100% of Martellus clients cite driving top line growth in an uncertain economic environment as a top priority for 2020. And most of our clients acknowledge that extracting more value from best customers is a proven growth lever. We agree, for three reasons:
- The 80/20 rule applies: Time and again we see that 20% of a company’s customers account for 80% of value creation; in some cases, the concentration is even greater. Protecting – and getting more — power users enables companies to focus their investment dollars and jumpstart growth.
- Keeping a valuable customer is much cheaper than acquiring a new one: The cost of retaining an engaged customer is much lower than cost of acquiring a new one, yet most companies we work with have serious, and often undetected, leaky buckets.
- The best customer opportunity remains largely untapped (still): Most companies design programs and processes around the average customer. An unintended consequence of average customer design is under-investment in best.
If the case for best is clear, why are so few companies harnessing the full opportunity? Because they work “best customer” as a project rather than as a way of doing business enterprise-wide. And to get the entire organization working in concert on behalf of best customers, the single most important thing companies can do is get “The Who” right – who are these best customers around whom we are all going to rally?
An effective definition of “Who:”
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- Aligns with top priorities – there may be more than one best: Define as best those customers within your base that you want to protect and/or grow. Most companies define highest revenue customers as best, but there may be other segments, for example, customers with multiple relationships (or assets under management, or influencers). Limit best to at most 2-3 discrete segments, however. More than that is confusing and counter-productive.
- Is Radically Simple:Don’t black box your definition of best customer. Effective definitions are 1) easy for the organization – from marketing executive to service representative – to understand; and, 2) easy to report on a timely basis. Ideally, choose a definition of best that the organization already tracks, reports on, and understands.
- Empowers the customer: Your best customer definition will have the most impact if you can use it in marketing. Implement a definition of best that customers can action. You want your customers to be able to say: “I want that pay-off, and I know what I need to do to get it.”
- Aligns with top priorities – there may be more than one best: Define as best those customers within your base that you want to protect and/or grow. Most companies define highest revenue customers as best, but there may be other segments, for example, customers with multiple relationships (or assets under management, or influencers). Limit best to at most 2-3 discrete segments, however. More than that is confusing and counter-productive.
Mobilize the entire company to work on behalf of best customers by getting “The Who” right. Reinforce the radically simple, empowering “Who” with best customer specific customer listening and measurement. Then watch the “What” (specific programs and services) organically emerge enterprise-wide.
If you want to continue to the conversation, connect with me on LinkedIn or email rsabater@martellusgroup.com.
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Martellus is a specialized consulting network of senior women executives ready to partner with you/your company to deliver results in areas where we have deep functional expertise. Our network includes expertise across most core marketing and customer experience functions. Whether you have a specific project assignment or need help filling an interim role, we can help.