Frequently the measures of your organization do not line up with the actual experience you are delivering to customers. They frequently don’t show potential profitability losses that are imminent due to the following reasons:
1. You track sales, customer acquisition numbers and trends.
This gives a false positive, as you may be hitting your sales goals, but are falling short on keeping and growing customers – the cleanest way to drive growth.
2. Your leaders discuss retention rates.
They don’t actively discuss lost customers and their impact on retention. Therefore you are only showing one side of the story—the perceived positive side. Retention rates give a false positive.
Let’s say you are holding steady at 60%. This means that the new sales contributed to keeping the retention rate at par with its performance in the last period in which you measured it. If you had kept more customers than you lost – it would have grown.
3. You compare well against others in satisfaction survey metrics.
This is the ‘middle of the pack’ approach. If you’re comparing yourself to others, you will continue to be shopped for price and compared to competitor
Show Leaders the Impact of Customer Profitability
Get leaders to engage in efforts that will impact their operation by showing the impact of the customer experience to the profitability and revenue of the business. Your job must be to work to show the trending that will continue if customers don’t repeat purchase your goods and services, if they don’t buy more, and if you can’t continue to absorb growing costs by raising the price to customers. Your job as the CCO is to create urgency.
Find Out Why Customers Left
Take Action: Contact a statistically valid sample of former customers and find out why they left.
Make the mix of who you call fall in every segment of customers who contribute profitability.
Identify along the customer lifecycle the vulnerable spots where your current experience is driving customers away, then extrapolate those vulnerabilities to like segments within your customer base.