Not All Customers Are Equally Important: Designing Customer Experience to Win

“It’s not about pleasing people, it’s about winning…”  For Alun Wyn Jones, it’s about winning rugby games. For business leaders, it’s about winning in the marketplace.  As consumers, we sometimes have the occasional bad customer experience.  We also enjoy the benefits of the type of excellent customer service that makes some retailers famous. We believe we deserve at least the same quality of service as the next person. Realizing that no one wants to be treated like one a “have not,” how can organizations design the customer experience to accommodate customers at all levels?

Customer Experience Considerations For Business Leaders

The quality of its customer service can make or break a company. This is especially true in the age of social media, when stories of customer service glitches spread in the blink of an eye.  Walker’s 2020 Progress Report predicted that customer experience would overtake price and product as the key brand differentiator. Customers now often look to purchase “outcomes” rather than specific products or offerings, and have high expectations for customer service. As a result, leaders find themselves struggling to design and manage the customer experience in a way that works for their operating model and meets customers’ expectations. Developing capabilities, such as training employees and supporting systems like artificial intelligence, facilitate good customer experiences. Yet even the most robust and capable systems can underwhelm customers. Simply implementing these systems and capabilities does not guarantee success.  You must make the right organizing choices to ensure the customer experience aligns with the rest of the organization.

Trade-Offs Are Key

When considering the strategy around which to build an organization’s customer experience capabilities, deliberate trade-offs are critical to the design process. As John Lydgate and later, Abraham Lincoln, famously said, “You can’t please all the people all the time.” Organizing choices coupled with their commensurate trade-offs should guide the company as it strives to deliver a deliberate customer experience. This could well mean that every customer experience may not be designed to be identical.

Case Study: Why All Customers Are Not of Equal Importance

In recent work with a retail sales and service provider, all customer service calls came into one central reception forum, prioritizing on a first-come, first-served basis. The company did not know which customers were big spenders.  There was no information as to which customers place greater demands on the customer support center relative to spend.

In asking leadership to run some data (which took a few days), we discover that the company has about 5,000 active customers. A whopping 69 percent of revenue came from 40 customers (less than 1 percent of the customer base). Ninety-seven percent of revenue came from 250 customers (5 percent of the customer base). Yet, up to this point, the top 40 or top 250 customers were not treated any differently in terms of customer support. It also became apparent that managing the remaining 4,750 customers accounted for a significant portion of the company’s resources. In fact, a huge percentage of the customer service resources were supporting customers ranking from 4,500 to 5,000 (based on annual sales revenue).

The most obvious solution is to divide the customers into four tiered groups and manage them differently according to their spend. However, this tactic brought its own set of challenges that impelled the organization’s leadership to consider different organizing choices. The customer experience strategy was to provide solutions and deliver desirable outcomes. Now, armed with data, leadership began to explore new customer service organizing choices (outsourcing, enhanced IT support, self-help, etc.) to manage the customer experience across the board. This also meant making difficult trade-off decisions around varying levels of customer support based on customer spend.

Organization Alignment and Customer Experience

Determining how to sort and manage the organization’s customer experience is still only half of the battle. The next step is to align other related business systems and processes to the new customer experience operating model. Here are a few areas where organizational alignment can benefit a customer experience operating model:

• Information and Metrics: Technology provides detailed information about customer purchases. With the right information, a business can anticipate its customers’ needs and wants. Identifying the best technologies for the frontline workforce and architecting them into an integrated flow has a significant positive impact on the customer experience.

• Continuous Improvement: It is essential to regularly determine and adjust the right interplay of human and technological capabilities in order to optimize both efficiency and value. This should not be considered a one-time fix.

• People and Rewards: Organizations can steer and bolster positive customer experiences by emphasizing positive sentiments that already exist within its culture. Leaders should reinforce desirable employee behaviors through appropriate recognition and rewards.

• Leadership and Culture: Business values should clearly define and communicate expectations for the customer experience. Culture is not likely to shift by simply directing people to change the way they think and function.

Equal or Equally Important?

Strategically, we manage customer service operations such that all customers are treated as if their business is important. We tailor solutions to meet the needs of every customer at every tier. However, as with the above case study, not all customers are equal. Some customers, due to the nature and needs of the business enterprise, will always be in the bottom revenue tier. Strategically, simply meeting their customer support needs may be enough; attempting to “delight” every customer every time is not likely the most logical solution.

Other customers have immense strategic importance to the success of the business. It can be vital to the organization’s success to identify these business partners, intentionally develop the necessary capabilities, and make deliberate organizing choices to consistently offer a differentiating level of customer support.

Shiv Singh, the best-selling author of the book, Savvy, advises that “the purpose of a business is to create a customer who creates customers.” As you seek to understand your customers and integrate new support offerings and technologies that are effective and efficient, your top-tier customers (and hopefully all customers) are more likely to be the best possible advocates for your product offerings.

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