OBSTACLESTO CUSTOMER ENGAGEMENT

HOW THE CMO CAN CHAMPION CUSTOMER STRATEGIES THAT TRULY DRIVE GROWTH

BY PHIL BOUNSALL AND PATRICK GIBBONS

Every executive knows

it makes sense to align

strategies behind one voice –

the voice of the customer. However,

too often voice-of-the-customer

initiatives occupy too much energy

and produce meager results. How

does this happen? After all, it seems

pretty logical – if we put forth an

organized effort to listen carefully

to our customers, interpret what

they’re telling us, and act on their

insights, we should be able to build

a better business. Many companies

have benefited by weaving this into

the way they operate.

However, often the complexities of business tend to get in the way.

At Walker, we work with dozens of market-leading companies developing customer strategies to drive performance. We’ve seen the successes and we’ve seen where companies struggle. This document highlights five common obstacles companies encounter when implementing their customer strategies. Being aware of these and focusing on overcoming these obstacles will help your company make better decisions to drive growth.

WHY IS IT SO HARD?

Some underestimate how tough it really is. Here are some of the key areas where customer listening falls short:

• Noaccuratelistingofcustomersandcontactinformation.

• Gatheringfeedbackisperiodicorhaphazard.

• Notenoughthoughtbehindaskingtherightquestions.

• Notenoughprobingtopromptaction.

• Notagoodmixofinput – surveys,socialmedia,operationalmetrics, etc.

• Informationcollectedisn’trelevanttotheneedsofthebusiness.

WHAT CAN I DO?

Startbyaskingyourself,“WhatamIgoingtodowiththisinformation?” The answer can give you some great guidance onthequestionstoask,orevenhowtoinvolveanexperttounderstand the best ways to get information that can drive your business. Developing an effective listening program meansyou’reaskingtherightquestions,you’reprobingintheright areas, you’re in touch with the right contacts, and you have a good mix of feedback that provides a well-rounded view of your customers.

Ineffectivelisteningisthefirstkeyobstacle every company must overcome to be truly engaged with their customers. Unfortunately, many companies simply don’t have a good system set up to gather insights from their customers.

IS ANYBODY LISTENING?

DOING IT RIGHT

RIGHT SURVEY QUESTIONS

LEADS TO $200 MILLION

A leading provider of technology

solutions established a goal to

generate sales from an obvious

source – their existing customers.

This guided them to develop

aseriesofquestionsintheir

relationship survey that would

identify customers interested in

additional products and services.

As customer feedback was

received, these “loyalty leads”

were immediately forwarded

to account managers for follow

up. The result? More than $200

million was credited to this

program where focused listening

had a big payoff!

INEFFECTIVE LISTENING

WHY IS IT SO HARD?

Processing customer information can be tedious. Here are common challenges:

• Nothoughtbehindwhoisactuallygoingtousetheinformation.

• Nosystemfordeterminingwhogetswhatinformation.

• Timingispoor – informationdoesnotgettousersuntilitistoo late.

• Trainingisnotinplacesopeopledon’tknowwhat to do.

• Nobuy-in – peopledon’tfindtheinformationhelpfulorrelevant.

WHAT CAN I DO?

The goal is action, so you need to build an infrastructure that manages the information, distributes it to the right people, and makes them accountable for putting it to use. Training and education are key components to ensure that all involved understand the goals of the program and their specific role. Essentially, customer insights need to be “built in” to processes and systems across the company.

Too many companies suffer a lack of infrastructure when it comes to putting customer insights to use. They gather all kinds of feedback from their customers, thenlookatitandsay,“NowwhatdoIdo with all of this?”

TOO MUCH INFORMATION,

NOT ENOUGH ACTION

DOING IT RIGHT

HOT ALERTS PRODUCE

$150 MILLION

A Fortune 500 advanced

manufacturer sought to reduce

customer churn and identify

customers that may be willing

to increase their business. To

dothisaseriesofkeyquestions

were used in surveys to trigger

immediate notification to

account managers when there

was a problem or opportunity

to address. Account managers

were trained in the “hot alert”

processandwererequired

to document their follow

up procedure, including the

estimatedROI.Inthefirst

six months they were able to

identify more than $150 million

in the form of business saved or

new business created.

