Stuart Aitken admits that he has an eclectic background in business. He has tried his hand at making a fortune in Silicon Valley, he’s been a vice president of marketing for the grocery chain Safeway, and he was chief marketing officer for the arts and crafts store Michaels. His background is what brought him to dunnhumbyUSA, a consumer data analytics company.
In 2009, Aitken was hired by dunnhumbyUSA as COO and was promoted to CEO of the $245 million company a year later. His experience with consumer data made him the logical choice to lead the company after former CEO Simon Hay was promoted to lead the London operations.
“If you look at my background, there is a lot of IT and a lot of loyalty marketing in my background largely with the work I did at Safeway for 10 years and the work I did at Michaels,” Aitken says. “For me, this was the perfect fit of bringing my technology background with my marketing background to a company that fundamentally believes in the data and the customer, and for me, I had admired dunnhumby for many years. In fact, I recall trying to emulate some of what they were doing. This was a fantastic opportunity to join a company I feel is on the forefront of customer understanding and customer behavior.”
Aitken has helped to further dunnhumbyUSA’s focus on customer loyalty and retention all while growing operations to better serve its clients. Here’s how he helps dunnhumbyUSA and clients like Coca-Cola, Procter & Gamble, Kroger Co. and Macy’s succeed through a focus on the loyal consumer.
Focus on customer retention
Everyone in business knows that gaining loyal customers and having a high customer retention rate is extremely valuable. However, not many companies aim to please loyal customers.
“We have a fundamental belief that companies, regardless of who you are from a company perspective, and it can be any organization, has a monomaniacal focus on the customer and understanding the customer and not just any customer, but loyal customers,” Aitken says. “We fundamentally believe that you have to focus on loyal shoppers to be successful. It sounds like a principle that most companies would adopt and adhere to. But what we’ve found is that very, very few do. You talk to companies and the vast majority of companies talk about bringing in new customers, new clients, etc. versus saying, ‘Who are my loyal customers, what’s my headroom with those customers and how do I reward those customers for being loyal to me, my retail organization and my brand?’ Whether you’re a (consumer packaged goods company) or a retailer, very few companies think about customers in that way. It’s a different philosophy and that’s what makes it successful.”
Not only does dunnhumbyUSA advise its clients to focus on loyal customers, but it also adheres to those same principles.
“Our business model is very different, too,” he says. “We are exclusive with the retailers we work with. Because we work with Kroger, we will not work with other grocers in the U.S. Because we work with Macy’s, we will not work with other department stores in the U.S. We are exclusive and therefore it means we’re trusted. We’re not like any of the other big consulting firms who can help with strategy with competing retailers. For us, we just do not go there.”
Aitken realizes that by focusing more on existing and loyal customers, companies are limiting the number of clients, but there’s a reason this method works.
“What’s interesting to me is that there are many, many white papers out there and educational institutions produce it all the time, that it costs X times more to bring in a new customer than it does to retain an existing customer,” he says. “It’s likely something like six or 10 times more. But very few companies do that and focus on that and I liken it to a bucket of customers. Most companies are focusing on trying to find another faucet to fill that bucket of customers and very, very few are focused on plugging the hole that is in the bucket.
“You would need to win 12 new customers on average, we’ve found, to replace one loyal shopper. What we’ve also found is that with loyal shoppers the headroom with them, even with your most loyal shopper, you’ll likely have a 50 percent share of wallet, which gives you enormous headroom with those customers.”
Read the full article here.