The Key Role of CFOs in Customer Retention Strategy

The following is a contributed article by SurveyMonkey CFO Debbie Clifford. The views expressed are solely those of the author.

Over the past few months, COVID-19 has caused unemployment, business closures, school shutdowns, and service disruptions. Although many people have been able to move work and school to their homes, millions across the country are beginning to worry about how to pay their bills. Not only are we in uncharted waters, but we find them full of risk.

Many companies that survived the initial shutdowns continue to seek reasonable strategies, such as adjusting billing and collection policies to help customers while maintaining their own operations.Airlines、Credit card companiesandinternet service providershave waived fees for the duration of the crisis, but this is not the right strategy for every business.

As financial guardians, advisors, and gatekeepers of an organization, CFOs play a critical role in helping companies chart a path forward. To do so, CFOs must understand how to retain customers through billing and collections while maintaining good financial health. This means leveraging data discovered in customer experience efforts while persisting in efforts to improve outcomes for all stakeholders.

Customer retention is critical

Building strong, long-term relationships with customers is key to stability, which is not news to any CFO. However,one-thirdof consumers say that a single bad experience would make them abandon a brand they otherwise love.

In the midst of a widespread health and financial crisis, finding the right way to handle billing and collections is crucial. Our goal is to retain customers—in whatever form—and focus on the long-term health of customer relationships.

A recentBain & Company studyfound that even a small increase in customer retention (5%) can boost profits by 25% to 95%. Although a full return to normalcy is still far off, building customer loyalty now by focusing on retention will yield long-term benefits and competitive advantages.

Building lifetime value may mean collecting $1 today from a customer who paid $100 yesterday. But if a company can retain a quality customer, especially after shutdowns ease, it is likely worth it.

We should provide as many resources as possible to ensure customer success, especially in subscription-based businesses like SurveyMonkey. Short-sighted decisions only bring short-term gains, and customers who partner with organizations that understand their long-term value are more likely to stay.

Focusing on company financial health

Of course, CFOs and finance teams must still manage finances responsibly when working with customers. Payment structures vary by industry and company, and there is no one-size-fits-all solution.

During the pandemic, there have been manygreat examplesof companies adjusting waivers and billing policies based on specific customer needs. Wells Fargo waived payments on a case-by-case basis, Aflac waived copays for certain services, Albertson's waived delivery fees, and American Airlines waived fees until a specific date.

Additionally, a thoughtful finance department must also consider the other side of the payment equation, negotiating fair terms with suppliers. Carefully assessing the company's financial situation and proactively communicating with suppliers helps find a balance while caring for both company well-being and customer interests.

This is also a great time to examine supplier behavior in other areas, such as diversity, equity, and inclusion. As we continue to build anti-racist policies and practices, an organization's stance cannot stop at its own doorstep. Suppliers play an important role in ongoing efforts to advance diversity, equity, and inclusion, and ensuring company funds only flow to suppliers that support similar values is crucial. These initiativesare critical to company successand are also important foremployee well-being。

Understanding the best path for the company

To achieve all this, organizations must actively listen to customers to determine their needs and what solutions might be offered. Customer experience (CX) management—a process that allows companies to collect daily feedback signals across multiple channels—has long been the best way to understand these needs and is the best tool for driving retention and differentiating from competitors.

Keeping communication channels open and active provides leaders with hard data they can use for decision-making. Proactively reaching out to suppliers and customers to understand their challenges will help organizations determine the right way forward and where they can be most helpful.

When determining billing and collection approaches, having clear insight into customer sentiment to guide decisions is crucial for CFOs. Leveraging CX to gather these insights enables companies to improve retention and build strong relationships.

When the crisis subsides, companies with the best customer experiences and strongest relationships will emerge stronger and recover more quickly.