“Your love for customers attracts them, and differentiates you from the less loving competitors.” – 1000ventures
Customers are the reason for any business, and so it is important for a company to understand and prove its business’ value to the customer. The balance of power has shifted in favour of customers, forcing companies to place an increasing amount of focus on its customers – both existing and prospective. Customers have a lot more choices than they have ever had, which means if they feel that a company is not offering them their money’s worth, they would not hesitate to take their business to a company that would. It is important for companies to know what is important to customers, what they like, and what would be their business’ value to the customer.
Companies actually do know that success lies in focusing on their customers, and to their vision and mission statements display this through lofty words and ideals. However, even the most seemingly customer-focused companies would find it hard to explain their business’ value to the customer and the measurement techniques of how their customers perceive this so-called value. This lack of understanding, focus, and alignment of what value they do and can provide to their customers, is the cause of negative perceptions that customers form about companies. Customers want to know what a company can do for them – beyond just the business association – and most companies are usually at a loss to understand their own abilities in this regard.
CRM systems have seemingly come into being so that companies can segment their customers, and provide them with individualized attention and offerings. This in turn allows a company to sell more, put together targeted messages, and do so at the most in the cost effective manner from the business’ perspective. However, CRM systems should ideally help to add value to customers, and make it easier for them to conduct business. To ensure its business’ value to the customer, a company requires practical and useful tools to assess the needs of the customers, and measure its efficacy in satisfying those needs as compared to other market players. Assessing and measuring the needs of customers, would enable a company to put in place strategies and plans based on what customers value.
Given the increased competition, most companies seem to struggle with showing their business’ value to the customer. They seem to fall short in putting in place reliable methods to measure the value of their business vis-à-vis competition, which in turn would help them to increase their market share and gain customer loyalty, while increasing profitability. Achieving competitive advantage and better business results would be a lot easier to achieve.
Companies are beginning to understand the importance of customer value management, which in turn ensures that companies collect, collate, and use customer data meticulously and consistently. Customer data now has become as important and critical as any other statistical and financial data that companies need for working effectively. Companies that use this data to add value to customers, win more customers, gain more profits, and are able to attract and retain some of the best and brightest talent in the market. A business’ value to the customer is all about the offerings and relationships a company has with customers and the ability to consistently lower costs for the customer and the business.
A business’ value to the customer comes from a company’s knowledge of techniques and methods that would allow it focus its resources on creating that value, helping customers to succeed in their business. Companies that do this better and consistently, would benefit in every aspect – including shareholder value. Research has found that even though companies use techniques to gain customer feedback, only about one in every three actually uses the feedback, only one in every nine companies implement any improvements or changes based on customer inputs. This in turn leads customers to believe that companies do not truly appreciate them, and are not dedicated to ensuring their business’ value to the customer. Such negative perceptions of customers, soon lead to dissatisfaction and churn.
Companies can overcome this problem of not using and connecting customer feedback to business value. It would require some practice and tools in order put in place successful programs and strategies based on customer feedback and inputs. Companies need a clear understanding of what its business’ value to the customer would be based on what customers value, and know exactly what they would need to improve and accomplish in order to enhance their value proposition to deliver the best that customers can get anywhere in the market.
Understanding and creating the business’ value to the customer for a company means directly asking target customers what they perceive as value. In addition, it is about asking existing customers how they would rate the business’ value them when compared with other market players. The company should then use the inputs from both the customer bases to decide on its priorities, and determine which value propositions it should put forth before its customers. In order to enhance consistently the business’ value to the customer, a company must ensure that its processes remain aligned with the top value proposition, and that it would be flexible enough to make improvements and changes in order to deliver the highest value to all customers.
It is not enough for a company to know its business’ value to the customer. It is essential for the company to communicate this value to the target customers and a wider audience. It would also be necessary to let customers know the number of resources, and amount of investments made by the company to deliver increasingly greater value than the competition. While delivering value to the customer is vital, a company must also know the impact of doing so on its own business by correlating the value with business needs. Competitor information is also extremely critical for a company to enhance its business’ value to the customer. Without knowing what the competition would be offering as value propositions, a company would not be able to do better or improve on its own value proposition. A company must ensure that its employees understand what it would want to convey as the business’ value to the customer, and make sure that the employees remain aligned with its vision and value drivers. Without complete buy-in from all, there would be resistance and opposition to any changes required to up the ante on the business’ value to the customer. With everyone in the company aligned towards common goals with regard to customer service, creating and sustaining a customer-focused culture would not be hard.
Mastering the art of showing the business’ value to the customer will put a company on the fast track to success. It is important to remember that sustainable success however, would lie in the company’s abilities to consistently innovate and create. It is necessary to pay attention to details, listen actively to customers, and formulate plans that allow customer feedback to be used for positive action. What matters most is a company’s ability to understand the needs and feelings of customers, and ensure that it can consistently ramp up its business’ value to the customers. Customer expectations have evolved – to show value, a company must be able to evolve and change to keep pace with these changing expectations. Is your company ready?
