The CFO'S Perspective

How Creating Connection is Helping Service Providers Improve Revenue

People connected in a webCreating authentic connections with customers can help companies to attract new customers, retain existing customers, and develop brand advocates to increase customer lifetime value across the organization. It can also benefit employees, strengthening the company from within. Having a meaningful connection with the people they are serving allows employees to find meaning in the work that they do, simultaneously increasing employee retention and making it easier to attract top talent for new roles. The net effect of these internal and external shifts is greater, more sustainable revenue.

So, how can service providers improve customer connections? Let’s first take a look at what types of connections service providers can create across the entire customer life cycle and what kind of impact of these connections can have on their bottom line.

Types of Connections

Service providers can improve revenue using a connection-mindset by:

  • Delivering personalized customer service
  • Following up and engaging with customers after they purchase
  • Offering tailored solutions
  • Taking an “advisory” type approach versus a basic transactional approach
  • Quickly addressing and resolving customers’ problems
  • Providing access to a community of likeminded customers
  • Utilizing account managers to build one-on-one relationships
  • Producing content that is meant to help prospects/customers instead of just selling/upselling to them

Driving Results through Forming Connections

The results of connecting could not be more salient for service providers! According to a recent McKinsey & Company study about the value of personalization 76% of consumers are more likely purchase from brands that personalize, 78% are more likely to repurchase, and 78% are more likely to refer friends/family.

When purchasing, customers are also willing to pay a premium to companies that do a better job of connecting with them using personalization and other engagement tactics. In fact, customer service data from HubSpot indicates that more than 80% of consumers are “willing to pay more to get a better experience.” Given this information, it is no surprise that the same data also revealed that 89% of companies with “significantly above average customer experience,” due in part to their customer engagement efforts, exhibit better financial performance than their competitors.

Zendesk’s 2023 service report indicates that executive leadership’s experiences echo these trends as well. According to the data 77% of business leaders reported that offering more personalized service has allowed their organizations to increase customer retention, and 66% indicated that it has lowered their acquisition costs.

How to Connect

A Forbes article on how to strengthen connections with customers explains that a service provider should:

  1. Gain (and maintain) their customers’ trust by giving them what they need/want/are asking for instead of what the provider wants to give them.
  2. Land accounts and then expand the opportunity to work with them moving forward by offering them more services.
  3. Listen to what customers value most to identify ways for the provider to offer more value.
  4. Look for ways to subscription-itize services and set up an automatic renewal program to create consistent revenue.

In order to connect well, the entire organization will need to be aligned across sales, marketing, customer service, and accounting/finance. This last piece is something that is easy for service providers to overlook because the cost of connection is sometimes hard to measure.

The Cost of Connecting with Customers

Connecting with customers individually instead of simply offering a one-size-fits-all solution is going to be more costly initially as an organization implements and manages these initiatives. However, the long-term payoff can certainly be worth it. As a service provider makes strategic marketing, sales, and customer service decisions it will need to lean on its financial leadership to analyze its investments. Their CFO will be able to determine where the company’s budget can be best spent to maximize return.

In many situations, outsourcing business processes is going to be more efficient and cost effective than doing them all in-house, freeing up both personnel and funds to be used towards the organization’s ongoing connection efforts. Service providers will need to rely on accurate and timely cost data to make smart financial decisions and ensure that they have resources appropriately allocated to cultivate future growth.

Need some help? We provide outsourced CFO services to service providers across multiple markets. If your company needs strong financial leadership, please reach out to us. We have a team of highly experienced CFOs ready to come alongside your organization to help it improve revenue.

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Topics: Growth, Strategy, Service Providers

Topics: Growth Strategy Service Providers