5 ways operational excellence boosts customer loyalty

Businesses that use resources effectively and deliver better services attract and keep more customers

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Michael Hill
01/17/2024

Operational excellence (OPEX) plays a key role in maintaining strong customer relationships. Organizations that have a reputation for quality and reliability create customer connections that last longer and are more productive. Conversely, inefficient processes and poor OPEX can lead to late delivery, overruns and other factors that contribute to client dissatisfaction, which can be a hammer blow to brand loyalty.

Amid on-going cost-of-living challenges and with buyers often flooded with opportunities to save money through “new customer” discounts, client retention has never been more important.

Data suggests that new deal pipeline and bid-to-win ratios are 32 percent and 28 percent higher, respectively, for firms that perform well with regards to operational efficiency and client relationships. This indicates that organizations that are outcome-focused and use resources effectively provide better service delivery, leading to more customers.

“Strong OPEX helps streamline business processes, reduce errors and provide faster and more reliable services, thereby increasing customer loyalty,” Jamil Ahmed, distinguished engineer at Solace, tells PEX Network. “This all starts with a strong view of data. With a birds-eye view, the business can continuously monitor and receive feedback, all to improve quality and service standards in the future.”

READ: PEX Guide: What is operational excellence?

Here are five ways OPEX can boost customer loyalty.

Customer satisfaction

OPEX helps businesses meet and exceed customer expectations. Streamlined processes and error reduction allow businesses to provide services and products quicker and more reliably. Likewise, process efficiency data and feedback can be applied to monitor and improve standards, helping to ensure customers satisfaction and trust.

“OPEX focuses on meeting customer expectations by aligning processes with the voice of the customer, leading to high-quality products and services delivered to their core needs always in mind, which fosters customer retention and loyalty,” says Steven Remsen, senior manager of internal consulting at Intel.

A crucial, and often overlooked, factor of operations is mapping the customer journey, Kerri Linsenbigler, The RevOps Team, tells PEX Network. “Building and enabling a smooth internal process reflects back to the customer, making it easy to buy your product, easy to get in touch with the right members of your team and easy to repeat the process over again.”

“Strong OPEX helps streamline business processes, reduce errors and provide faster and more reliable services, thereby increasing customer loyalty”

Customer engagement

OPEX can act as a catalyst for customer engagement, which enriches organizations’ customer relationships in several ways. Aligning processes with customer needs and preferences allows for offerings and interactions to be tailored, creating more personalized and convenient customer experiences. For example, tailoring offerings to specific preferences resonates well, while digital platforms, mobile apps and innovative solutions enhance communication and make customers feel valued and understood.

“This engagement becomes a cornerstone for building lasting loyalty,” says Navneet Kaur, business development and finance specialist. “OPEX, when coupled with a customer-centric approach, becomes a powerful tool for business success.”

Loyalty programs, for example, build a profile of spending habits, timing, location and patterns – all of which can be analyzed and used to calculate and produce special offers tailored to each customer/customers with similar profiles, adds Ahmed.

“The key is for these loyalty offers to be delivered at pace, in real-time. This can be done through an event-driven architecture (EDA), allowing the business to see a combination of customer data, items purchased, location and data, with the information consumed asynchronously and in real-time by several systems. EDA lets retailers simultaneously send information about such events to any number of subscribers.”

READ: 5 operational excellence trends for 2024

Customer advocacy

OPEX paves the way for strong customer advocacy. By delivering exceptional value and service, businesses can not only retain customers but also turn them into promoters of their brand.

“Sharing their positive experiences, whether with family or on social media, acts as authentic marketing,” says Muhammad Umar Ibrahim, business transformation and lean manager, Master Group of Industries. “Such organic endorsements can significantly boost brand reach, driving growth and enhancing market presence. Rewarding this advocacy, perhaps through discounts or exclusive offers, reinforces loyalty.”

“OPEX focuses on meeting customer expectations by aligning processes with the voice of the customer”

Reduced customer turnover

OPEX can contribute significantly to another vital business component – customer retention. Customer churn can be damaging, but data and analytics can identify and address issues/gaps in customer journeys. Pain points, complaints or dissatisfaction can be proactively acted upon to prevent clients leaving, minimizing customer churn and maximizing customer lifetime value.

“OPEX is a game-changer in reducing customer churn, transforming the customer experience into an exciting journey of reliability and satisfaction,” according to Yulia Lavie, COO and partner at CWS Israel. By streamlining internal processes, companies can anticipate and swiftly respond to customer needs, delivering consistently exceptional service.

“This proactive approach ensures that issues are addressed before they escalate, significantly enhancing customer trust and attachment,” Lavie says. “Imagine a world where every interaction leaves the customer more impressed than the last, creating a loyal customer base that not only sticks around but grows through positive word-of-mouth.”

REGISTER: All Access: OPEX Operational Excellence 2024, taking place November 26-27, 2024

Customer profitability

Customer profitability and revenue can be improved through OPEX. Repeat purchases, cross-sells and up-sells can be increased, while customer acquisition and service costs can be reduced.

“From personal experience, when OPEX is prioritized in a company it not only enhances customer engagement but also accelerates delivery of higher quality results,” says Ryan McNamara, head of operations at Rise at Seven. “I have found that improved internal processes and a customer-centric culture enable quicker pivots to align with customer visions, ultimately driving better profits for clients.”

Organizations can optimize pricing and margins as they offer more value-added products and services to customers, boosting customer profitability and revenue by creating more loyal and profitable customer relationships.