How the Customers Influence Business Strategy Essay
A business strategy describe how a particular business intends to success in its chosen market place against its competitors.
It therefore represents the best attempt that the management can make at defining and securing the future of that business. A business strategy should provide clear answer to the questions: -What is the scope of the business to which this strategy applies? -What are the current and future needs of customers and potential customers of this business? -What are the distinctive capabilities or unique competence that will give us competitive advantages in meeting these needs now and in the future? What in broad terms needs to be done to secure the future of our business? These questions should have been addressed during the process of strategy formulation. In this paper, we will discuss the second question that described above or on the other hand the question “how the customer influences the business strategy”. Most companies still develop business strategy by defining their markets as a collection of current and future products/ technologies/ competitors and not as group of customers with distinctive needs.
Such a strategy is unlikely to be de-risked against market shifts and companies might actually miss the big opportunities offered by the market. One of the quickest ways to lose customer is to not have an effective business strategy in place for customer service. In today global markets, customer experience has become a key business differentiator. The world’s largest and most influential technology use their customer relationships as a key of continuing business success.Customers are demanding better service, more convenience and more personalized communications and business must maximize very interaction with their customers across multiple channels to drive loyalty and preference. Nowadays, when a customer have a bad experience with a company, they don’t keep it to themselves, they instantly start venting on social networks. Survey show that the customer who has an unpleasant experiences at a business will tell or more people about it. This mean you don’t just lose one customer, you lose many, hindering new and existing opportunities to grow your business.
You also lose brand value and positive word of mouth which may be the truly cost-effective form of advertising left. For upper manager, the challenge doesn’t come in making incremental improvement ito the company contact centre or website. Instead it comes in shifting the strategic focus to providing customer experience-empowering the people in the organization who are connected to each step along the customers’ lifecycle to do what is needed individually and collectively deliver compelling and consistent experience.Customer experience is the sum total of all the interactions a customer has with your brand during their lifecycle has become the critical differentiator in today’s hypercompetitive, hyper-connected global market place. Differentiation based on product innovation is no longer sustainable because competitors can leapfrog advantages more quickly than ever. And differentiation based on price kills profitability.
On the other hand research shows that 86% consumers said they would be willing to pay more for a better customer experiences.There are many things organization need to do to deliver a superior customer experiences. They must response quickly to customers’ requests. They must ensure that customer interactions are highly personalized. And they must deliver the right information to the right place at the right time.
Customer experience leadership is not easy, and there are all kinds of issues that can derail even the best-intentioned customers’ experience initiatives. That’s why so many companies fail to achieve customer experience excellence. There are many ways you can improve customer experience.However, you won’t be able to accomplish anything if the people in your company are pulling in opposite directions. A key aspect of your mission as a customer experiences leader is therefore to act as political champion for customer experience. Everybody of the customer experience is of central strategic value to the organization. The company which thinks that customer experiences is just a matter of improving a few select business process will always lag behind competitors who are making customer experience a core competency of the entire organization.
Customer satisfaction is another important fact to be considered. It is widely accepted that delivering products and services of high quality leads to customer satisfaction and in turn to high profit. In order to improve their competitive position, many companies use form of customer satisfaction program in developing , monitoring and evaluating their products and services, formulate strategies to enhance satisfaction and compensate employees based on satisfaction rating. Companies, however, will allocate resources for improving customers satisfaction only if the effects are satisfying in financial terms.Numerous empirical studies could find a positive relationship between customer satisfaction and profitability. Customer satisfaction leads to repurchase. The continuously repurchase of a company’s product results in a stable relationship between customers and suppliers.
A large stable customers based reduces the volatility of the cash flows. The lower volatility of the cash flows also leads to a lower cost of capital. Customers’ satisfaction also leads to cross-selling. Enhance cross-selling make the total sales of the company grow and markets can be penetrated faster.
Satisfied customers are less price- sensitive. The lower price-sensibility increase the willingness of the customers to pay for the benefits they receive. Furthermore, satisfied customers are more tolerant to price increase. They are less susceptible to price reductions of competitors.
From a managerial point of view, it is vital to know how many resources should be devoted to customers’ satisfaction program. Conclusion The purpose of business strategy is to exploit the capabilities of the enterprise to gain and sustain competitive advantages in serving the needs of customers in a chosen market place.An effective business strategy will provide good answer to questions on business scope, customer’s needs, how the enterprise will exploit is advantages, and on how competitive advantages will be achieved. It also describe the main actions necessary to implement the strategy and the reason why the changes necessary. Customers are the lifeblood of the business, so it is crucial to maximize customers’ satisfaction and customer experience.
Building a successful, positive image with the customers enhances the overall credibility.