Customer Carousel™

 Once you have the right processes and systems in place, developed a collaborative mindset based on a shared vision, and established cross-functional teams that understand the customer dynamics, you’ll appreciate the high level of detail we’ve put into describing the entire customer lifecycle process.

8.1 - SHIFTS IN CUSTOMER DEVELOPMENT

We found that the customer development process has changed significantly in recent years and in many ways. Not just because of globalization and digitalization, but also due to rising concerns over matters like income inequality, our environment, and climate.

Let’s review just some of these changes, although there are many more:

Brands need to be purposeful: "It is (about) the story you tell, not the product you sell".

Technically, your mission is your purpose. However, customers demand more than a mission statement explaining what it is you do, how you plan to do it, and to who it may concern. They want to know why you do what you do. What drives you, what passionates you, or what keeps you awake at night. They need to know whether you’re equitable to your stakeholders and care about our planet. With the rise of social media public scrutiny is intimidating, so whatever you do, don’t pretend to be what you’re not. They’re bound to find out and destroy your reputation.

The moment of purchase should no longer be perceived as the end, rather as a means to an end.

Common practice dictates that customer development is mostly about driving a customer to a moment of purchase. This is unsound: purchase is not an end, it is the start of a relationship that is based on an Understanding of Trust™ and confirmed by a contract to which both parties are commited.

Only if you follow through, as promised and expected, the relationship may develop into an Alliance of Trust™ which could lead to a long-lasting relationship. However, most marketing and sales funnels describe ‘purchase’ as a final stage while a few models have added ‘satisfaction’ and ‘advocacy’, without describing how to reach these post-purchase stages or who is responsible for it.

Marketing communications is no longer about sending, rather a real-time reciprocal process.

Before the age of digital, marketing communications was mostly a unilateral process, often referred by as ‘sending’. Due to the rise of
the Internet, mobile devices, and social networks customers can now actively engage in the buying process, driving bilateral communications.

Yet, most purchase funnels still perceive the customer journey as a one-sided process. It is not: from a customer’s point of view, it is a decision tree while from a brand’s point of view it is an influencing tree. As we will explain further down, the buying process is best seen as two separate ribbons, that may become entangled for as long as it is beneficial to both parties.

Buying motivation throughout the buying cycle shifted from rational to emotional triggers.

Due to the amount of information that is now freely available to each and everyone, customers already know most of what is to know about your product and your reputation. Customer activation, therefore, needs to shift, from an emphasis on rational triggers to emotional triggers, i.e., all signals and sensory stimuli customers can experience about your product or brand.

As a result, Emotional Intelligence (EQ) and emotional engagement have become prevalent in customer experience management.

Customer development should not be seen as a series of steps, rather as an integrative process.

The frontline operation has become extremely divided with numerous specialists, each focusing on a fraction of the 360-degree puzzle. It should come at no surprise that individual employees have become entirely disconnected from the overall customer development process and often have no clue what customers experience during each of their interactions with the organization at large.

Customer on-boarding has become a critical component of the customer development strategy.

As more and more companies make the shift from as-a-product to as-a-service business models, the revenue model is also changing from one-off purchases to subscription-based services. While customer churn hasn’t been of much concern to product-centric brands, in case of subscription-based services it is absolutely vital that customers extend their subscriptions.

To reduce customer churn ─ and increase employee engagement to raise customer loyalty ─ brands now resort to Customer Success, a kind of proactive customer support practice. Customer Success efforts commence just prior to or shortly after the moment of purchase.

Significance is the traverse in customer lifecycle management, leading to customer extension.

Customer Lifecycle Management involves many steps, however, one step has been overlooked by most: Significance. Significance supersedes Satisfaction and even Happiness. While Satisfaction and Happiness look backward, Significance looks toward the future. Why should a customer maintain a close relationship with you? What future value do you have to offer them? Why would they want to associate themselves with your brand?

If you want to build strong customer bonds, you’ll need to provide customers (implicitly) with favorable answers to these questions.

Innovation can either extent (sustain) or prematurely end (disrupt) a revenue stream.

It should come to no surprise that we live in an age of technological disruption. Technology that was developed in the previous century is now phasing out, while new (digital) technology is rapidly gaining traction. If your core operation still relies on old systems, or your
business model is out-of-date, chances are that your revenue streams will soon be prematurely discontinued.

Since your business relies on revenue, this disruption could become fatal. While product innovation could provide a temporary edge over the competition, outdated business models may require your organization to make a complete turnaround.

Employee-customer engagement drives customer loyalty and customer advocacy.

As mentioned before, the customer journey isn’t a one-sided process: it involves two parties, your brand, represented by its employees, and the customer. If you want to drive loyalty and advocacy, you’ll need to get both your customers as well as your employees engaged in the process.

Customer expectations may vary greatly depending on their point (or frame) of reference.

