Tag: Loyalty

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The Customer is King: But do you know who the Customer is?

boy wearing a prince costume

It’s a very old adage and it is rolled around by companies and consultants the world over. Even my favourite Management and Marketing guru Peter Drucker has a good quote relating to it:

Marketing is the whole business seen from the point of view of its final result, that is, from the customer’s point of view.

Peter Drucker

But how many companies actually live and breathe it? More fundamentally, how many companies actually know who their customer actually is? And, are they right? Because if the customer is king, but we’re not clear who the customer is, then we’re almost certainly going to make a pretty poor job of serving that king!

The customer is king; the consumer is king.

It appears that in the consumer goods world there is a clear, implicit belief that the consumer is the customer. Indeed, from the responses to this question posted on LinkedIn, it appears that the words consumer and customer can be used interchangeably. Indeed Drucker’s seminal quote) was used for the purpose of justifying the value of consumer-centricity.

The word switch from consumer to the customer is made almost subconsciously in many posts here, which leads me to conclude that the words are completely synonymous in the minds of many in the industry. 

When we say the customer is king – what we often mean is ‘the consumer is king’.

And what is wrong with that? This is the consumer goods industry after all! We know that consumers are important – and that not satisfying them is likely to lead to a very short-lived brand. Isn’t all this semantics? Isn’t it, as one post on the LinkedIn thread suggested, that consumer-centrism lies at the heart of true marketing? Well – let’s see what happens when businesses become too consumer-centric, by way of a case study.

Why do you need to know who your customer really is?

Consumers in one market like to drink beer at parties: so they need lots of stock at home at one time. A brand decides to corner the party market and launches in only a jumbo 48 pack. They launch it at a discount to the market because in research consumers expected to pay less for a bulk pack, but they had also made it a premium quality brew as the target consumer was planning to serve at upmarket events. Needless to say, they researched heavily with consumers and created a brilliant communication message which they leveraged through all available media.

So far, so good, but what happens when it is presented to the trade? Well – it gets rejected by most customers. Retailers are disappointed with the lower-than-average margin, and the fact that it trades down other premium beer buyers on a bottle-to-bottle comparison. Once the buying team is finally bought off, it is rejected by the store operations team as it doesn’t fit on the racking, and given its relatively low rate of sales, it will only get one facing: the equivalent of two units per store. If only they’d thought about the retailer as well as the consumer eh?

Three weeks in the product isn’t selling. Junior managers are dispatched to stores to see what is happening. The product is listed, they report, at the right price. But nothing is happening. Nobody could spot the problem until one bright young manager observes the shoppers. 82% of them have baskets. Even those with trolleys buy only a few items. Following some shoppers back to the parking lot, she observes that there are very few cars, but lots of free courtesy buses. Then it clicks. The pack is way too big to carry home on a bus.

We Three Kings?

The story is exaggerated, but only a little. Perhaps there was a time – fifty or sixty years ago, when complete focus on the consumer was ‘good enough’.

Trade was relatively weak and highly fragmented, so big national brands could easily call the shots.

And for many household goods, the ‘housekeeper/mom/consumer’ controlled what went in and out of the family. But things have changed. Trade consolidation has given retailers power, and that means brands need to serve this customer too. Shoppers are much more influential, behave differently and are influenced by different things than those that influence consumers.

If all we do is focus on them as consumers, we will miss much of the opportunity to learn about them, connect with them, and influence them.

Consumer marketers, don’t fret. The consumer is still king of kings: without consumption brands die, it is as simple as that. But brands must be configured to ensure that they serve all three customers. Branding models may still have the target consumer at their heart, but should also reference what the brand delivers for shoppers and retailers.

Shopper Marketers. The shopper, as the newest king on the block, is most often the one who gets neglected. Ensure your colleagues and peers know the difference between the shopper and the consumer, and how this varies by store type.

Customer managers. Your customer is a king too. Brands that don’t serve retailers will struggle to get to shoppers and therefore to consumers. But we mustn’t make the mistake of serving this king to the detriment of the others, or the detriment of the brand. Just because it is good for your retailer, doesn’t mean it is good for the brand.

The customer is king, but the consumer goods industry has three kings: the consumer, the shopper, and the retail customer. Marketing must move on to a marketing approach which recognizes the need, and indeed the opportunities which come from marketing to these three customers in an integrated manner.

Feel free to contact me if you would like to learn more about how to build brands which work for all three customers, and to use this to drive phenomenal growth and better investment returns.

The original version of this post by Mike Anthony is located here and this repost is with his permission.

The Pretectum CMDM is a customer master data management platform that can be used by organizations to curate zero-party and first-party data that relates to customers that are consumers. The platform is industry agnostic and supports deep integration with various applications that your business may have for more personalized customer interaction. Reach out to find out more.

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Consumer Loyalty and Customer Master Data

Rewards Club card Handover

Previously it was mentioned how some airlines leveraged their loyalty programs to secure loans from various backers. At face value, this tells you that though we as consumers store value in our reward points or air miles, so do the airlines and retailers themselves!

Customer loyalty programs like Airmiles and rewards are forged relationships between brands and customers. This is one of the reasons that when a rewards or loyalty program changes the terms and conditions of the relationship, sometimes you will see a sharp uptick or drop-off in the use or support of that program. Launching a loyalty program is also expensive and complex.

In the US alone, companies spend a staggering $2 billion on loyalty programs every year according to Capgemini.

Typically loyalty programs serve as a way for the brand to offer membership-related exclusive products, promotions, or pricing. The reciprocated offer from the customer is their agreement to sustain the relationship with preference against that product line or service through repeat purchases or brand engagement.

