Some prognosticators see green shoots of growth beginning to emerge from the long economic winter. Others say the lean times will linger. Most agree, however, that businesses are facing a fundamental ‘reset’ – markets with profoundly different customer behaviors and internal business models that have been ravaged by quick cost-cutting measures. Some companies used this cycle to conduct a more thorough review of their structure, processes, and capabilities to create competitive advantage, directing resources to create value and win customers. They are taking control of their destiny and seeking to “create their own upturn.”
High-performance businesses eventually outperform the pack —even through a down economy. One tactic they employ to sustain performance is to remain customer-focused, and marketing has taken a lead role in driving a new focus on customer retention and acquisition. What can we learn from these leaders about the new role of the frontlines of marketing play in addressing operating costs and capturing new revenue waves?
Developing Actionable Segmentation: Although data-driven segments are widely used today for customer targeting, the most successful customer segmentation approaches have significant impact when used beyond marketing activities. Actionable customer segments incorporate a broader set of sales and service behaviors/preferences to establish a more execution-oriented profile of each segment. This translates into fewer segments that are more easily understood – from the company president to the front-line associate – and acted upon operationally.
Hearing the Customer – the Science of Triangulation: Analysis can distinguish between front-office activities valued by customers and those that are not. Organizations that expanded their product and service portfolios in response to changing customer demands have created a level of complexity in front-office operations that taxes the enterprise without creating value, thereby lowering overall profitability. With a more scientific approach to assessing impact, companies are triangulating customer needs and values with traditional customer research, market research and behavioral data gleaned from multiple customer touch points. This information helps companies identify and eliminate front-office assets and activities that no longer deliver value for customers or, in turn, the company.
Digital Transformation – The Drive for Multi-Channel, not just Multiple Channels: The rise of digital channels has captured new revenue. Getting the multi-channel experience right also creates other benefits. Our research has shown that multi-channel customers are accretive, not cannibalistic. When served by a customer-centric, multi-channel model, these customers tend to purchase more, purchase more often and are more profitable than other customers. We also find that multi-channel customers are made rather than born, by providing a relevant and consistent experience across channels.
At a time when companies must get it right the first time, high-performing companies spend wisely and reinvent themselves with a customer-centric focus. They know their customers have more access than ever to information and look closely at their choices to determine where they will spend each dollar. Smart application of data analytics, combined with organizational agility and willingness to reform customer-facing operations, enable companies to grow revenues while managing costs.