Opinion
kbb Birmingham 2018 Show Special
How to… turn customer recommendations into profit
Chris Burton, founder of business consultancy Brand Success, explains why creating more brand fans is a top priority if your business is to achieve its true profit potential
e all know that customers who recommend your brand to others are very valuable to your business. They usually do so because your brand has done something for them that they love. I call them brand fans. Typically, they create eight times their own lifetime value – so, if they buy £20k of goods from you, their recommendations will create eight times that, which is significant. Typically, although brand fans only represent 2% of customer numbers, they account for 20% of sales volume, and their recommendations lead to a further 60% of sales, making a total of 80% of sales volume. In addition, the margin on these sales tends to be higher, typically accounting for 150% of a company’s profits [that are reduced back to 100% by lower margins or losses on sales to other customers]. These brand fans are so valuable, that attracting
W
1 5 2
and creating more of them should be your number- one priority. What better way to create profitable growth that is not only sustained but can accelerate with time? No doubt your business has created, and is creating, customers who recommend your brand. But think of the growth potential for your business if you could consistently create more brand fans. So how do you do that? It has been demonstrated that surprising customers with an unexpected experience and/or delighting them by exceeding their expectations are the most significant creators of strong recommendations. So how can you surprise and delight more of
your customers? I recently worked with the team at Extreme Design, who specialise in kitchens and have showrooms in London, Berkshire and Surrey. The team fully grasped and implemented my five- step process (see box below) to produce sustained, profitable growth.
The Extreme Design team realised that their brand was often outside its sweet spot (step 1). They
Sweet spot Identify where and when your brand is at its best. This is likely to require a combination of expertise, assets and skills. Keeping the brand in its sweet spot.
3
needed to refocus it, so that they only ever played to its strengths and uniqueness. We created the Extreme Design proposition. This was ‘personal living spaces that defy convention’, which is about creating living spaces that capture a life lived, not just a lifestyle. This can be interpreted powerfully for each customer group, so that in their eyes, only Extreme Design can provide the right solution (step 3).
There are many ways that higher performance can be measured (step 5). I favour keeping this focused on measuring the willingness to recommend. At Extreme, customer experiences are measured and managed to ensure brand fans are actively created. This approach has refocused the Extreme team on keeping the brand in its sweet spot by providing specific groups of customers with something unique and highly valuable to them.
• Chris Burton will be speaking at the kbbreview Retail & Design Conference, see pages 8-9 for the full programme
steps to attract, create and retain brand fans Powerful propositions
Most valuable customer groups Identify two or three groups of high-value customers who will become the main focus for your brand. Consider the criteria you’ll use to identify your highest-value customers. Focus on what they produce for your business. Once you have identified these customers, the challenge is to understand them in specific ways.
Review steps 1 and 2 to find out what your brand does best for each of the most valuable customer groups. The ‘problem’ that your brand solves might be slightly different for each group, so your brand needs to respond with different solutions for them. Think of the difference in what airlines offer their customers in first class, business, premium economy and economy. Think of your brand as offering an experience to these potential brand fans. The challenge is to make the experience more valuable to these people (and more profitable for your brand) than the alternatives on offer from your competitors.
4 5 34 kbbreview kbb Birmingham Special Edition March 2018
People
Everyone who works for your business is involved in bringing your brand alive and will influence the customer experience and your brand’s ability to create strong recommendations. It’s vitally important that they understand steps 1-3 and how this all comes together under one clearly defined brand.
Measure and manage To create brand fans, you need to continually
measure their recommendations so you can manage them and increase their number by adapting your brand fans’ customer experiences.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112
