Major Stages of The Customer Relationship Life-cycle
The first step in developing the optimal customer relationship is to define the various major phases in your customer’s journey as they interact with your company (i.e. customer acquisition through customer retirement/closure).
The subsequent steps in the process are to define the phase objectives of each major customer relationship life-cycle stage and to determine the range of customer treatments, by customer segment, that exist within each phase. In addition, in order to arrive at accurate segmentation definitions, a segmentation approach and method must be defined in order to properly develop distinct and meaningful customer segments groups.
Balancing Customer Service Costs with Customer Needs & Satisfaction
Once customer value segments are properly determined, customer needs and appropriate service levels for those segments can be determined. This is important to delivering cost effective service levels that doesn’t over-deliver to customers and ensures a maximized customer satisfaction level for that particular customer segment group. Equilibrium is achieved when customer service costs are balanced with delivered customer satisfaction and customer value (i.e. a company would not want to expend a great deal to over-deliver to a traditionally frugal customer segment with a negative contribution (value) margin).
Matching Customer Service Delivery Levels to Customer Value
As customers deliver greater value to the company, service and reward levels are adjusted to deliver increasing levels of customer value to maintain market equilibrium and prevent high value customer defection to competitors.
Architect The Cost Effective Customized Customer Experience Across All Touch Points
Each customer touch-point needs to be examined to determine the optimal customer treatment approach for each customer segment that interacts with that particular touch-point. Only then can an econometric model can be developed via a multi-dimensional matrix of customer touch-point, customer value segment and customer relationship life-cycle stage.
Developing The Optimal Customer Relationship across all touch-points, segments, customer life-cycle stages
The final multi-dimensional matrix developed should consist of 4 dimensions (comparable to a Rubik’s Cube) of 1) Customer touch-point; 2) Customer Needs/Preferences; 3) Customer value segment and 4) Customer relationship Life-cycle Stages (CRLS).
Developing the Optimal Customer Relationship Life-cycle
I have found that the best approach to determining the final multi-dimensional matrix developed to be through a series of cross-functional workshops with internal knowledge experts consisting of customer analytics, customer service, marketing, sales, warranty claims (if separate from service) and touch-point subject matter experts like website managers, multi-channel contact center managers, etc.
The above is the structure for determining the optimal customer relationship for each segment group per touch-point as they transit through the customer relationship life-cycle stages. The final outcome is your delivered customer treatment strategy across all touch-points, segments and stages in the customer relationship life-cycle.
The benefit of this requirements definition exercise is minimized customer service cost at a level that just meets (or slightly exceeds) customer expectations such that high levels of customer satisfaction is delivered at the ‘maximum bang for the buck’.
The how to guide to Win a Customer for Life by Employing the 5 R’s of Customer Loyalty
The 5 “R’s” of Customer Loyalty
Ensure Your Company is 5 “R” Customer Compliant
Following the 5 R’s of Customer Loyalty Will Enable Your Company to Attract and Keep Customers for Life
Ensure Your Company is Customer R-Reliable
Top Steps to Ensuring Your Company is R-Reliable
The First “R” of Customer Loyalty Is Setting High Quality Customer Standards (External) and Goals (Internal) and then Delivering on that Customer Promise for Each and Every Customer Interaction as well as the overall & long-term customer relationship
Example of How a Company Demonstrates Customer R-Reliability
Example of How a Company Demonstrates Customer R-Reliability (continued)
Ensure Your Company is Customer R-Responsive
Top Steps for Your Company to Become Customer R-Responsive
The 2nd “R” of Customer Loyalty Is Ensuring That Customer’s Expectations Are Met: Needs, Concerns, Quality, Cycle Time Expectations, etc.
Example of How a Company Demonstrates Customer R-Responsiveness
Example of How a Company Demonstrates Customer R-Responsiveness (continued)
Ensure Your Company is Customer R-Recognizable
Top Steps for Your Company to Become Customer R-Recognizable
The 3rd “R” of Customer Loyalty Is Ensuring That Your Brand and Company has Distinctive and Positive Characteristics such that it drives positive emotions (driving repeat business, customer referrals, word-of-mouth adverting, etc.
Example of How a Company Becomes Customer R-Recognizable
Example of How a Company Becomes Customer R-Recognizable (continued)
Ensure Your Company is R-Relationship Oriented
Top Steps for Your Company to Become Customer R-Relationship Oriented
The 4th “R” of Customer Loyalty Is Ensuring That Your Brand and Company develops a high quality and mutually beneficial relationship with your customers based on mutual respect, customer insights, an ongoing and open dialogue and a model that encourages a partnership between your brand & company and your customers
Example of How a Company Demonstrates That It Is Customer R-Relationship Oriented
Example of How a Company Demonstrates That It Is Customer R-Relationship Oriented (continued)
Ensure Your Company is Customer R-Rewarding
Top Steps for Your Company to Become Customer R-Rewarding
The 5th “R” of Loyalty Is Ensuring That Your Brand and Company rewards mutually beneficial customer behavior (greater share of wallet, spend, brand partnership activities, etc.) such that it drives further and longer-term customer loyalty.
Example of How a Company Demonstrates Customer R-Rewarding
Example of How a Company Demonstrates Customer R-Rewarding (continued)
Is Your Company Ready to Take the 5 “R” Pledge?
SUMMARY: If you take the pledge above to adhere to the 5 R’s of customer loyalty, you will enhance your ability to attract and retain customers for life. Key to this is developing the capabilities to be best in class for each “R” and ensuring that you are (cost effectively) maintaining a major qualitative advantage in each customer R vs. your competitors.
For addition information on this topic, consult the following resources:
