A Proactive Front-Office is the Secret Sauce to Keeping Customers

Customers today are savvy – and understand how to leverage digital capabilities to get the tailored experience they’re looking for. With access to social channels, customers are interacting with brands and other customers in real time.

This has enabled customers to make decisions, and share opinions about brand loyalty in real time. More frequently, customers want to feel valued – preferring a mix of human and digital interactions.

There are companies that have perfected this. Best Buy, for instance, has completely redefined its route-to-market approach through a suite of churn-busting organizational initiatives. The electronics giant leverages stores to enhance the online experience—an initiative that has also unlocked $2 billion in inventory for potential sales. Its renowned Geek Squad, which makes four million house calls per year for customer service, provides an end-to-end experience that even leading online retailers can’t match. This proactive, multichannel approach helped grow operating margin by 150 basis points between FY 2012 and FY 2015.[1]

However, many brands still struggle. According to recent Accenture Strategy research, frustration with poor customer service drove 65% of customers to alternative providers in 2015 – costing businesses far too much to keep up. Accenture analysis indicates that the global switching economy is already worth $6 trillion—and growing at double the rate of global GDP. Many companies attempt to compensate for churn by acquiring new customers. However, it’s suggested that acquiring new customers is five times more costly than retaining existing ones, and with a poor strategy, retention isn’t possible.

Despite their openness to disruptors, most customers want to stick to the brands they know. Eight in ten customers who switch providers say they could have been retained if the company had been more responsive to their needs. By strengthening company “ownership” of customer issues, a lean, responsive, digitally-driven operating model focused on customer outcomes has cut churn and enhanced operational performance for a range of leading companies.

The key is to create an operating model that turns digital disruption to your advantage. The following should be considered when taking steps to improve customer service:

  • Learn more about your customers. It’s critical to identify the KPIs and metrics most likely to help you understand the impact of your customer experience on churn. Align those metrics to the right outcomes, and leverage analytics to gain insight into what determines optimally differentiated customer experiences.
  • Focus operational design decisions on driving end-to-end customer outcomes. Take an outside-in approach. Instead of creating functional teams (e.g., billing, technical support, sales) that align to your existing operating model, organize employees around customer intent (e.g. onboarding, service upgrade, service issues), and empower them to conduct all aspects of support across those areas. The benefits of such a customer-centric operating model include fewer transfers, greater employee ownership and happier customers.
  • Develop an organizational culture that can adapt to changing customer needs. Abandon siloes and foster a culture that’s consistently focused on improving customer retention. Incentivize behaviors that will drive the right customer outcomes, and communicate consistently with your teams, leading from the top.
  • Establish a process to allow for continuous improvement. Implement a “review, approve and prioritize” process to drive customer value generation and ensure future value is unlocked. Continually monitor, evaluate and adjust your performance metrics to prioritize opportunities to adapt, while identifying risks.

These steps will help to build a more proactive front-office that is agile enough to embrace constant digital disruption – helping to improve customer experience and reduce costs to serve customers.

Shawn Meyer, Senior Manager for Accenture Strategy

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