Delivering The Optimized Customer Relationship: Minimized Customer Service Costs with Maximized Customer Satisfaction: Win-Win!

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).

Customer Relationship Life-Cycle Objectives & Segmentation Strategy Considerations

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’.