One of the problems companies face in this high-paced world of business is an inability to nail down repeat customers.
When companies don't connect closely enough with their customers, loyalty, revenue and customer sentiment can be impacted in ways that harm the business.
If this sounds like an unnecessary nice-to-have, you're wrong. Sure, your core product provides value for customers, which is the driving force behind your business. But there is so much more value you could proactively provide in order to increase customer loyalty and reduce customer churn. You have an organization filled with experts in their specific areas -- many of whom can meet the needs and values your customers are looking for from a business they patronize.
Alongside your primary product, you have the opportunity to provide your customers with increased value in a way which matters to them by tapping into and addressing their needs. Your ability to do that effectively is what customer intimacy is all about.
What is customer intimacy?
Customer intimacy is a business strategy based around high attention to customer needs, and it measures a company's alignment and prioritization of those needs. This may involve close contact and outreach to customers across a range of different channels. Customer intimacy increases customer loyalty and fosters customer-driven revenue growth for the business.
A great overview of the original thinking behind customer intimacy can be found in "Customer Intimacy and Other Value Disciplines" by Michael Treacy and Fred Wierserma. Treacy describes customer intimacy as, " … segmenting and targeting markets precisely and then tailoring offerings to match exactly the demands of those niches. Companies that excel in customer intimacy combine detailed customer knowledge with operational flexibility so they can respond quickly to almost any need, from customizing a product to fulfilling special requests. As a consequence, these companies engender tremendous customer loyalty."
Customer intimacy isn't just about taking a proactive approach with customers, but about targeting a specific subset of customers whose desires you know you can meet.
Then you can become proactive and highly customer-centric. You need to know your customer first before you build that relationship.
In the article, these authors use the now slightly dated example of Home Depot; a store which knew its target audience and would try to hire staff knowledgeable about that area. Staff would then be instructed to take time with each customer to make sure they chose the right products for their needs. The in-store help became in-store consultancy, which results in in-store sales.
The next time someone had an issue in their home they needed to fix, they would know they can go into Home Depot not just to buy what they needed, but to find out what they needed to buy.
Customer intimacy is a way of inserting value into the market. You have to understand what value your customers want and how you can deliver it. Below are different strategies companies of any size can start implementing to be better attuned to customer sentiment and loyalty:
8 Customer Intimacy Strategies Any Company Can Try
1. Implement operational practices that prioritize the customers.
Listen to customer concerns, analyze them, and act on them. More importantly, implement practices that prioritize them, rather than discourage them. For example, instead of measuring and evaluating customer support reps solely based on the number of calls they take, also include a goal for them to improve their customer Net Promoter Score® (NPS) after every call.
2. Create, enforce, and adopt policies to make them more customer-centric.
Create customer service policies that actually benefit and help your customers get more value out of your product or service.
Zappos is well-known for being a customer-centric company, thanks to policies like:
- The ability to send back shoes you don't like free of charge
- Free shipping both ways to reduce risk for the customer
- A 365-day return policy
This represented a really bold shift in delivering a service which met what customers were looking for, and it came from a commitment to listening and responding to customer needs.
Zappos didn't originally start with a 365-day return policy, for example. But an internal company culture which put the customer first and allowed itself to test and tweak its business processes encouraged the evolution of the return policy over time. As Tony Hsieh puts it, "Originally, our returns policy was only 30 days, but we kept increasing it at the urging of our customers, who became more loyal as we lengthened the returns period."
3. Let your customers know they are valued.
Walk the walk on telling your customers that their feedback and input are valued and appreciated. You can do this by appointing customer advisory boards, creating a forum for your customers to communicate, or reaching out to high-value customers and partners before product launches to get their input and ideas.
4. Write case studies about your customers.
Capitalize on social proof by writing case studies and soliciting testimonials from your happy customers. This information will help prospective customers checking you out decide if they want to do business with you, and you'll give their product or service a boost with your marketing materials to further bolster your customer intimacy.
5. Hold competitions with your customers and reward them for advocacy and loyalty.
Once you've built a customer base that's engaged and excited about your brand, start rewarding them to be your loyal advocates. Hold competitions, or create a point-based system, that rewards customers for advocacy activities like sharing your content on social media, leaving a customer review, or writing a testimonial, so they can redeem points for free swag, purchase discounts, or other valuable prizes.
6. Host events with your customers centered around their needs.
Since so much business is done touchless-ly these days, with minimal in-person and phone interactions with customers on a regular basis, in-person or digital events can go a long way towards building customer intimacy. Webinars, trainings, trade shows, and events can further build trust, and emotionally-driven relationships that are better predictors of loyalty than customer satisfaction alone.
