A typical boardroom type meeting will have the Chairman, CXOs and other important stakeholders. Lately though, a new participant has arrived. A Customer Insight Expert.
Businesses are increasingly realizing that strategies should not only focus on the corporate aspect of a business but also the market. One way of market inclusion is by integrating customer insights into your business strategy. You can achieve that by collecting, analyzing and integrating customer insight form data collected over the course of your customer engagement.
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It is important for you to understand what customer insight and business strategy mean before we delve into how well you can blend the two. Customer insight (CI) can be defined as an in-depth truth about the customer on the basis of their needs, desires, behaviors, beliefs and experiences. It includes elements such as segmentation, engagement and utilization.
On the other hand, a business strategy is a defined plan that describes how an entity will achieve its objectives in the short, medium and long term under the broad categories of general strategy, competitive strategy and corporate strategy.
For convenience, customer insights has been shortened to CI. (We could have done the same thing with business strategy, but it wouldn't have been appropriate.)
How to Incorporate Customer Insight in Business Strategy
So, how can you merge customer insights with business strategies in a seamless and productive manner?
1. Determine which strategy is to be driven by customer insights
Some strategies (like corporate strategy) are not necessarily influenced by CI but others (like competitive strategy) should be determined by CI. The reason why you are carrying out CI in the first place is because you want to know how to attract, retain and satisfy customers. As a result, your objectives (and by extension business strategies) should use information from CI to achieve just that. For example, a bank should understand that when inflation is high consumers will spend more money on consumer goods due to their lower purchasing power (consumer insight). As a result, the bank should put in place mechanisms for availing small loans in the short term (business strategy).
In economies where customers have limited purchasing power, financial companies are adapting their asset acquisition strategies. For example, Leshengo from Africa, a micro-finance entity, allows mobile lendings where borrowers repay loans in small amounts through their top-ups. Leshengo's repayment numbers are better than traditional banks.
2. Tailor your marketing strategy
CI is a powerful tool that can help you develop a customer-oriented marketing strategy because you can use information from CI to put in place strategies that will attract different segments to your business. For example, the means of attracting small-scale borrowers are different from those of attracting large scale borrowers since the two segments have different behaviors. With the help of CRMNEXT cross sell modeler, you can segment customers according to defined parameters. You then determine which segment should have what products. This algorithmic intelligence empowers you to cross sell better with relevant products. You can tailor your strategy to include means of attracting each of the segments as an individual part of the whole market.
3. Customize your products
The product development process should also be a part of your business strategy. This means if you want to outdo competition you should customize products in such a way that they will satisfy consumer needs and wants. One way of doing that is by using customer insights as a basis of product development. Understand what the consumers are looking for and then put in place a plan (business strategy) that will provide exactly that. For example, if consumers are more interested in investment loans then adjust your strategy to offer more large-scale loans than small scale ones that are typically used in the purchase of consumer goods.
Gathering intelligence through social media and surveys done with the CRM solutions can go a long way in personalizing products for your customers.
4. Trend setting
Most successful businesses are those that set trends rather than following market leaders. In order to be a trend-setter, your business needs to have a strategy that can anticipate consumer trends and future behavior. Such information can be acquired by analyzing consumer insight over a period of time (few months to five years). In doing so, the business will be better positioned to develop a strategy that will be in line with the anticipated consumer behavior.
For example, in an economy where the middle class is expected to grow rapidly over the next five years, a bank will be better placed if it can offer mortgage and home loans in attractive packages because home ownership is one of the major priorities of middle class people across the globe. Financial services CRM can offer end to end fulfillment online with the help of visual designers.
5. Effective communication
Finally, CI should be a platform upon which effective communication can be established between a business and its stakeholders. For instance, understanding customer behavior in terms of communication technology (that is an example of CI) makes it easy to pass and receive information to and from customers.
Currently, most customers rely on their smartphones for communication, therefore any business that desires to be successful should have a responsive website as part of its online marketing strategy. Implementing multiple engagement channels over a customer's preferred choice of communication should also be a priority.
Remember that tying CI with your business strategies will not immediately translate to business success. That assumption will lead to complacency. Each CI initiative should be clearly defined and should lead to measurable business goals; otherwise expansive interpretations will lead to extraordinary mess.
1. CRM for Financial Services: The 3 Mileposts of Customer Discovery Journey
2. CRM in Banking: Developing Customer Experience as a Strategy
3. Model Your Growth with Algorithmic Sales Performance Management in CRM