Customer centricity is key to financial health
The author’s shorthand for Happiness Index, Infrastructure, Talent, Regulations, Access and Capital. The six pillars that make the UAE a great place for a startup. This week’s article is about Infrastructure and Access.
One of the biggest challenges in strategy consultancy is closing the gap between executive focus on customer centricity and the execution teams. Owners and CEOs fully appreciate the massive value of brand resonance among the customer base. The friction occurs because the rank and file in many companies still tend to focus on a “sales era” culture — Build it and they will come.
Rather than undefined statements about the subject of customer centricity, this article lays out 10 statistics from diverse sources to demonstrate the key role that it plays.
> According to research from Accenture, US companies risk losing $1 trillion in revenue if they fail to maintain customer relevance, forcing consumers to seek alternative brands. Once gone, more than one quarter of the consumers are unlikely to return. This is based on a survey of 400 C-level executives.
> to buy again from, 7x as likely to try a new product from, 5x as likely to forgive and 4x as likely to refer a company that is high on customer empathy. (CloudCherry blog based on The Temkin Group Ultimate CX Infographic, Oct 2018). When building a company, the imperative is to keep understanding what the customer wants and find ways of fulfilling the need effectively and profitably.
> 25x more expensive to acquire a new customer than to retain an existing one. This is based on a Harvard Business Review study. And yet it’s quite common to see companies burning investor money on “buying” new customers in the name of scale, rather than refining the proposition to the level where a small number is delighted.
> of customers will buy again from a company that provides outstanding customer service, according to American Express, in a 2011 survey.
> more profitable. That’s the impact on profitability of companies that are focused on customers versus those that are not. In fact, the blog posted by Steven MacDonald goes on to claim that customer centricity
USD 1 trillion. 5x as likely It’s 5x to Seventy per cent Sixty per cent
trumps data, innovation, collaboration and agility as contribution to profitability.
> of marketers say that making marketing individualised is a priority. That’s according to the Teradata 2015 Global Data-Driven Marketing Survey. So, what does it take to make this happen? Walk in to a Starbucks coffee shop or a McDonalds and the answer is apparent. The ability of a brand to cater to individual choices is critical to success. This is equally applicable to business customers.
> of CEOs want to rally their organisations around the customer as a top investment priority this year, according to PWC. This is the gap referred to at the beginning of this article. Although there is overwhelming intent, it doesn’t always translate to execution.
> more likely to do business with a company — millennials are that much more sensitive to a positive customer experience than other demographics. That’s according to a 2017 American Express survey. This is a direction that is well-recognised by the payment industry. Millennials are highly sensitive to their payment experience.
Ninety per cent Sixty-three per cent Twenty-one per cent Seventy-two per cent
> of businesses say improving customer experience is their top priority. That’s according to Forrester. This is another area where startups could profitably focus on. From customer engagement to CRM, to other ways to delight the customer, companies are looking for support.
> increase in customer retention rates increases profits anywhere from 25 per cent to 95 per cent. This statistic is based on a Bain & Company study. In a way, this supports the statistic about the cost of customer acquisition versus retention. But from a P&L perspective, it shows the value of investing incrementally to get multiplier results.
There it is. Ten statistics on why customer centricity is critical for financial health.
A 5 per cent
US companies risk losing $1 trillion in revenue if they fail to maintain customer relevance, forcing consumers to seek alternative brands