5 Ways To Excel in Customer Intimacy
Have you ever interacted with a customer service rep at a Home Depot store? Or with a customer support agent online at Zappos?
If you have, then you most probably fondly recall how the rep helped you find a product or solution that perfectly matched your needs. These employees create memorable experiences by putting in dedication and effort to meet all your requirements. And they do this for every customer they interact with.
Their employees are motivated to do so because Home Depot and Zappos are customer-intimate companies that share a common goal of doing the right thing for their customers, regardless of the effort or cost.
In this blog, we’ve charted out some practical ways to help customer-focused organizations who plan to choose customer intimacy as one of their core business disciplines.
What is customer intimacy?
According to Michael Treacy and Fred Wiersema, customer intimacy means “segmenting and targeting markets precisely and then tailoring offerings to match exactly the demands of those niches.
Companies that excel in customer intimacy combine detailed customer knowledge with operational flexibility so they can respond quickly to almost any need, from customizing a product to fulfilling special requests.”
Based on business priority, market leaders typically choose one of the following approaches to do business – either focusing on operational excellence, customer intimacy, or product leadership, or a combination of any two. Popular brands that we all love including Home Depot, Nike, and Dell, have adopted one of these disciplines and excelled in it while meeting the standards in the other two. The image below will give you a better idea about three different value disciplines.
You’ve now understood what customer intimacy entails. The next step is to initiate and implement the process of transforming into a customer-intimate company. Let’s take a look at how you can do that.
5 ways to excel in customer intimacy
1. Understand customer needs
The core philosophy of customer intimacy involves:
– taking into account your customers’ needs,
– developing a solution that is entirely in line with those demands, and
– delivering a consistent, and memorable experience throughout.
63% of consumers expect businesses to know their unique needs and expectations, while 76% of B2B buyers expect the same thing1
A product or service that meets every need of customers is likely to seize a large share of the pie while keeping customers happy.
So, identify what matters to your customers and what they expect out of your business. Don’t forget that customer needs are not only specific to your product – your customers also have emotional and customer service needs.
Given below are the best methods to get a complete list of your customers’ needs:
Customer journey analysis
You need to understand your customer’s complete journey with your business and identify requirements right from discovery to post-purchase. Analyzing every customer touchpoint can highlight specific needs that you might have otherwise missed. For instance, you might come across a touchpoint where your customers are dropping off, sharing poor feedback, or churning.
Another way to identify needs is to study your market or industry. Market research and competitor analysis can help you get a good feel of the industry you’re in and help you identify how your business can stand out and shine.
Today’s digital customers are likely to be discussing their needs on social media. Make sure you monitor your direct and indirect brand mentions and the buzzwords in your industry.
For instance, the recent launches by McDonald’s including healthier food options, longer opening hours, and the all-day breakfast initiatives resulted from their keen social listening.
Conduct in-person interviews or events
One of the best ways to check if your product or product idea matches your customers’ expectations is to find out from your customers themselves. You can do this by speaking to your customers over the phone, or sending surveys. Alternatively, you can catch up with your customers in person regularly to gather feedback and information.
At Freshworks, we have customer advisory boards (CABs), a periodic meet and greet with our customers to understand their pain points and discuss further improvements.
Once you’ve identified your customer’s needs, you need to look at different ways to cater to them. Let’s find out how you can do that.
2. Tailor your product according to your customer needs
As a customer-intimate company, you need to strive to meet every need of your customers. Creating personalized products and experiences relies on how flexible and responsive you are to your customers’ needs.
Here a few ways in which you can go about personalizing your product, service, and customer experience:
Give customers more autonomy
Enable each customer to tailor your product and service, either in parts or whole, according to their requirements. Give customers a choice and empower them to make decisions autonomously.
Nissan Motor allows its customers to choose the engine model, interior and exterior details of the vehicle according to their taste and preferences. The end product is a car that has your favorite colour, finish, and power. Who wouldn’t want that?!
This initiative is predicted to boost after-sales revenue to contribute to 25% of total sales by 2022.2
“This strategy is about giving our customers more choices and new services to make the ownership experience better. It will also help us expand our connected car, big data and personalization innovations to improve the customer experience and open up new revenue streams for the company.” – Kent O’Hara, Nissan Corporate Vice President and Head of the Global Aftersales Division.
Segment your customer base
If your business is growing or already caters to a large customer base, then individually meeting each of your customer’s needs might be challenging, sometimes even impossible. In this case, you can segment your customers and tailor your offering to each segment. Segmentation can be done on the basis of geography, business size, specific needs, etc.
Zappos launched a range of shoes to cater to the needs of the differently-abled. The Single & Different Size Shoes Program, a part of Zappos Adaptive, enables customers to buy a single shoe or build a pair using different sizes.
This initiative by Zappos would not have been possible without customer intimacy being a core element of their company culture, which brings us to our next takeaway.
3. Create a customer-centric culture
The journey of transforming into a more customer-intimate company requires your entire organization to come together. Each employee needs to pull their weight throughout the process.
Creating a culture that puts customers right at the heart of every decision-making body in the company is the best way to highlight customer intimacy’s importance and philosophy.
