3 Reasons the Future of Marketing is Customer Centric
Marketing as a practice continues to evolve. Capabilities and tactics have changed so much in the past decade. While historically, since the 1980s, marketing has been largely driven with a product focus, a transformation is underway in how we think about measuring the impact of marketing programs. Here are three reasons that marketing is becoming driven by customer centricity (not to be confused with customer focus or experience centricity).
1. Competition is in Customers’ Hands
Customers are searching for your products online with their smartphones in your own stores. With a tap, they can buy somewhere else for cheaper and probably have it delivered for free. The nature of competition is transforming. With that shift, it is critical to understand and serve your most valuable customers in smarter ways.
Even more so, if your business is non-contractual with non-discrete opportunities to buy, your best customers never formally let you know they have moved on. It is only through customer centric metrics that a retailer may spot those that are about to churn, or have recently defected, and that are worth saving through targeted campaigns. Customer centricity is necessary to understand and rein in attrition.
2. The Paradox of Customer Centricity
Yes, I am claiming a second reason for a customer centric future in marketing is a paradox of the entire concept. Wharton professor Peter Fader discusses this topic in his book Customer Centricity: Focus on the Right Customers for Strategic Advantage (end of Chapter 2). Essentially, the paradox is that while customer centricity gives you tools for focusing on your most profitable customers, the rest of your customer base is still essential for the survival of your business. Collectively, they still represent a large part, possibly even a majority, of the profit of your firm.
Customers are not one-size-fits-all. There is heterogeneity in value to your organization, that should be incorporated into your business tactics to optimize your portfolio. However, without customer centric metrics, it would be very difficult to see that value discrepancy among your base. As we fully endorse a portfolio approach to managing customers as assets of your company, you need to be able to properly classify each customer to make informed decisions about nurturing the value in each relationship.
3. Omnichannel is the New Normal
It is not that customers have the option to interact with a brand in different ways, it is that they now insist on it. We all do. I spot a billboard for a new flat screen on my way to work, which sticks out to me, because I remember seeing it in a commercial last night. I research it on my phone, and now deals for it are following me in my social feeds. I purchase it on the web and pick it up at the store. I call the helpline about a missing part, and when the customer service is awful, I let them hear about it on Twitter.
How on Earth is a marketer to attribute that sale and journey by channel, campaign, or even product in any way that can useful? It is less about the product sales today. Although, this has been historically simpler. Just add up the amount spent promoting that product across all media, subtract that from the total product sales, and see if there’s anything left to call profit. Today, that view is myopic and lacks a representation of the true residual value that may have been created along the customer journey.
Instead of the product, put the CUSTOMER at the center of your marketing data strategy. Eureka! It is a challenge, since traditionally retail data systems have not been optimized or even organized for this.
When a marketing campaign promotion, or loyalty program is executed, the true return on investment (ROI) can ONLY be seen in the aggregate change in customer LTV that results. When you think “customer centricity,” think “customer lifetime value.” They go together.
originally posted at http://crookedchimney.com/3-reasons-the-future-of-marketing-is-customer-centric/