customer intimacy companies
customer intimacy companies
The next time someone had an issue in their home they needed to fix, they would know they can go into Home Depot not just to buy what they needed, but to find out what they needed to buy.
If this sounds like an unnecessary nice-to-have, you’re wrong. Sure, your core product provides value for customers, which is the driving force behind your business. But there is so much more value you could proactively provide in order to increase customer loyalty and reduce customer churn. You have an organization filled with experts in their specific areas — many of whom can meet the needs and values your customers are looking for from a business they patronize.
Create a training program that gives your teams the resources and tools they need to anticipate customer needs and proactively serve them in a positive way. Customer intimacy needs to be in the forefront of their minds at each touchpoint.
By conducting a customer touchpoint analysis, you’re gaining a better understanding of the customer experience and optimizing each interaction to provide the most value and to stand out.
Brand Intimacy is at the heart of this new thinking. We have been studying it for several years, initially by understanding shifts and updates in the worlds of technology, marketing, and science, and then by undertaking in-depth, qualitative, online communities research to better explore and understand the very idea of Brand Intimacy. This resulted in over 20,000 brand stories across the United States, Germany, and Japan. Finally, we have completed quantitative research with 6,000 consumers, encompassing 52,000 brand evaluations in the United States, Mexico, and the UAE to validate and better understand the implications and performance of intimate brands.
Amazon also leads our research as the favorite brand of millennials (18—34 year olds) and those who make between $35,000 and $75,000 per year. If that isn’t convincing enough, note that Amazon is trusted more than any other online retailer 1 , that it invested nearly $10 billion last year in R&D 2 , and that its cloud services division will soon eclipse the operating profit of its retail business 3 , and you can quickly see that its dominance is only beginning.
The customer intimacy strategy focuses on offering a unique range of customer services that allows for the personalization of service and the customization of products to meet differing customer needs. Often companies who pursue this strategy bundle services and products into a “solution” designed specifically for the individual customer.
The corporate disciplines they cultivate include:
The company also introduced inventory management systems that use this data to automatically reroute or reorder the right products to the right places at the right time. The store’s cash registers were then programmed to print out promotional vouchers along with receipts, offering discounts that are relevant to the customer’s buying habits. It even rolled out entirely new products for regions where the demand for them was highest.
Continuously tailor your goods or services to meet the needs of individual customers.
Below is a customer intimacy example of a Fast-Moving Consumer Goods company (FMCG) which could be applied to any sales function and shows a move from a complex functional design to a more customer intimate design. The company had customers who bought products from four different parts of the organization, food, beverage, confectionery and pet food.
Figure 1 – Market Functionalisation to Customer Design
They share the same competitive theme and value proposition — customer service and connectivity — and they unite their organization and people around it.
Research by Vlerick Business School has identified a specific set of activities common to most successful customer-intimate businesses. These activities can be grouped under five sets of processes managers must master to make strategy work. The main ones are outlined below.
There are four basic types of customer data: descriptive, behavioral, interaction and attitudinal.
The first value discipline we discuss is Operational Excellence: providing customers with reliable products or services at competitive prices, delivered with minimal difficulty or inconvenience. Operationally excellent companies deliver a combination of quality, price, and ease of purchase that no one else in their market can match. Their value proposition to customers is garantueed low price and/or hassle-free service. An operational excellent company has an operating model based four distinct features: 1. Its core processes are aimed at end-to-end product supply and basic service that are optimized and streamlined to minimze costs and hassle. Costs in this context does not merely mean the price that is paid for a product. It also includes costs in terms of time spent to purchase the product, product maintenance needed in the future and the ease of getting swift and dependable service. 2. Operations are standarized, simplified, tightly controlled, and centrally planned, leaving few decisions to the discretion of rank-and-file employees. 3. Management systems focus on integrated , reliable, high speed transactions and compliance to norms. 4. A culture that abominate waste and reward efficiency. Especially, efficiency is a key word in operational excellent companies. Variety kills efficiency because it burdens the business with cost. A narrow product line and standarized products are therefore central features in the operating model. Some great examples of operational excellent companies are McDonald’s, Southwest Airlines, Wal-Mart and IKEA.
In their book ‘The Discipline of Market Leaders‘ M. Treacy and F. Wiersema argue that no company can succeed today by trying to be all things to all people. It must instead find the unique value that it alone can deliver to a chosen market. This is quite in line with Porter’s Generic Strategies in which Porter describes how companies gain competitive advantage by either focusing on low cost (Cost Leadership is a type of competitive strategy with which a company aggressively seeks efficient facilities, cuts costs and employs tight cost controls to be more efficient than competitors. A low-cost position means that the company can undercut competitors’ prices while still offering comparable quality and earning a reasonable profit. Cost leadership is, just like Differentiation and Focus, part of Porter’s Generic Strategies.
Leading the Way
Ideas for Leaders suggests that there are several strategies to maintaining a customer-intimate model for your company: