This post is a follow-up to yesterday where we began talking with Jim Sellers, our SVP of Marketing Services, about the new way to think about direct marketing.
Buxton: So Jim you've said a couple of things here that perk my ears. When you talk about things a brand should be doing and suggest right off the bat that there should be an effort to drive all marketing activities from a customer orientation, that sounds like one of those “no duh” concepts that is shockingly obvious...until I try to explain it to myself. In your mind what are some indicators that there is a lack of customer orientation within an organization? And what is the upside of adopting a customer-oriented mindset?
Jim: As I am assessing an organization, here are the red flags that tell me there is not enough focus on the customer:
- No stable, practical, and measurable customer segmentation schema
- Reporting is product focused. Companies know what's being bought, buy not by whom
- Product and/or channel managers promote to the same customers with little or no coordination (or even knowledge) that they're hitting the same customers
- Promotional budgets allocated to products, not customer segments
- Pricing strategies are set at the product level. Little or no understanding of cross product price elasticities
Now, the benefits for an organization who effectively adopts a customer centric orientation are numerous. Some of the big wins include:
- Budgets allocated based on potential revenue upside by customer segment (across products)
- Reduction of inefficiencies that stem from different product groups targeting the same customer
- Customers see the company via its promotional efforts in a way that makes sense (based on how the customer consumes the company's products or services)
- Allows companies to understand and manage the customer lifecycle, acquisition, activation, growth, retention, and churn