LACK OF INFRASTRUCTURE

WHY IS IT SO HARD?

Itseemslogicalthatcustomerprogramswouldbeimportantinany organization. However, here are a few reasons why that is not always the case:

• Notapriority – toooftenleadersareonlyfocusedonquarterlyearnings.

• Customerstrategiescompetewithotherinitiativesinsteadofbeing woven into everything the company does.

• Executivesponsorsarenotinplacetoadvocateforcustomerstrategies.

• Internalcommunicationisineffectivesopeoplejust don’t know about the customer programs.

• TheCEOandotherseniorleadersaren’tonthefrontlinesmeeting with customers, insisting that others do the same.

WHAT CAN I DO?Look at all levels to develop leadership for your program. First, theCEOshouldbeanadvocateofvoice-of-the-customerstrategies. An executive sponsor should represent these initiatives at the board and executive levels to ensure it has the necessary resources to be effective. Managers throughout the company need to be leaders within their areas to ensure they are aligned behind the voice of the customer. Finally, the team running the program has to show effective leadership and communication to ensure their program is not lost in the clutter of everyday business.

Leadership at all levels is a critical element to ensuring that voice-of-the-customer initiatives are truly strategic.

WHO’S IN CHARGE?

DOING IT RIGHT

GLOBAL COMMUNICATION

SPARKS ACTION

A leading U.S.-based provider

of information storage services

goes to great lengths to

ensure their customer listening

program is a high priority. An

aggressive team leads the

program,called“G.R.O.W.”–

Gather,Respond,Own,Win.

They take their message on the

road by visiting regional offices

around the world to educate

employees on the initiatives and

how managers can be effective

leaders within each region. The

CEOisalsofrontandcenter.

He issues a video message to

customers sharing key learnings

and committing to actions

aimed at improving customer

experiences. The energy behind

this program has created

effective leadership at all levels,

driving action and results.

POOR LEADERSHIP

WHY IS IT SO HARD?

Whencustomerinitiativesarealignedwithbusinessobjectives,employees see a clear line of sight toward improving the business. However, too often these initiatives are not in sync with corporate growth strategies. Here are a few reasons why:

• Objectivesarenotclearorwidelyknown.

• Resultsarenotunderstoodorwidelyused.

• Theprogramisisolated,separatefromtheotherpartsofthebusiness.

• Employeesseeitasdisconnectedorevenconflictingwiththeir other goals.

• Peopledon’tunderstandhowcustomerfeedbackistobeused.

WHAT CAN I DO?

Start by looking at your key corporate strategies. Pick them apart to understand how customer initiatives line up with each one. Make customer feedback results an important part of the management information system and ensure leaders are keenly tuned into how customers’ viewpoints are aligned with their own key strategies.

When customer initiatives aren’t aligned with other company strategies they lack relevance and meaning. Suddenly, investments don’t make sense and employees see the lowly survey program asjustonemorethingtodistractthemfromtheirrealjob.

MAKEIT MATTER

DOING IT RIGHT

ALIGNMENT DRIVES

COMPETITIVE EDGE

TheCEOofoneoftheworld’s

most influential technology

companies invites customers

to provide input by saying,

“Customersareournumber

one priority.” This is evident

throughout the company – even

on the company intranet where

customer scores are displayed

right next to the company’s

stock price – a clear indicator

that the two are closely related.

Their program reaches out to

dozens of departments, business

units, and an entire network

of channel partners, and is a

standard topic at operational

reviewsconductedbytheCEO.

This level of alignment drives

a culture where more than 80

percent of their users indicate

that customer insights have

a positive influence on their

business performance.

STOCKLOYALTY

WEAK ALIGNMENT

WHY IS IT SO HARD?

Companiesgetboggeddownforavarietyofreasons.Herearea few:

• Objectivesareunclearsonomeasurementisinplace.

• Customermeasuresareviewedseparatefromoperationalmetrics.

• Compensationincentivesdon’texist,ortheydon’tmakesense to those involved.

• Improvementisn’treallythegoal;insteadthecompanyis trying to make marketing claims, meet an industry certification,orjustkeepscore.

