Recent articles highlight the catastrophic consequences companies can face when they overinvest in customer acquisition while ignoring basic business fundamentals, like material costs, supply chain management systems and customer experience software. Some companies have lost loyal brand enthusiasts due to
delayed or canceled orders
; others have experienced severe
and may never recover.
While spending money on infrastructure may not be as glamorous as running Super Bowl ads or hosting live events with celebrity influencers, it is equally important. The entire experience a customer has with your brand affects future sales and directly impacts customer lifetime value. The initial customer acquisition is only one part of the equation.
Before joining Anvyl, an intelligent supply chain platform, I spent more than a decade in global manufacturing and distribution. I believe that investments in core infrastructure, the federation of disparate data and surfacing process optimization opportunities are critical to brand success. Without systems to ensure scalable, repeatable, sustainable customer experiences – that incorporate real-time feedback loops – even large brands fail.
Here are five things your company can do to deliver a truly differentiated customer experience.
1. Don’t Overspend
There is a lot of focus on growth vs. profitability in the direct-to-consumer startup market today. While viral growth is important, fiscal responsibility will ensure you don’t end up over-leveraged. Don’t fall into the trap of thinking the next raise will make up for the deficit and let material costs, hiring or customer acquisition get out of control. Understand that demand may change, popular product trends may shift and that next raise may take longer than expected.
Be careful not to overextend your budget on advertising and branding while losing track of other costs. Track and analyze your current supply, product and people costs. Keep in mind that they will change over time and like the other process loops, you should have a real-time picture of what you are spending and a strategic view into variables that may change.
2. Invest In People
Invest in hiring and training the best people, and foster a culture of ongoing development. Organizations that have teams of individuals who feel empowered to make decisions, have strong support systems and participate in continuous learning will outperform expectations and deliver a significant return on investment. Don’t overlook the value of a strong team that is focused on exceeding customer expectations. In customer-driven markets, service levels, customer experience and constant process innovation can be huge differentiators.
Help teams train to develop strategies to deal with “what if” scenarios. What if there’s a strike or a natural disaster, or the cost of raw materials jumps overnight or certain components are suddenly scarce? How will each team member react? What decisions will they need to make, and what is their authority to make them? When should they sound the alarm? Continuous training and fostering transparency about real challenges teams are likely to face will enable your team to deal swiftly with issues when they arise.
3. Anticipate Customer Behavior
Investments in infrastructure systems that allow your teams to anticipate challenges, manage operational costs and exceed customer expectations are critical. One facet your supply chain strategy should include is predictive demand planning. Research buying behavior across customer segments, considering seasonal demand spikes, unique buying patterns and event-driven ordering.
This may sound intimidating, but initial efforts can be as simple as estimating the number of potential customers in the market and the portion your business is likely to capture over time. As these efforts mature, models for demand planning can become more sophisticated. Many leading companies have begun to incorporate deep learning across demand planning. Scenario-based software like Kinaxis allows global teams to simultaneously model multi-dependent outcomes (changes in tariffs, natural disasters, raw material shortages, demand spikes and customer behavior) and determine the best path forward. Understanding the risks across the entire supply chain and determining how to adjust can save millions of dollars and help ensure a more optimal customer experience.
4. Create Real-Time Visibility
Unfortunately, even the best plans can go wrong. While understanding what might happen is a critical component of supply chain risk mitigation, no amount of planning can eliminate risk completely. This means during the execution phase, your team must have complete, real-time visibility across the entire product journey so they can adapt to changes immediately. Your team needs to track every order across suppliers: from purchase order entry, through pre-production and production, throughout shipping, all the way through to delivery. The more your team knows, the more agile they can be. This means when challenges like natural disasters, tariffs, demand spikes or shortages do occur, they can stay ahead of them.
5. Deliver Incredible Customer Experiences
Once demand planning is in place and your team has continuous, real-time visibility, be sure that your company culture incorporates a customer-first approach. This means everyone across functions works in concert to deliver a delightful customer experience.
Real-time customer communication and feedback loops are important. A customer success system will help drive real-time collaboration across your customer teams, measure customer experience and surface continuous feedback from customers. If your teams can be proactive and identify potential problems before they escalate, teams will foster greater trust and brand loyalty with customers. Communicate challenges immediately, and if you are making changes that may not be popular, be transparent about the reasoning behind the decisions. For instance, if you change from an overnight freight guarantee to only offer three-day shipping, sharing the business goal and benefit of the change (to keep prices down for customers), can help minimize negative reactions. In general, take immediate action on customer feedback and follow through on helpful suggestions when possible.
While a successful customer acquisition strategy is important to rapidly growing your customer base, the fundamentals can’t be ignored. Invest in your company’s customer culture, infrastructure and people. You will create the foundation for a fast growing, customer-centric brand with a loyal following and avoid more #InstaProblems.