Much that is written by the various www.customerthink.com bloggers is about understanding your customers from a transactional point of view. For example, what they bought, when they bought, how much they bought, what particular promotion generated incremental sales, etc. In other words, understanding the WHAT of your customers.
There is no doubt that what customers have done in the past is a good predictor of future behavior. As result marketing and selling efforts should indeed focus more effort on customers highly likely to buy again than those unlikely to buy.
What has also written by me and several other blog colleagues is the importance of better understanding the WHY of customers. For example, why you are doing well with certain customers and not others, where you should strengthen your customer service operation to encourage even stronger buying, the areas were marketing and merchandising should focus attention to bring customers to the next level of profitability.
What few have mentioned, at least overtly, is being able to tie the WHAT of your customers to the WHY of them. It’s often referred to as LINKAGE.
The next time you conduct a survey of customer attitudes model the attitudes to your database. That is, assuming you are researching your own customers, make sure you have a customer ID code on every questionnaire you complete. Conduct an adequate number of interviews for a decent modeling effort. Usually a minimum of 600, better a sample size of 1,000.
The customer code is your linkage to all the behavior, promotion or other metrics you have on that customer or group of customers. Being able to do this is critical in more effectively mining your database.
Next, find a good statistician or modeler…one with experience in attitude research surveys and developing customer attitude profiles. From there it’s not a big leap to determine the attitudes that are held by the various WHAT groups that make up the segments of your database.
The ultimate goal is, of course, to optimize your customer service, advertising, promotion and merchandising approaches on segment to segment basis. A more sophisticated modeling effort will even allow you to market on a customer by customer basis.
Understanding how to link the WHAT of your customers to the WHY of them is the key to speaking their language. And speaking the language of your customers is the key to growing your business.