Companies Can Create Or Destroy Value
By Graeme Coyne
Enhancing customer value is essential for most organisations. However, in order to achieve this, companies need to closely examine their customer management (CM) strategies and evaluate carefully where they are creating value and where they are inadvertently destroying it.
At any stage of customer management, value can either be created, destroyed, or ignored, but most value is generated by organisations that engage in value creation at every CM stage by building on the growths created in the previous stages.
Primarily, value is created by understanding your customers, knowing how much you can afford to spend in acquiring and retaining them, as well as efficiently developing those with potential. Value is destroyed through a lack of knowledge and understanding of the customer and poor data analysis.
Another situation in which value is destroyed is when there is no clear board-level commitment to customer management, or when the organisation stifles quick decision-making relating to CM.
Creating value through a proposition which helps you find, keep and develop the customers you want to manage is accomplished when you are in a position to attract high potential customers and maintain them while still increasing their worth. It can also be created when your proposition development entails all your supply chain providers.
Creating value through efficiency, service and intelligence
Efficiency, service and intelligence are key elements in creating value. This is achieved when customer and transactional data is acquired and managed professionally and is also made available to customers, partners and employees.
Alternatively, value is eradicated when poor quality data is acquired and kept with no detailed purpose or is generally poorly maintained. When contact permissions are not stored, this is also the case.
Creating value through understanding of performance
When the relationship between resources, activities and performance is understood, optimum value can be created; however, when effectiveness and efficiency are not measured or organisations don't learn from their successes and failures, value is destroyed.
When there is a clear understanding of the actual customer experience value can be created. This applies to how committed and satisfied the customer is as well as how the customer experiences the various aspects of the proposition.
Conversely, value is destroyed when you focus solely on customer satisfaction and not on customer commitment. This is also true for not benchmarking the experience of your customers against those provided by competitors and suppliers in other markets.
Creating value via acquisition, retention, development and recovery activities
Optimum value is created when the plans that are put into action target the right customers efficiently and you ensure new customers understand and enjoy your product.
It is equally important to manage dissatisfied customers properly as well. Value is destroyed when your CM activities are not aligned with your CM plan, when your customers leave without being asked why, when you stop focusing on customer service excellence and also when customer dissatisfaction is handled badly.
The highest value is achieved when customer management is viewed as a holistic and mutually supporting set of strategies and initiatives instead of independent parts.
Consequently, knowledge of which customers to manage will enable you to develop a more appropriate proposition. A good proposition will help you to shape your organisation and align your people, processes and IT infrastructure. Good measurement will improve CM activities and so on.
Author Bio: Reap Consulting is a management consulting group focused on customer management and customer experience as a means to improve business performance. Article Source: http://EzineArticles.com/?expert=Graeme_Coyne |
No comments:
Post a Comment