Now Is the Right Time for Silo Busting

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Few would argue against the importance of word of mouth as companies try to appeal to the widest number of customers without having to spend mountains of cash to do so. After all, it is a well-documented fact that it takes far more to gain new customers than it does to keep existing ones.

Several studies on the subject have been conducted over the past few years, and they have concluded that the costs for acquiring new customers are anywhere from five times to 25 times higher than they are for retaining existing ones. Increasing customer retention rates by as little as 5 percent, on the other hand, can increase profits anywhere from 25 percent to 95 percent.

So exactly how do you ensure that level of commitment from customers that keeps them coming back time and time again?

“You need a clear, 360-degree vision of your customers and their experiences that everyone in your organization who relates to the customer sees and acts on,” says Vala Afshar, chief digital strategist at Salesforce.com.

But getting to 360-degree customer visibility across the entire organization is not always such an easy undertaking. It requires continuous interaction and collaboration between the sales, marketing, and customer service departments, which often operate independently of one another.

If you don’t have active collaboration and communication between these three distinct departments, it is likely to be difficult, for example, for you as a sales rep to know that your most loyal customer was recently disappointed with the quality of his last order, which could make him less receptive to a new proposal the next time you call.

If that is a problem at your company, it’s time to tear down the silos. It’s a tall order, to be sure, but it’s definitely not an unsurmountable challenge.

“A customer-centric culture should be the North Star and guiding principle for tearing down the silos [between marketing, sales, and customer service],” Afshar says. “Before joining Salesforce, I spent 12 years running global engineering and also serving as a [chief marketing officer]. Silo busting was how I spent most of my time. I realized that I had to try to align different areas of the business, and the only way to do that was to silo-bust.”

Afshar points out that in a recent Harvard Business Review study, 50 percent of marketing departments passed leads to sales without qualifying them. That’s not only a common scenario, but it’s an example of a silo that is hurting not only the overall customer experience but the bottom line.

If you’re the CEO of a company where that is happening, and you must answer to a board of directors and other stakeholders, you’re probably finding it increasingly hard to defend the siloing of departments, particularly when it affects revenue.

“The siloing of departments has a significant negative impact on customer satisfaction and retention,” says Johann Wrede, global vice president of strategic marketing at SAP Hybris. “Customers don’t really care and are often unaware of which department they are dealing with; they do not see experiences with these departments in isolation, but rather as elements of one continuous journey. They expect that journey to have a consistent experience, but siloed departments by their very nature cannot deliver a sufficient level of consistency to match the expectation. That results in fractured experiences, damaged brand perceptions, and a decrease in satisfaction and loyalty, which ultimately hurts revenue.”

SILOS IN THE FIELD

There are myriad stories all over the Internet, social media, and other venues involving mistakes companies have made when dealing with customers. “United Breaks Guitars,” following a musician’s experience with the airline in 2008, is one of the most viral, having become an instant hit on YouTube and iTunes and a public relationship nightmare for United.

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