When customers revolt – fixing the negative customer experience
The company had burned through virtually all the cash raised through the public offering over a period of five years. The crisis forced the board to remove the CEO and CFO and bring in a Transformation Advisor to address the issues. As a result, the liquidity crisis was averted, revenue growth was restored, and the company became profitable.
A publicly traded supply chain software company was facing a crisis. On the surface, the issue was rapidly declining revenue, persistent losses and a pending liquidity crisis. The company had burned through virtually all of the cash raised through the public offering over a period of five years. The crisis forced the board to remove the CEO and CFO and bring in a Transformation Advisor to address the issues. An Advisor was chosen for speed and because the board was frankly unsure of what the issues were. A search for a new CEO would have taken too long and the condition of the company made the position relatively unattractive.
After talking with employees and key customers, it became clear to the Advisor that, for a variety of reasons, there was open revolt among the customers. Most customers were Fortune 100 companies with complex supply-chain challenges. Many, if not most, were looking to replace the company’s products with competitors and several had filed or were threatening to file lawsuits. Publicly available customer satisfaction measures placed the company at or near the bottom of the industry. The causes included:
- Substantial amounts of capital had been invested in product development. But, product development was focused on exploring new architectures and not enhancements desired by customers. In fact, virtually no customer input was sought. Customer saw no viable upgrade path going forward.
- Virtually no interaction with customer decision-makers was taking place. This exacerbated the view that there was no path forward with the company’s products.
- Day-to-day customer service was viewed by the company is largely an annoyance. Customer issues were left unresolved for extended periods.
Working with a cross functional team of key employees, the Advisor developed a new organization structure focused on resolving customer issues. A knowledgeable senior employee was assigned to each key customer. That employee and the Advisor visited every customer. The new organization was empowered to mobilize the company resources to resolve issues immediately. At the same time, it was necessary to refocus product development on features critical to customer success. The new architectures were abandoned. The importance of customer satisfaction was reinforced throughout the company in order to shift the culture.
As a result of these changes, the liquidity crisis was averted, revenue growth was restored and the company became profitable. The company was then able to recruit a very senior permanent CEO.