Strategy — Customer Centric & Up-Selling

I got some comments from the previous post regarding the customer-centric approach saying that customer-centric is all about up-selling and manipulating the customers. And that is a valid concern because effectively many companies went that way in manipulating the customer. And here it is worth it to mention the consideration of the ethical question and the long term success of the business.

So back to the customer-centric component and what strategy you can adopt to get it right serving the benefit for both the business and the customer in the long run.

There are plenty of strategies that customer-centric companies rely on, but all these strategies fall into three broad categories:

• Customer development
• Customer retention
• Customer acquisition

Customer development

Firstly, customer development is all about making your existing clients more valuable. Here, companies analyze their data and identify patterns to come up with cross-sell and up-sell opportunities. This helps them increase the Average Order Value (AOV) and Lifetime Value (LTV) of each customer.

Note that customer-centric companies do not aggressively up-sell customers just to hit their sales goals. Instead, they make it a point to only up-sell customers when it makes sense, and when it results in a win-win.

Customer retention

With customer retention, companies basically engage and cultivate their customers so that these customers stick around for the long-run. Again, this helps the company increase their customer LTV.

One major benefit of investing in customer retention is that it helps companies increase productivity and save cost. Acquiring a new customer can cost up to 5x more than retaining an existing customer, and the success rate of selling to an existing customer is 60% to 70% (as compared to the success rate of selling to a new customer, which is 5% to 20%) (Source: OutboundEngine).

Customer acquisition

Finally, customer-centric companies also take great pains to fine-tune their customer acquisition strategies so that they acquire the right type of customers. More specifically, these companies tend to focus on acquiring customers based on behaviors instead of demographics. And here, we mean by behaviors the type of interaction of the customer in exploring the services and products of the business. Usually businesses use their CRM system and other automated tools in tracking the navigation on their websites.

Those strategy components drive some of the requirements of your customer interaction system such as:

• It is a prerequisite that the interaction with your customer should be traceable in your system since even before the early stage of the onboarding.
• It is a prerequisite that the customer interaction system allows for capturing data and persist it from both ways business and customer
• It is a prerequisite that the system should allocate for analytics to drive insights and meaningful information to personalize the customer journey.

Please drop your comments and share your thoughts below.