Since the early 1960s, Silicon Valley is known for its many tech-startups. The birth of the Internet in 1995 meant that information, experiences, opinions, and knowledge could now spread beyond physical boundaries, rapidly advancing technological developments. Driven by fierce competition and limited funds, tech-startups found a way to establish product/market fit quickly and cost-effectively, allowing them to convince investors to help them scaleup the operation and disrupt markets.
This mode of operation became known as the Lean Startup Movement, inspired by Steve Blank and Eric Ries. The ongoing disruption of products and markets shortened the lifespan of most products while the rise of the Internet meant that customers became much better informed – dramatically shortening the buying cycle (in some cases even down to seconds).
Before the rise of the Internet, customer acquisition was key to most businesses while customer retention lagged far behind. Nowadays, due to a remarkable shift from as-a-product to as-a-service business models, customer retention is one of the most critical aspects of any operation.
While the need to quickly establish product/market fit had led to so-called ‘agile’ product development methods, the customer creation process hadn’t changed much. Most marketing teams still use a funnel-analogy, taken from the 1950s, and focus almost entirely on marketing and sales initiatives.
However, given the fact that most value propositions are vulnerable to disruption and buying cycles are turning ever ‘darker’ ─ what can be measured ─ firms really need to engage customers beyond the moment of purchase, by pro-actively onboarding customers to make sure customers’ needs are met. If firms fail to do so, those that will are bound to take their place.
We were astounded to find that existing models ─ marketing and sales funnels ─ were oblivious with regards to activities that occur post-purchase. Because we were convinced this was a huge omission in customer relationship management, we decided to fill in the blanks. After having described the delivery-related activities, we found that to forge strong customer bonds firms needed to look even further, beyond the moment of satisfaction. And so we added a fourth department, Customer Success, to the Customer Carousel™.
The lessons we learned is that to be right on the money, firms need to capture a 360-view of the customer to deliver relevant products and services that will satisfy their needs while delighting them in the process. To achieve this, firms should consider all frontline activities as one integrated process aimed at getting the customer to experience, consume, or utilize the purchased value, sooner rather than later, to instill a perception of future value. This perception of future value is the only intrinsic motivation that will drive customers to extend the relationship with the brand beyond the initial purchase.
Markets will continue to change. Technology will further advance. And others will still try to disrupt your revenue streams. But if you succeed, as a collective, to create and deliver meaningful value with compassion that is perceived as significant to the lives of your customers, you’re sure to stay right on the money for times to come.
SIDE by SIDE
To understand how the ROUNDMAP method relates to the aforementioned ‘Agile method’, let’s first have a look at the traditional methods:
Waterfall (left) is a tried-and-true method for project management. It requires that, before advancing to the next stage, the previous stage should be finished. A typical Waterfall process could take up many months or even years while it is almost certain that during this time the conditions that led to the development will have changed. The traditional marketing funnel (right) typically ends in a moment of purchase while loyalty seems to appear out of thin air.
Although in some cases the Waterfall method may still be applied, it doesn’t mitigate well against the risk of developing for the past. The traditional sales funnel may still be used, provided the firm’s emphasis is solely on acquiring customers, however, most businesses today can’t sustain the costs involved with customer acquisition if they stand to lose these newly acquired customers at the backdoor.
Now let’s have a look at how ‘agile’ development compares to ROUNDMAP’s integrative development method:
Instead of developing a final product in one stretch, the agile method (left) consists of a series of short development cycles (sprints). The method suggests to create a minimum viable product while asking for customer feedback on a regular basis: Are we on the right track? Is this what you mean? It may take several iterations to reach a product that matches actual demand, but contrary to the traditional method, the outcome is a sure fit.
The ROUNDMAP™ integrative method (right) works in pretty much the same way: customers are nudged and persuaded until they feel confident enough to commit themselves to a purchase. Purchase isn’t merely a sale, it is the Moment of Commitment™. To satisfy the needs of the customer, aligned with their expectations, is the first step in retaining a customer. The second step is to make sure that the purchased value is and can be utilized by the customer ─ before trying to expand the purchase amount (deep sell, up-sell, cross-sell) and/or extend the customer lifecycle (return/revisit/repurchase).
Now let’s see what happens when we combine these two methods:
Isn’t it amazing to see how the two methods interrelate and how feedback from the customer development process drives effective product development?
Again, don’t make the mistake to merely focus on creating customers. You’ll need to be able to prove to them that your primary mission is to make them flourish, thereby providing them with a good enough reason to return or refer. If you fail, you won’t be able to thrive.
By using the words ‘right on the money’, we also mean to say: be fair and just to your stakeholders ─ consider their interests in all of your endeavors.
For your convenience, this is the link to the PDF, containing the figures above.