Traditionally, sales and finance have operated in silos, with very different objectives. While sales teams have focused on finding customers and selling products, finance teams have focused on managing costs and maximizing profits. However, this setup doesn’t work today because a siloed arrangement doesn’t provide businesses with the certainty they need in these very uncertain economic times.
The key is aligning sales and finance with a customer-centric approach, ensuring that the two teams work together on delivering better service to customers and improving customer retention. But what exactly is customer centricity, and how do you achieve it?
What is customer centricity?
Customer centricity means putting the customer at the center of every decision and action. It means working to get a deep understanding of customer needs and pain points, then using that knowledge to tailor products and services to meet those needs and solve those pain points.
To achieve this, sales teams must step up their game and master the art of actively listening to customers and understanding their unique needs — or as my colleague Joe Thomas put it more provocatively in a recent blog post, “shut up and listen to your customers.” Then they must offer personalized solutions that address those needs, rather than the traditional mass-market solutions. Only then can sales teams build trust with customers, gaining their loyalty and earning repeat business. That provides certainty.
For finance teams, a customer-centric approach means using customer data to inform financial decisions. This entails analyzing customer spending patterns and preferences to develop pricing strategies that are more in line with what customers want to pay. It also entails investing in customer service and support programs to help customers feel more confident in their purchases. This encourages customer loyalty and, again, provides certainty to the business.
Three steps toward customer-centricity
Implementing a customer-centric approach in sales and finance will help the business align these two teams and gain certainty. But it won’t happen automatically. Companies must be intentional to foster greater collaboration between the teams. Here are three steps they can take.
1. Free up customer data. Sales teams usually have direct contact with customers, gathering information about their behaviors and preferences. For their part, finance teams have valuable insights on customer profitability, pricing trends and cost structures. Collecting insights from across the organization leads to higher-quality data that is complete, consistent, accurate, valid and timely, providing a foundation upon which complex data analysis becomes possible.
2. Engage in joint analysis. With the combined data in hand, sales and finance teams can work together to analyze data and identify trends and patterns that help them understand customer needs and preferences better. For example, a CFO could use predictive analytics to forecast customer behavior and identify potential issues before they occur. This could help sales and finance teams take proactive steps to address customer concerns and improve customer satisfaction.
3. Develop customer-centric strategies. With a better understanding of customer needs and preferences, sales and finance teams can collaborate to develop joint strategies that align with both the company’s financial goals and customer desires. For example, blending sales and finance data with customer data allows for comprehensive analysis of which combinations of products and services customers buy and implement together — allowing a business to blend lower and higher margin products into repeatable, templatized packages or bundles, increasing customer satisfaction while maintaining profitability.
Building a culture of collaboration
These steps are a solid start. But above and beyond such ground-level efforts, companies should work to instill a culture of collaboration from the top. Often, teams are focused on their specific responsibilities and don’t take time to understand the needs and challenges of other departments. This lack of understanding can lead to silos, mistrust and a shortage of coordination — all of which can impact the quality of the products and services offered to customers.
What’s needed is a shift in mindset, from a focus on individual functions to a focus on common goals and the overall success of the company. Leaders can make it happen. When they act as role models for collaborative behavior, they encourage their teams to do the same. This may require a periodic step back by leaders, from a concentration on customers to consideration of the needs and challenges in various departments, so they can come up with solutions that work for all.
Resistance to change also is a common challenge for organizations that are seeking to implement customer centricity. Departments are often hesitant to alter their existing processes and culture (“We’ve always done it this way”) and often resist new, customer-centric strategies.
That’s why businesses need to create a compelling case for change. They can do it by highlighting the benefits of a customer-centric approach, such as enhanced customer loyalty and increased revenue. This will help them communicate the need for change to all stakeholders and involve them in the process of transitioning toward a customer-centric approach.
Measuring customer-centricity efforts
Gauging the success of a customer-centric approach is not a straightforward task. Traditional metrics like gross dollar retention can give an indication. Customer-satisfaction scores, NPS scores and the level of collaboration among departments can also provide evidence. But the success of customer-centricity efforts is truly reflected in the relationship between the company and its customers — and this can be hard to measure. After all, how do you put a number on customer loyalty, positive word of mouth and the strength of long-term relationships?
“I can’t define it but I know it when I see it.” Customer-centricity is like that. You know it’s working when you see teams collaborating, when you have fewer surprises and more predictability in your business, when you see an upward trendline in customer satisfaction. Sometimes the evidence comes from small gestures. For example, we work with one customer who travels to his home country every six months and always brings back a package of fresh baklava for me and my team. Little things like that speak volumes about the bond we have with him and, by extension, with all our customers. When you introduce a culture of collaboration and encourage alignment of sales, finance and customers, you’ll have that bond too.
“ABC!” Alec Baldwin yells in Glengarry Glen Ross, the seminal 1992 film about sales. “A, always. B, be. C, closing. Always Be Closing!”
That may have worked in the analog world of the ’90s. But what works now is customer-centricity. It’s not just about closing and maximizing profits. It’s about aligning your sales and finance teams, building loyalty among your customers, gaining certainty in your business and strengthening your bottom line for the long-term.
When you put customer centricity at the heart of your systems and processes, you’ll set your company apart from your competition and achieve real, positive results — in good economic times and even more so during a challenging environment.