”You can very well say you are a customer focused company: I hear everybody here talking about customers.” The words come from a consultant to a management team. Everybody is nodding around me. I feel like an idiot, because I start to wonder. Does “talking about the customer” make us customer driven? It is certainly a start, but isn’t it more about the content of the talk than simply mentioning the word “customer”? Isn’t it more about actions than mere talk?
Companies often include “customer focus” in their values. Companies also include “customer insight” in their strategies. Companies claim to be built for the main purpose of serving their customer . But do the actions really echo the words? How do companies measure customer focus? How do they follow up on it? By the amount of talk about customers? By the occasional customer satisfaction survey?
I think it has to start strategically from the income statement reported to management groups and boards. The basic income statement is made for financial and legal purposes, but has since evolved – for example, some companies also include product accounting. So if you want to be customer centric you should start here – be curious about what lies behind the numbers. You should follow the money!
Follow the money to the source: Who is paying you? Why? And who is NOT paying you and why? Can you find a customer group that is more profitable than the others? Can you find a customer group that is costing you money? What is their role in your customer portfolio? Should you keep them or try to get rid of them? Which customer group is growing? Why? Which customers have been with you the longest? Why? Who loves you more than others? Why? Who do you want your customers to be now and in the future? Which are the strategic customer groups you want to pursue long term? Who loves your brand and who is there for the ”wrong” reasons – strategically? Have you succeeded in your branding: does your customer base mirror your branding strategy?
Think about your income statement opened up by your strategic customer groups: Revenue by group. Costs by group. Wouldn’t it create a lot of interesting discussions? Wouldn’t it make your daily customer “talk” more meaningful?
After the first phase you could start addressing broader issues and broader data:
- Do we know enough about our customers? Or do we just know a customer?
- Do we have all the right customer insight? Or is it one-sided?
- Which customer groups do we know best?
- Whom do we talk about? Whom should we talk about?
- Where is our future? What is our growth segment? What kind of services is our growth segment going to require?
By following the money, I bet you will have a much better platform to base your decisions on. Where to invest, where to cut costs. Because the source of your income is your customer – not your product, not production, not your channels, not even your personnel. The challenge is to shift your financial accounting from the age of production economics to the age of customer economics. To make your branding, customer relationship programs and financials speak the same language. To follow the money.
”Information is just signs and numbers, while knowledge involves their meaning. What we want is knowledge, but what we get is information.” – Heinz Pagels
Wishing You a great spring, Jaana Rosendahl