A Call For Customer Centric Supply Networks

Supply Chains tend to spend a lot of time measuring internal processes and not putting enough time into keeping external ones in check. Sales departments adopt a product or service-centered approach, meaning their key decisions focus on what they have to offer with the aim of increasing sales. When they do track their customers’ buying habits, it usually begins and ends with the purchase frequency, product type, and order history. This type of data, while valuable, doesn’t tell us much about customer sentiment and the health of our customer relationships – something where we could do better.

What is a Customer-Centric Strategy?

While seemingly obvious and easy to execute on the surface, understanding where you stand in the customer’s eyes requires you to have well-defined processes that start at the supply chain management level and end with the last mile execution. If these processes are well-honed, your customers will come back, purchase more of your product, and tell others about your brand. Furthermore, the data doesn’t lie, as customer-centric supply chains are outpacing their counterparts on all fronts:

How to Create a Customer-Centric Supply Chain?

A customer-centric Supply Chain places the customer experience as the most important part of doing business. It involves optimizing every customer touchpoint, be it pre-sale, point of sale, and after the sale to ensure customer satisfaction at all times. We’ll look at six strategies supply chains can use to improve their customer-centric approach.

1. Create a customer-centric culture

Building a customer culture is a concentrated effort that starts from the top of the organization – most specifically with management. Strong customer centricity stems from policies and technologies that make it easy for employees to form relationships with customers. Everyone on the team must have a firm understanding of how their roles affect the customer experience, and how their behaviors empower customer loyalty and engagement.

Appoint leadership

For a company to be customer-centric, it must first have customer-centric leadership. This is usually delegated to a CCO (chief customer officer) who is accountable for customer-centric strategies and processes within the organization. Customer officers act as customer advocates, communicating developments around customer concerns, and look for ways to optimize the customer journey map.

Make room for ideas

Go beyond listening to customer concerns and collecting feedback. Teach your employees to be proactive and identify what customers appreciate, value, and respond positively to. Set up brainstorming sessions to bounce ideas around. Your strategy can include things like personalization options, promotions, or a new approach to customer service, things a quality CRM system can help you with.

Break down silos

Knowing your marketing strategy, sales trajectory, and what your customers want will enable you to position yourself to better provide value. By sharing data between eCommerce, CRM, ERP, WHM, procurement, accounting, and other systems, you’ll get the ultimate visibility into operations. Conversely, being in the dark about these crucial processes will only hurt your ability to promote customer-centricity within your organization.

Invest in technology

Growing customer expectations are fueled by technology. Mobile is a large part of our lives, data-informed decision making is everywhere, and AI promises to take work off the shoulders of marketers, sales reps, and supply chain professionals. With the trends in remote work, self-scheduling technology, and the willingness to offer employees greater autonomy can also facilitate customer needs, and offer empathetic, proactive service.

Example of a customer-centric marketing strategy, many customer-centric organizations encourage employees to go the extra mile to make customers feel great. Zappos famously empowers employees to do whatever they feel is the right thing to do, to ensure customer happiness. If your budget doesn’t allow that, sometimes, even the smallest gesture works.

2. Gather and share customer data company-wide

Every organization is different and the way and type of data it collects on customers will vary. Whether it’s personal data, engagement patterns, transactional details, or customer feedback, data will help you be more customer-centric. That’s where your tools such as your CRM, eCommerce platform, marketing automation tools, and even AI chatbots can all play a role in encouraging more detailed, personal conversations.

Collect sales data

Your sales data holds the key to unique shopping experiences for every customer. Data such as the churn rate, the net promoter score, and the customer lifetime value are some general metrics that measure customer-centricity. By combining sales and feedback data from your CRM and eCom systems– and sharing them across departments – everyone understands how the customer perceives your brand.

Customer segmentation

Customer segmentation gives businesses a better understanding of their market and customers. Aside from knowing what type of customers purchase what product, segmentation gives brands an idea of customer engagement at a granular level. This can uncover untapped business opportunities, and help brands make strategic decisions without affecting other customer segments unintentionally.

Customer journey

Every stage of the customer journey must be monitored often and adjusted to maintain the customer-centric approach. By keeping a close watch on customer journeys, you can uncover trends, dips in engagement, or friction points, and work quickly to rectify them. Over time, this can build loyalty and long-term customer satisfaction, which will result in more referrals.

3. Invest in the user experience of online channels

In order to achieve success in your customer-centric initiatives, it’s crucial to understand the motivations and desires of your customers. As the share of online D2C sales increases, customer expectations around the user experience grows and shifts with it. Regardless of what industry you’re in or who your customers are, if the user experience is lacking, they’ll think twice about doing business with you down the road.

Transparency

Transparency isn’t just about assuring customers that raw materials come from sustainable sources. It’s about communicating crucial data at the right time. When you indicate out of stock items on product pages or list approximate restocking or shipping times, customers have less reason to get frustrated. An ERP integration can help you update inventory data to your eCommerce site.

