Thought Leadership

What is Customer-Centric Marketing? A Definition of Customer-Centric Marketing, Benefits, Best Practices, and More

In the digital age, marketing buzzwords abound: Dashboard-driven. KPIs. Omnichannel. Metrics tell the story. But where are the customers in this picture? Today’s consumers demand highly personalized, relevant experiences, and companies that place the customer at the center of their marketing initiatives gain a strategic competitive edge. Here’s what you need to know about customer-centric marketing.

Definition of Customer-Centric Marketing

Your customers are the reason your business exists; that’s obvious. Yet many companies get so caught up in channel optimization or product segmentation that they forget their core focus: the buyers.

According to Custora University, customer-centric marketing “places the individual consumer at the center of marketing design and delivery.” In other words, customer-centricity requires marketers to:

  • Know: Understand there is no “average” customer
  • Attract: Turn strangers and contacts into leads
  • Acquire: Deliver the right message to the right customer at the right time to convert leads to sales
  • Grow: Create the kind of long-term engagement that generates repeat business.

Benefits of Customer-Centric Marketing

Customer-centric marketing allows you to build your brand around different market segments, adapting to each demographic’s product or service affinity. By analyzing customer perception against customer-centric metrics, you will differentiate your brand, build loyalty, and retain customers long-term, according to the American Marketing AssociationCustomer-centric marketing

A customer-centered focus is the hallmark of profitable, world-class organizations, confirms customer centricity expert Bill Self. What is good for your customers is good for your business: employees who feel empowered to deliver top-notch customer experiences tend to have greater job satisfaction, so it’s a win-win.

Core Competencies for Leveraging Customer-Centric Marketing

Several core competencies are necessary for companies to embrace customer-centric marketing, including:

  • Customer market segmentation. By managing the demographic group rather than channels or products, you are able to remain focused on the unique wants, needs and tastes of each market. Brands built around the customer attract more business because they are targeted towards a specific segment, e.g., women’s prenatal or post-menopausal vitamins.
  • Laser focus. Narrowing and sharpening the segment enhances its perceived value. Customers want to feel special. So even if a company develops market segments that focus on age-specific or gender-specific groups, for example, customers will feel more — not less — appreciated.
  • Atomic-level customer views. Simple segmentation isn’t enough to truly put your customers at the center of your marketing initiatives these days. Today, customers demand an individualized experience, and companies that leverage technology to gain an atomic-level view of every individual prospect and customer are poised to deliver.
  • Actionable analytics. If a customer’s buying behavior shifts, marketers must respond readily to adapt to their changing needs. That may mean up-leveling a customer, or it may mean responding to indicators that a customer is about to churn with efforts aimed at retention.
  • Adaptability to respond to trends and consumer demands. Customers, like products, evolve with the times. A preservative-laden snack line may now be less popular than the company’s newer organic snack line. This is a growth opportunity, and understanding your customers inside and out, along with shifting trends and changing demands within broader customer segments, is key to adapting to these shifts.

Challenges of Customer-Centric Marketing

Since analytics are key to customer centricity, the principal challenge is harnessing appropriate Big Data. A study by the CMO Council, in partnership with SAS, found that, “The main challenge, according to 52% of marketers and 45% of IT professionals is that functional silos block aggregation of data from across the organization.”

This speaks to corporate culture, and the need to align around customer needs in order to drive connected experiences. If there is no clear-cut ownership of a customer-centric model across all levels of the organization, from chief executives to sales to IT to line staff, a true customer-centric model is not possible.

Beyond focusing on the customer internally, device proliferation has made it more challenging than ever before to home in on your target audience. While email has the least friction of any form of communication, it’s also harder to understand who your customer is, or which devices they use.

And, while email remains the highest ROI channel in e-commerce, the trend over the last decade has been to augment email marketing with a consistent message across all channels.

A third challenge concerns the explosion of social media and mobile, which has driven the growth of word-of-mouth marketing. Three-fourths of consumers say they rely on social media and friends’ input in their decision-making process.

Best Practices for Leveraging Customer-Centric Marketing

A recent McKinsey study found that companies with a customer-centric, data-driven marketing and sales platform improve marketing ROI by 15-20% or more.

Successful customer-centric marketing relies on four best practices:

  1. Start with senior leadership
  • Establish a core philosophy for customer centricity that unifies functional goals and processes.
  • Align corporate culture with customer needs.
  • Identify key stakeholders across marketing channels.
  • Leverage technology that eliminates data silos and promotes the sharing of information across channels and teams.
  1. Define and measure
  • Tie metrics to tactics: organize customer record and identity in a single location.
  • Factor multichannel into the customer journey: text message, push notification, email, Facebook ad — but don’t overdo it.
  • Track results: a data-driven, adaptive approach helps you determine the best timing and optimal number of touch points by testing your content as appropriate.
  1. Iterate and automate
  • Test, learn, optimize, repeat.
  • Implement customer-centric data in every aspect of your organizational framework.
  • Onboard data-driven, customer-centric technologies.
  1. Build infrastructure from customer-centric insights
  • Craft a culture based on a cohesive customer experience that makes sense for that customer at that place and time.
  • Personalize the journey with targeted messaging and optimized design.
  • Create a closed-loop feedback system.

As best-selling author Gary Vaynerchuk writes in The Thank You Economy, “There is proven ROI in doing whatever you can to turn your customers into advocates for your brand or business. The way to create advocates is to offer superior customer service.” That is the essence of a customer-centric culture.