Do you know what your goals are, or even how to get there?
Those were key questions raised by Patrick Anglin, a director at global management consulting firm AlixPartners, who spoke on “Creating a Customer-Centric Strategy.”
“I believe that many of our clients face a big risk of being left behind if they are not able to effectively use the data that’s available to them, especially in this environment of rapidly changing customer behavior and also increasing competitiveness,” he said.
Anglin said that as companies try to be more customer-centric, many put tactics in place that are not aligned with the overall strategy.
“If you can’t see that you’re making progress against your goals, then it’s very easy as soon as you hit a hiccup in overall performance to just start to revert back to the way you had always done things. Maybe you go back to a KPI like same-day sales — comp sales — and revert back to the behaviors you’ve had before and you don’t stay the course,” he said.
Anglin provided an example of how companies can put the right mechanism in place to achieve their goals. That process includes segmenting the customer base first; building predictions on where the company thinks the performance will be and the overall company’s performance; developing specific initiatives to move certain customer metrics to achieve the set goals and then tracking those metrics against the goals.
The AlixPartners director spoke about a simple customer life cycle segmentation — new, returning, top or best, and lapsed customers that a company wants to reactivate. Once the segmentation is in place, it’s important to have a baseline where one thinks performance will be, he advised attendees. “Using it at that segment level allows us to be more granular in where we think the performance will actually land and [provide a] baseline that we’re working off of,” he said.
Once you have the forecasts at the segmentation level, you can begin to build up specific initiatives tied to one or more metrics — whether acquiring new customers or increasing transactions of a certain customer group — and determine what do you do to get there. Anglin said armed that with that information, “[W]e build [up] to the goals from there and we end up with a new projection of what the ultimate goals of the company will look like.…The other part behind the business case is, how do we track that? We want to make sure we have good tracking at both at the initiative level to make sure we are achieving each of those initiatives, but then also at the more macro level.”
He said that by having the goals and plans laid out, there is confidence that if “we are on track to achieving our goals, even if we’re not achieving our revenue goals right now, if we stay the course [then] we know from our modeling from our customer level that this will work out for us — if not this year then the year after.”