The perennial cry from CEOs around the globe is that they are focused on their customers. It’s their A-#1 mission. Everything emanates from understanding what customers need and want, and then delivering on it. However, without up-to-date information trending profitable versus non-profitable customers and the issues driving the best customers away, CEOs and their businesses are unable to manage customers as assets.
Guerrilla metrics give leadership five questions for commanding customer accountability inside their organizations.
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- Create a cultural shift to make customers the asset of the business.
- Supply leaders with a platform to stand behind and reinforce.
- Establish a language for CEOs in how they ask about customers; placing the customer front and center on their agenda.
- Are a potent first step to kick-start or reenergize a faltering customer ‘focus.’
1. What Are Our New Customers; Volume and Value?
Ask about the volume and value of your incoming customers as often as you ask about sales goals. You may find that you are tracking incoming customers across a multitude of company areas – with conflicting definitions of what it means to be a new customer. The wild card here is if you have achieved alignment in how customers are classified inside your system. The part that’s not likely tracked is the quality of incoming customers. This is especially important as the market becomes more saturated, and new, profitable customers are harder to come by.
2. What Are Our Lost Customers; Volume, Value and Reasons?
The volume and value of lost customers needs to be paired with the new customer information to lay out the true situation for your company.
You must reconcile “Customers In” with “Customers Out” to know how well you are doing with managing customers as an asset of your company.
In addition to knowing which customers left, you need to know the reasons why they don’t care to do business with you anymore so you can drive change across the business. Without this information, the organization misses a massive opportunity to galvanize people into taking action.
3. What Customers Renewed, at What Rate and Why?
For this to have relevance for your company, you’ll need to define customer behaviors that constitute renew or the commitment to continue doing business with you, according to your business model. The key is to understand patterns which indicate loyalty based on continuous purchase habits.
You must ask for reasons why customers are staying with you.
- Ensure that you personally know what you are delivering that customers value.
- Ensure that you are aware when these reasons shift or begin to erode.
The “reasons” part is key to taking a leadership role in demanding focused actions to drive customer profitability rather than reacting to random pitches that come across your desk.
4. What is Our Revenue and Profitability by Customer Group?
You need to understand the movement of customers from one profitability group to another so you can strategically lead the customer agenda.
Your goal should be driving efforts that cause your costliest customer groups to decline and those most profitable to grow. If you are not demanding that the business be tracked this way and if you do not ask for accountability around these metrics in the regular language of meetings, it won’t happen.
Getting this data in line to achieve a regular pattern of accountability around customer profitability patterns will take some time, but stay the course. It will optimize your ability to manage customers as an asset of your business.
5. What is Our Referral Rate by Customer Segment?
If your customers are willing to stick their necks out vouching for you, they have become your marketers. Keeping these customers, growing them and developing other customers like them are the key.
You need to know how far you are down this path of building a customer base that would refer you. Because if you can track the rate of referrals in general and by customer group, you’ll know the strength of your ongoing revenue stream before you even spend another dollar on marketing. Companies completely focused on customer profitability will learn how referral rates differ by customer group and reasons for not referring. They will rigorously apply this learning to constantly adjust and improve.
Use this simple scoreboard, and you can get things started. Just getting your company aligned to track these things will let you know how well the hand wave to customers can turn to action. Once you’re measuring and tracking guerilla metrics, you’ll be on a strong path to drive the action ahead.