Customer-Centric Marketing: Step-Up Performance

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customer-centric marketingCustomer-centric marketing is necessary, yet far from sufficient — from customers’ and investors’ perspectives. Thankfully, many companies have been migrating away from product-centric, month/quarter-end-centric and competitor-centric marketing, toward putting the individual or most profitable customer at the center of marketing design and delivery.

As such, customer experience tools are being embraced by marketers: journey mapping, personas, single view of the customer, story-telling, customer life cycle management, and customer lifetime value. Typical roles adopting customer-centric marketing are in the marcom area: digital, content, automation, intelligence, retention, advertising. Less often, customer-centric marketing is also being embraced by all marketing roles, such as events, research, budgeting, strategy and so forth.

Why is it insufficient? Examine the gap between aiming at the customer and elevating the customer.1

  • Less mature customer-centric marketing: “Aiming at the customer puts customers at the center of marketing; all promotions and messaging flow towards them in the way that is most relevant to them. Marketers put themselves in the customers’ shoes to sell to them better.”1
  • More mature customer-centric marketing: “Elevating the customer uses customers’ goals as the compass to make decisions about marketing approach. Marketers put the long-term interest of the customer above the short-term company conversion goals. Marketers put themselves in the customers’ shoes to serve customers better, thus building a long-term, sustainable competitive advantage.”1

It’s much more than semantics. Every marketer knows that benefits are more meaningful to customers than features, and many companies have recently come to appreciate customer-outcome-based selling approaches as even more meaningful. Likewise, personalizing your messaging and offers is an essential part of the equation, yet it’s also vital for customers and investors that the entire Marketing department “elevates the customer” by centering everything about their work on helping customers reach their overall goals.


 
Top concerns of customers who aren’t satisfied with a brand:
1) “The company does not put my needs and wants above its own business goals.”
2) “The company always tries to sell to me instead of providing value”.1

Top experiences among satisfied customers are massively broader than marcom:
1) “I consistently have good experiences.”
2) “It is easy to conduct business with the company.”1

Mature customer-centric marketing is a mindset for the entire marketing department.
It’s also aessential for all departments enterprise-wide to adopt this mindset:

  • Are we putting customers’ well-being first in all of our decisions?
  • Are we driving consistency in the delivery of our brand promise?
  • Are we doing everything we can to make things easy for customers?
  • Do we believe that putting customers’ well-being first will set us apart from competitors, earn trust, win their passion, and lead organically to recommendation, repurchase and growth in customer lifetime value?

To step-up your customer-centric marketing performance, (1) co-create marketing with customers, (2) bridge silos of all kinds, and (3) dedicate budget and ownership wisely to customer experience excellence.

1) Co-creating marketing with customers is a sign of mature customer-centric marketing:
“Pace-setting CMOs are aligning their marketing models to customers’ life cycle expectations”, writes Christine Crandell2. “Customer behavior, emotions, actions, input and feedback are used to define marketing mixes without regard for traditional organizational ‘sacred cows’. The extent of the customer’s impact on marketing strategy is substantial — as well as the rewards — when companies leverage their customers’ voice in a range of activities — from defining go-to-market strategy, messaging, inbound and outbound marketing, segmentation and personalization — to how digital properties function, what strategic partnerships to forge, and what constitutes a whole product solution. The motto is: if customers value it, keep it, otherwise drop it.

Four actions they’re taking to co-create marketing with their customers:

  • Routinely invite in high value target market buyers to collaborate and validate market strategy.
  • Engage high value customers in defining distinctive and valued life cycle experiences.
  • Test marketing campaigns and messaging with high value customers.
  • Routinely share company results, good and bad, with customer collaborators.”2

2) Silo-bridging is central to mature customer-centric marketing:
“Marketers feel a cultural shift will need to occur, including new processes and tools to execute changes faster”, according to a CMO Council study.3 “60% believe a focus on customer over product will need to take place for any significant progress to be made:

  • Corral all the content makers: Are these teams using separate systems now? Can we leverage one to remove the cost of others?
  • Connect technologies for real-time transparency: How many technologies do we use to bring all our physical and digital consumer communications to market? Where are the inefficient hand-offs?
  • Rather than focusing on one silo of work: Think about how we can simplify the entire value chain: What would the impact be on our business if our time to market for physical and digital communications was half of what it is today?”3

3) Dedicated budget is a prerequisite to mature customer-centric marketing:
Leapfrog Marketing Institute studied who owns the customer experience budget.4

  • Half of B2C companies and a third of B2B companies have a dedicated customer experience budget.
  • Among those, 53% are owned by Marketing, 24% are owned by a dedicated Customer Experience group, 11% are shared or not explicitly assigned, 7% are owned by IT, and 4% by others.
  • For the 55% of respondents who shifted budgets to be consumer-centric, 55% focus on consumer life stages, approximately 30% on consumer value/LTV models, and 9% focused on cross-functional alignment.4

