Ability to grow a business is what distinguishes a truly great marketer, according to an article by consulting firm Booz Allen Hamilton: “In an era of unlimited opportunities but constrained resources, the only marketing metric that matters is growth. Driving growth means stretching the traditional boundaries of the marketing function to encompass activities many companies don’t even think of as marketing — yet.”
So the question is: how is growth measured? Revenue. Profit. Market Share. Brand Equity. Customer Lifetime Value (CLV). Can we safely say that CLV is a key driver of market share and revenue?
- Surely, CLV grows as your customer base adopts up-sell, cross-sell, and good Word-of-Mouth (WOM) behaviors.
- Research shows that a 1% improvement in customer retention can increase CLV by 3-7%.
- Similarly, Customer Experience Management (CEM) — prevention of customer hassles — improves retention, encourages WOM and up-sell/cross-sell behaviors, and also reduces wasted costs.
- So, revenue, profit, market share, brand equity and CLV can grow significantly through CEM.
Wisely, CEM is a growing practice among leading companies. As author Leigh Duncan outlines, CEM is the “process used to comprehensively manage a customer’s cross-channel exposure, interaction and transaction with a company, product, brand or service.” An “outside-in” operational excellence focus is one of the key components of CEM, with a “comprehensive evaluation and improvement of people, process, policies, technology, and systems that facilitate, track, and measure customer interaction and transaction”.
Marketers have an awesome opportunity to assert their authority and value as a conduit for the customer’s voice into all areas of the company. They can really help all the functional areas realize how they impact customers and the company’s growth. This expands the definition of marketing well beyond lead generation and product management. It brings an outside-in perspective to many organizations that are otherwise sheltered from their connection to delivering the brand promise.
CEM may stretch the boundaries of what many companies have traditionally viewed as marketing’s job. “Squeezing the lemons“, or driving company-wide action on the less attractive feedback from customers, represents a chance to own CEM and improve CLV at the top-line and the bottom-line. CEM may be the ticket for marketing to play a more integral and strategic role in the company. And be acknowledged as a truly great marketer — playing an instrumental role in the business’ growth.