The value of a customer based business model

“We all need people who will give us feedback. That’s how we improve.”
– Bill Gates

A Customer Based Business Model

According to the Chief Marketing Officer (CMO) Council, only 14 percent of marketers
say that customer centricity is a hallmark of their companies, and only 11
​percent believe their customers would agree with that characterization.

 The phrase "The customer is king" is something that you have most likely heard at one point in your life. When you read that statement it may bring back memories of a manager who spouts platitudes without actually putting any real weight or meaning behind them. Or you might think it's a cliché that has roots in a fundamental aspect of what drives people towards a product or service but is too hypothetical to be of any real value.  
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The term "customer centric" may convey  the same assumptions, however contracted labor may rely on customer feedback more than any other industry. 

Communication (Gathering customer Data) 

 At the heart of customer centric business models is the ability to communicate, forming two way relationships where information is allowed to flow both ways. In the context of design and development there needs to be constant communication, especially with companies that rely heavily on contracted work where loyalty and reliability become the two largest factors in repeated work. With contracted entities, an accurate communication of a timeline may make the difference between receiving future work and getting dropped for another company.  One way to make sure that you are catering to the correct demographic, anticipating client expectations, and building a better relationship with your clients, is by effectively gathering information and communicating accurately. 

Methods of Gathering feedback

• Customer Satisfaction Surveys 
• Direct Communication
• Shared timelines
• Collaborative efforts. 
• User Testing

Picking a feedback model

eHow you communicate with customers depends on your business model, the products and/or services that you provide, and your ability to understand and apply what information you have gathered. Can you choose more than one method of communication? Yes, for larger companies selling a product directly to customers, but also managing design and supply communication, may look like all of the above.

Customer satisfaction surveys are useful in nearly any business model when dealing directly with someone who is purchasing your product. This works best when the product is marketed to a more general consumer with many small or individual buyers, and does not always work as well in a company with fewer large clients. 

Go.medallia.com, qualtrics.com, and voxco.com are some of the most popular survey generation tools that allow for customers to design, format, analyze and test surveys before sending them out. While other companies like birdeye.com, and thryv.com, seek to manage online customer ratings and perceptions. ​

Direct Communication provides qualitative data which can take the form of a call in help service, an email, or simply a customer service number. Although most companies have had services like these implemented for decades, it has become increasingly popular with business to business companies to provide a way to help implement the improvements company wide. Working with a few large clients, direct communication is not a one time survey, but an ongoing dialogue that helps to ensure expectations on both sides. 

Shared Timelines  are an effective way of connecting with customers and provides the most benefit when both the customer and seller are on the same page. Although not applicable to every industry, having a shared timeline in the cloud that can keep both parties involved, grants them the ability to keep successfully working together and up to date. We created our project management tool to provide this service by allowing for the ability to share timelines with customers. 

Through experience with our clients, we have found that providing the full value of our aero2web software means implementing it across multiple departments and working with clients to allow them to use this tool to its fullest potential. Although there is an initial investment for setup time, it creates a win-win situation that allows us to foster a mutually beneficial environment with our clients. Allowing client's to share timelines and keep track of progress creates a  situation where both customer and buyer save money, How project management software can save you money. 

Collaboration, where customers and businesses work together for the benefit of both parties, is last on this list, but it is by no means the least important. Creating a culture of customer-based service is by far the most difficult part of implementation and requires the most effort. You may need to revise core values, reaffirm the ones that add worth, and remodel the ones that no longer serve growth. The next hurdle may be a bitter pill to swallow. Taking a hard look at where your existing company culture is now and how closely it matches the values that you have set out to fulfill. After you've decided which direction you want the company to move,  the next step is to make a plan that aligns with those values and tracking your progress. 

User Testing Software companies make a product to fit a specific niche. Many software companies function within a very competitive environment, making feedback an integral part of creating something that customers won't only use, but will continue to choose over other competitors. Collecting and analyzing appropriate data, representative sample size, and a culture that is willing and able to respond to the information that has been gathered, benefits both the potential user and the company that is developing that particular product. 

After you have determined what method of feedback is right for you, it's time to consider the benefits and costs of implementing the process yourself, or hiring a third party to do it for you.

Analysis  

Once you have effectively understood your specific customers needs, and have learned how they feel about your company or product, the next step is to learn what to do with this information. As was said previously, creating a culture around a mutually beneficial relationship is imperative.

After collecting data on existing and potential customers, organizing that data into usable categories is the first step to understanding it. Adding subcategories can provide a bit more nuance and a more detailed picture. All feedback is good feedback, given that it's accurate, because it provides a picture of how your customers feel about your product. Separating these categories into positive and negative feedback will give you a picture of what is working and what needs to be improved. It's important to look at the bigger picture. As more information is collected, trends will become apparent providing a clearer path forward. 

 NPS(Net Promotor Score) 

A net promotor score represents the chance that any given customer is likely to recommend either positively or negatively your product or service. Increasingly adopted by fortune 500 companies as bench mark comparisons against competitors, an accurate NPS score can give you a good estimation of average customer satisfaction. The determination of this number is simple. The question is asked, How likely is it that you would recommend our company/product/service to a friend or colleague? Customers then respond on a scale of 1-10. Scores of 9-10 are considered promotors and any answer from 0-6 is considered a detractor. The equation below shows the NPS score. 

% Promotors - % Detractors = NPS score

​It's important to ask follow up questions in order to categorize responses and further understand customer perception and how that affects the interaction with your business. 

Closing the Loop is one strategy to convert negative perceptions is by reaching out to detracts (those who scored a 0-6)  gathering additional information and attempting to convert a detractor into a promotor. 

An NPS score, although useful, has some pitfalls that need to be addressed in order to use it properly. Like all surveys, passive non responders are not represented, so the answers have the potential to be biased. NPS does not generally represent a customers future loyalty as a single predictor and must be taken with other models. It does not always perform as an accurate predictor of future company success. 

(NPS) Alternatives and improvements

• Specific Recommendations 

ex: In the last 3 months have you recommended company x to a friend, colleague, co-worker? 

• Customer Loyalty behavior

ex: Have you considered cancelling your subscription in the last x amount of months? 

• Customer Satisfaction 

ex: How satisfied are you with (product/company x) 

If you own a business with a few larger supporting clients, these questions may still be useful when asked in a different ways to help you understand how they view your service. By being more specific, a much better picture of your consumer and client base will allow you to make more informed business decisions. 

Flow of customer Satisfaction 

Improving Customer Experience

With an understanding of your customer landscape, working backwards and fitting your business model to the needs of your customer will help  keep focus on the people who depend on your products and services and creating a more positive experience. Putting the customer at the center of your operation will allow you to find new opportunities for growth and increase employee satisfaction.

Catering to customer need is an ongoing process.

Being able to anticipate and collaborate with  the people who depend on your business is an ongoing process. It’s important to maintain communication with clients. It's important for information to consistently flow from the customer to your business, and from your business to the customer. Personalizing customer responses, providing multiple feedback channels, and having a business that is willing to grow and change based on feedback, will not only improve the customer experience but your business will also be in a better position to respond to changing markets. By listening to responses, assessing criticisms and empathizing with the people that depend on your product or service, you will not only increase loyalty, but  also increase the possibility of previous detractors being converted into a valuable recourse.

​Creating a Customer based Business.

• Listen to your customers
• Evaluation of your core values.
• Set a goal and make a plan.
• Reinforce behaviors that align with these chosen values.
• Examine your hiring process
• Evaluate progress. 

The Wise.aero, inc. 
admin@thewise.aero ​