The conventional approach to gaining customers, which was based on picking a segment of purchasers to target and developing products for that segment, is no longer sufficient. A customer strategy goes further: It is the articulation of the distinctive value and experience your company will deliver to a chosen set of customers over three to five years, along with the offerings, channels, operating model, and capabilities you will need.
Ten principles are at the heart of any effective customer strategy. Based on a recent global survey of 161 executives by Strategy&, PwC’s strategy consulting group, interviews with key players in eight industries, and long-standing observation, these principles show how companies can position themselves for future customer success.
1. Master the art of the possible.
The most successful companies continually experiment with innovations that make life better for customers. That means developing your own informed judgment about what new technologies will appeal to your customers at just the right time, in just the right way, so that customers become more loyal to you.
2. Know your customers at a granular level.
To raise your own customer analytics ability, thoroughly define your market and customers. Deepen your knowledge by applying techniques such as mapping the customer journey. Seek out data from a variety of sources at the most granular level: activity tracked by the Internet of Things, real-time interactions with your Web and e-commerce sites, and social media.
3. Link your company’s customer strategy to its overall identity.
Every successful company has a strong value proposition that distinguishes it from rivals. To deliver, it must develop and deploy a group of distinctive capabilities that work together across the full portfolio of products and services. This coherent combination of value proposition, capabilities, and offerings gives the company its identity. Linking customer strategy to value proposition means aligning the emotional elements of your customer strategy, and all customer touch points, with your strongest capabilities.
4. Target customers with whom you have the right to win.
When your company has a strong identity, you don’t need to claim the right to compete in every marketplace — only in the categories where you are reasonably confident of winning against competitors.You can and should branch out to other customers and markets, but they should be reachable with the same capabilities that gave you an edge with your core base.
5. Treat your customers as assets that will grow in value.
Building great customer relationships is a long-term game. It goes beyond quantifying the lifetime cost of a customer relationship, though that’s an important first step.You can build on this quantitative understanding by analyzing your customers’ paths to purchase. The results can affect every aspect of your customer relationships, including your brand’s emotional attributes and pricing consistency.
6. Leverage your ecosystem.
A broad ecosystem — suppliers, distributors, retailers, associations, institutional partners, and government agencies — can reveal what is of interest to your customers, thereby opening up new ideas for product and service offerings and growth opportunities.Crucial to this approach is developing brand ambassadors, advocates who promote your brand to win over new consumers for you.
7. Ensure a seamless omnichannel experience.
Consistency across channels will be critical during the next five years, because customers are taking it for granted. They expect to be able to hop between call centers, websites, apps, retail stores, and sales calls, getting the same experience at each stop. This raises the bar for every part of the organization.
8. Excel at delivery.
The physical delivery of products and services is critical to keeping your customers happy. You can tailor delivery options on the basis of margin, brand positioning, and customers’ value expectations — while staying in step with technological advances.The use of relevant metrics, including customer experience, cost, and productivity, can help ensure high-quality delivery without sacrificing profitability.
9. Reorganize around the customer.
Your organization should be “fit for your customer”: designed to make it easy to deliver a great customer experience. Redesigning it might involve changing decision rights; shifting responsibilities; establishing new teams; and aligning incentives, norms, and practices, always with your preferred customer and value proposition in mind.
10. Match your culture with your customer strategy.
You might feel that your embedded cultural inhibitors hold you back. Don’t try to fix these problems directly. Focus on the critical behaviors in your organization in which people are doing well for their customers; perhaps mobilizing a cross-functional team to help a customer solve a problem quickly, saying no to a potential deal with a customer with whom you don’t have a right to win, or starting a meeting by explicitly asking how it is relevant to the customer strategy. Then help spread these behaviors through the rest of the company.
Adapted and reprinted with permission from “10 Principles of Customer Strategy” from strategy+business ©2016 PwC. All rights reserved.