We’re not customer centric. Yet.

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13 June 2019

Recent research from Marketing Week found that marketing departments are not structured around the customer, despite most marketers believing they should be. Analysis from IBM* showed that 70% of consumers are not impressed with what IBM called the “Experience Revolution” and that there are clear gaps between what business executives think consumers value and what consumers actually value when it comes to digital experience initiatives (see below). 

And KPMG Nunwood’s latest Excellence in Customer Experience report showed little increase in overall scores from customers. The underlying message seems to be that whilst customer expectations are increasingmost businesses are struggling to put the customer at the heart of their business. And although brands are investing heavily in marketing technology, the benefits of that investment to the customer are not always being felt. 

So, why is it so hard to be customer centric? Over and above the indisputable fact that change is always difficult, it seems to come down a number of things. 

Firstly, the perennial struggle between meeting short-term business needs and meeting long-term objectives can often undermine efforts to change. Great intentions get swamped by the need to drive sales now, which in turn, starves investment in projects with a longer-term focus.  

It’s also fair to say that there can be too little clarity about what customer centricity tangibly means for a particular business. This perpetuates an underlying suspicion that the value of being customer centric is a bit fluffy and not proven – it sounds good, but does it really make the business money?   

Finally, there’s the ageold issue of people thinking and operating in siloes. We’ve all experienced the challenge of acquisition and retention teams working completely at odds to deliver their own targets rather than connecting with the wider company to be more effective and efficient in the long run. Customers just expect brands to be consistent and seamless – but businesses themselves can inadvertently conspire to make that hard to deliver. 

In our experience, whilst there’s no blueprint, there are four building blocks that any business can use to become more customer centric and, importantly, deliver more sustainable revenue as a result.  

Build a deeper understanding of the relationship between strategic metrics and sales

Many customer metrics, such as NPS (Net Promoter Score) or engagement, are important barometers for future sales success. The challenge for marketers is understanding which metrics are key and how much they actually relate to sales.  

Brands can, over time, build a really solid understanding of NPS and how each % change in performance impacts repeat purchase and cross-sell, churn and potentially acquisition through advocacy. With the right tools, brands can work out how much each % change in NPS is worth to their business. A granular understanding of exactly what drives NPS can also act as a diagnostic tool for where things are going right and wrong.  

Customer engagement can also correlate heavily to sales growth. According to Gallup, based on years of research across multiple categories, “customers who are fully engaged represent a 23% premium in terms of share of wallet, profitability, revenue and relationship growth over the average customer”. Gallup defines customer engagement as the emotional connection between your customers and your company”, so they explicitly make the link between a ‘soft’ metric and ‘hard’ incremental sales. 

Alongside these metrics, building an unambiguous picture of Customer Lifetime Value can be valuable to align marketing efforts. 

Businesses need to pick one or two of the right strategic metrics and work with them. Credible, tangible evidence makes it easier to prove success of customer centric initiatives, which in turn should help unlock more opportunities. It can also start to break the cycle of short-termism. 

Understand your customers more deeply

It feels blindingly obvious but building good customer understanding is vital. No business can be truly customer centric without it 

Research and analysis help brands identify the things that really matter to a customer and work out how to deliver on them to create more value. Brands need to prioritise their effort and investment in what matters to prove success quickly. We do this by looking in detail at customer journeys to understand how customers behave, their needs, how they feel and what influences them at different points in their decision journey or lifecycle with your brand. We use analysis to scale the opportunities and enable us to prioritise. Where there are gaps in customer key needs or expectations is the brand’s opportunity to shine and accelerate momentum.  

Engage cross discipline or channel teams

Customer journeys also provide a simple, practical way to bring people together to identify opportunities and solve problems. This can be the first important stage of building across teams and breaking down siloes. Landing collaboration around a practical, tangible task can often feel more natural and easier than some massive theoretical re-orchestration. 

Start with the basics

Customers buy into a brand in good faith that it will do what it promises. It’s hard to get customerto buy again – or buy more, or stay, or advocate – if they don’t feel you’ve delivered on your original promise or lived up to that brand purpose you bang on about in your ads. Let’s be honest, sometimes the starting point to being customer centric is just about nailing the basics. Once you’ve earned a customer’s trust, you can move things on 

Finally, a watch out. Marketing technology is a great enabler of customer centricity, but it isn’t inherently customer centric. We may sometimes forget the customer in our desire to embrace clever technology and let it do its thing. Being customer centric means never losing sight of the human being at the receiving end and being conscious of what they actually experience. The customer doesn’t see (or care) how clever the tech is, they just experience what your brand does or communicates. If that’s not executed well, it’s still a crap experience.  So, don’t invest all your budget and effort in the tech and compromise on the quality of the communication or interaction. Invest wisely in both and you’re more likely to make significant gains.  

Written by Kate Wheaton, Director of Strategy at TMW Unlimited.

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