Forget the 4 P's: Here's How to Measure a Customer-Focused Marketing Strategy
The consumer era is upon us and customer-centricity is the new black when it comes to marketing, so how can we measure the return on investment?
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Last month I was at IBM Amplify and the big focus there was the fleeing of the traditional four marketing P's (product place, price and promotion) and a migration toward the new one C: the customer. This shouldn't come as a surprise. With the "consumer era" dawning upon us, businesses -- at least those who keep an eye on which way the wind is blowing -- have started taking their customers more seriously than ever. Customer-centricity is one of the hottest topics in the business space today and we are constantly talking about ways to improve customer experience. The world is moving so fast. The only way to compete is to nurture, sustain and foster the relationship you build with your customers.
But companies that have taken the customer-centric route will tell you that it doesn't come without a price. Why? Because you need to spend those marketing dollars to create and nurture customers in a world where getting a slice of their attention is becoming harder day by day. And that begs the question: Can customer-centricity and ROI-focused marketing live together?
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Assumptions are not facts
The biggest problem with most claims of customer-centricity is that they are largely based on assumptions. I mean, how many businesses can actually point out the real reasons a customer keeps coming back to do business with them? Was it the product quality, the turnaround time, customer assistance, post-sale service or something else? Did the customer come back because, maybe, there wasn't a suitable alternative available at that point of time? What are the chances that the same customer would stick around if he or she finds an alternative?
Spend time getting to know your customers
Not having the answers to these questions is one of the surest signs you aren't customer-centric. You've probably heard it a thousand times (if not more) by now that the first step towards being truly customer-centric is knowing your customers. I can't help but reiterate this because most businesses think, and wrongly so, that getting to know their customers is a process that starts and ends with the few initial interactions. Once they have all the customer information they think they need in their pockets, they turn their focus on the new batch of customers. And then that cycle continues.
Soft touches and engagement are a must
What businesses often forget is that knowing a customer should be an ongoing effort. Customers' behavior, preferences and other factors may change over time and, the data from a few months ago may fail to give you the real picture. At the same time, businesses make dozens of customer-facing decisions on a daily basis, and it's not possible to question all of them. Moreover, activities related to customer-experience management often means added expense. The days of the hard sell are long gone. Customers are instead looking for soft touches, actions that engage them and make them feel special throughout the buying cycle and beyond. Not surprisingly, factors like engagement, social listening and on-demand support are a part of today's customer service landscape.
Worth the cost
These factors tend to add, not subtract, cost and rarely do these touches directly correlate to marketing or sales revenue. So, how do we measure the ROI for the marketing dollars we're spending on customer-centric activities? And, while data and technology bring us closer to accurate digital attribution, are the things that drive customers and the paths to ROI really achievable? The answer is (and you knew I would say this!): yes. In fact, in a world characterized by mobile, social, big data and endless tech availability, customer-centricity and marketing ROI can and should overlap.
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Breaking down silos
When traditional ways of doing business are no longer relevant it only makes sense to adopt new ways to measure the ROI of our marketing efforts. Therefore, today's marketing efforts should focus on metrics like customer satisfaction, customer retention and employee engagement -- efforts that often feel distant from ROI but are highly relevant from the standpoint of long-term performance. When customers are brought to the center of the wheel, businesses are automatically required to open their eyes and look ahead of the curve. And silos need to be broken down. For instance, employee satisfaction, long traditionally considered HR's job, is now an issue that the marketing department must take seriously. Why? Because employees are your first customers. Happy and satisfied employees are your brand's best advocates.
Measuring ROI on your marketing spend is no longer a linear path. In order to truly weigh the effectiveness of your customer-centric marketing moves, it's important to identify and take into account the new KPIs of marketing. Businesses that adopt this outlook will realize that the roads leading to customer-centricity and ROI-focused marketing have fused into one.