7. Offer customer training courses to become product specialists who can offer product consultancy service of their own.
If you sell a robust product or service that's widely adopted within your industry, create customer training courses and certifications they can fulfill to become industry experts in your product or service, and allow them to offer consulting to help them improve their profile and earn more money.
8. Create free educational resources to help customers derive more value from your products.
Create and publish free resources customers can use to get more value from your products. Blogging, webinars, social media content, YouTube videos, and videos classes are all examples that any company can do.
The founder of Geek Squad, the tech support company acquired by Best Buy, was asked at a conference why the company runs a YouTube channel where it teaches people how to fix their own problems, when that undermines the core service Geek Squad provide.
The response was that Geek Squad became the go-to troubleshooting option for many people interested in tech, and this audience would only seek out a professional once they had exhausted other options. Which means that after watching hours of Geek Squad videos this audience trusted Geek Squad to be able to help them; converting a customer through the trust which the video content had created.
So, what Geek Squad had done was create value-adding content related to its core service, to add extra benefits for its audience; customers and non-customers alike. And any startup can do this.
My language-learning startup is publishing articles about the best way to learn Spanish or the top Spanish-language movies. These articles don't replicate the value of our product, but they do provide a tangentially relevant value to the same audience which might be interested in our product.
As a bonus, these resources function as marketing materials, but they also provide tips, tricks, and new info to your existing customer or user base. Instead of just telling your audience how good your product is, give them extra value which they can benefit from.
Customer Intimacy for Startups
If you're working at an early-stage startup and wondering how you can implement customer intimacy to build a community of early-adopters, you can take steps to understand your target audience that will help you start doing some of the strategies above.
- You may not know your customers' needs yet, so you need to find them out and dig into them in depth.
- You don't have many customers yet, so you can personally give as much attention to each one as possible. This helps make your customers feel valued while also giving you insight into their specific needs and how your business relates to those needs.
- You can test and use your own product so that you can understand the kind of value it gives you and what the experience is like from beginning to end.
Once you have a greater understanding of your customers' needs, you can try to meet those needs. For a customer intimacy approach, you can think about adapting the product to meet requirements. You can think about providing the highest standard of customer service. And, you can think about providing extra added value, and other strategies listed above, as you scale -- instead of working backward and fixing older policies that don't foster customer intimacy.
How to Measure Customer Intimacy
This brings us on to how you can measure your customer intimacy efforts. The primary metrics you'll want to look at include:
- Word of mouth sentiment
- Customer churn
- Product adoption
Each of these measures can tell us slightly different things. However, they can be a little tough to measure at times.
Trying to understand word of mouth metrics requires finding out from your customers or clients how they heard about you in the first place. If you're selling high-level professional services this is easy as you'll be interacting closely with your clients. If you're selling a product via an external outlet - a supermarket - then there are more obstacles between you and understanding the customer's purchase decision.
Product adoption can give you a good baseline for that last scenario, as it shows increasing customer demand for your product. A good measure of customer intimacy could be found deeper within product adoption. If you have a brand and you're attempting to maintain a close relationship with your customers, when you release a new product line, you would hope to see existing purchasers of your other products adopt your new product out of loyalty.
Customer churn refers to how long a new user continues to use the product until they cancel. Even if they really love the product, are they still getting benefit from it over time? A SaaS product would want a very low churn rate and the success of the business hinges on this metric.
It's particularly important to offer effective onboarding for new clients if you're a SaaS business. The data tells us that the quality of the customer onboarding period can drastically impact on the rate of churn. This is where a company following a customer intimacy approach would want to create brilliant client onboarding processes to make the most of the time they can spend with each customer.
Ultimately, metrics around purchasing, using, and continuing to do both, are the best ways of measuring your customer intimacy. If you can compare those rates to competitor performance, then you'll be in a great position to understand how your customer intimacy program is measuring up in the real world.
Customer Intimacy Is Key
We've covered a great deal in regards to customer intimacy, but there is always more to add.
Let's boil it down to a few key actionable principles:
- Make your company customer-centric.
- Create an amazing customer support system.
- Add extra value for your key audience and customers.
From the front desk right up to the boardroom, if you can put the customer first, the customer will put you first. Try Amazon's empty chair strategy for the next meeting you're in: Always have an empty chair in every meeting which symbolizes the presence of the customer. What would the customer say if they were there? What would they think about your decisions? Try it out.
To learn more, learn how to create an effective customer journey map.
Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.
Originally published Nov 15, 2018 8:00:00 AM, updated July 20 2020