Do you think focusing on your customers is worthwhile in a challenging economy?
I recently started some fresh research to support a keynote and two track sessions at the next Forrester’s CX North America Conference, which will take place in Nashville from June 13 to 15. “Customer Obsession For When The Going Gets Tough” is the title of my study. Here is my argument:
Too many companies retreat into a defensive crouch during uncertain times, falling back on antiquated practices that still feel familiar even though they are no longer effective. But, in any economy, taking a conservative stance on budgeting, innovation, and strategy won’t result in growth. In fact, refusing to invest in innovations, especially those that are customer-focused ones, can hurt your company’s bottom line.
That’s right: Doing nothing actually makes it worse. My argument:
Investing in customer obsession yields a 700%-plus return on investment. Specifics depend on your industry, how customer-focused you are already, and how customer-focused you hope to be. But in all businesses — regardless of industry — experience improves customer retention, employee engagement, revenue growth, and profit as they become more mature with customer obsession. I get the challenge to this point, though: In order to achieve this size of a return, you do have to spend. And time, energy, and budget may all be in short supply in the present market context.
So the second point to my argument is this:
Not investing in customer obsession creates risk. When you stand still, you choose to not be customer-led, insights-driven, fast, and connected. You:
Lose customer goodwill. This is easy to see in something like the high volumes of marketing emails that people get daily. People (you and me!) expect a personal, intimate communication because that is what email means to them. Marketers blast out multiple communications a day that don’t seem to have any sensitivity to who the recipient is or how they got on the receiving end of the outreach. When disconnects like this happen between a brand and a customer, customers lose trust in the brand. Lost trust is very hard to restore and leads to declining retention, increased acquisition costs, limited upsell potential, and loss of brand equity.
Face regulatory fines. There are real financial penalties associated with handing customer data poorly, targeting individuals based on sensitive social, demographic, or economic indicators. Besides sacrificing customer insights that are useful for customizing marketing or demand planning, losing customer data also means having to buy data to replace it or spending on acquisition and nurture programs to woo new buyers.
Suffer waste. The COVID years showed clearly that companies with sluggish processes that don’t have a dynamic pulse on customer information can’t flex to changing market conditions. This costs budget and time. Norwegian Cruise Line lost millions when it couldn’t quickly stop ads from airing during news programming about COVID outbreaks on cruise ships.
I’m working with Corey McNair, an expert in Forrester’s Total Economic Impact™ (TEI) methodology, to model out the opportunity cost of not maturing with customer obsession. By the Forum, we’ll have a price tag associated with the seemingly “safe” strategy of limiting investments. In the meantime, I’d love to talk to you about your own take on this question.
What are you prioritizing as we move through 2023? How do you decide what to prioritize?
What bold actions have you taken to preserve or drive new growth?
Does an enterprisewide focus on customers help or hinder you this year?
Contact me here or at firstname.lastname@example.org; let’s include your voice in this research!