There is a very important question that every organisation on the planet needs to have an answer to if they are to truly create winning customer strategies…
Do we have a customer growth and relationship plan?
A plan that is…
Some companies have an answer to one or two of these statements, but most have not grasped their importance.
We call this having a KUPP plan.
Without a clear customer perspective, organisations:
- Leave millions in lifetime value with their existing customers on the table.
- Leave their customer relationships to chance and vulnerable to competitive influence.
- Create no unique and differentiated advantages that make them highly valued and sought after.
This was all too obvious when I was in a meeting with a successful technology company who was winning on a massive scale, receiving awards for achievement and closing large ticket deals. They had 7,500 customers doing over 300million in revenue. Their only challenge was 197 of the 7,500 customers were delivering almost 95% of the revenue. That meant just 3% of their customers were delivering 95% of the company revenue.
More companies than you think have this unhealthy ratio.
They knew this, but they had no idea what to do with it. Account plans were present but not driven around a core strategy or guiding question.
Strategy expert Richard Rummelt once said:
Good strategy and good organization lie in specializing in the right activities and imposing only the essential amount of coordination.
The company had failed to understand what they needed to do and how to activate the other 7,303 customers. But more importantly, they didn’t realise why they needed too.
With a simple assessment, we call 7 Signals, we determined the percentage of untapped accounts likely to move with focused action.
We realised an additional 15% equating to over 1,095 customers they could be speaking with!
If they could activate just 5% of their inactive ideal customers, they could jump to 7th in their market based on revenue. Activating the entire 15% would get them to number 2 in their market, and increase their revenue by 4 times without adding a single new customer.
You can imagine the jaw-dropping moment once they saw the danger of not looking more closely at those 197 clients, and the opportunities they were missing with the other 1,000 plus existing customers.
This is the state of many businesses who have no clear process.
The unfortunate conclusion is this company is still sitting on the decision to change.
This doesn’t have to be you.
The problem for this technology company wasn’t that they didn’t have great people, resources or products.
Their problem was they didn’t understand the key growth drivers to activate the growth they realised was there. Nor did they understand the specific systems needed to support it. Systems that every business needs to support its people and customers to see exponential and predictable results long-term.
What are Growth Systems?
Growth systems are both invisible and visible in every organisation. They support the success of key function areas, equip employees and leaders to do great work, enable an organisation to deliver profitable results for themselves and their customers consistently.
Examples of visible growth systems:
- Distribution channels.
- Financial management protocols.
- Product superiority.
Examples of invisible growth systems:
- Strategic relationships.
- Organisational collaboration.
Many will not have considered their business as having these kinds of systems.
It’s this view of your business that will truly transform how you view everything, particularly how you support the customer growth drivers shown in the image below.
A system at its core is a group of interacting or interrelated entities that form a unified whole.
In relation to growth with our most important customers, Customer Growth Systems refers to:
the creation of organising systems and practices that supports the core growth drivers for long-term continued profitable relationship health and success with our most important customers.
What we choose to adopt, change and include in our business and daily practices eventually become part of the organising system.
What we choose matters!
The challenge is understanding what systems to include and how to effectively identify and evaluate the ones we have.
First of all, you must know among many growth systems out there which ones support long-term customer success and focus on those.
Below are six growth systems every organisation needs to adopt, review and optimise.
Six core customer growth Systems
ONE — GROWTH PLAYBOOKS
Playbooks are vital for any organisation, from business to professional sports teams. They help people and organisations plan, pivot, prioritise and strategise tactics built to deliver specific results or outcomes.
A key account plan fails when it does not hold into account the changing nature of the company’s own business, their customers business and the market.
Customer playbooks enable you to do this and include six core elements:
- Assumptions — guard against potential false and unhelpful biases that may prevent you and your organisation from making poor customer decisions.
- Journey — helps us to accurately view where a customer is in their path with us, so we can meet their objectives, feelings, needs and goals.
- Map — enables you to explore and uncover what might get in the way of sales growth or relationships with your customers, plus the known and unknown spaces for growth.
- Goal — designed to ensure you challenge the goals you set for yourself and those set with your customers.
- Strategy — evaluates the most important activities, approaches and actions needed to accomplish a goal and experience a very specific outcome.
- Team — identifies the right team members, or in most cases helps you get the best from the team you have to achieve the right client outcome.
In regards to the creation of a KUPP plan, a playbook methodology is essential and one that can be applied to any and every area of a business.
Internally in your business ask:
Do you have playbooks created that support the success of your current customer plans?
If the answer is no, then you may find you’re experiencing RAS moments in your business.
TWO — ASSET LEVERAGE
An organisation’s ability to continuously identify, utilise and discover hidden assets in its business will, in most cases, determine the limit of how much value it can deliver to its customers.
Teams and leaders can learn how to do this for their departments anytime and anywhere to enhance customer success.
