As a B2C marketer, what would you say is your brand’s most valuable asset? Patented IP? Your beautifully designed and perfectly located physical facilities? Well-trained and highly-motivated employees?
How about your customer relationships? Customer relationships can be a brand’s most valuable asset, yet often remain a neglected and underutilized asset.
Ecommerce statistics prove the value of building customer relationships: while just 27% of first-time customers make a second purchase, 45% of two-time buyers make a third purchase and 54% of three-time buyers make a fourth purchase.
Relationships start with identity. In this digital-first world, the brand-customer relationship really begins when a consumer shares their identity with a brand, usually in the form of their email address. Many brands are realizing that they’ve already built a substantial yet underutilized database of identified customers. They’re sitting on an untapped opportunity to improve customer retention, engagement and lifetime value. But how to proceed? How can you rally your organization to start viewing customer relationships as a strategic asset that can and should be actively managed for growth?
Three-quarters of business leaders believe their company won’t survive beyond the next two years unless they put more focus on customers. Yet, astonishingly, almost half (43%) have “more important business issues to focus on.”
Let’s look at three common marketing mindsets and how a purposeful shift in mindset can help you turn your customer relationships into a strategic asset.
1. Shift the Focus from Products to Customer Experiences
A product management mindset can be a barrier to focusing on customer relationships. Marketers have historically been trained to focus on making their brand bigger by developing more features, benefits, user groups and usage occasions for it. The keys to success in the product management mindset are scale and physical visibility. Capturing large numbers of customers, and analyzing large segments of customers, is prioritized over building knowledge at the individual customer level.
In the Age of the Digital Customer, however, the power of big brands and big physical footprints has diminished. Small brands can compete on a much more even footing with big brands in the digital context. At the same time, content — in the form of information and interactive tools — has become almost as important as the actual product. As a result, the new imperative for marketers is to shift their focus from the product itself to the customer experience. In coming years, improving the customer experience will be the key battleground, according to nearly 90% of executives in the Forbes Global top 500.
Be aware that the operational impact of this mindset shift is significant. For example, while a product is the same for all, today’s consumers expect individually-customized experiences. Therefore, managing for excellence in customer experience requires the ability to accurately recognize individual customers whenever they appear at any of the brand’s sales, service or marketing touchpoints, both online and offline. The data captured (e.g., marketing content viewed, stores visited, and items purchased) from all of those touchpoints must be continuously integrated and applied to improve the next interaction. This individualized marketing approach also complicates attribution analysis; the solution, again, is an integrated approach to customer identification and data compilation.
2. Shift the Goal from Transactions to Customer Lifetime Value
Do you primarily focus on transactional measures of success, such as individual campaign click-throughs and conversions, or customer satisfaction surveys based on a single in-store purchase, website transaction or call center interaction? The danger in this approach is that a brand can achieve acceptable scores on individual transactions and still have low customer satisfaction with the brand’s overall, end-to-end experience (i.e., the total buyer journey) – which is critical for repeat purchasing and deeper customer engagement.
Managing for customer lifetime value is a significant shift both in mindset and operationally. From a marketing standpoint, every customer touchpoint must be evaluated to ensure that it deepens, not weakens, a customer’s emotional connection with the brand. For example, every ad delivered must feel relevant, not generic or redundant, to the customer.
Emotionally connected customers are 52% more valuable, on average, than those who are just highly satisfied.
As with the shift in priority from product to customer experience, a lot more customer data is required: ideally, a lifetime of individual-customer activity. Foundationally, a brand must be able to recognize each customer across time and channels, and create an integrated view of the customer’s entire history with the brand across all marketing, sales and service touchpoints.
3. Shift from Single Channel Optimization to Omnichannel Optimization
The third necessary mindset shift addresses the problem of channel myopia. Channel myopia occurs when each marketing, sales and service channel is managed independently. This leads to a disjointed customer experience.
When a brand has channel myopia, it can be very difficult to link together the data from all aspects of the customer experience: call center, website, app, in-store check-out, digital ads, email and so on. Each touchpoint may use different identifiers for the same customer, and the data is likely siloed in different systems around the company or (as is often the case with addressable digital advertising) held within third-party systems. Not only does this make it hard to integrate historical data on the same customer, it also makes it extremely difficult to recognize a customer the instant they appear at an individually-addressable moment and to deliver the expected individualized experience.
When a brand shifts its mindset from focusing on single-channel optimization to omnichannel optimization, the customer experience can be dramatically improved. Operationally, the brand must first become customer-centric at the data level by assigning a universal identifier to each customer. This singular identifier has several purposes. First, it can be used to recognize a given customer at the start of any brand-customer interaction. Second, it enables the integration of enterprise-wide, cross-channel data on that customer. Third, this unified view of the customer can be accessed to deliver more relevant customer experiences in both owned and paid marketing channels.
Strong Customer Relationships Are Vital to Long-Term Success
It’s time to think about customer relationships as a strategic asset that should be actively managed for growth. It starts with these three shifts in mindset: from products to experiences, from transactions to CLTV, and from single channel to omnichannel. With each mindset shift, though, must also come operational changes, the most critical being the ability to recognize individual customers across time and touchpoints and to create a unified profile of each customer. Continuous customer identification is crucial to create the kinds of memorable experiences which add up to highly-engaged customers and long-term growth. Will your brand survive beyond the next two years?