Customer Intimacy

Want to follow a Customer Intimacy-based strategy? Here is how you need to execute…

Line-of-Sight led a survey of more than 100 CEOs to measure how they evaluated the execution capabilities of their organization. This survey took place in Q1 2021, when most businesses were transitioning to a post-pandemic world.

The 2020 crisis forced many businesses to rapidly adapt their strategy to a radically shifting market demand, both from consumers and from business buyers. Therefore, it was to be expected that the strategies they pivoted towards would be in majority customer-centric.

Line-of-Sight data confirms this shift: 40% of CEOs surveyed are now pursuing a customer intimacy-based strategy (the survey did not baseline pre-pandemic strategies; it can be assumed that this percentage was substantially lower then). Indeed, companies have had to be attuned to rapidly changing demand patterns to adapt all aspects of their execution: sales, customer support, marketing, product development, supply chain, and fulfillment – in addition to moving to a fully or partially remote work environment.

Now that post-pandemic economic growth is here again, should companies shift back to other types of strategies, i.e., based on operational excellence or on product innovation? The answer is no: deep customer intimacy will continue to be a key factor of resilience as the business environment remains unpredictable. McKinsey recently outlined that B2C and B2B companies should continue to maintain a deep understanding of their customer behavior because “both business-to-consumer (B2C) and business-to-business (B2B) companies expect to see meaningful shifts in the shape of future demand.” For example, online grocery shopping is likely to stay, but leisure travel (and possibly business travel) as well as education are likely to go back to pre-pandemic level. There is even anecdotal evidence that in-office work may return to levels close to pre-COVID.

If you are the CEO of a company whose strategy is based on customer intimacy, execution will continue to be key. In particular, McKinsey stresses the need for speed: “Over the past year, adrenaline unlocked speed. In the near future, speed will need to arrive by design”.

Line-of-Sight data shows that speed, and overall customer-centric strategies, require rigorous execution discipline: indeed, CEOs pursuing customer-centric models rate all aspects of their execution consistently high: from strategic understanding, leadership, and balanced metrics, to activities & structure and human capital. CEOs pursuing alternative strategies tend to acknowledge and tolerate gaps in their execution (for example, companies pursuing operational efficiencies tend to rate the human capital part of their execution significantly lower than any other dimension).

Below are 4 best practices that CEOs should consider implement to be better attuned to customer demand and effectively adapt to it:

1. Make your strategy clear across your organization: If goes without saying, but your employees need to all be aligned on your strategic intent. As CEO, your top role is to make it clear to all. Line-of-Sight data in unequivocal: CEOs who are unsure about their go-to-market approach rate their execution performance at mediocre to abysmal levels, 15 to 30 points lower than CEOs whose strategy is explicit.