Asset leverage is a term typically used in the financial industry. It’s a strategy in borrowing that allows you to increase the potential return on any investment made.
This principle can be applied to customer success to gain maximum leverage from every action, investment, or commitment you make.
A question to consider in your department:
How can you engineer greater success into every action and decision you make that impacts the customer?
This may not be a question you’ve asked before, but the exploration will yield new reflections and undiscovered ideas.
An example of this came from my recent work with a pan-Africa financial services provider.
My work identified a department that for most businesses would not always be seen as an area that impacts customer growth. That was the Finance department.
We asked them for a week in each of their meetings to ask a single question
What else can the financial transactions of our customers tell us about how we can serve them and increase profits?
After a week they discovered the data they had from the thousands of customer transactions could be used to create a new pricing structure that would attract new customers, offer better terms to existing customers and raise profits without adding any additional cost to the business.
The result: an extra 217K per month in recurring revenue.
To truly take advantage of asset leverage, the quality of your questions are more important than the perceived answers you receive.
THREE — CHANGE PRACTICES
One of the most underestimated growth systems that happen almost daily, seen or unseen, is CHANGE.
All organisational change impacts people, partners and customers.
The effectiveness of the change practices we adopt will determine the likelihood of us achieving the outcome of that change.
Our interactions with our customers require a clear understanding of how we will enable and support our customers to change, and make the changes needed to achieve the results they want.
What is your internal change and customer change process?
You can start by using a change model favoured by many change professionals called ADKAR.
ADKAR is an acronym that represents the five tangible and concrete outcomes that people need to achieve for lasting change: Awareness, Desire, Knowledge, Ability and Reinforcement.
By outlining the goals and outcomes of successful change, the ADKAR Model is an effective tool for planning change management activities. It will equip your leaders facilitating change and support your employees throughout the change:
- A — Awareness of the need for change.
- D — Desire to support the change.
- K — Knowledge of how to change.
- A — Ability to demonstrate skills and behaviours.
- R — Reinforcement to make the change stick.
Like many models, there are always alternatives, and your business may have a preference for another.
Whatever change practice you use, it must be made known and trained so everyone knows, understands, and can practice change successfully.
FOUR — LIFE CYCLE MANAGEMENT
There are different stages in the customer life cycle and there are various methods to define them.
One approach is that of Jim Sterne and Matt Cutler, as published in 2000 in a paper called “E-Metrics, Business Metrics For The New Economy.”
It illustrates one of the most effective views of a customer lifecycle in Key Account Management.
There are eight different steps to full life cycle management that every organisation needs to be aware of. You can be at different stages with a customer but every customer will go through this cycle consistently every time you begin something new, a contact changes or a customer need shifts.
To assist you further on life cycle management, I have produced this simple guide to take you through each area of the sequence. Access it here.
FIVE — AGILE COMMUNICATION
One of the most under-valued and under-leveraged opportunities we have to reshape and reinforce the quality of our customer relationships and results, is the way in which we manage customer communication.
Agile communication is a phrase typically used in the project management discipline.
In the area of customer communication agile represents our ability to effectively communicate in a way that gets us the intended result first time in the fastest and most efficient manner possible.
The result: increased productivity, quicker decision making and an immediately improved customer experience.
In order to fully maximise this opportunity, we must have a clear process that enables anyone in the business to replicate the communication experience with customers at any time, anywhere and in any customer situation.
This requires three things to get started:
- Process evaluation — taking account of what is working, what isn’t and why.
- Clear outcomes — decisions on the exact result you want from all areas of communication.
- Group ownership — clear assignments designed into the roles across the business.
If these are promoted with a clear and communicated view of the benefits to all people, teams, partners and especially customers, you will have a greater percentage of compliance and engagement.
SIX — ORGANISATIONAL PHILOSOPHY
Organisational philosophy is:
“The way we do things around here.”
In another sense, a company philosophy stands for the basic beliefs that people in the business are expected to hold and be guided by. These are the informal unwritten guidelines on how people should perform and conduct themselves.
Organisational philosophy is powerful as it shapes and influences the core beliefs about how you serve your customers.
How you communicate your philosophy, the core WHY of what you do, and who you do this for matters.
The philosophy is designed to create a vision for what you want customer engagements to look like across your business.
Without a clear vision, you will have an organisation living out customer values that do not achieve your ideal result.
It’s all about WHY!
Ask this question of yourself, colleagues or internal departments:
How do you believe your department/role contributes to the success of customers in the business?
Every response from each department will show if you see your roles the same way, and whether or not you have a clear customer philosophy.
All six of these areas are systems and practices that must be considered seriously.
Where are your growth systems?
These should be the ones you trust to support in delivering greater and more expansive results with your most important customers.
If you’d like to know how to identify, evaluate and enable growth systems in your business to support customer results you can trust repeatedly, then get in contact with my customer transformation team.
Your Customer Growth Guide