Finding new ways to increase revenue is always top of mind, especially to sales teams. As customer acquisition costs continue to rise, businesses need to come up with innovative ways to create valuable customer relationships. The value of customer loyalty and retention is significant. You have heard it time and again that it's cheaper to get past customers to purchase again. So why are businesses still focusing on short-term results instead of long-term value?
Many of you have probably heard of customer-centric marketing. Bud did you know that research by Deloitte and Touche found that customer-centric companies were 60% more profitable than those not focused on the customer? Not only does focusing on the customer make business sense, it also makes financial sense. Here we go into what customer-centric marketing is and what components you need to start your customer-centric journey.
What is customer-centric marketing?
At its core, customer-centric marketing is a strategy that places the individual customer at the center of all marketing activities. Remember,marketing campaigns, brands, slogans and products don’t sell products; they create a memorable customer experience. While you may feel like you already do this, it’s more likely that you actually don’t. Filling a specific need is what will sell products.
Brands that are committed to customer centricity believe that the customer comes first and that without that customer they cannot succeed. These brands focus on analyzing, planning and implementing a strategy that focuses on creating and keeping loyal customers while understanding what these customers want. It is not only about building better relationships with your customers, it is about building long-term relationships around customer data.
How to start your customer-centric journey?
The key to becoming a customer-centric marketing organization is understanding the components required to implement and execute successful marketing campaigns.
Data is one of the most important pillars of customer-centric marketing. You cannot become a customer-centric marketing organization without customer-level data. Individual clicks are great but the real value is understanding what an individual customer is worth. This means that you need to go deeper than product level sales by accessing data on individual customers and their behaviors then taking it a step farther and having the ability to combine this data and provide a unified view of your customer.
2. Customer Insights
Utilize behavioral segmentation to speak to your users directly and understand where in the purchasing lifecycle they currently are. Derive deep insights about individuals and customer segments by leveraging predictive analytics and collecting additional data. Once you have generated customer insights, makes these insights accessible to the entire marketing organization.
3. Choose the right KPI - Start measuring customer lifetime value
The single most valuable metric to measure customer centricity is customer lifetime value. Customer lifetime value (CLV) measures how much a customer is worth over their lifetime. It allows you to measure the profitability of any one customer. Measuring CLV helps put a number to retention. It exposes how much profit you will lose if your customers move to your competitors. It will help you allocate resources and decide where to spend money.
Making the move to becoming a customer-centric marketing organization will not be a one-time change. Customer centricity is an iterative process that is focused on what the customer wants and understanding your best customers. While your marketing environment, customers and competitors will be constantly evolving it is up to you to start the customer-centric journey and focus on those high-value customers that will be adding value to your business.
Just remember, not all customers are created equal!