Customer expectations greatly determine Customer Satisfaction, Happiness, Significance, and Loyalty. However, each customer has a
different point (or frame) of reference, meaning, their expectations may vary greatly. While one customer may be thrilled because your customer service desk was quick to solve an issue, others may not be so impressed and demand that you proactively help them to obtain as many benefits as soon as possible from what it is they purchased from you.

8.2 - INTEGRATED PROCESS

To incorporate these changes into a modern buying cycle, we’ve created the Customer Carousel™.

The Customer Carousel is the ’roundtrip’ part of the ROUNDMAP framework and contains:

• 4x Customer Development Goals ─ Acquisition, Creation, Retention, and Extension.
• 4x Frontline Departments ─ Marketing, Sales, Delivery, and Success.
• 8x Moments of Engagement ─ Brand-initiated touchpoints.
• 8x Moments of Reflection™ ─ Measurable responses by customers to these touchpoints.

Instead of focusing on creating the perfect customer journey, we believe companies should focus on providing more insights into the gains of their product (Prospect Theory) and adhere to a very simple 4-step response to each touchpoint (f.i., “More info”, “Order now”, “Keep me informed”, and “Not interested”). This way ─ provided brands use the right channels and responsive touchpoints ─ firms will be able to drive their prospective customers forward. Remember the KISS-formula: Keep it simple, stupid.

8.3 - TIMELINE

Since the customer lifecycle is a cyclical process, as suggested by the term, a circular layout may be difficult to grasp at first sight. The cycle includes the classic AIDA, as well as elements of Alan H. Monroe’s Motivational Sequence (mid-1930s). 

To introduce you to these steps, we’ve created a more familiar linear timeline. First, let’s have a quick look at it:

On the bottom half of the figure, you’ll find the brand-initiated touchpoints or Moments of Engagement (Attraction, Awareness, etc.). Beneath each Moment of Engagement you’ll find a Prompt (1-8) that determines its position and meaning in the lifecycle process. While on the upper-half you’ll find the Moments of Reflection™ ─ the measeable responses of customers to the touchpoints. In between is a color-coded wave, representing the Ultimate Level of Truth™.

The figure illustrates how customers respond to the brand-initiated touchpoints as they pass through the Customer Carousel™. By extending the frontline operation with a fourth department, Customer Success (marked in red), the likelihood of retaining more customers ─ getting them to return more often and spend more over the course of their customer life time ─ increases significantly.

According to Zappos, 75% of their daily purchases come from returning customers (successfully extended).

8.4 - RELATIONSHIPS AS A DOUBLE HELIX

Although we’ve chosen to explain the arrangement of the Customer Carousel™ to you by using a linear timeline, please remember fact that the actual motion is circular (360-degrees). Over time this creates a helix (see image to the right), indicating a customer circling around the brand.

However, since it is a two-sided process, engaging the brand as well as the customer in the process, it is actually a double helix ─ much like a DNA-string. In a more abstract way, the Customer Carousel™ is about estabilishing a product-customer fit, as part of the product-market fit, that creates a double helix.

A product-market fit is the degree to which a product satisfies a strong market demand.
Product-market fit is a first step to building a successful venture in which the company meets early adopters, gathers feedback and gauges interest in its product(s).

8.5 - FROM CYCLES TO WAVES

In fact, a product-market fit is exactly that: two interwoven strands, one of demand and one of supply, held together by for the most part emotional bonds. While we could consider customer relationships as a mere consequence of our actions, convictions, or even as strokes of luck, we should place them in perspective. Afterall, cycles are a series of occurrences that occur over time, destined to repeat itself ─ given the right circumstances and conditions. Let’s consider the Customer Carousel™, the customer lifecycle, over time:

By plotting the steps of the Customer Carousel™ on a timeline, you can see that we need to invest in the relationship (downward movement) before we can capture value from it (upward movement), following tipping point #1, i.e., the moment of transaction.

In a similar way Product Carousel™, Growth Carousel™, and Business Carousel™ can be plotted over time while we need to consider that the Customer Carousel™ is the shortest wave (spanning across the lifetime of a customer relationship) and the Business Carousel™ the longest (spanning across the lifetime of the business venture). More can be found in our online programs.

In general terms:

• Business Carousel™ is about developing the business venture over time.
• Product Carousel™ is about developing the product-market fit over time.
• Customer Carousel™ is about developing the customer-product fit over time.
• Growth Carousel™ is about developing the strategy to grow over time.

PETER DRUCKER: PURPOSE OF BUSINESS

Despite Peter Drucker‘s suggestion that “The purpose of business is to create and keep a customer”, few companies actually have a customer retention strategy ─ even though an increase of a mere 5% of the customer retention rate could raise profitability by as much as 25-95% (Harvard).

And: “Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.”

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