Double Dip Recession? Not If You Listen to Customers
THE SITUATION: The US government avoided default by the skin of its teeth ... but instead of stability, we have a first-in-history downgrade of the nation's credit rating and world-wide financial turmoil.
THE OPPORTUNITY FOR MARKETERS: Is it possible that good margins, robust market share, and growth are possible, even in the current market environment? Industry leaders I work with think the answer is "YES”. They have learned lessons about today's markets ... from direct interviews with their own customers.
Three Essential Marketing Takeaways: The consumer landscape has changed in some important and, I believe, permanent ways since the first of our two recessions kicked in in 2008. Although specifics vary by company, three principles of Customer-Centricity can apply broadly to all major industry sectors.
Permanent Market Change #1: Attrition matters. The pre-2008 complacency about whether customers defect to the competition, or stop buying altogether, is no longer acceptable. "Plenty of fish in the sea" may be a good maxim for dating, but not for marketing. Indifference is not a viable starting point for today's relationships between seller and buyer.
Respect is mandatory; it starts with truly caring whether the customer sticks around, and today's economy-savvy, Internet-savvy, social-media savvy consumer knows that. What's more, market leaders have developed a new respect for the high cost of replacing a disaffected customer, and as a result, they do not stop asking themselves, "What can we do to improve the customer experience ... and reduce attrition?" See this blog post for some insights on how the legendary merchandiser QVC did this.
Permanent Market Change #2: Consumers expect to be listened to via their own preferred channels and media. They are far more outspoken and explicit about their preferences, and they want to share specific preferences such as: how they define a value added relationship, how they wish to be communicated with, and what mix of media they wish to use to engage with companies.
As a result, today's market leaders are building their relationship marketing strategies around the rich feedback about multichannel preferences they receive directly from consumers. See this article for an overview of how Customer-Centric market leaders have achieved double-digit revenue increases by following this approach.
Permanent Market Change #3: Consumers expect true personalization in exchange for providing personal preference information. They want to be able to determine the content, messages and offers they receive, based on their unique personal preferences, and they want to have a clear sense of what custom-tailored value they will receive in exchange for sharing this information.
If you establish a powerful value proposition that justifies what I call a Reciprocity of Value Equation, consumers will provide you with invaluable opt-in information regarding their message, offer, and media preferences. This information becomes the core of a uniquely powerful preference-driven database ... which will drive double-digit increases in response and revenue. This case study shows exactly how Microsoft did this.
Learn how your customers define a compelling Reciprocal Value Exchange with your company. Understand how they want to deepen their relationships and what type of information they would provide in exchange for specific value added information and offers.
Do not attempt to launch this type of high engagement program without guidance from the voice of your customers!