Our experience working with companies of all sizes and in multiple industries tells us that when companies neglect having a separate budget line for voice of the customer, when controls and methods, guiding principles and accountability are lacking, and when insights are not gathered holistically from the customers’ point of view, then money spent on gathering customer insight is a cost, not an investment. It is flushed down the proverbial drain each and every year.

See my previous blog which discussed how to retool your customer listening from the customer point of view. However, knowing how to structure your customer listening is not enough. You must have a master budget and build accountability to the budget in the areas of customer retention, repurchase, and referrability.

If you want to become a truly customer-centric company, if you want to be able to measurably tie corporate actions and decisions to customer insight and back to what matters most – investing every dime in growth and keeping your team focused on the dials that create value – you will also need to institute methods, controls and accountability around the dollars your company spends on gathering and leveraging customer insight.

Start by asking yourself, who on your management team is staying up at night when a customer defects, does not renew or only buys in piecemeal? Who’s on the frontline when a customer de-positions your company or detracts from its brand with negative word of mouth? You already know that sales to existing customers are faster and more profitable. Retained customers not only contribute to growth; they co-invent and co-innovate. Your very reputation and ability to enter accounts, let alone new markets, is contingent upon the building a foundation of credible customer advocates.

To drive the correct investment and organizational behavior, retool your budget so that there is a master line item coupled with centralized ownership for capturing voice of the customer. Make voice of the customer a corporate versus a departmentally driven mandate. The net is that if voice of the customer is to make a difference in retention, repurchase and referrability –the three essential, revenue-driving customer metrics, it needs a formal line item in the budget with executive ownership and accountability across the management chain.

David Ambler, Vice President of Client Services David.Ambler@phelongroup.com

Labels: accountability, customer advocate, customer retention, customers, reference, repurchase, revenue, voice of the customer, word of mouth

If you’ve ever walked down the strip in Las Vegas, taking in that flaunting of excess, you’ll appreciate what a feat it would be to achieve any kind of conservation goals there. Making do with less? In Vegas? That’s a tough sell. But it’s also just what Pat Mulroy, the water chief for the city, has accomplished (here’s a great story about her that aired the other day on NPR’s Morning Edition). She got big results that crossed state lines, changed the way the Colorado River is managed, and made new artificial lakes illegal in Las Vegas, to name just a few specifics.

There are a lot of tough sells in business – getting resources devoted to listening to customers, making changes to the business javascript:void(0) Publish Postin response to what you hear, creating a strategic customer reference program – and I think Pat Mulroy’s water conservation efforts hold a lesson for everyone fighting those uphill battles.

Here’s how she did it, according to Alan Feldman, vice president of the Mirage Resort: "She framed it as a business issue: 'This is a resource, this is how much we have, this is its correlation to the economy. How do we manage it to its best impact?'"

A lot of forward-thinking people find themselves frustrated by their inability to get everyone to agree on how to manage customer referability – that is, willingness to recommend your company to a colleague – “to its best impact.” You may be convinced that listening differently or better or more often to your customers is critical. You may think you listen plenty, but don’t respond well enough. But mobilizing others to action around these ideas is arguably harder than getting Vegas to conserve.

But think what you’d be able to do if you could get everyone to see customer referability as a resource, and then trace its impact. Referability may be a slightly more complex resource than water, because so many moving pieces go into creating it, but it’s a resource nonetheless. And it certainly has a powerful impact on your bottom line – the challenge is to make that connection visible. If you did, maybe you could change the way your company manages its equivalent of the Colorado River.

Whitney Wood, Senior Consultant
whitney.wood@phelongroup.com

Labels: customers, listening, referability, reference, vegas, water