We finished running our CX course in March 2022 and one of the most memorable discussions was with a participant who summarised their customer dilemma as follows. "Having done some digging we have identified an opportunity which will bring us more customers but will alienate a significant proportion of our long serving customers, I just can't figure out our next steps."
We posed the question to the rest of the group and of course they asked questions. Far too many initially but eventually they honed in on the 5 critical questions that you should have answers to before making such a decision.
What is the lifetime value of the new Vs the old customers?
How much will it cost to implement the change and what is the payback period?
Can you do both and what is the cost of doing both?
Who else is in the space that you want to move in to? What is the market landscape?
How does this compare with doing nothing?
Clearly the income stream from your existing customers, if you do not change or adopt a more organic change to your strategy, has to be compared with that of your new customers. Are you moving into a high volume market? Are you geared up in other ways to deliver a great user experience in a high volume market which necessitates speed? Years ago we worked with a successful bakery which specialised in speciality cakes. They sold about 5 to 6 cakes per month and they were more like sculptures and most of their customers were firmly in the A/B social groupings. To smooth cashflow their bank suggested that they started baking something with a lower price point that would create income flow - more of a high volume product. After much debate they homed in on donuts. They already had some of the machinery to make the dough but needed to buy fryers plus they experimented with a new healthier baked donut.
Like many organisations a UX,CX consultant is called in when there is something wrong and this was the case here. They found that their main business supplying high-end artistic birthday and celebration cakes was suffering and the new business was not going well either. What went wrong?
The business model and processes had not adapted to supplying a fast moving product
The baked donut was a failure and they just kept trying to fix it instead of walking away
They needed different staff with different skills or a change in staff attitudes to run the fast food option
They took their eye of the ball and their mainstay business with high-end artistic cakes started to suffer. They were not following up leads efficiently and in a way which fits the product. If someone is paying £1000s for a cake, then the service cannot be rushed. An element of luxury has to be injected into the customer journey. They tried to automate some of this journey and it worked in terms of customers selecting which cake they wanted The visual displays on the website enhanced that part of the experience. However the automated system for selecting add-ons was not flexible enough to accommodate all needs. On reflection they discovered that this part of the process should have been a personalized experience with a human being.
So what are the key takeaways here? By all means explore additional revenue streams. However, think holistically about what needs to change to accommodate this new product or service. You cannot serve a new type of customer with old outdated processes. A total revamp of the customer journey, taking soundings along the way can help. Digitalisation is an important component but use it for what it is suited to. An impersonal online service is probably not great for a high-end luxury item which requires lots of personalisation. Being flexible and responding to findings quickly is important during times of change. During the height of the COID19 pandemic we noticed many organisations flexing their digital strategies to accommodate the move to online. As we have said before, it does appear that customers, users and consumers now see agile as the new normal.
コメント