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Few businesses today will tell you they’re not customer-focused. Mission statements promise great customer service and senior management will tell you that customer relationships are top priority.

The fact is, many businesses don’t really know who their customers are, because they don’t take the time to research their customers profiles or purchasing patterns. In fact, they don’t know the difference between one customer and another beyond the specific product or service that was purchased -- and that spells trouble as customers’ service expectations continue to increase.

But not all customers are created equal -- some are worth more to you than others. That’s not to say that they don’t all want, expect and deserve good service, but different customers will define great service in different ways.

You need to differentiate customers first by their value to your business and then by their needs. In other words, which customers contribute the most to your bottom line? Those customers should be differentiated by their specific needs so you can create marketing and service programs that cater to those needs. And by catering to those needs and providing additional service in anticipation of new needs you build stronger customer relationships that are less vulnerable to competitive offers.

For low-value customers, marketing and service programs can be more generic and, as a result, be implemented at lower cost. This ensures that you maintain a low cost relationship with low-value customers and that higher cost relationships are reserved for high-value customers.

But how do you know what customers really want? Simplistic as it sounds, all you need to do is ask. The more customers tell you what they want, and the better you are able to deliver, the less likely your customers are to go elsewhere. You can create the interaction any number of ways. The phone is very effective and data capture is good because a customer service agent inputs the information as the customer provides it. But telephone customer surveys are also expensive. Direct mail can also work well, but return rates are very low and as a result it is also a costly approach.

An increasingly popular alternative is the Internet. You can interact with customers online at zero cost -- the trick is to make your web site quick, easy, convenient and fun to use. That way, customers will go to the site, and stay there long enough to give you the information you need. You may even be able to give customers who want it, a “serve yourself” alternative. In any case, the more customers use the site, the more cost-efficient your business will become.

Customer acquisition and retention depends on your being on top of what customers want. Customers are dynamic -- their preferences and their needs can change from day to day. If you are thinking of customers as individuals, you’ll know which ones want personalized service, which ones prefer an automated, serve-yourself approach and which ones want different service options to choose from. And, you’ll be able to deliver.



© 2005 5th Business Management Practice Inc.
www.5th Business.com