Assigning ownership of the company’s customer experience excellence to Marketing can be problematic. Don’t leap to the conclusion that Marketing’s use of journey mapping, lifetime value and life cycle management make them the natural owner of Customer Experience Management. Don’t assume that Marketing’s ownership of things like market intelligence, predictive analytics, digital, retention, loyalty and CRM qualifies this department to achieve your enterprise customer experience goals. A 2017 CMO Council study5 reveals that:

  • Less than 10% of Sales leaders and CMOs view themselves as the owner of the customer experience.
  • Fewer than one in four Sales executives and only 39% of marketers believe they have total access to a comprehensive view of the customer.
  • Only one in eight Sales and Marketing professionals believe their organization’s ability to deliver connected, personalized, contextual experiences, regardless of channel and across the entire organization, is exceptional.5

The Marketing function has outward orientation and strengths, but is relatively inexperienced in influencing and driving improvement efforts among other functional areas and business units inside the company. A key tenet of Customer Experience excellence is synchronizing upstream functional areas with what’s most important to customers (see MarketingSherpa’s table above) so that burdens and inefficiencies are prevented for customer-facing functional areas and for customers themselves.

“Only 16% of marketers feel their organizations are extremely responsive to the consumer,” cites another CMO Council study3, “failing to make changes to products, packaging, services and experiences based on real-time consumer requests and feedback.

  • Specific to marketing campaigns, 78% of marketers feel they are able to respond or react to consumer feedback, requests, suggestions or complaints in less than two weeks, with 43% actually saying that they are able to respond to the consumer within 24 hours, effectively setting the expectation with consumers that responsiveness is possible.
  • Specific to physical touchpoints, 77% admit it can take up to 90 days to respond and react to customer feedback, suggestions or issues, with 36% needing up to three months to respond.
  • Agile marketing teams are looking to address this execution and engagement gap as 53% of respondents acknowledge that their goal is to deliver updates and make changes to physical touchpoints in under 14 days, with 20% of marketers hoping to see that gap narrow to just 24 hours to deliver updates across physical experiences.”3

Mature customer-centric marketing is not new, yet timing is right to embrace it now.
We may be new to adopting a mature approach, but the concept was described beautifully by Peter Drucker:

“Because the purpose of business is to create a customer, the business enterprise has two — and only two — basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business. The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.”6

1Customer Satisfaction Research Study, MarketingSherpa, December 2016.
2Going Beyond Customer-Centric Marketing, Forbes, Christine Crandell, 2015.
3The Responsiveness Requirement: How Agile Marketers Act on Consumer Feedback to Drive Growth, CMO Council, August 2017.
42017 CMO Digital Benchmarking Study, Leapfrog Marketing Institute.
5Customer Experience Dynamics: Defining the Requirements for a Strong CX Ecosystem, CMO Council, September 2017.
6Drucker on Marketing, William Cohen.

This article is the first of a 6-part series as an exclusive CustomerThink Advisors column: How Customer-Centered Marketing Steps Up Your Performance & Influence.

Image licensed to ClearAction by Shutterstock.

2 COMMENTS

  1. Excellent article Lynn. Good advice backed up by solid data points. Particularly like what you say about aligning marketing to customers’ life cycle expectations. Was surprised by the statistic that less than 10% of Sales leaders and CMOs view themselves as the owner of the customer experience. This will definitely change over time.

  2. Yes, Chris, at a conference with marketers we asked them to put red/yellow/green stickers on each phase of the customer life cycle to indicate their Marketing organization’s level of attention to each one. Predictably, there were a lot more green stickers pre-purchase and a medium level of green stickers at renewal/repurchase. The discussion we had in the conference session was memorable throughout the rest of the event.

    I recall in 1990 seeing Fred Reichheld’s HBR article about far superior financial performance from customer retention versus acquisition. In casual conversations with business people from various disciplines it seems those 1990 findings are well accepted. Yet, 30 years later, typical practices of Marketing have yet to embrace this. Equally interesting is the last section of that HBR article (The Zero Defections Culture) advocating what I’ve described in my article as “more mature customer-centric marketing”. Even in Fred’s writings these past couple decades those gems seem to have gotten lost in the quest to focus on an ultimate score.

    There has been a lot of noise about Marketing taking on Customer Experience management responsibility for the enterprise. It certainly is interesting that CMO Council’s most recent studies are showing smaller percentages and definite weaknesses in demonstrating leadership for CXM. Here are my thoughts about CMO’s potential to take on the CCO role:

    Marketing Wins Strategic Clout by Driving Customer Experience Management

    Customer Experience + Marketing: Pro’s & Con’s

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