• Itisanafterthought – peoplearetoocaughtupinthedetailsto determine the impact.

WHAT CAN I DO?

Start by asking yourself, “What key business metrics will change if our strategies are successful?” Set up processes to monitor those metrics and focus action planning to tie directly to these measurable outcomes.

Too often, companies can’t (or don’t) calculatethepayoff.Customerstrategiesshouldn’t stand by themselves–they should connect with other business metrics and prove that there is a strong impact on corporate performance.

SHOW ME THE MONEY!

DOING IT RIGHT

ROI FOCUS DRIVES

CORPORATE VALUE

One of the worlds largest

electronics distributors initiated

a voice-of-the-customer

strategy to drive business

process improvement and to

improve customer service.

By tying each activity to the

program, they were laser-

focused on improving the

metrics most critical to their

businessstrategy.Itworked.

They saw operational expenses

as a percentage of gross profits

decrease 15 percent, operational

income margin almost doubled,

and return on capital employed

more than doubled. What’s

more, during this time their

stock price increased 35 percent

while their biggest competitor

increased only 8 percent.

US

THEM

INADEQUATE PAYOFF

Inmanycompaniesthe marketing function drives customer listening activities –

and that’s a good thing! You

should already know how such

strategies can accelerate growth,

spark innovation, and sharpen your

company’s competitive edge.

Your challenge as a customer-focused leader is to make sure everyone knows this. Itgoesbeyondjusttellingcolleaguesthatcustomers are important. Everyone knows that. Rather, you must provide clear evidence of the return on customer-driven activities that boost customer retention, increase cross selling, identify cost savings, improve service, strengthen innovation, and more.

WHAT IF YOU’RE NOT INVOLVED?Ifyou’renotalreadyinvolvedinyourcompany’svoice-of-the customer programs, you should be. Think about it. You probably have direct responsibility or some degree of responsibility for the organization’s brand, sales strategies, product strategies, and long-term strategic direction. All of those are significantly influenced bycustomers.What’smore,CMOsarewiredtoconstantly think about the company’s position within the market. You are responsible for developing strategies to set your company apart from competitors and you should know that distancing yourself based on customer experiences is one of the strongest levers you can pull.

CMOsgetit – youunderstandtheimportanceof the viewpoint of customers. And, you can make sure that customer initiatives receive the visibility that is necessary for them to make a big difference.

Leadership is critical in developing and deploying voice-of-the-customer strategies. The breadth of responsibility, the strategic influence, and the ability to broadly communicate the profound impact of the customerexperienceareallreasonstheCMOshould be a clear advocate and strategist for your customers

THE CMO AS THE LEADER

Each case cited in this document is a client of Walker. Based on decades of

experience we help some of the

world’s most influential companies

overcome their most difficult

obstacles to drive bottom line results.

Walker specializes in customer loyalty and

related customer strategies, including innovative

approaches to segmenting, valuing, obtaining,

serving, and growing customers. Walker’s

diverse team of consultants provides tailored,

comprehensive solutions to help companies

achievetheirbusinessobjectivesand,ultimately,

grow shareholder value. Walker’s consultants

regularly conduct workshops and assessment

programs to help organizations improve their

ability to administer customer listening programs.

ABOUTWALKER

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Walker Index S&P 500Dow Jones Industrial Average NASDAQ

TheWalkerIndexisastockindexcomprisedofcurrentWalkerclients.Companiesareincludedin the index only during their tenure as Walker clients.CompaniesattractedtoWalkerarecommitted to using the customer perspective as an impactful management tool. The Walker Indexindicatesthesecompaniesoutperformthe broad markets.

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THE WALKER INDEX™

PHIL BOUNSALLPRESIDENT

pbounsall@walkerinfo.com

blog.walkerinfo.com/blog/valuable-accounts

PATRICK GIBBONSPRINCIPAL, SVP MARKETING

pgibbons@walkerinfo.com

blog.walkerinfo.com/blog/engaging-the-enterprise

AUTHORS

301 Pennsylvania Parkway Indianapolis,Indiana46280 Telephone:1.800.334.3939 International:+1.317.843.3939 info@walkerinfo.com www.walkerinfo.com

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