The five elements of a clienting strategy

#1: Customer Intelligence

Victories in Clienting are considered to be a reduction in the number of exits made by profitable, or potentially profitable, customers, and a systematic margin improvement for all customers. These two great victories require a function of “intelligence” over the enemy (customer exits and anorexia), which allows us to consider waging battles that can be won.

In order to perform customer intelligence, we need information. Some of the information sources to which we can turn include the following:

  • Company databases, in which transactions should be recorded. This is the most valuable source of information. In many companies, however, the state of the databases is disastrous. Without databases and rigorous information collection, it is impossible to perform customer intelligence.
  • External databases that round out the information about the company’ s clients. 
  • Direct questions to the customer, to enrich existing customer information, and suggestions from front-line personnel in direct contact with the public.

Subsequently, all of this information must be structured, warehoused, and treated in a manner such that we can extract from it conclusions and action plans. Customer intelligence feeds analysis into the action plans that will be articulated in phases 3 (Service Mix) and 4 (Implementation) of the process. The result of customer intelligence will normally be a battery of matrices displaying intersecting information that is sorted by segments, channels, regions, etc., as follows:

  • importance of service attributes vs. satisfaction with those attributes
  • profitability vs. customer potential
  • profitability vs. customer satisfaction
  • profitability vs. customer loyalty
  • satisfaction vs. customer loyalty

These matrices are extraordinarily useful for making a high-quality customer strategy, in which commercial, economic and human resources are rationalized and employed intelligently. Another product of customer intelligence is a set of initiatives to improve the way in which the company competes in the market. By this, we mean to say that customer intelligence must be the major driver of a company’ s business model adaptation and change processes.

# 2: The Strategic Business Model

Customer intelligence should be an endless source of improvement ideas for the business model. The synthesis of the executives’ business sense and the customer intelligence input

can be a creative explosion serving the company. A good business model is the creative synchronization of decisions the company makes in four basic areas: targeting, value proposition, supply chain and channels.

The quality of the service experience that the customer takes away with him is in direct relation to the quality of the business model. Without a good business model, there is not a good service experience. If we want to improve service quality, we must improve the business model. The incongruities and defects of the business model end up destroying the service experience.

Customer intelligence must be made into a source of change and adaptation for the business model. The best business models can be recognized by their internal coherence, focus, and abundance of good practices and self-reinforcing elements. Performing Clienting does not mean aspiring to have the best business model. Clienting questions and improves the existing business models. Clienting knows that sustainable improvement in customer management is impossible without constant adjustments to the business model. The best adjustments to the business model are those that are born from customer intelligence and are filtered through, and enriched by, the business sense of the executive teams.

# 3: The Service Mix

This phase of Clienting requires crossing the border of the conceptual to enter into the operational. Just as the marketing mix aspires to an efficient use of resources to capture customers, the service mix aspires to an efficient use of resources to increase customer loyalty and profitability. The business model of the previous phase acts as a conceptual frame that disciplines and orders the mix of services that are being designed. Any mix of services that doesn’ t fit with the business model is a mix to discard.

Companies have to create an environment in which the customer is compensated for being a “better” customer. With “coffee for everyone” policies, that will never happen. We need to group customers in such a way that the always-scarce resources that generate perceived value can be intelligently assigned. Grouping to discriminate – this is segmenting. Clienting segments customers, searching for “good” customers (from yesterday, today, and tomorrow), as opposed to Marketing, which tends to pay more attention to the “attractive” customers (in the sense that they analyze appearances and expectations, not actual current behaviors).

Defining what we understand as a “good customer” is a task that is supported by customer intelligence and targeting. The criteria with which to measure the relative “goodness” of a customer depend on very company-specific variables. For this reason, it is not a good idea to generalize. The definition can vary, from the simplest measure (comparing profitability and potential variables), to the most sophisticated one (creating a score by means of many variables and various considerations that can be modified constantly).

Once the battle to segment customers according to the aforementioned criteria has been won, the next battle is to design a service mix that will improve customer profitability and duration (loyalty). This is the moment for guerrilla warfare, and the start-up of well-designed and well- executed account plans.

# 4: Implementation

This is the fourth phase of Clienting. We have already operationalized the desired type of service to be provided to each type of customer. The only thing left is implementation – which is not an easy thing. The customer focus developed in the previous stage needs favorable soil in order to take root in the organization. For this reason, we sometimes need a change process that touches such critical aspects as structure, systems, people, or culture. The implementation of identified actions will generate a corporate change that will materialize in four basic aspects.

The work in these areas can be enormous. Once again, coordination and coherence are the key words. Company culture cannot be changed in a week, and people are even slower to change. No healthy, vital customer strategy develops without these favorable “atmospheric conditions.”

# 5: Key Management Indicators

In order to learn, we have to measure the causes/effects of the system. This is the fifth of the Clienting phases. It is the phase for presenting the data that will allow us to understand the progress of service quality and customer satisfaction, loyalty, and profitability. We will have the information in a segmented fashion, which will give us the capacity to infer conclusions about how the variables relate to one another.

The typical presentation of key management indicators will be in customer management dashboards, with different dashboards for different hierarchical levels within the organization. These dashboards should be broken down to the level of the commercial manager. There is nothing so characteristic of Clienting as to see a commercial manager using a customer portfolio dashboard, in which his customers’ operational/financial information is placed in the context of their satisfaction, loyalty, potential, etc. If we give these tools and a good commercial planning system to a manager, his effectiveness, as well as his pro-activity, will increase. Pro-activity and personalization are the two secrets of improving customer loyalty.

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