In a nutshell, a loyalty program is another marketing mix element. A part of any marketing strategy Loyalty Programs is designed to encourage customers to sustain their shopping or use the services of a business associated with the brand and program.

Loyalty programs cover most types of commerce, each having different features and rewards. Industry segments that have leveraged broad loyalty programs include financial credit, hospitality & travel, retail and entertainment.

According to Sallie Burnett, a loyalty consultant and Founder of Customer Insight Group. in a Forbes article, one of the most successful loyalty program examples is that of Nordstrom retail stores. Nordstrom customers move up through levels from Member to Insider, Influencer and Ambassador.

Annex Cloud a loyalty experience solution suggests however that not all loyalty programs are a guarantee of success. Annex Cloud cite, a report by Capgemini wherein a high percentage of loyalty programs are considered to be failing.

53% of consumers stated that they abandoned at least one loyalty program within the last year which means businesses are putting money and energy into strategies that aren’t being successful. The main reasons vary, from a lack of reward relevance, flexibility, and value (44%) through a lack of a seamless multi-channel experience (33%) to customer service issues (17%).

Pretectum feels that one of the ways to mitigate some of the aspects of customer service and multi-channel interaction is through the convergence on a single-source-of-truth in relation to the customer master. If your sales, service, support and loyalty programs are all reading from the same song-sheet, a centralized customer master data hub, then the ability to service the same message consistently and coherently is greatly improved. This in turn leads to a greater likelihood of retention.

Here are some interesting statistics in relation to loyalty programs and the customer relationship from Smallbizgenius.net

  • 82% of companies say customer retention is cheaper than acquisition.
  • 75% of consumers say they prefer brands that offer rewards.
  • 56% of customers stay loyal to brands that “get them”
  • 58% of companies use personalization to retain customers 
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Making wishes come true

white dandelion flower shallow focus photography

Make people who aren’t your customers wish that they were. Sounds easy right? We know it is easier to say it than it is to make it happen but we do have some thoughts about how the way you interact with your customers and prospects may just influence them in a way you hadn’t considered.

“Even the best of what formerly passed for good customer service is no longer enough” – we’re sure you agree, that the way your customers have come to expect personal interaction, is radically different today as compared with what it likely looked like even just a year ago. 

The reality is that your customers are evolving, and with them, their expectations. Today, every member of your sales, support, and service team needs to function as a customer concierge. 

A concierge ([kɔ̃sjɛʁʒ]) is an employee of a multi-tenant building, such as a hotel or apartment building, who receives guests. The concept has been applied more generally to other hospitality settings and to personal concierges who manage the errands of private clients. - https://en.wikipedia.org/wiki/Concierge

Even if your business isn’t in hospitality, your staff need to do everything they can, to make every prospect and customer, feel recognized, acknowledged, appreciated, and heard. They all want to feel special 

As Gary Vaynerchuk, states in The Thank You Economy – “You have to make them feel special, just like when your great-grandmother walked into Butcher Bob’s shop or bought her new hat, and you need to make people who aren’t your customers wish they were.”

So how exactly can your business do that?

At Pretectum, we think the answer lies in the data. If you have the data, you can leverage it.

Three circles with CMDM at the center.
Three circles with CMDM at the center.

If you don’t have the data, you can embark on a data gathering and data collection exercise that will empower your teams and fuel your technologies for improved messaging and personalization – customizing the whole customer experience in a way that is aligned with their preferences, passions, and interests.

With the Pretectum CMDM solution, you’re able to take advantage of a platform that supports centrally managed customer master data for small or large groups in a unified or an isolated way, according to the specific way in which your business prefers to have data governance organized.

Forging good customer relations

In retail good customer relations include remembering and appreciating repeat customers, creating local connections with shoppers, putting product knowledge to good use, and of course much more. A great deal of this can be augmented with data that your business has in relation to those customers provided you take the trouble to capture it and harvest insights from it.

If you’ve ever spent any time dealing with an older established department store you will know that many of them have staff who are “personal shoppers” – people who help others shop by giving advice and making suggestions.

You’ll still find them in some high-end stores but of course, smaller retailers can do this themselves simply by training their retail staff to be more attentive and personalized and less transactional. Personal shoppers are often employed by department stores and boutiques, although some are freelance or work exclusively online.

Often with a focus particularly on apparel, the reality though, is that personal shopping can also apply to non-clothing retail – such as furniture, and specialized fields like electronics, vehicles, and travel – offering personal shopping services is on the rise.

As consumers, we will tend to appreciate the store owner who remembers the repeat customer. One of the easiest ways to support your staff in being able to do that is by providing customers with a unique way of being identified, like a loyalty card; and storing essential information that relates to the relationship with the customer in a point of sale, service or support system.

At the swipe or scan of a card or phone, your staff can surprise and delight key customers with personalized service which will drive positive retention. All your repeat “known” customers are likely to be your best ones’s they’ll be very appreciative of a retail experience that is finely attuned to them and their loyalty

So, make it a point to let your frequent customers know that you’re grateful for their purchases by taking advantage of the data that you have about them, every time you interact with them.

Put all that info you have in your CDP, CRM, and ERP to good use by augmenting your systems with a single source of customer truth – a customer master data management system.

Once you have their information you’ll be sure to be able to use that customer data to serve your customers better.

The customer experience is more than important ever. You’re doing business in an environment where consumers have more choices than they have ever had before. How you interact with them can be a huge differentiating factor and it can turn indifferent shoppers into raving fans.