At Chronion, we supported businesses across a variety of industries become more customer centric. Through this journey, we’ve developed and refined our Customer Excellence Model, which focuses on four key areas for improvement. Today, we’re excited to share some of the insights we’ve gained along the way, which helps organizations achieve faster revenue growth, increased profitability and higher customer retention.
Let’s explore how our Custex Model can help you put the customer at the heart of your organization. On top, we will highlight some of the benefits our clients have experienced by adopting a customer-centric approach.
Customer segmentation: the core of customer centricity
At the center of the Custex Model is customer segmentation, which should be the starting point for any customer-centric initiative. While many organizations have undertaken customer segmentation exercises, they often fall short in their application. The common pitfall? Companies don’t find the right dimensions for their segmentation and/or fail to make the exercise actionable.
Customer segmentation should go beyond simply dividing customers into groups; it needs to be the foundation upon which tailored strategies are built. The exercise doesn’t stop at defining customer segments—it should guide the creation of tailored propositions and inform your entire organizational strategy. This implies that it must be clearly represented in your data and systems too. Without it, the ability to take effective action is limited.
Key Insight: Actionable customer segmentation are most often need-based and leads to the ability to align propositions more closely with these customer needs, setting the stage for increased business success.
Understand your customers: Walking in their shoes
Once customer segments are defined, the next crucial step is to dive deeper into each segment and thoroughly understand the factors driving their decision-making. The approach to gaining this insight varies depending on the customer’s context—different industries, company sizes, or the importance of a segment may call for different methods. For example, strategic accounts may require in-depth interviews, while focus groups might be sufficient for other segments. However, in our experience, it's crucial to combine both quantitative and qualitative research methods to develop a well-rounded view of your customers' needs, no matter the segment. Gaining this understanding also involves mapping the customer journey, which offers valuable insights into the drivers behind different customer personas, helping to identify their specific needs more effectively.
To add an extra layer of understanding, consider the value chain: What does the customer of your customer need? Understanding this dynamic provides an even clearer picture of how you can deliver value.
Key insight: This deep understanding fosters increased loyalty (+25%), better customer retention, and generates more referrals. When your customer feels understood and appreciated, they are far more likely to return and spread the word about your business.
Design unique value propositions: Tailoring the offer
Armed with a thorough understanding of your customers, it’s time to design unique value propositions. These value propositions should meet the specific needs of segments while staying realistic for the business. This ensures a sustainable launch and helps maximize long-term profits. For example, we shouldn't overdeliver to a less strategic customer segment.
In essence, there are five key components to crafting a strong value proposition: product, service, experience, price, and access. Depending on the predefined customer needs, the value proposition components should be configured differently.
A simplified example to illustrate this: The customer of our customer employed the Just-in-Time (JIT) principle in their supply chain. In that case, their need for strong service reliability will outweigh other considerations, such as the customer experience. In such cases, your proposition must emphasize reliability over experience or even price.
Key insight: By tailoring your value proposition to specific customer needs and delivering true value to the customer, you open up new ways to win business and accelerate revenue growth (4-8%).
Empower Your Organization: Bridging Strategy and Execution
The final element of the Custex Model is ensuring that your organization is empowered to deliver on the value propositions you’ve created. Unfortunately, many companies fail at this stage because they continue to operate under old systems and processes, even after designing new customer-centric strategies and propositions.
To truly align with your customer-focused goals, it’s essential to adapt your internal processes, data structure, resources, and culture. Employees need to be aligned with the vision and empowered with the tools and autonomy to deliver the unique value propositions. When the organization works in harmony with the customer strategy, you ensure seamless execution.
Key insight: Empowered employees are highly satisfied employees. There is nothing more frustrating than not being able to deliver what was promised to the customer. Remember our example where reliability was the key component in our value proposition? Well, if we don’t adapt our own organization to live up to the reliability promise, we will fail to deliver. When your team feels confident in their ability to meet customer needs, it translates into better service, greater engagement, and a more motivated workforce.
The overall impact: Faster revenue growth and increased profitability
By focusing on customer segmentation, understanding your customers deeply, designing tailored value propositions, and empowering your organization to deliver, you set your business up for long-term success. These four pillars work together to create a virtuous cycle where customer loyalty grows, your ability to win new business improves, and employee satisfaction increases.
The result? A measurable impact on both revenue growth and profitability—the ultimate markers of business success.
At Chronion, we believe that putting the customer at the heart of your organization is the surest way to drive sustainable growth. If you’re ready to embark on this journey to customer excellence, we’d love to partner with you and help you take the next step forward.
About the author
Abel Vanacker is senior consultant at Chronion.
Bert Vandewiele is partner at Chronion.
Do you want to know more about commercial excellence, contact us.
Comentarios