16 questions every true customer-driven startup should be able to answer

The evidence is in: Customer-driven companies are far more successful than those that neglect their customers. In fact, I’d go so far as to say that the ROI of customer management is that your business will still be around in five years to talk about it. But what is it that makes one company stronger than its rivals? Is there a checklist of factors that can be used to benchmark your startup?

At its simplest, effective customer management comes down to five broad strategic steps…

• Find out what your customers want and do your best to give it to them better than your competitors can.
• Identify and win over the customers that you desire based on their needs and characteristics, but being very careful to not invest in those that you don’t desire.
• Retain the desirable customers making sure that they never leave, by having a meaningful retention and loyalty strategy that emphasises innovative value added and puts relationships first.
• Grow the value of these customers to your business through cross-sales and up-sales, and by proactively using the power of referrals and recommendations.
• Constantly work on reducing the cost to serve customers without compromising the business relationship.

Of course, these broad strategic goals need to be translated into meaningful steps that can be implemented by your business. I have listed these below, and you should be able to rate your company’s performance on these themes without too much trouble.

1. Authentic Management Commitment

Is our leadership team in agreement on key business goals and priorities in customer management? Do they understand the importance of a strong service culture to achieve these goals? Do they really “walk the talk” when it comes to customer management, or is it just lip service? Is there a “Chief Customer Officer” responsible for customers’ experiences?

2. CVP

Do we have a clear customer value proposition that describes what kind of “perfect experiences” we want our customers to have when they deal with our business, and that makes us unique and distinct from our rivals? Do all our employees and partners clearly understand our service vision and act to make it real every day? Is the CVP translated down to individual level for every employee?

3. Measurement

Are our current strategic measures aligned with our service vision as well as business priorities, or do we measure traditional financial metrics only?

4. Customer Feedback

Have we mapped out all of the key customer “moments of truth” or touch points for all of our customer groups, and do we have a visceral and deep understanding of what they like and don’t like about our business?

5. Customer Needs and Desires

Do we have an active and formal process that helps us to deeply understand all of our customers’ changing needs, wants, desires, expectations, and fears? Do we also have similar information about perceptions and expectations of our non-customers – including our rivals’ customers – that don’t buy our products/services? Do we include “voice of the customer” comments in our communications? (How do we capture “the voice of our customer”? Do we share it widely throughout our organisation?)

6. Customer Retention and Loyalty

Do we have visible, irresistible and proactive programmes/processes in our organisation that ensure effective retention of our customers, and to penetrate more deeply through cross-sales and up-sales to increase our “share of wallet” and “share of market”? Do we recognise, reward and celebrate our best customers, and formally show them that we appreciate their business?

7. Valuable Customers versus the Long Tail

Can we determine the worth of individual customers or segments of customers? (Not just by sales revenue, but by gross profit having subtracted cost of sales, cost of servicing, and cost of communicating.) Are we targeting the right customers for our efforts, and guaranteeing that we don’t waste resources where the results are poor? And do we have a process to manage, discipline or even fire our non-profitable customers?

8. Knowledge of customers

Do we have a customer intelligence process or system that gives us powerful information about all the important aspects of our customers’ businesses, (or lives)? Do we use this information to add value for them and their businesses? Do we use it gain advantage over our rivals, and to create loyalty in our customer base?

9. Referrals and Recommendations

Do we have a formal programme in place to mobilise the power of referrals, recommendations and customer testimony? Do we have a policy of keeping in touch with our most important customers at least once every 60 days in a manner which is relevant, anticipated and personalised?

10. Consequences

Does every single employee in our organisation understand the benefits of customer loyalty, and the price we pay when we mess things up? And do they completely understand their role in creating delighted customers – no matter how far back in the value chain they operate?

11. People Behaviour and Attitude

Does this knowledge and insight translate into customer-focused behaviour where customers’ interests are put first, and where every employee takes full responsibility for all of our customers’ experiences? Do we recruit the right people in the first place? Are our employees trained, motivated and committed to given constant superior customer care? Does every person in our organisation know who are our top 20% of customers? Do our communications to employees – including training courses, coaching sessions, briefings, meetings, newsletters, and all other media – regularly feature service issues and achievements? And do we recognise, reward and celebrate employees who give superior external service to customers and internal service to colleagues?

12. Problems, Complaints and Unhappiness

When breakdowns occur in customer experiences, does our complaint management system respond immediately, with empathy, consistently and in a positive manner to ensure “customer bounce-back”? Is our complaint recovery worth talking about because it was legendary? And do we have a process to ensure complete prevention when things go wrong?

13. Value Innovation

Are we any good at value innovation to create customer loyalty? Does our service improvement process seek new ideas from every employee and every customer? What percentage of ideas are about improvements or added value for customers, rather than saving money for the company? Are these given priority?

14. Looking Out the Window

Do we benchmark our customer management performance with companies both inside, and outside our industry, and even beyond our natural borders? Do we have a process to identify global best practices? And is this information translated into action through our idea-generation schemes?

15. Technology Support

Are we ahead of the game when it comes to using technology (hardware, software, and social media to ensure that our customers have flawless experiences?

16. Giving Back

Are we a responsible member of society that gives back to the communities in which we operate, and honours our commitment to the viability and sustainability of our planet for future generations?

While this is by no means a comprehensive list of the characteristics of a customer-driven company, using it to create a snapshot of where you currently stand can be very useful for determining your future direction.