Building a customer strategy:

There are many elements of a customer strategy. This article is focused on the following elements that best pertain to CRM systems:

• Customer personas and acquisition – chasing the right target
• Customer success
• Customer experience and differentiation
• Value creation for both the firm and the customer perspective.

 

 

 

Client personas and acquisition – chasing the right target.

A persona is the profile of your target client and is a great place to start.  You can create more than one persona and the definition will change over time. Having a clear starting point is important.  The following are a few elements to consider:

• The customers problem and its components that you are solving.
• The pain points caused by that problem.
• Demographics: age, gender, location…
• Psycho-graphics: personality, emotions, lifestyle, opinions…
• Customer goals and expected outcomes regarding your solution.

 Client acquisition

In my consulting practice, I often ask clients a simple question: “how do you determine how much to spend on client acquisition?”  The range of answers is surprisingly broad with “as much as I can afford” to “a reward or punishment for my team”.  In hindsight, the range of answers does make sense – my best answer is that it depends upon the objective you are trying to optimize.

The following are examples of objectives:

• Leads: quickly assess campaign performance
• Opportunities: quickly assess engagement with the client
• Revenue: assess the ability to sell something
• Profit: assess the profitability of what is sold
• Value: assess the long-term value determined by discounted cash flow

 

Optimizing value is the highest objective.  With the emergence of software as a service to companies, creating value strategies with customer lifetime value (CLV) has become popular.  CLV can be described as the value that a single average client brings to a firm throughout the client’s life-cycle.

Client acquisition costs are analyzed at multiple spending levels and used to drive the valuation model of the firm.  The budget is used to create total valuation estimates and iterated until the optimal value of the firm is found.

Customer success

The net promoter score (NPS) starts with a single question: “On a scale of 0 to 10, how likely are you to recommend our product to a friend or colleague?” This is a stronger question than “are you satisfied with our service?”, since it is aligned more closely with loyalty than satisfaction.

 

 

Customer experience and differentiation

Love them or hate them, Amazon is a success story when it comes to differentiating the customer experience.  Everyone who visits Amazon sees a totally different set of choices and product suggestions. I find Amazon’s suggestions to be useful and the experience to be an extremely efficient way to shop.

 

So why bring up Amazon? Having fully connected websites and portals is becoming more feasible and cost effective for smaller companies. These portals come fully connected to your client database (with special interface coding) and can provide a fully differentiated experience for those without Jeff Bezos’ budget. Portals have flexible sign-on provisions with sources that can be limited by your company or as broad as a anyone with a Facebook account.

 

 

A customer strategy must create value for both parties.

 

Value in the eyes of the customer.

Customers are interested in products and services that solve a problem or pain point.  Both the fit with a “pain point” and the ability of your product to fit this need are critical.  Value is also seen by the ease of working with both your product and your company.  When was the last time you felt delight in buying a product? Did you feel that their service was designed with you in mind?

 

Value in the Eyes of the Company

Company objectives are to find customers that provide long term value creation for their firm.  By adopting value as our goal, we are forced to consider strategies that are longer in term and focused on ongoing profitable sales.  The higher a firm’s client acquisition costs, the more critical maintaining a focus ongoing products sales and customer lifetime value strategies becomes.

 

Summary

While customer strategies can have many elements, focus on acquiring the right client persona, building loyalty, and creating value for both the company and the client is always a winning strategy.

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