Amazon’s CEO, Jeff Bezos, is famous for leaving an empty chair in meeting rooms to symbolize the importance of keeping the customer’s needs and thoughts in the discussions.
In a customer-centric culture, employees treat customers as partners, not just as transactions. This culture empowers employees to put the customer first and do what’s best for them. It breaks down organizational silos and enables employees to collaborate across departments without any hassles.
Mojo Coffee, a chain of coffee shops in New Zealand, is a great example of a company with a customer-centric culture. Mojo Coffee has over 40 cafes, and each cafe has a unique ambiance that makes visitors feel closer to home. The company maintains a culture that puts customer experience above all else. Their business expansion strategy sits at the very heart of customer intimacy.
“What makes Mojo different from other coffee shops is it’s got the resources of a large company, but definitely with the heart of a small company. We ask you how your day is going, and we remember your name and what you like to drink, how you like to drink it. So it’s those small touches, those fine details, that make Mojo a special place.” – Christian Cook, Mojo’s barista3
Since personalization is critical in customer intimacy, let’s look at why you need to tailor customer service and how you can do that.
4. Offer personalized customer service
A customer-intimate company focuses on personalizing every aspect of the product based on the customer’s need. But they don’t just stop there. They look to customize every customer touchpoint, and this includes post-sale customer service too.
80% of customers are more likely to purchase a product or service from a brand that provides personalized experiences.4
A personalized customer service experience leaves the customer feeling that your brand truly understands them and knows exactly what they want.
When it comes to personalized customer support, the more you know about the customer, the better. Having access to information like their previous orders and the more minor details like their name and location can help agents offer contextual and accurate assistance.
If your business is in the B2B space, and especially in the early growth stage, you can even take things a step further and map a set of customers to each agent in your support team. This helps ensure that your agent knows every aspect of your customer, delivers a consistent experience, and strengthens customer relationships.
On the other hand, if you’re a large business, segmenting your customers in your customer support software is one way to personalize experiences at scale, easily. You can leverage keyword-based or profile-based triggers to ensure that each customer can get assistance from an agent who is most skilled in assisting them. Offering consistent and satisfactory customer service gives your customers one less reason to leave your brand.
5. Focus on retention over acquisition
Customer-intimate companies are willing to invest more in the short term if that leads to loyal customers in the long haul. These companies realize that the cost of acquiring a customer is more than the cost of retaining customers. Studies have shown that increasing customer retention rates by just 5% can increase profits by between 25% and 95%.5 Investing in new customers is between 5 and 25 times more expensive than retaining existing ones.6
In addition to creating a product that meets customer expectations, you need to look at other ways to deliver value to customers. This includes creating a loyalty or rewards program to reward customers for doing business with you consistently. You can create educational programs that help your customers upskill or get more out of your product or service.
If creating a loyalty or educational program is not feasible, then you can give out gifts, thank you cards, or free upgrades to the most loyal customers. It helps to have a list of customer appreciation ideas.
How do you measure customer intimacy?
Once you’ve started working towards becoming more customer-intimate, you need to measure your efforts to see if you’re on the right track. Here are the three key metrics that will help you do that:
Customer lifetime value (CLV)
The CLV is a measure of the profits that your company makes from a given customer. This metric is calculated by adding up the total revenue earned from a customer and subtracting the initial costs from the total. As a customer-intimate company, your CLV is a critical metric that needs to be at an all-time low.
The customer churn rate helps you identify the reasons why customers are churning. This metric is calculated as the percentage of customers your company has lost over a given time frame. If the number is high, you need to drill down on the reasons and change your strategies to reduce churn.
Net promoter score (NPS)
The NPS measures your customers’ willingness to recommend your company’s product or service to others. This metric helps you understand whether your customers are satisfied with your product/service and is a good indicator of how loyal your customer base is. The NPS is a 10-point scale that is calculated on the response to the question “how likely are you to recommend <brand name> to your friends or family?” or a set of questions, although the former is more popular.
Empower customer-facing teams with the right technology to deliver personalized experiences
Technology plays an essential role in the process of transforming into a customer-intimate company. The right set of tools will integrate well with one another and empower customer-facing teams with the data and context they need to deliver personalized experiences. So investing in the right technology such as CRM software, analytics software, and customer service software right from the very start of the business will be absolutely critical.
With an omnichannel customer service software like Freshdesk, you’ll have the right context you need — easy access to customer records, and a unified view of previous interactions across all channels — to create consistent and memorable customer experiences.
1 – https://c1.sfdcstatic.com/content/dam/web/en_us/www/documents/research/salesforce-state-of-the-connected-customer-4th-ed.pdf
3 – https://www.forbes.com/sites/dangingiss/2019/01/15/how-one-coffee-company-is-redefining-the-coffee-drinking-experience/?sh=b8d40b68ee3a
4 – https://www.epsilon.com/us/about-us/pressroom/new-epsilon-research-indicates-80-of-consumers-are-more-likely-to-make-a-purchase-when-brands-offer-personalized-experiences
5 – https://media.bain.com/Images/BB_Prescription_cutting_costs.pdf
6 – https://www.invespcro.com/blog/customer-acquisition-retention/