Gone are the days when there was just a one-way communication between brands and customers. Before customer centric business when brand managers had to develop marketing strategies based only on sales reports and their gut instinct. This methodology got even riskier when brands were launching a new product.
By the time product managers realized they had made a huge mistake in their expensive marketing campaign, it had already been too late. They had misjudged their target market and pushed a product that nobody needed or was just not economically viable.
But as marketing evolves, brands can now interact directly with customers, collect information from them and then tailor offers accordingly. I’m not just taking about the quarterly customer survey, we’re talking about leveraging the big data revolution and getting answers from the customers at multiple stages of their life cycle.
In the same way, customers, now more than ever, feel like they can actively engage with their brands. They can now share their problems and get resolutions in near real-time. When was the last time you had a poor brand experience and your gut feeling was to take your beef out on social media? Think about it, the power of customer advocacy is more powerful than ever. Everyone has always had a voice, but now hundreds if not thousands of people are listening and reacting as keyboard warriors.
The Customer Centric Change
Companies and big brands have started to shift their focus from driving incremental value through transaction based sales to increasing the overall customer lifetime value (CLV) of a customer and driving brand advocacy. As product marketing becomes subservient to customer relationships, companies would have started to change their complete marketing strategy and reinvent their marketing teams, from the ground up.
Even if you still call your Marketing Department by its original name, try to start thinking about the functions of an overall ‘Customer Department’. In the end, this department cares less about how to push existing product into crowded market places, but rather turns to the client base and asks the question “what do you need today? How can I make your job / life easier?”
Building stronger relationships with customers
There is no point of trying to get new customers through expensive marketing campaigns if you are not able to retain the existing ones. In the B2B world with insanely long sales cycles, you typically spend months if not years gaining a valuable client, why not make sure you are taking care of that customer’s needs on an ongoing basis? Welcome to the world of being customer centric.
Instead of devising a single strategy and hoping that it will work for all customers, companies need to take advantage of the rich data that they have about their customers and use it to create better, targeted strategies.
The idea is to create thinly sliced segments that are tightly targeted. It might seem more challenging, but in the long run, this will eventually allow you to deliver more relevant messaging to specific audiences, and in turn develop tighter relationships and ultimately more long term revenue.
Focus on customer facing functions
As a part of the customer centric migration, companies need to re-introduce customer facing functions that were previously removed or were never a part of the overall marketing strategy. These functions are vital to understanding customer behaviour and to develop solutions tailored to their needs.
Some of these functions include:
· Customer Relationship Management (CRM)
· Market Research and Landscape Analysis
· Technology Research & Development (R&D)
· Customer Service and Feedback (e.g. NPS)
By integrating all these functions into the Customer Department, you can see how the feedback loop drives innovation, need and ultimately fulfillment of the customer’s needs. Customers didn’t know they needed an iPod, they just knew they needed to carry their music with them, and lots of it!
Executive Buy-In: The Chief Customer Officer
To make any radical shift official you need executive buy-in and you need someone to spear head this new effort to drive a customer centric culture through your organization. One tactic businesses have taken is to replace their company’s Chief Marketing Officer (CMO) with an emerging new C-Level position, the Chief Customer Officer (CCO). Responsible for developing and executing the company’s customer facing actions and customer relationship strategy, a CCO reports directly to the CEO and removes any obstacles in the flow of customer information. From needs, to buying behaviour, to customer satisfaction, this new big dog at the management table needs to be all in when it comes to the customer base.
Depending on customer centric metrics
As the strategy changes, you also need to change the metrics that would be used to judge the strategy’s effectiveness. Companies would have to focus more on customer profitability and less on product profitability, which means it is still okay to have products that aren’t killing it on margin as long as they are able to strengthen overall customer relationships of the brand. We call this being sticky. We take a small hit on solving some of the customer’s pain points for a chance at becoming a trusted advisor.
The golden metric that marketers have been chasing all along and is still key is ultimately customer life time value (CLV). Current sales and the health of the funnel is still important, but the CLV will help determine if you are growing the average share of wallet in your customer segments over time and ultimately what a single customer is worth. Current sales might be showing you the present sales scenario, customer life time value will give you an idea about future profits and sales. And at the end of the day, that is what we are all looking for.
The Customer Is (Hopefully) Here to Stay
However daunting it may seem, this shifting tide of the marketing department is absolutely inevitable. Gone are the days of “spray-and-pray” advertising campaigns and hitting the three martini lunch. With more and more companies becoming customer centric and gaining an edge against their competitors, it is impossible for others to compete without changing their marketing strategy.
With the big data revolution available at our disposal, gaining insight and understanding customer needs is now not only an opportunity, but our duty as marketers to further strengthen our client relationships and serve the needs of our customers.