How Developing a Consistently Customer-Centric Culture Helps Businesses Innovate
• • • • • •
Learn how to develop a consistently customer-centric culture for your business.
By: Bryan Silverman, Chief Operating Officer
In today's digital era, where customer preferences and market dynamics evolve rapidly, businesses that prioritize understanding and addressing their customers' needs stand out. This blog post draws on insights from the Yale Customer Insights Conference, personal experiences, and industry best practices to explore how a deep understanding of customers is pivotal across all departments, from sales to engineering, and marketing to strategy.
The Essence of Customer Centricity
At the heart of every successful business lies a profound understanding of its customers. This understanding transcends traditional departmental boundaries, affecting everyone from the C-suite to frontline employees. It's about more than just collecting data; it's about gaining insights into what drives customer behavior, preferences, and decisions. Attending the Yale Customer Insights Conference underscored this point, revealing that leaders who prioritize customer insights in their strategic decisions often find themselves in the most influential positions within their organizations.
Learning from Leaders
Leaders from diverse sectors shared how their early focus on customer insights shaped their careers, propelling them to top roles where they now influence major decisions. They emphasized the need to look beyond surface-level data to understand the 'why' behind customer actions. This involves storytelling and narrative building within organizations to ensure alignment and a shared mission focused on customer value creation.
Strategy & Operations: A Case Study in Integration
The Strategy & Operations team I oversee serves as a testament to the power of integrating various data sources to paint a comprehensive picture of our customer landscape. By combining internal business metrics with customer usage data, external market research, and direct customer feedback, we develop strategies that not only meet our immediate goals but also position us to capture significant market share in the long run. This approach is reflective of the conference's insights, emphasizing the importance of solving real customer problems and driving value as the cornerstone of business strategy.
The Power of Data and AI
In an age where data is ubiquitous, the challenge lies not in its collection but in its interpretation and consolidation. Artificial Intelligence (AI) emerges as a powerful ally in this endeavor, offering the potential to amalgamate diverse data streams into a single, comprehensive view of the customer. This 'single pane of glass' ensures that customer perspectives are always considered in decision-making processes. However, it's crucial to remember that AI is a tool to augment human insight, not replace it, particularly when navigating complex customer needs and preferences.
Beyond Surface-Level Desires
Understanding customer needs goes beyond merely responding to their requests. It involves anticipating future needs and innovating to meet them before they become apparent. This proactive approach, inspired by Wayne Gretzky's philosophy of "skating to where the puck is going to be," requires a deep dive into the underlying problems customers are trying to solve. The conference highlighted the importance of this forward-thinking mindset, showcasing examples where anticipating customer needs led to groundbreaking innovations and solidified long-term customer loyalty.
Practical Steps Towards Customer Centricity
Adopting a customer-centric mindset involves several practical steps. First, fostering a culture that values deep customer understanding across all departments is crucial. Tools and methodologies that enable the integration of customer insights into product development, marketing strategies, and operational decisions are also vital. Regularly engaging with customers through interviews, feedback mechanisms, and direct observations can provide invaluable insights that drive strategic decisions.
Last Words
The lessons from the Yale Customer Insights Conference, combined with personal experiences and industry practices, underscore the indispensable role of customer-centricity in achieving business success. By placing the customer at the heart of every decision, businesses can innovate, solve genuine problems, and build a loyal customer base that is the foundation of long-term success and differentiation. As we move forward, let's commit to maintaining this focus, ensuring that every department, from strategy to operations, contributes to a comprehensive understanding of our customers.
Shift now to the idea of loyalty. Like frailty, we can explain and define it. And yet, how does one measure loyalty? Let’s take man's best friend for example. Often considered one of the most loyal animals, how could we measure its steadfastness? If a dog runs away from its owner 10 times but returns 9, is the dog loyal? What about 8 times?
What if your dog wants to meet every person it sees? Is it loyal to you? What is the right criteria to measure if the dog remains loyal to its master?
And so begins the assessment of loyalty within the world of brand marketing. Brands work hard to develop a loyal customer base. CRM systems and reward programs represent significant investments meant to keep customers loyal. Do the investments work? The only way we can know is by establishing criteria that define loyalty.
In this blog, let’s explore a few ways that brands can measure loyalty.
Defining and measuring loyalty
Loyalty can be defined by attitude or by behavior. But, looking at loyalty this way can be difficult for products with long purchase cycles. For example, it’s difficult for me to demonstrate my loyalty to an automotive or a durable goods brand through repeated purchasing. I own a Whirlpool refrigerator. Am I loyal to Whirlpool? It’s difficult to assess since I likely won’t need a new fridge for (hopefully) many years. I cannot demonstrate repeated purchase behavior here. On the flip side, I am a very loyal McDonald’s breakfast eater. By going there two to three times per week, I have shown my loyalty to the point where the cashier knows my order by heart.
