What are the business benefits (and value) of Strategic Design?

By | November 23, 2013

Strategic Design can be used to redesign organizations to improve how they are experienced by people. A primary focus is on customers, of course. The point of doing that is to increase the benefits customers perceive they are receiving from the organization. The point of doing that is to increase customer loyalty.

So a primary business benefit of strategic design is increased customer loyalty.

The business value of strategic design is therefore increased lifetime customer value and profits.

As I noted in another blog post, lifetime customer value is calculated as the present value of future revenues from a customer and depends on customer loyalty. In banking, a 5% increase in customer loyalty lifts lifetime profits from that customer by 85%. This is because of high customer acquisition costs such as advertising, on-boarding, and financial inducement (a lower price or special promotional deal) required to get customers to switch banks or choose one bank over another for a particular product.

That said, there are other benefits of Strategic Design, such as higher quality leads (referrals), improved brand equity, and increased sales conversions of new customers.

 

One thought on “What are the business benefits (and value) of Strategic Design?

  1. Pingback: Building a business case for investments in customer experience | Alan Street

Leave a Reply