4. Prioritize customer retention

It’s well known that keeping customers is easier than acquiring existing ones. Thus, retention is a big part of any customer-centric strategy. Your churn rate, repeat purchase rate, existing customer growth rate, and the effectiveness of relationship-building strategies will tell you how well you are doing. Growing these metrics requires keeping a close watch of your customer’s long-term needs, and acting quickly to assist them as their needs change.

Utilize a CRM

One of the reasons why many businesses struggle to get customer-centricity right is the overwhelming amount of customer data now available. Many organizations simply don’t have the right tools and technologies to help them accomplish this. A customizable CRM system is one such tool that allows brands to segment, profile, and target customers with the right messages.

Train for success

In order to be customer-centric, sales teams must change how they think about sales. Metrics such as pipeline and revenue streams are important, but so is helping, being empathetic, and understanding customer pain points. Many customer-centric companies practice whole company support. They get not only sales, but marketing, product, and engineering teams get a break from their tasks and learn about common customer objections.

Marketing alignment

When most people talk about aligning sales and marketing, they are suggesting unifying the lead management process across departments. This means being on the same page of tracking and managing revenue opportunities, whether prospective or current – from generation to its conversion into a customer relationship. Integrating a CRM and eCommerce tools together improves lead visibility, which increases the effectiveness of marketing, sales, and customer success efforts.

5. Sell based on value, not products or price

Instead of beefing up the product or lowering the price, focus on how you deliver value to customers. Since salespeople are at the frontlines of customer interactions, they must adjust that value according to the customer and situation. If customers are interested, they’ll want to know what the product does, how it can help them, and what the results of that help will be, in real terms.

Listen to customers

Effective customer listening is a top competitive advantage. That’s why communicating and listening to customer feedback frequently and regularly should be every customer-centric brand’s priority. Whether that’s conducting surveys, allocating time for one-on-one sessions, or keeping an SMS line or social media account open to collect feedback, it’s important to always be on top of customer concerns.

Make opportunities

With enough customer data and research under your belt, you can generate a detailed picture of what customers are looking for. Once that’s in place, you can place the customer’s interest in everything your sales team does. This does more than just create experiences that customers are likely to enjoy, as you can also discover tactics that generate predictable outcomes and repeat their use.

Sell experiences

Businesses that place customers at the forefront understand the power of a pre-sale question. By asking the right questions, such as “How can I help you be more productive today?” customer-facing teams can not just make the sale, but learn more about the customer’s situation, and quickly connect the answer with something valuable that they can offer.

6. Streamline the Supply Chain

Many customers demand lower costs, faster delivery, and greater transparency. Giving customers up to date information on their delivery remains a strong differentiator, such as when their items leave the warehouse, service center, and when it arrives at the customer’s destination. This trend is speeding up the digitalization of supply chains and introduces technologies such as real-time tracking, advanced analytics, and greater end-to-end visibility of all aspects of fulfillment.

Demand planning

Proper demand and inventory planning depend on careful analysis of your sales history, transactional data, as well as information from your inventory, suppliers, warehouses, and outside market trends. As any of these elements change, your demand planning forecast needs to be updated as well.

Order management

Visibility into customer orders helps eCommerce businesses determine how to fulfill them with the customer in mind. For example, orders can be fulfilled by each pick, piece picking, case picking, or pallet picking. The advantages and disadvantages of each method should be dynamically analyzed and optimized for current state conditions.

Warehouse management

After an order is finalized, the packing and shipping processes can commence. Mismanaging these steps can negatively impact the customer experience. Your systems must maintain a perfectly crafted SKU numbering system, an exact picking process that gets the item shipped to its final destination as quickly as possible.

Multiple fulfillment channels

The “omnichannel” trend is taking not only the customer experience but the supply chain industry by storm. Many large retailers have already embraced omnichannel supply chains by offering the option to buy online and pick up in person at a specific location. Building in multiple parallel fulfillment channels make it easier to offer the speed and convenience customers might expect.

Conclusion

Why does a customer-centric approach matter? Customers nowadays are seldom prepared to purchase quantities suppliers would like to supply, at a time determined by the supplier, in the form preferred by the supplier. This is excellently explained in Tony Hines’ book Supply Chain Strategies, where he stresses the importance of customer focus and the “seven customer Vs” that businesses must offer to customers: value, volume volatility, velocity, variety, variability, visibility, virtuosity.

There’s no single strategy that demonstrates customer centricity. In order to be successful, organizations must focus on their culture, data, user experience, retention, value, and their supply chain structures. That is, organizations must not only consider their own customer-centricity but the customer-centric nature of others that make up the supply chain network. It’s only then brands can use the collective focus, strategies, and actions that benefit the end customer.