Since the dawn of the new millennium, the world has experienced tremendous change, both positive and negative. There has been rapid advanced technological developments; introduction of new regulations; natural disasters; increased social and political unrest; growth of social media usage; global economic meltdown; increased cyber threats; increased globalization; increased competition; collapse of once dominant companies, and supply chain complexities.
These forces are dramatically changing the shape and course of doing business. What may have been regarded as the norm a few years back is no longer regarded so in today’s dynamic economic environment. In today’s ever competitive environment, businesses need to be agile and resilient if they are to achieve sustainable performance. With many players in the market vying for the same customers, only those organizations that clearly recognize and understand customer dynamics will reap positive returns from their marketing investments.
Many companies spend vast amounts of money on marketing campaigns in an attempt to create product or service awareness and solicit customer buy-in but, unfortunately, only a handful of these efforts actually achieve the desired outcomes. The problem lies mostly in their lack of understanding of the customer’s needs, wants and buying habits. Because of their reluctant to move on with time and adapt to change, these companies are still rooted in the pats. They are still holding on to their past success strategies under the mistaken belief that the champagne will keep on pouring. As Marshall Goldsmith said, “What Got You Here, Won’t Get You There”.
To reap positive ROI of marketing spend, organizations need to become customer intelligent. You have to be able to determine how much are you spending in marketing to retain customers and which type of customers should you focus and marshal more of your resources. Waking the sleeping giant and maximizing the ROI of your marketing spend begins with you segmenting your customers into logical groupings.
The best approach involves establishing a profound criteria for defining each customer segment, identifying all the characteristics of a segment that are foretelling, differentiating profitable segments from loss-making ones, analyzing the movement of each customer from one segment to the other over time and devising ways of proactively managing these movements, and deciding the appropriate communication channels and types of marketing messages for each segment. Gaining these customer insights will tremendously help you identify which customers to retain long term and those not to waste resources on.
The revolutionary transition from mass marketing to customer database marketing systems has even increased the need for organizations to garner vast insightful and informative customer intelligence. The internet and now social media have created a social platform for current and potential customers to access and exchange critical information about a company’s products or services. Comparisons are now easier and faster than before. The power has shifted from the seller to the buyer and the customer is in control more than ever. This new model requires companies to invest in customer intelligence systems capable of helping them refine marketing and sales effort, target individual customers with pinpoint accuracy and manage their conversation and interactions.
Customer intelligence systems help analyze customer segments and then formulate strategies that help satisfy and retain each customer segment. Because of their analytical nature (data mining and extraction tools), companies are able to gain insights about who their real customers are, their location, what they want from them, how often as well as anticipate their future needs. Instead of managing customers, companies will be able to enhance their customer relationships by fostering long-lasting good experiences and interactions that lead to repeat purchases and future referrals.
Rather than offer and deliver the right product or service via the right channel to the right customer at the right time from the business’s point of view, the company will be able offer and deliver from the customer’s point of view in much more pleasurable way. The company will no longer focus on outbound calls and marketing campaigns intended to sell its products or services. Instead, the company will maximize the responses from its inbound interactions with customers. The moment customers calls in, based on what the company already knows about them, it can maximize profit by up-selling or cross-selling its products and services.
Understanding this relationship between increasing customer satisfaction and generating higher revenues will help companies improve their profitability. This, however, requires more and better customer contact, closer customer relationships and the ability to proactively anticipate customer needs. It is the manager’s responsibility to place current and potential customers’ experience at the centre of the organization’s priorities and ensure that incentive systems, processes and information resources support these relationships by improving the experiences.