The customer-centric theory may, at first blush, seem a backwards approach to profitability. The focus is not on the customer's wallet, but the customer himself. Learn how successful businesses have increased share of wallet and generated fiscal growth by putting the individual customer's needs before the company's. More CRM and Loyalty Marketing Resources Loyalty Blog: http://www.customerinsightgroup.com/loyaltyblog/ eBooks: http://www.customerinsightgroup.com/white-papers Loyalty Workshops: http://www.customerinsightgroup.com/custom-loyalty-workshops Systematic New Loyalty Program Development: http://www.customerinsightgroup.com/systematic-new-loyalty-program Pinterest: http://pinterest.com/engagekeepgrow/ Who is Customer Insight Group? Customer Insight Group, Inc. leads the way in the evolution of how companies engage their customers, positively motivate them and earn their long-term loyalty. Our extensive client work is testimony to our depth of knowledge and ability to apply strategic insight and solutions to a wide variety of business objectives. Our team’s client experience includes: NHFA, Thomasville Furniture, The Maxim Group Carpet Franchise, Ashro, A&P, The Bon Ton, Crate & Barrel, Dick’s Sporting Goods, Edwin Watts Golf, GE Consumer Finance, Monroe and Main, Swiss Colony, Midnight Velvet, MySwingle.com, The Great Indoors, G.H. Bass, Golf Galaxy, Helzberg Diamonds, HSBC, Kohl’s, La-z-boy Furniture Franchise, MCI, Payless ShoeSource, Pier 1 Imports, Petco, Proflowers.com, Regis University, Ruby Tuesday, S&K Menswear, Sierra Trading Post, Stein Mart, Tommy Hilfiger, Ulta, as well as various other leading companies.

1. Customer Centricity: Beyond the Theory
Customer-CentriCity entails a Company understanding
individual Customer needs and improving the Customer
experienCe thereby Creating sustainable and profitable
Customer relationships impermeable by Competitors.
more than An Idea the customer-centric theory may, smith, Best Buy’s senior marketing
at first blush, seem a backwards director of customer insights.
Customer centricity is much
approach to profitability. the focus
more than an idea to electronics
retailer Best Buy — it’s a new
is not on the customer’s wallet, the Challenge
but the customer himself. By
way of life for the Fortune 100 Becoming customer centric
putting the individual’s needs
company. Any retailer who still seems a daunting on several
before the company’s, businesses
doubts the customer-focused levels. For one, acquiring the
earn customer loyalty that, in
way of doing business needs only data to make it work requires
turn, generates fiscal growth.
to look at Best Buy’s impressive months of time, planning and
results. In 2006, Best Buy had “If we understand our customers effort, plus with a significant
better than our competitors do, and front-end investment — tough at
a 12 percent revenue growth. It
if we can inspire our employees to any point in a company’s life, but
returned $922 million to share-
have richer interactions with cus- particularly difficult under current
holders through stock repur-
tomers, then we can more effec- weak economic conditions.
chases and dividends, “nearly
tively compete,” Anderson said. Instinct tells companies to seek
a three-fold increase over fiscal
“I strong believe that our decision immediate profitability. But it’s
2005,” according to Best Buy’s
to accelerate customer centricity shortsighted and, in the long run,
2006 Annual report.
contributed to our 22 percent
likely to cost a company far more
Vice Chairman Brad Anderson increase in earnings from con-
than it profits it.
gave credit to the company’s tinuing operations this year.”
growing customer-centric philos- And data collection is just the
Best Buy has continued its cus-
ophy explaining that, “I strongly beginning. using it to execute
tomer-centric approach through
effective programs is the most
believe that our decision to accel- 2010, understanding that,
important, and most difficult,
erate customer centricity contrib- “there’s a uniqueness to how our
step toward customer centricity.
uted to our 22 percent increase customers experience our brand
in earnings from continuing and there’s a uniqueness in the “globally, 75 percent of com-
operations this year.” way we look at them,” said matt mercial businesses believe they
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2. are losing money through missed profitable programs using the ships with high-value customers
business opportunities because same types of data collected by must be established and deep-
they are unable to quickly and companies still missing the cus- ened over time to generate truly
effectively profile customer and tomer centricity mark? sustainable profitable growth”.
prospect data to data quality
issues,” according to a survey
from QAs, a division of experian
“in the u.s., 77 perCent of Companies admitted
marketing services Business. A
that shortComings in data quality are having
recent gartner study found that
a detrimental effeCt on their bottom line.”
poor quality customer data costs
u.s. business loses an estimated
$1 billion annually.
