- Customer satisfaction should be the major driving force behind any business venture. The most successful companies put their customers first.
- To achieve a high level of customer satisfaction, changes must come from top to bottom. Executives must be on board with supporting customer-based initiatives.
- Businesses need to tap into resources to help become more customer-focused. Referral programs and strategic partnerships will help achieve company goals.
The difference between successful businesses and underperforming ones often lies in the way they treat their customers, new research finds.
Companies that fail to focus their cultures, strategies, and employees on pleasing customers are encouraging failure, according to a study from the Institute for Corporate Productivity (i4cp) and the American Management Association (AMA).
What are the top performers doing?
The best-performing organizations, as defined by their revenue growth, profitability, market share, and customer satisfaction, understand that being customer-focused requires a blend of attraction, engagement, satisfaction, collaboration, and retention, the study's authors said.
Overall, 40% of the business leaders and professionals surveyed admitted their organization doesn't know their customers well, with just 52% saying their companies are more customer-focused than their competitors are.
Jeremey Donovan, chief marketing officer for AMA, said that even though just about all businesses know that customer focus matters, they have to take that knowledge one step further. "High-performing organizations turn that knowledge into actionable business practices," said Donovan.
A big problem is that many organizations fail to live up to the guarantees they make to their customers, the study revealed. Nearly 35% of those surveyed said their organization doesn't keep the promises they make to customers.
Committing to provide exceptional customer service
"Failed promises can be as simple as poor service or unresponsiveness and may extend to more complex issues, such as inconsistent quality," Donovan said.
In addition to not living up to the promises of its customers, an even smaller percentage of companies – 40% – are keeping the promises they make to their workers.
"Organizations that fail to deliver for their employees are inviting comparable failure on delivering on promises made to customers," said Kevin Martin, chief research and marketing officer for i4cp. "The two are interdependent and cannot be viewed in isolation."
Researchers found that to become more customer-focused, there has to be a commitment from the people at the top of the organization. The study discovered that executives at high-performance organizations are three times more likely as executives at lower-performing companies to support the successful execution of customer-focused strategies.
Additionally, these organizations are four times more likely than lower performers to set clear customer satisfaction goals. High performers are also five times more likely to align internal systems and processes with customer needs, the study found.
The study shows that another way top organizations are focusing on their customers is by hiring employees with that goal in mind. High-performing organizations are three times more likely than lower-performing organizations to make new hires based on customer focus, the study found. In addition, the best companies are three-and-half times more likely to base, in part, on how employees perform at customer-oriented activities.
How to build a customer-focused business
"Providing customer-focused training and development to employees will create brand value and drive incremental revenue," said Donovan.
Top organizations also do a better job of taking what their customers say to heart. The study found that top-performing companies take advantage of customer feedback nearly twice as much as lower-performing businesses do. Additionally, high-performance organizations are twice as likely as lower performers to collaborate with customers on custom products, the research found.
Referrals are a great strategy when you want to make the shift to a customer-based business. Although providing exceptional service is useful for garnering referrals, you also can provide incentives. For instance, a referral program encourages current customers to recommend your products or services. Provide the current client with a reward such as a free or discounted product, when a referral is made. You could also offer an incentive to the new client. As an example, give 50% off the new customer's first order.
Develop strategic partnerships to help build your business. Two like-minded businesses can combine forces to expand their market reach. For instance, an athletic clothing provider could partner up with a fitness center to provide discounts to one another's customers.
Exceptional customer service is a definitive part of putting clients first. Representatives should be highly trained with the goal of making sure clients leave calls and chat sessions satisfied. Make sure customer service representatives are responsive, good listeners and professional. Use surveys to communicate with your customers. Confirm that each person is happy with the customer service received during the call or chat session.
The most important part of building your customer-based business is consistently looking for ways to improve. The market changes rapidly and you should always be on the lookout on how to improve products and services. Showing that you're in tune with what customers are demanding helps prove to your target audience that their needs are important to your company. [Learn more about the best CRM for one person and very small businesses]
The study was based on surveys of 1,333 business leaders and professionals worldwide, as well as secondary research and interviews.