Mastering the Customer Environment
New Report to be published Feb 25th 2009
The Critical Moment
Given the current world climate that companies now operate within, much greater consideration must be given to the wider aspects of onboarding new customers and re-assessing existing ones. Trust, accessibility and brand execution at the consumer interface will be of higher value as indeed will be the way in which the business world wants to makes judgements of its own on who it deals with and how. Arguably, in the next two or three years the dynamics surrounding customer interaction are more critical than any other dimension
B2C
Retailers - either online or on the high street should consider the management of the first 90 days of the customer relationship to be a high priority issue. Onboarding of new customers can be a seminal experience which may be defining for the customer's Lifetime Value. The available evidence - from the banking sector -suggests that the highest attrition rates happen in this period and also, by far the greatest amount of cross-selling. Furthermore, it is the time of most frequent inbound communication and of maximum propensity for giving information.
In preparing our original report (March 2008) we looked for as much research evidence as we could find on the impact of the first 90 days. Rather suprisingly, we found relatively little, although such as there is can be very compelling and should not be dismissed simply because it relates to banking - arguably, it was the failure to onboard properly that caused many of the current problems in banks.
Failure to fully exploit the first 90 days of a new customer relationship is one of the great commercial paradoxes. The entire effort of the organization - marketing, brand, sales and product mix have gone into acquisition. The customer and his or her loyalty are in the retailer's hands - as is the possibility to acquire information that may inform the optimum profitability of the relationship over the short and long term. The new customer is in a ?receptive? mode just as any human being is at the start of a new relationship. The propensity to give information and indeed the desire to be asked is at its highest in these early stages. Without care, the highest chance of cross selling may pass by unrewarded and with it the opportunity to create a more sticky and informed long term relationship.
B2B or Partner relationships.
Our initial report considered Business to Consumer (B2C) relationships and onboarding. We believe that much the same principles apply to B2B type relationships and there is evidence to give strong support to this. Employee onboarding is directly analogous and there is much more supporting research from this area.
Conclusion
There is a 'magic' period of Propensity in the first 90 Days of a customer relationship. Creating an effective onboarding opportunity at the first point of contact may be far more commercially important than most current operating procedures allow for. Developing more positive onboarding strategies offers the double benefit of enhanced revenue opportunities and a better customer experience.
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