Companies Are Falling Short of Customer-Centric Goals

Strativity Group surveyed more than 200 business executives for its 2004 Customer Experience Management Study, asking them to rate the degree to which they are committed to customer-centric strategies, as well as to identify certain key CRM metrics like retention rates and service costs. The majority of respondents represented services companies, with roughly 20 percent each from consumer goods and B2B companies. The survey's figures paint a picture of a business community still wholly consumed with concern for top-line quarterly performance, as fewer than 20 percent could identify the cost of new customers, customer complaints, or even average annual customer value. "They don't know, beyond the first deal, what [customers] can do for them," says Lior Arussy, Strativity Group president. "No wonder caring for customers is becoming a chore and a burden, as opposed to something they will [voluntarily] invest in. They will invest in salespeople, but not in [service] delivery, because they have no clue what the customer's potential is." What stands out more than the results is the fact that many of the key measures of customer centricity actually dropped from 2003 to 2004. Fewer companies said they tie compensation to service quality, cannot clearly define their customer relationships, or believe they have earned the loyalty of their customers--and in each case a majority of companies fell on the "wrong" side of those questions. Arussy says that with a relatively strong overall economy in 2004, companies have started to be more honest about their shortcomings. "In 2003 executives were still thinking that the economic downturn was stopping the company from conducting itself seriously and sincerely with customers...but we are seeing that we have more money, but still don't take the customer seriously." Lack of visibility into true customer cost and upside potential makes it difficult, if not impossible, to articulate a long-term customer relationship strategy, particularly one that includes differentiated service. "Companies are heavily focused on selling, not on investing for a long period of time, and part of structuring the role of the customer is longevity...when companies don't [measure it], and it's all about the quick closing-the-quarter deal, they're leaving a lot of money on the table," Arussy says. Nearly 70 percent of respondents attributed some of their customer relationship difficulties to a lack of tools and a lack of authority to solve problems--even though more than three-quarters of respondents said they invest in technology more than people. Arussy says the problem lies in strategy, not in software: "The [lack of] tools is just an excuse--it's a matter of taking advantage of what's out there." Related articles: Required Reading: Who Is the Voice of Your Company? Profits, One Customer at a Time