Many marketers talk about customer-centricity, but execution of this critical concept can be the difference between failure and success and directly impact brand loyalty.
“Understanding what your customers are saying is and always has been very important,” David Hazeltine, Director, Demand Generation, Pointillist told attendees during Thursday’s Loyalty360 webinar titled, “Retention Is The Key To True Customer Centricity: Start Driving Insight Rich Customer Interactions Today.” The webinar was presented by Pointillist.
“However, what they’re SAYING is not necessarily what they’re DOING and it’s time we start understanding their actual behaviors because THAT is what drives retention, revenue, and CLV!” Hazeltine added.
What does it mean to be “customer-centric”?
First, Hazeltine pointed out what customer-centricity is NOT:
Focusing on the “average” customer.
Courting and retaining low-quality customers.
Underspending on acquiring high-quality customers.
Instead, Hazeltine said customer-centricity IS:
Using customer data to better understand and segment your customers.
Identifying your best customers and non-buyers.
Focusing on products and services for those best customers.
Using Customer Lifetime Value (CLV) to segment your customers.
Bringing all departments together to work from a customer-centric standpoint, rather than a product-centric perspective, to profit from the most valuable customers.
While there are numerous attributes (characteristics) to customer-centricity, we believe these are the key ones:
There are no “average” customers. Customers must be looked at -- and treated as individuals.
Once you design experiences around your BEST customers, others will likely follow.
Hazeltine offered some key statistics:
Engaged consumers …
Buy nearly twice as frequently as their unengaged counterparts
Spend 60% more per transaction, and
Deliver 23% more revenue.
87% of consumers say brands need to put more effort into providing them with a seamless experience.
73% say that brands pay more attention to generating sales across channels than to providing an integrated customer experience.
“Customers expect the royal treatment, and if your brand doesn’t step up, they may engage with your competition,” Hazeltine said. “They also expect you to know how to engage with them regardless of what device they’re on. Put your customers and engaging them before your products and revenue, and it will pay off.”
Hazeltine cited another statistic: 36% of marketers struggle to identify individual customer behavior information at scale.
“Frankly, we believe 36% is very low,” he said. “Keep in mind, this 36% is based on individuals and is likely higher for segments, which is the deepest level many marketers are currently operating.”
What’s more,
42% of organizations feel they cannot drill into enough detail within their data to gather actionable insights.
Only 23% have invested in predictive tools;
33% are enriching profiles with third-party data;
24% pull insights from customer forums or panels.
“Although these numbers are growing rapidly year-over-year, there’s plenty of room to grow here,” Hazeltine said. “We believe that a major contributor to these low numbers is not a lack of desire, but rather a lack of tools that are marketer-friendly.”
An audience poll questions revealed the following:
Does your organization have a formal plan in place to increase customer retention?
Our retention rates are already great! (0%)
Yes, we have a plan (29%)
No, but we’re discussing it (59%)
I wish we had a plan (12%)
Parag Pathak, Head of Product Marketing, Pointillist, said that building a customer-centric organization requires identifying and prioritizing the opportunities where advanced analytics can make a significant, measurable difference−in the quality of both the customer experience, and in (cross-departmental) business decisions.
What’s the value of becoming customer-centric?
66% of marketing leaders do not know how much their customers are worth to their organization.
Companies have a potential 17% increase in sales when they identify and maximize top-value customers.
Customer retention yields better profits than customer acquisition; increasing retention rates by just 5% increases profits by 25% to 95%.
“Whether you’re focusing on acquisition or retention, imagine being able to demonstrate your ROI and its effect on your ability to justify your marketing budget,” Pathak explained. “Sixty-six percent of marketing leaders have no idea how to do that!”
Truly knowing your customers means answering the following questions:
Are you revealing meaningful customer journeys?
Is the data you are analyzing actionable data?
What if you had the ability to actually predict customer journeys?
Better yet… what if you could INFLUENCE and DRIVE those journeys?
“The narrowly-focused and technical tools of yesterday have evolved into the agile, flexible tools of the data-centric era,” he said. “But what we’re now experiencing is the onset of new, customer-centric tools that require a whole new level of power and sophistication.”
A well-orchestrated customer journey strategy:
Lowers Acquisition Costs
Increases Initial Conversions
Maximizes App Usage
Predicts Purchase Intent
Grows Share-of-Wallet
Increases Retention
Increases CLV
Increases Revenue
As a result, understanding the customer journey is of paramount importance.
“Whether you call it Behavioral Marketing, Customer Journey Analytics, Predictive Analytics, or whatever your definition of that term may be, what they all boil down to is understanding the customer journey,” Pathak said. “Because once you truly understand the customer journey, you can extrapolate, interpolate, back-fill, whatever to identify opportunities to deliver a better customer experience – and retain customers! Just thinking or talking about increasing your retention rates and becoming customer-centric will not help you reach your goals – you have to take that first step.”