Organization design: functional or phase based departments?


So I was pondering the other day about how organizations are sectioned off.  Most organizations are  grouped by department: sales, marketing, finance, engineering, and operations.  This is convenient for the organizations, less so for the customer.   As social media emerges as a primary vehicle for communications: for marketing, sales and customer service, organizations are struggling to build a communications group, for all stages of the customer lifecycle.

Some companies assign a team to a customer.  So they’ll interface with one account manager, one service person and so on throughout their relationship with the organization.  This is a great customer friendly model, but for smaller organizations, it is pretty impossible to implement while you have limited resources.

For most organizations, the primary goal is to find customers, engage them and keep them as long as possible.  Why aren’t our organizations structured around these phases of the customer relationship?  What if instead we organized our business around stages in the customer lifecycle.  Some roles would have more representation in one stage or another, but the metrics for the organization would be based on performance in the stage?

Here’s a basic lifecycle:



Identification finding new prospects, potential customers. Nurturing them until they are ready to progress the relationship with a purchasing cycle.  In this “department” staff would be weighted around communicators.  In a tech company this would include conventional marketing and communications people.  Perhaps pre-sales technical resources.  A market researcher. And a lead qualification team.  The market researcher would pass feedback to the product development team on what prospective customers are looking for.  This team would be graded on the number of prospects they find, and perhaps brand awareness.  This team would be focused on though leadership and making the brand feel “warm and fuzzy.” A key metric would be related to conversion rates between this stage to Acquisition. They’d also focus on understanding the market and the target customer.Acquisition: transitioning the prospect into a buyer.  This is the area where are traditional account manager would begin a relationship with the prospective customer.  This is where the operations and production staff would be beefed up.  The product development team would primarily reside in this area of the customer lifecycle.   Obviously, there is a range of communications that happen in this phase: product focused and transactional focused.  The technical resources here would be product experts, and understand the real life use cases of the product.  In this stage, for customers, the project is no longer theoretical, and they need details. The metrics for this stage would be they typical revenue goals, and initial customer satisfaction (out of the box experience.)  Most organizations today are well equipped in team building in this area, but they don’t tend to have these different roles work closely together on customer acquisition.  This would be a pretty different way of looking at your organization.

Retention: focus on post-sales support and continual relationship building.  This group would be focused on account management, customer support and communications.  Most organizations don’t include exiting customers in their communications strategies, and this would be the biggest benefit to this sort of organization.  As the customer base increases, this would be one of the largest areas of the company, with the largest amount of resources.  This team would also provide ongoing feedback to the other teams to help them accomplish their goals.  The measurements for this department would be around customer retention and satisfaction levels.

Do you know any companies who have organized around customer lifecycle?  Organizational structure and design experts, what do you think?

Have you thought about alternate organizational structures?  Any thoughts?  What would be a good customer friendly way for companies to organize their teams?


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