With Regan Yan, Managing Director, Digital Alchemy
Some people argue that the first and only purpose of a company is to create and retain customers to sell their product or service? And furthermore, that this objective should be the ultimate entity that a company should consider when developing a marketing and sales strategy.
However, some might also bring the argument that a customer obsessive focus has a destructive impact on competition; when each competitor focuses on customer service and discounts rather than what can lead them to the sale and profit.
There is a balance to achieving the best of both worlds, and to focus your efforts on being a customer centric organisation in everything you do, whilst maximising profit.
We asked Regan Yan, Managing Director of database marketing services provider Digital Alchemy: How are customer centric organisations different? He said simply “because they make different decisions and choices. Many organisations I see aspire to become customer centric, but don’t want to change the way they make decisions. Customer centricity to them is making their communications more customer friendly.”
It is a case that too many companies are customer friendly, but not customer centric. Organisations manage each customer equally, missing an opportunity to discover who their valuable customers are. Without that data and knowledge, they cannot make their most valuable customers even more profitable ones.
Another mistake people often make is that they think being customer centric means doing everything your customers want, and that’s simply not the case. Customer centricity means that you’re going to reach out to customers in the right channel, time and communication that suits them, it means to provide good service and develop new products and services for the pivotal customers, not the one timers. Some customers deserve the special treatment, others simply don’t.
“Customer centric organisations make decisions fundamentally differently” says Regan. To be truly customer centric requires the ability to look at your customer in a different light and delve into a more granular level; where you can make decisions based on the individual or customer segments who are valuable from the ones who aren’t. Regan’s right, organisations need to shift their current mindset, not only in customer service, but in the channels and mediums they reach out and respond in.
In order to see if you’re as customer centric as you think, Regan presents you with a couple of questions to see which choices your organisation would make:
1. Customer has a product that costs twice as much as the one they need based on their usage. Does your organisation write to the customer and recommend they downgrade to a product with half the revenue?
2. You have the opportunity to sell a product to a customer, product A is appropriate for the customer and has revenue of $100, product B, is not so relevant for the customer but has a revenue of $300. Which one do you decide to offer the customer?
3. You have a very aggressive product offer that offers the first 3 months of usage free but it’s only available to brand new customers. If an existing customer, who has been with you for many years tries to purchase the promoted product, do you give them the 3 months free if they ask for it?
4. Product manager creates a product offer that converts to a high monthly usage fee above the market after 2 months free. They want to send it to your high value customers. What do you do?
Now think about the level of change that your organisation would need to make in its decisioning to consistently choose the best customer outcome at every interaction…
This does bring some clarity to the subject and raises some questions. Overall it’s clear that if you’re going to look at becoming a customer centric marketer, you need to understand what all the potential consequences are going to be before you get into it. Make sure you understand why you are going down the customer centric pathway, and where you want to get to if you choose to go there.
Is your organisation ready to become a customer-centric business? We’d love to hear your thoughts.