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Five Reasons Marketers Should Be Customer-Centric

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What is customer-centricity? And why does it matter?

Customer-centricity is a marketing strategy with the primary goal of acquiring high-value customers and maximizing the value of every customer relationship. It acknowledges that there is no "average" customer and that the differences among customers represent an opportunity to build more long-lasting, profitable relationships through relevant communication.

Customer-centricity stands in contrast to other common marketing strategies, such as product-centricity (competitive advantage through superior product design or merchandising) or channel-centricity (focus on achieving dominance in one or more channels).

Moreover, customer-centric marketing isn't new, but in many ways, it represents a return to a much earlier era of marketing: the personal relationship between neighborhood shopkeeper and customer.

Being customer-centric also has made a resurgence in recent years, fueled in large part by e-commerce tools.

Here's why being customer-centric matters.

1. New tools offer visibility into individual customer behavior

Throughout much of the 20th-century, mass retailers didn't know who you were or what you did once you completed the check-out process. Often, they lacked even the ability to tie together multiple purchases that you made over time.

The loyalty card revolutionized customer-centric marketing in the 1990s by offering a way to track and link an individual customer's transactions. But Web technology has gone leaps and bounds further, creating an unprecedented opportunity to collect information on shoppers' behavior, interests, and preferences... and to create a single unified vision of the customer across multiple touchpoints.

2. Customers are interacting with you in more ways than ever before

Web technology has also offered new opportunities for customers to engage with brands, transforming the "broadcast" mentality of mass advertising into a dialog between retailers and customers. A customer who pins an apparel retailer's Capri pants on Pinterest and likes every Facebook update is different from a customer who responds only to steep discount emails. That data represents a potential windfall for retailers: It gives them the opportunity to tailor communications to different customer segments in a more meaningful and relevant way.

3. Customers expect a single, seamless experience across different platforms, devices, and channels

Gone are the days when mobile was used primarily for a quick in-store price comparison. Holiday 2013 e-commerce data shows that customers are increasingly using mobile devices for exploration and engagement. As shoppers feel increasingly at home across both digital and offline environments, retailers that understand how and when to engage with key customer segments will be best positioned to win their business—in the long run.

4. Traditional product-centric strategies are increasingly vulnerable

As author Peter Fader argues in Customer Centricity, globalization and the unprecedented rate of technological advances have created cracks in the foundation of product-centric strategies.

The "ever-more demanding consumers of today have every reason to be demanding; the entire world and all of its goods and services are now at their fingertips," Fader says.

Nowadays, customers can find virtually any product online with the touch of a button. Retailers can no longer rely on geographic exclusivity or even proprietary technology to drive long-term profitability. To establish meaningful and lasting competitive advantage, retailers must build their businesses around communicating the right message to the right customer at the right time.

5. The explosion of metrics has led to inefficient channel-centric strategies

Opens, clicks, impressions, likes, retweets—the complicated digital advertising ecosystem has led to a profusion of metrics to track and optimize. But has it led to smarter spend? After all, optimizing in isolation can often lead to misguided investment decisions. Without a clear sense of the role that each channel plays in the purchase process, individual channels often all look to maximize their own metrics at the expense of overall profitability. The solution? A channel strategy built on an understanding of distinct customer segments—and how to communicate with each to maximize their long-term engagement and loyalty.

* * *

Ultimately, customer-centricity is both an opportunity and an imperative for retailers wanting to thrive in the 21st-century marketplace. By orienting their business around customers rather than products or channels, retailers can ensure that their marketing strategy is aligned around their single most valuable long-term investment.

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Jordan Elkind heads the customer success team at Custora, a customer-centric marketing platform for e-commerce retailers.

LinkedIn: Jordan Elkind

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  • by Dan MacInnis Sat Jun 21, 2014 via web

    Love this article. Can't wait to podcast with you John.

  • by Natalie Staines Mon Jun 23, 2014 via web

    Could not agree more that customer-centricity needs to be the focus rather than messages that are brand-focused or even simply customer-focused. There's enough data available and enough access to the experience of customers to understand what makes them tick and to ensure they not only happy but in it for the long haul with a brand. We covered this same topic on the r2i blog: One of the other components of being customer-centric though that has come to light is taking the cross-platform and multi-device detail one step further. As digital marketers we focus a lot on how we can optimize that online experience but in order to be truly customer-centric we have to make sure we're also including the offline experience. The in store experience and the call center experience. Customers (myself included!) believe that online actions are known across brand representatives for any in person or call-oriented experience, and customers want those dots connected.

  • by Megan Heuer Sun Jun 29, 2014 via web

    Hi Jordan,
    Thanks for the post. You make an interesting point when you say, "Customer-centricity is a marketing strategy with the primary goal of acquiring high-value customers and maximizing the value of every customer relationship." Customer-centricity has a commercial goal of course, but its execution must be based on creating value in those customer relationships, not just trying to extract value from them. Only then will the full financial potential of customer-centricity get realized. If I extend this to the b-to-b world, not exclusive to e-commerce models, this is the justification behind why so many companies are embracing account-based marketing. While ABM is not a new strategy, the need to focus on individual customers to stay relevant has made it an appealing one. This is very much related to what you say in this post about the technology-enabled return to the old-school shopkeeper relationship, but it requires making sure the shopkeeper is truly helpful. At SiriusDecisions, what we see when customer-centricity and account-based marketing efforts go wrong is that the effort never really understood and spoke to customer needs in a non-selling context. They only focused on what the seller wanted them to buy. A propensity-to-buy model and targeted advertising are not the same as true customer focus, and customers aren't fooled by it. Thanks for the post!

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