The Promise & Challenge of Customer Intimacy for Med Tech Companies

No, it’s not about low lights, mood music or negligees. Customer intimacy is a business philosophy that commits you to deeply connecting with your customers. The deeper you connect, the more you sell.

Fundamentally, there are two main aspects to customer intimacy: One is really understanding what customers want. The other is giving them what they want. And that makes for very loyal and profitable customers.

When you are customer intimate, you focus on specific customers and let go of others. You precisely tailor your offerings to what your customers want and need, and do (almost) whatever it takes to make them happy. That requires really tuning to customer desires, both stated and unstated. And it may mean using big data analytics to make optimal recommendations to customers – like Amazon does with products, Pandora does with songs, and LinkedIn does with business contacts.

As a result, your customers are thinking “How do they know me so well?!” And of course, if you are practicing customer intimacy, you also genuinely care about your customers.

Sounds good, right? Here’s the rub: Most every med tech executive will say they are committed to connecting with their customers. In thought, they are. But in practice, it’s often a different story. Customer intimacy is hard to achieve. It’s a long-term strategy that requires organizational commitment, a relentless “tuning-in” to customer problems and desires, and both responsiveness and creativity to solve those problems and fulfill those desires.

Customer intimacy also challenges and turns traditional revenue goals right-side up. How? Customer intimacy is about maximizing the lifetime value of a customer. It is absolutely not about about lowering prices to hit quarterly or end-of-year numbers. In terms of KPIs, long-term relationships trump short-term profit. This can be a tough sell in solely numbers-driven organizations.

On the other hand, because it is challenging for med tech companies to practice customer intimacy, those that do will: 1) gain a significant competitive advantage in a very tough market, 2) build a barrier to commodization of their products and services, and 3) create a unique and powerful brand promise that can be core to their very identity. And as Zappos, Southwest Airlines, and Nordtrom all attest, bottom line, customer intimacy can be highly lucrative.

The first step is to decide if you have what it takes to be customer intimate over the long run. Consider: Money aside, how deeply do you care about your customers? Do you commit resources to really understand them? How far will you go to satisfy them?

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Resources:

The HBR classic by Michael Treacy & Fred Wiersema: Customer Intimacy and Other Value Disciplines

Interesting Forbes magazine article by business technology expert Joe Weinman on how digital and big data is transforming customer intimacy into “collective intimacy”

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