX Star – the CX Type in the framework that balances the customer experience with the company’s best interests and looks for win-win solutions.