Why Customer Centricity Is More Than a Marketing Trend

Its Definition Has Implications That Should Reach Deep Into the Marketing Organization

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Michael Radigan
Michael Radigan
We live in a world of trends. The Walkman, Pinot Noir, the Lambada, animated gifs, tree hugging, the mullet. Some endure; some don't. One recent trend in marketing is customer centricity.

Nearly 2 million results -- that's how many pages show up on Google when you enter the keywords "customer centricity" (heck, it even has its own Wikipedia page). The philosophy is far from radical, but it's also one that is sadly not commonly executed in many marketing organizations. So what does "customer centricity" mean, anyway? A dime-store definition is this: "Customer centricity" means focusing on the customer you're talking to rather than on the product you're trying to push.

Seems simple enough, doesn't it? But this deceptively simple definition has implications that should reach deep into the vitals of a marketing organization.

Let me play this out a bit more. Let's assume that you acknowledge the concept of customer lifetime value. Are you also factoring in the expense of that marketing? If so, my guess is that you're looking at it at a global level (campaigns or products or programs), because breaking the expense side of the equation down to a customer view can be technologically challenging. It requires boatloads of data and sophisticated analytical models based on more time-series regression analyses than you can shake a stick at. So, mostly, we take a fairly straightforward propensity-to-purchase model and rank our audience. Then we select the top X deciles in that ranking and invest.

In a truly customer-centric world, that's no longer good enough.

Previously, I wrote on the topic of "wasted conversations," and there was some lively debate about "missing the importance of brand awareness." However, brand awareness, brand preference, brand impact, etc., can all be measured and tracked. Certainly, a single conversation doesn't have to result in an immediate sale, and that's why the lifetime-customer view is so fundamental to a customer-centric philosophy. Repeat business is what makes our Wall Street godfathers happy, after all.

Another implication of this customer-centric, lifetime-value view of the marketing relationship is this: We have to stop living in a 90-day world. This is particularly important when it comes to the importance of factors like brand awareness, because the measurable effect of brand advertising on sales lags behind that of stimulated sales, stubbornly refusing to limit itself to a convenient 90-day window of time. We not only have to shift from product centricity, we also have to move away from calendar centricity.

So. Here we are on Planet Customer Centricity. Let's take a look around. We embrace the concept of customer lifetime value, our horizon stretches way beyond the fiscal quarter, and we understand the role of brand advertising as much as we know that of the directed-sales stimulus. Now, let's take another look at the expense side.

"Given your current propensity to purchase, Judy Six-Pack, we can send you an e-mail, but we can't send you a $5 coupon. Or, we can talk to you on Twitter, or through a Super Bowl ad, but we can't afford to send you a catalog. Because if we do, our aggregate CLTV/E won't hit target."

Now we know who is worth talking to, and how, and when. For those "wasted conversations," we still have non-addressable, wide-reaching, inexpensive "air cover" to build and maintain awareness, to increase propensity to purchase. Now, our job is to convert the customer from a waste of our resources into an asset that will provide lifetime value to us at an acceptable level of investment. How will we do that? By offering Judy Six-Pack value in return. Yes, another funnel.

So, moving from Earth to Planet Customer Centricity isn't merely a shift in focus from widgets to individuals. It's a whole new marketing mindset that will transform much of current strategic planning, marketing and media optimization, and force us to revisit the way we conduct conversations with our customers.

So here's a revised definition: Customer centricity means focusing on the customer, both in terms of the value you offer, but also in terms of the long-term value that the customer will provide in return.

The good news is that by embracing a truly customer-centric philosophy, your CFO will be a much happier camper, because now you can quantify your investments and returns in a way she understands.

There are plenty of ways that your customers will benefit, too, but I'll save that for another post. Right now, I have an appointment with my barber. Goodbye, mullet.

Michael Radigan is VP-interactive for Javelin, which offers consulting, decision support and direct-response agency services.
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