Fewer than 15 percent of retailers selden and co-program director, Armed with facts, companies can
who aim for the customer centric Fortune editor geoffrey Colvin, turn those cold, hard numbers
experience are satisfied with their sum up the five of commonalities into programs that reach the
programs to date, according to of customer -centric businesses: customer’s hearts — what an nrF
the national retail Federation’s report on the “Art and science of
1. they see themselves not as
Crmretail study. Customer experience” calls the
a group of products, services,
art of customer centricity.
Virtually every company claims territories or functions, but as a
to be customer-centric, but portfolio of customers. For instance, westpoint stevens’
few really are, said professor data revealed how often people
2. they know how much money
Larry seldon, co-director of a purchase its bath and bed items
they make or lose with each of
new university of pennsylvania and remodel bedrooms and
their customers or customer seg-
wharton executive education bathrooms. It further tracked pur-
ments and understand why.
Customer Centricity program. chases that allowed it to divide
Companies need to understand 3. they understand the individ- customers into three spending
the different needs of different ual needs of different customers segments: value-oriented, mod-
customers and group them into and group them into operational erate and fashion. the creative
operational customer segments segments and sub-segments message was then tailored to
and sub-segments based on based them. address the motivations of each
common needs. they then thrill 4. they continually innovate group. For example, fashion
their customers by delivering by updating their customer seg- customers received mailings that
knockout value propositions ments and sub-segments, improv- reinforce the feeling of luxury,
that competitors cannot match. ing their value propositions as while messages to value-oriented
Customer-Centricity is at the customer needs change. customers focused primarily on
heart of their success.” 5. they create a completely everyday items. the segment
unassailable customer-innova- based communication strategy
the Look of tion advantage based on models generated high response rates
Customer-Centric grounded in continuous testing at and roI.
so what does a customer-centric customer touch-points. the science of data roots pro-
company look like? It looks like grams in reality. If the data is
selden and Colvin agree that,
Best Buy, but it also looks like faulty or the company’s vision is
“products come and go and new
Amazon.com, Zappos.com and unclear, even the best programs
technologies develop at ever-
nine west. And how do they spin are doomed to fail.
increasing rates, but relation-
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3. Armed with accurate data, Are your customers affluent? customers and focus your best
companies can begin to see efforts there. use a proactive
Thrifty?
common factors linking customer approach and make changes as
Fashion conscious? trends evolve and fade.
lifestyles and purchase patterns.
they can determine which prod- Outdoorsy?
Companies can never afford to
ucts are profitable and which How old are they? rest on their laurels, count dollars
aren’t, if new products will be well
Do most of them have chil- and bask in the glow of suc-
received and find the basis for
dren, and if so, how old are cessful programs.
customer dissatisfaction.
the children?
the authors of the nrF's “Art and
Learn who they are — age,
then, track how they respond to science of Customer experience”
income level, gender — what
your programs. time your mes- report advise, “once you think
they buy and when.
sages for the greatest impact, you have it all down, think again.
Do some customers only pur- based on those patterns. tailor It’s time to reinvent yourself
chase at certain times of year? your messages to each customer all over again. with your ear to
Specific times of day? segment. Identify your best the customer’s voice, and with
sallie burnett C u s t o m e r i n s i g h t g r o u p, i n C .
strategist. leader. innovator.
Customer Insight Group is a strategic
With over 20 years’ experience in marketing company that uses customer
strategic marketing, sales management information to help its clients engage in
and customer relationship management, successful and profitable long-term rela-
Customer Insight Group founder Sallie tionships with each and every customer.
Burnett has built her vanguard reputation It provides marketing strategy, customer
by crafting solid customer-centric strate- research, data analysis, program develop-
gies that drive bottom-line success for ment, implementation and refinement
her clients. Renowned for her out-of-the- of customer-centric programs including:
Sallie Burnett box thinking and wealth of experience, loyalty, social media, customer engage-
president, Ceo she’s been sought out by many of the ment, retention, win-back and new
Customer Insight group
nation’s top companies to engage, keep customer acquisition.
twitter.com/sallieburnett
and grow their customer relationships at
every point along their customer relation-
ship journey. Her insight results in better
aligned sales, service and marketing,
while generating the greatest return on
investment based on the voice and value
671 Secrest Circle
1
of the customer. Arvada, CO 80007
ph: 303.422.9758
www.customerinsightgroup.com
info@customerinsightgroup.com
Customer relationships — engage.Keep.grow. twitter.com/internethowto
|| ©2010 Customer InsIght group, InC. ph: 303.422.9758 www.CustomerInsIghtgroup.Com