What's cooler than gaining a customer? No, not gaining two customers (though I have to admit, that's still pretty cool). It's getting customers to come back to your business.
Why? Because this demonstrates an understanding of customer intimacy.
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 to increase customer loyalty and reduce customer churn. You have the opportunity to provide your customers with increased value in a way that 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 how attentive a company is to address its customer's needs. It's a business strategy that measures a company's alignment and prioritization of those needs. This may involve close contact and outreach to customers across different channels. It increases customer loyalty and fosters customer-driven revenue growth for the business at hand.
A great overview of the original thinking behind customer intimacy can be found in Michael Tracy and Fred Wierserma’s, "Customer Intimacy and Other Value Disciplines". 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. It’s about targeting a specific subset of customers whose desires you know you can meet.
In the article, these authors use the example of Home Depot. Its staff is instructed to take time with each customer to make sure they chose the right products for their needs. The in-store help became known as in-store consultancy — that led to in-store sales. The next time someone had an issue in their home, 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 use 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 support reps solely based on the number of calls they take, include a goal to improve their customer Net Promoter Score® (NPS) after every call.
2. Create, enforce, and adopt more customer-centric policies.
Create customer service policies that actually benefit and help 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 that met what customers were looking for and it came from a commitment to listening and responding to customer needs.
For example, Zappos didn't originally start with a 365-day return policy. But an internal company culture that 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 put 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’re valued.
Walk the walk when 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.
Sharing positive customer experiences on the platforms your prospects and previous customers frequent most can be a great strategy for customer intimacy.
Capitalize on social proof by writing case studies and soliciting testimonials from happy customers. This information will help prospective customers decide if they want to do business with you, and you'll give their product or service a boost with your marketing materials and further bolster your customer intimacy.
5. Reward your customers for their advocacy and loyalty.
Once you've built a customer base that's engaged and excited about your brand, start incentivizing 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, in-person or digital events can go a long way towards building customer intimacy. Webinars, training, 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 create product experts.
If you sell a robust product or service that's widely adopted within your industry, create customer training courses and certifications. Customers can fulfill these 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. Share 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 options that any company can do.
The founder of Geek Squad was asked at a conference why it runs a YouTube channel teaching people how to fix their own problems, when that undermines the core service it provides.
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. This 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, adding extra benefits for its audience; customers and non-customers alike — and any startup can do this.
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 that 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 and build a community of early adopters, take these steps to understand your target audience.
- You may not know your customers' needs yet, so you need to find them out and dig into them in-depth.
- When you don't have many customers you can give a lot more attention to each one and personalize their experience. 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 start thinking about how you’ll fulfill them. For a customer intimacy approach, think about adapting the product to meet requirements. And, consider how you can provide 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 to how you can measure your customer intimacy efforts. The primary metrics you'll want to look at include:
- Word-of-mouth sentiment
- Product adoption
- Customer churn
Each of these metrics tell us slightly different things. However, they can be a little tough to measure at times.
Trying to understand word-of-mouth metrics requires asking 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 — like 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 want to see existing customers adopt your new product out of loyalty.
Customer churn refers to how long a new customer continues to use the product until they cancel their subscription or stop buying your products. 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 your 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 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, including principles like:
- 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. Understanding their needs, adjusting your offering, and showing them appreciation will form business relationships that last.
The article was originally published November 2018 and has been updated for comprehensiveness.
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.