Wednesday, September 5, 2012

Really, we CAN work together! (Reducing customer churn)

I've heard over and over again, "If you're not talking to your customer, someone else is!"  This is a typical reflection of the depth of customer intimacy a salesperson has with his/her customer.  The concept of selling to a customer, for most salespeople, far outweighs their ability to work with their customers. The result being a dissatisfied customer who also lacks loyalty. 

Back in the 1990s I worked for a company here in New Zealand who developed point-of-sale solutions for gas stations. Their major customers included Caltex and BP. During turbulent times the company almost went into liquidation.  Quickly, management took action to ensure that there was better internal collaboration and also better collaboration with the customer.

Through the use of a common collaboration platform both the customer and the employees were able to collaborate through the use of discussion forums.  As the Research and Development department went about creating new products the customer was intimately involved in the development and prioritisation of new ideas. This sort of collaboration fostered a tight bond between the company and its customers.

There are several spin-offs from this sort of customer intimacy. Firstly when you engage with your customers at this level it makes it almost impossible for your competitors to gain access to your customer. It also gives you the ability to create a perception of value with your customer, taking away the need to compete on price. If your competitor calls your customer and offers a lower price, you'll be able to cash in on new-found customer loyalty.  

The cost of research and development along with the cultivation of ideas and innovation can pose a significant risk to the business.  However, the Social Business involves its customers through experiences which are intertwined with socially embedded processes.  By leveraging the customers desire to share experiences through meaningful engagements and dialogue, unexpected results become common place.

So, what are the advantages for the Social Business?  It's simple really. Having the customer engaged throughout the innovation process leads to reduced cost of failure, a lower cost of idea generation, shortened innovation cycles and increased employee productivity.  All of this leads to increased revenue and customer loyalty with a decrease in customer churn. 

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