For startups, customer engagement through iteration and improvement of solutions is second nature. However, as a company grows and corporate focus shifts to business efficiencies, it is easy to lose touch with customer needs.
How can companies stay true to their customer-centric roots while operating at a global scale? Based on Simon-Kucher’s work with hundreds of companies, we have developed a framework for supporting our clients in building a world-class customer-centric ecosystem.
Why is customer engagement important?
Customer engagement is crucial for businesses. It plays a pivotal role in fostering strong and enduring connections with their customer base.
In today's digital age, social media platforms have become instrumental in facilitating customer interactions, enabling companies to build and maintain customer relationships. A customer-centric approach, focused on delivering a positive person experience, is essential for ensuring satisfaction and cultivating brand loyalty.
Engaging with existing customers not only enhances their overall experience with products or services. It also provides valuable customer data, aiding in the development of a customer-centric culture.
Companies that prioritize customer engagement are more likely to establish long-term relationships. This creates a solid foundation for their success in the market. By engaging with customers through various channels and adapting to their needs, businesses can position themselves as customer-centric companies and build a loyal customer base.
Customer engagement requires an executive leadership focus
Nurturing customer focus starts with senior leadership embracing it as a core value. Leadership from the top drives a culture where understanding customer needs and anticipating how they will evolve is a habit.
As the renowned HBS professor Ranjay Gulati emphasizes, “It’s about understanding what problems customers face in their lives and then providing mutually advantageous solutions…for most firms today, customer-centricity is a necessity for survival.”
Ultimately, this focus should reframe the relationship from a transaction (i.e., “Product X costs Y”) to a partnership (i.e., “how can we help you solve your problems?”).
With increased corporate scale, remaining in tune with changing customer needs is a substantial challenge. Many companies have overcome this challenge by investing to understand evolving market trends and creating a solution roadmap for customers.
Larger companies can use their scale and allocate resources toward anticipating customer challenges to help customers “see around corners.” This enables larger organizations to position themselves as a trusted advisor relative to smaller and newly established competitors.
Building a customer-centric team
A customer-centric team is the starting point of building a world-class customer-centric ecosystem. Organizations should first focus on maximizing the insights that they can obtain from their own customer-facing teams.
Customer-facing teams should receive training in identifying customer needs. They should also have the processes to route those needs through the organization so that they are addressed in a timely manner.
Sales representatives and other customer-facing team members should attend periodic meetings to share best practice examples from the field. You can also reframe job titles to reflect evolving customer needs. This way, the customer-centric culture is reflected in roles and responsibilities.
Aside from training, many companies now regularly bring customers to meet with corporate teams in town hall settings. Team members from all business units, even those without a customer facing role (e.g., analytics, finance, etc.) attend the meetings to hear firsthand the experiences of their customers. This in-person customer exposure reinforces the idea that the customer is central to the jobs of all employees. This idea can get lost in large global companies.
Unprompted customer input
It's important for customers to know that they have a voice and there are channels for them to share input with your organization. All users of your product, not just purchasing departments, need to be aware that they are a customer and that they have a voice.
This could be, for example, via an online portal where users can share input. There should also be processes in place for all customers to receive some form of response from the organization. This means communicating relevant next steps, that you value their input, and additional input is welcome in the future.
Prompted customer input
Customer input is critical to maximizing investments and minimizing risks. It is valuable when making strategic decisions in all departments of an organization. Soliciting the right type of customer input in a timely manner can support corporate decision making at all levels.
Business decisions vary substantially in size and scope and therefore require different levels of customer input. Best-in-class organizations tailor the amount and degree of customer input based on the financial impact as well as the degree of risk.
For example, companies typically conduct large customer surveys to support various elements of a go-to-market strategy for an innovative product launch. Smaller focus groups can be used to provide input to R&D early in development to ensure that the feature, benefit, and outcome sets are delivering incremental value to the customer.
Simon-Kucher has supported numerous organizations in developing a customized decision toolkit for determining the breadth and depth of customer input required.
Brand monitoring
Systematically monitoring brand equity in regular intervals is important for holistically measuring:
- What is important to the customer,
- Your performance relative to the competition,
- ...and how that changes over time.
Brand monitoring results in specific corporate initiatives with measurable objectives that aim to address gaps in how a customer is being served.
For example, this could mean conducting an annual survey with your top global customers to track performance and to define initiatives. Using these results, account teams can then build initiatives into their annual plans to proactively strengthen areas where they are doing well and tackle areas where they can do better.
Brand communication
The importance of customer input to business decisions should be shared both externally and internally.
Efforts to integrate customer insights with business practices should be shared externally on a planned and consistent basis. Alerting customers to ongoing efforts to include their feedback in business decisions will ultimately enhance the perception of the company as a partner rather than a vendor.
Communicating partnership activities to high value customers doesn’t have to be a huge endeavor. This can also be provided in a condensed format that offers a holistic view of your efforts, including:
- Cataloging and quantifying the benefits that you provided to the customer. This includes the impact of free services, volume of feedback requests answered, and other indicators of customer-focus.
- Reviewing this activity summary during customer business reviews.
You can often inform lower value customers via a phone call summary instead of an in-person customer visit.
Internal communication is also vital to fostering a customer-centric culture. Best-in-class companies circulate an internal publication that demonstrates where the company’s customer focus and customer insights drove important business decisions. They also celebrate employee-level contributions to these efforts.
Organizational structure
Customer insights are only as valuable as a company’s ability to act on them. This requires an organizational structure that is optimized to receive, analyze, and effectively channel input. Creating this type of structure requires changes beyond redefining roles and responsibilities.
Organizations must manage the complexity of the customer interaction process by simplifying their communication channels both among internal teams and external customers.
For example, all non-complaint feedback can be routed through a single account executive responsible for the customer. This enables you to coordinate across multiple points of contact (sales/technical support/customer service). This streamlines the process to ensure that customer interaction is consistent and seamless.
Aside from adjusting existing responsibilities, companies should consider adding new roles to monitor input channels, champion best practices, identify areas of improvement, and provide learning opportunities.
KPIs to monitor customer engagement
While increased focus on a customer-centric culture seems like a qualitative goal, empirically tracking and measuring this strategic vision is critical for sustainable engagement. Data collection through IT systems will facilitate targeted utilization of KPIs to monitor and quantify success.
Key indicators to track these changes include Net Promoter Score, as well as operational, financial, and service level metrics.
Customer satisfaction scores (CSAT) are another key metric that many businesses use to measure customer satisfaction. These scores provide valuable insights into how well a company is meeting customer expectations and fulfilling their needs. Customer engagement plays a critical role in influencing these satisfaction scores.
What gets measured, gets done. These metrics will facilitate active monitoring and provide a means to show employees the positive impact of this continuous focus.
At Simon-Kucher, we understand the importance of the customer.
We work with you to optimize every step of the customer journey, helping you to develop great propositions and services based on a deep understanding of value delivery and willingness to pay.
The result? We unlock better long-term, profitable growth and create customer trust, loyalty, and advocacy.
It’s a win-win for everyone.
We are here to help you with your customer engagement strategy. Reach out to us today.
