How CEOs Can Benefit from the Newfound Power of the Customer
The dawning of the digital age has transformed every aspect of our lives, and business is not exempt from the revolution.
Companies are increasingly moving online, advertising now exists as much on screens as on billboards, and marketing has become increasingly digital in its focus. And it is not only corporate organisations which have changed with the growth of online; their customers have too. Empowered by social media, online reviews and influencer advocacy, customers have a keener sense of the options available to them, and higher expectations of customer service and communication. This has resulted in a ‘Customer Economy’, where customers hold an increasing amount of power, not just in terms of their own purchasing decisions, but also in influencing those of others.
Progressive businesses are recognising this shift in the dynamic already, making the customer experience a priority in all areas of their organisation. Companies such as US video conferencing company Zoom continually collect feedback, tweaking processes where pressure points are discovered to ensure that the customer has a positive and smooth experience. This has not only resulted in happy customers but employees are also pleased with the positive effects of the customer-first policy, with Zoom CEO Eric Yuan having the highest ranking of any business leader on Glassdoor. And this customer prioritisation is not limited to tech; the finance world is catching on to the importance of the Customer Economy too. Challenger bank Starling Bank has been named Bank of the Year for the past two years based on the strength of its customer-led digital platform, which has been designed around the way in which customers actually use it, making it intuitive and simple.
Customer focus is not a one-way street which only benefits the customer; it impacts everything from employee morale to corporate growth.
Zoom and Starling Bank are fantastic examples of companies with proactive customer strategies which earn customer loyalty. Also, the Customer Economy can produce a more collaborative relationship between businesses and their customers which can benefit both parties when experiencing unexpected change, as evidenced by LCH.
LCH is a leading global clearing house, providing proven risk management capabilities, and played a key role in managing the default of Lehman Brothers in the financial crisis of 2008. In the wake of the crisis, G20 countries and their financial regulators decided to make the over the counter (OTC) derivatives market more transparent, which involved standardising OTC trade derivatives by mandating the use of clearinghouses. This posed a challenge for LCH which had to figure out not only how to implement these new regulations, but also how to ensure that clients understood changes and benefitted from them.
So, what did LCH do? First, they had to educate clients on the new regulations and for this, transparency was key. “This necessitated LCH fundamentally changing from a straight sales relationship between the salespeople and their clients to consultative selling bridging sales and marketing skills”, said Marcus Robinson, Head of Group Business Development at LCH.
With these regulations posing an international challenge, LCH knew that it was key to work with local markets as part of its global strategy. They worked directly with their clients, for example, developing a working group in Sydney with Australian banks, receiving their feedback and co-creating risk management products and services that their market wanted to use. As a result, LCH engaged in this new global market by evolving the way it sold its financial services. This collaboration benefited both parties; banks received the services they most needed and LCH grew, offering products more suited to the market than their competitors.
This kind of development and customer focus requires more than just workflows; it requires dedicated staff whose number one priority is the customer, as well as a company-wide understanding that customer satisfaction and experience is key. “From a sales and marketing perspective, it’s very much about relationship management and a team effort. We’ve created a hybrid sales, marketing and relationship management role as a “Sales and Relationship manager,” which is customer-led and is helping us to achieve sustainable growth”, added Marcus Robinson. These roles ensure that clients are always put first and that their relationship with the business is prioritised in the same way that sales have traditionally been.
By understanding customer needs, adapting and developing products accordingly and boosting relationships with new customer-focused roles, LCH was able to not just survive unexpected regulatory changes; it was able to thrive and its customers were happier for it.
So what can other businesses take away from the example of organisations like LCH, Zoom and Starling Bank? Customer focus is not a one-way street which only benefits the customer; it impacts everything from employee morale to corporate growth. Employees are more satisfied with business leaders that understand the customers their staff speak to every day and develop products, services and policies that make their customer interactions more positive. Customers champion organisations that genuinely care about their experiences and recognise their expectations when they interact with the business. And as shown by LCH, customers can help businesses to adapt and grow even in times of crisis or change, proving to be both helpful partners when it comes to collaboration as well as giving insight into local markets. With these rewards already being reaped by those organisations which recognise the increasing power of the customer, it seems inevitable that businesses hoping to succeed in the Customer Economy must follow their example or risk becoming obsolete.
The Customer Catalyst: How to Drive Sustainable Business Growth in the Customer Economy by Daniel Bausor and Chris Adlard is available now.