During the marketing classes we all have heard about the four ‘P’s (Product, Price, Place and Promotion) which is also known as the marketing mix. It has always been the best parameters to control the internal as well as external constraints of the marketing environment.
In today’s hypercompetitive world, the four P’s are no longer an effective model to penetrate and exist in a market. Through the power of mass media, channels and technology, the control has slowly shifted from marketers to consumers. This is where ‘customer-centric marketing’ comes into existence which is now considered as the new model for marketing effectiveness.
According to Chaffery1, “Customer-centric marketing is an approach to marketing based on detailed knowledge of customer behavior within the target audience and then seeks to fulfill the individual needs and wants of customers.” It centers on the needs and wants of the customer, and not about what the marketer or seller wants a customer to buy. Thus by understanding the needs, wants and problems of the customer, businesses could gain direct insight into them and build a mutually beneficial relationship and rapport. Understanding how a customer or prospect is engaged with the brand and then tailoring resources, products, services, and communications to reflect their engagement level demonstrates a customer-centric business approach.
• Customer-centric approach is more like creating relationship sales by understanding your consumers as opposed to product or promotional approach.
• It focuses more on the satisfaction and mutual relationship with the consumer
• Communication becomes an important factor to get regular feedback from consumer
• Will be investing on potential consumers thus avoiding vain investments on low potential customers
• Sales will be generated as a result of a solid relationship, listening and problem solving
• Consumer information will be integrated across marketing, sales, and service departments
• Integrated mass and direct communications with the customers will be made regularly
To help frame a customer-centric strategy, Forrester has identified five key dimensions which marketers must focus on:
1) Establish a customer-centric marketing culture;
2) Rethink business processes;
3) Create a centralized view of the customer;
4) Use analytics to drive customer communication; and
5) Invest in a consistent measurement framework.
Why companies should change to customer-centric approach?
There are many benefits by switching to a customer-centric marketing approach and adjusting marketing practices to deliver relevant messages through multiple channels.
• The first reason would be ‘an improvement in selling and experience’ as there are no sales tosses
• Least expensive marketing program and improved referrals
• Marketing investment will be better aligned with customer profit potential
• Increase in profits through customer loyalty. Customers will buy over a long period of time
• Lasting business relationship
• Raises awareness and optimizes appeal
A comprehensive view of the customer helps marketers to deliver productive customer experiences, support marketing measurements, and drive new business opportunities. The first step towards greater profits is to recognize that company profitability is driven by customer-level profitability. Long term investments in the right customer base will definitely help businesses to position themselves to prosper and succeed.