Part One: Building a Customer-Centric Organization

CUSTOMER EXPERIENCEAND CUSTOMER LOYALTY

It used to be so simple.

photo: Ephemeral New York, Creative Commons.

yay.

a product.

The Old Way.

Brands made products that were distributed through one-directional channels to customers.

Customer experience was mostly about interactions with the product, not the way it was acquired.

And if brands thought about customer loyalty, discounts were often the first tactic they turned to.

(and since this is my tenth one,

I might expect to get it cheaper.)

But Now, Rather than Just Centering on the Product, Business Needs to Center on the Customer.

As markets and channels have evolved, products and services have become less differentiated.

Customers have more choice in both the brands they connect with and the means they use to connect with them.

Brands have less control over the process, but now have more opportunities to make a customer connection.

Then:

Now:

With all these options in play, customer experiences

- not just product and price -drive buying decisions and loyalty.

Organizations are aligning to deliver value through customer experience,

not just product experience.

And since the customer can engage with multiple channels

and touchpoints at once, no part of the brand can be out of alignment with the rest.

For this to work, the entire organization needs to center on the

customer.

For that reasoncustomer experience and

customer loyalty are colliding.

And that is a very good thing for everyone…

FROM “THE BUSINESS IMPACT OF CUSTOMER EXPERIENCE” (MAXIE SCHMIDT-SUBRAMANIAN, FORESTER. JUNE 10, 2013)

Good Customer Experience Leads to Loyalty…

CEB 2013

And Loyalty Leads to Growth…

GARTNER RESEARCH

… And Long-Term Profitability

PRODUCT & SERVICE DIFFERENTIATION

• Maturing markets & commoditization• Increasing price pressure• Limited “secondary” value props

• Travel & financial early to market• Prevented price wars• Increased perceived value

Mid 2000s – PRESENT

CX ERA BEGINS – “Age of the Customer”*

• Mass technology adoption• Increased consumer savvy & skepticism• On-demand & shared economies emerge• Increased financial pressure on loyalty programs

PRESENT >>>

Loyalty Marketing Has Been Around Much Longer Than The “Age Of The Customer.”

1980s

CX SOPHISTICATION

1980s – 2000s

LOYALTY MARKETING BOOM

• Holistic value delivery• Consumers drive brand• Radical innovation around consumer

But Customer Experience (CX) has shifted how we look at loyalty…

A Customer-Centric Organization:

So Where Do You Start?

Start with your internal organizational structure to

prepare for a successful journey.

photo: Aaron Danowski, Creative Commons.

Silo BustingTo accelerate expansion, many businesses have organized themselves into discrete specialized teams that can

replicate programs quickly. Communication between groups isn’t a priority because the program is fixed by

management from above. This is great for speed, but terrible for innovation. No one in this organization can get a

complete view of the customer’s experience. The brand can’t evolve consistently to face the customer – and

eventually the result is a fractured brand, lower sales and lower customer loyalty.

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CUSTOMER SERVICE

CXECOMMERCE

MARKETING

SALES

LOYALTY + RETENTION

PRODUCT STRATEGY

One Customer, One ExperienceAn integrated approach looks holistically at the customer experience in order to estimate the success of potential loyalty

marketing tactics – focusing deeply on the core product or service experience itself.

Value

Basic Customer Needs80%

Higher Customer Needs

20%Affinity

Rewards

Information

Met by Traditional

Loyalty Marketing

Met by Optimization

of Core Experience

Product / Service Utility

Recognition

Benefits

Quality

Service

Ease, Speed

photo: nick leonard Creative Commons.

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.

Traditional Approaches to Loyalty Still Have Their Place –

But Remember The 80/20 Rule!Loyalty Marketing must take into consideration the core product experience and meet basic customer needs, at a

minimum, in order to retain customers.

Preparing Your Organization is Only a First Step…

Next, develop a current state “audit”

across functional areas to better

understand how your customers

connect across ALL touchpoints with

your brand.

Here are five simple questions to get you started…

1. What are Your Customers’ “Loyalty Drivers?”

What impacts customer decision-making at each step in the journey in engaging with your brand?

A detailed understanding of the answer to this question is key to designing tactics that effectively drive

desired behavior.

Many companies have existing insights and research that can help answer this question. Any gaps

that turn up in the existing materials can be filled in with focused research.

Start at the beginning with the known customer pain points or opportunities that will address an unmet

need. These are often the issues that sit on a spreadsheet filed away for months without action being

taken, as they can be daunting to address—and yet, this is where the greatest opportunity often lies.

Consider which of these opportunities are highest impact and would provide the greatest improvement

in customer experience. Then work outward to identify new areas for growth and development.

2. Currently, What Known Opportunities Exist to Improve Your Core

Product Experience?

3. How is Your Company Utilizing Technology Today?

Technology is a powerful tool that can transform the way customers interact with your core product or

service. Given the proliferation of mobile technology and big data, consider what opportunities exist

to ease, simplify, and generally improve the product via available technologies.

Remember, technology must foster an integrated and seamless brand experience – across digital,

physical and service-driven touchpoints.

4. What Are the Current State First- and Second-layer Experiences That

Surround Your Core Product?

Enhancing the core product or service offering is the greatest opportunity to drive loyalty as it directly

enhances the core value proposition and primary reason for customers to engage with the brand.

However, “first- and second-layer” experiences, that are not the core product or service itself, can be

similarly powerful—both for good and for bad.

Consider what “first- and second-layer” experiences are impacting your customers and identify which

may present opportunities for improved, deeper engagement.

5. How Can you Operationalize Customer-centricity Within Your

Company?

Creating an effective, integrated loyalty strategy is a process that requires cross-functional

stakeholder support and buy-in.

Who will you need as advocates? Who do you expect to be skeptical? What sponsorship is

required to gain traction politically? What data and insights does the Loyalty Marketing team know

of that will support your case for change?

These questions will help drive alignment and a

rationalized plan that can serve as a starting point for

building a culture of customer-centricity at your firm.

Interested In Leaning More?

Check out Organizing for Customer-Centricity:

Two organizational models for

internal re-structuring

Lenati is a marketing and sales strategy consultancy that

helps companies acquire, grow and retain customers.

Our clients come to us to build market leadership, whether

through radical innovation or intelligent evolution.

Our core services focus on:

CUSTOMER EXPERIENCE

CUSTOMER LOYALTY

CUSTOMER ACQUISITION

GO-TO-MARKET STRATEGY

SALES PERFORMANCE

lenati.com | info@lenati.com | @lenati