The Self-Funding Journey From Product Centricity to Customer Centricity
Over the next three years there will be a major shift in business as an increasing number of companies transform their operations from product centric to customer centric. J. Patrick Bewley made this prediction during his presentation at the Building a Differentiated Customer Marketing Strategy event, presented by ARF and Acxiom.
Bewley, vice president, global marketing strategy, for Acxiom, went on to describe the five phases organizations will need to travel through on their journey to customer centricity:
Phase 1: Assess and collect
Customer centricity is a problem of recognition and intimacy, Bewley said. "You need to recognize the face of your customer," the way a small-town grocer knows all his customers and their preferences, he said. This requires amassing key customer information and third-party data, as well as matching and enhancing that data with what Bewley referred to as exogenous data sources.
Phase 2: Describe and codify information
During this phase marketers should use analytics to uncover meaningful patterns in customer data, and determine such key groups as high-value customers. Segmentation is critical, he said.
Phase 3: Predict and recommend
Valuable information on customer behaviors are already house in your database, Bewley said. Use predictive analytics to map customers' propensity for purchasing a next-best offer. Additionally, build a knowledgebase of likely customer actions, and then use that information in a rules-based system to present appropriate offers across channels.
This is where media mix optimization is essential. It examines costs versus margins, allowing marketers to see which product/media mix will be most profitable. Using media mix optimization, marketers can determine which of the company's next-best offer is not only the best value for its customers, but also which is the best value for the company.
Phase 4: Act
In most cases today the cycle time between insight and action is too long, Bewley said. It's vital to move toward real-time action. "Marketers must respect customers' preferences regarding both cadence and channel," he said.
The right timing is essential, but so is taking an action that is most likely to drive customer action. Consequently, it's important to consider past not only past purchase patterns, but also appropriate product recommendations when delivering a real-time offer to specific customers.
Phase 5: Measure and refine
Use closed-loop analytics to measure the actions taken across communications, offers, segmentation, and the like. Then make improvements in each area. "Recursively learn," Bewley said.
Ultimately, Bewley said, companies must be able to recognize customers across all touchpoints, find and codify patterns of behavior among segments, and then take action on them. This approach--especially when combined with media mix optimization--will lead to both incremental revenue growth and cost saving. Companies can use this combination of dollars to self-fund their customer-centric evolution, he said.
Customer insights drive engagement, Bewley said. Better engagement drives growth, satisfaction, advocacy, and efficiency.
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