The relationship – or ‘value exchange’ – between the business and the customer is the key to organisations emerging from the current economic crisis stronger and more successful believes Simon Rustom, managing director of the customer and change management company Customer Consulting Ltd (CCL).
CCL’s experience in recent months of helping organisations – drawn from a number of sectors of the economy – to be increasingly successful in the current harsh economic climate indicates that one of the keys to success is effective and efficient customer management. Moreover, argues Rustom, growing customer value is the way to combat increasing global competition.
Since customer management embraces the whole organisation; requires a view that transcends organisational boundaries; needs ‘top down’ leadership and culture change, and is a long term commitment, CCL recommends that customer management be seen – and treated – as a ‘main board’ issue.
“In addition,” Rustom said, “customer management strategy delivers against core shareholder value objectives: to build market share; increase profitability; grow revenue, and improve operating costs. That confirms that it is a main board issue and the concern of CEOs, FDs, CIOs and so on.
“Work with our clients across a range of sectors has shown that putting in place an effective customer management strategy is an extremely high value activity,” he continued.
“In many circumstances the return on investment (ROI) can be tens or even hundreds of millions of pounds. With several CCL clients, the business cases showed returns amounting to over £100m.
“An unprecedented shift of power to the customer means that, to remain competitive, companies need to optimise value from a range of interrelated ‘customer management’ disciplines: customer insight, value propositions, customer service, customer experience, relationship management, channel integration and so on,” Rustom explained.
“There is now evidence that neither piecemeal nor technology-led approaches to this issue have delivered value,” he continued. “To be successful requires strategic, organisational and operational elements to be aligned within a long term plan – and those operational elements comprise people and process as well as technology.”
Rustom believes that many current customer management programmes fail because of inadequate customer strategy; adopting a piecemeal or un-sustained project approach; placing too great an emphasis on technology; inadequate implementation skills, and lack of flexibility, alignment and leadership.
Consequently, Rustom advocates a three step approach to customer management: ‘fixing the basics’ and defining strategy; embedding best practice, and then growing customers’ lifetime value to the organisation, enhancing brand value, matching investment with potential in marketing, sales and customer service while also reducing marketing, sales and operational costs.