So what can we measure to quantify loyalty? What diagnostics metrics help us understand the attitudes and behaviors of a loyal customer? Here are some examples.
Customer satisfaction. Satisfaction does not guarantee loyalty, but the absence of satisfaction will likely lead to churn. (More on churn to come.) Many brands use customer survey research to measure satisfaction.
Net Promoter Score (NPS). NPS is probably the most popular surrogate for customer satisfaction. Around now for many years and well-known, NPS measures the likelihood that a customer would recommend a brand. While hardly perfect, NPS regularly correlates with other measures related to brand positivity.
Referrals. NPS measures the likelihood of a referral; in many cases, we can count the real thing. I go to the dentist once per year. That cycle makes it hard to literally demonstrate loyalty. However, if I refer someone I know to my dentist, I have found an alternative approach to showing my devotion to that practice. Additionally, I’m not likely to refer to a brand that I won’t return to. It’s common for businesses to reward customers for referrals, basically incentivizing that loyalty.
Social Media Following. If I am loyal to a brand, I want to remain informed about it. The more ways I engage with content from that brand, the more loyal I likely am. Following is the passive approach. For the more proactive approach….
Social Media Engagement. People like to talk about things they like. This premise applies to the brands they use. When people provide unsolicited mentions, recommendations, and the like, that signifies an association with and loyalty to the brand.
Repeat Purchasing. The most telling action among loyal customers is the willingness to reinvest in the brand. Consistency in the buying and usage of brands demonstrates commitment. Many brands, from behemoths like Amazon to small local delis make use of CRM systems, loyalty programs, and rewards programs to track customer behavior. Many reward programs pay customers back for their loyalty (e.g., get 9 car washes, 10th one is free).
Churn. The opposite of repeat purchasing, churn signifies the disappearance of loyalty.
Let’s take a look at churn
Churn can be permanent or temporary, which adds a wrinkle to the concept of measuring loyalty. What percentage of one’s purchases define loyalty? Early in my career, I worked for a fast-moving CPG brand. We considered a customer to be loyal if 40% of category purchases were on our brand. Brand switching was so common in that vertical, not even a majority of customer purchases were required for loyalty.
Custom research firms like Suzy offer multiple options for measuring and diagnosing churn.
Path to Purchase. By examining the consumer journey from awareness through to purchase, and eventual churn, Suzy can help identify key drop-off points.
Iterative Insights. A client can evaluate the effectiveness of different retention strategies over time. This could involve continuous monitoring and tracking of consumer sentiment and loyalty indicators, something easily and regularly done through the Suzy platform.
Qualitative Research. For a more nuanced understanding, Suzy Live can facilitate in-depth interviews (IDIs) and focus groups with churned consumers to underlying motivations and emotional triggers behind churn.
Why do brands need to measure loyalty?
Why does all of this matter? Is the measurement of customer loyalty a cost of doing business? Maybe not, but by now, it’s well-known that customer retention is much cheaper than customer acquisition. Companies succeed by making it easy for customers to do business with them, thereby eliminating churn by choice. And, also well-studied, the Pareto Principle dictates that a minority of customers will be responsible for generating a majority of revenue. So not only do brands want to measure loyalty, but they also want to ensure they keep those high-spend customers loyal.
In short, brands need to embrace the idea of retaining their loyal customers. To do so, brands need to identify the metrics that best demonstrate their customers’ loyalty. Once a metric is chosen, measure it frequently to maintain a sense of the health of the business.
Measuring loyalty using Suzy
By measuring some of the attributes mentioned above, a brand can arrive at a good sense of how loyal customers are. Suzy provides an easy-to-use platform to inquire about customer satisfaction, repeat purchasing, and Net Promoter Score. And our Research Design & Strategy team, part of Suzy’s Center of Excellence, has a full staff of research professionals happy to help you design a program meant to understand customer loyalty on an ongoing basis.
Always monitor your customers’ loyalty, so you can act before churn and before they become loyal to the competition!
In a world where wellness is constantly reimagined, staying ahead of the curve is crucial. Stream our latest webinar, State of the Consumer: Wellness Reimagined. As we traverse the multifaceted landscape of the growing wellness industry, now valued at an astonishing $8.5 trillion, we'll explore the myriad ways in which our daily choices impact our overall well-being.
Our expert guests, Catherine Chao, VP,Strategy & Evaluation at the Ad Council, and Jessica Rosenthal, Associate Director at Church & Dwight, will provide thought-provoking commentary and expertise on how trailblazing brands like Tonal, hims & hers, and Ozempic are revolutionizing at-home wellness technologies. We'll also explore the evolution of self-care, body positivity, and the intersection of technology and wellness. This session promises to equip you with insights and strategies to navigate the dynamic world of consumer wellness.
3 Key Highlights:
Holistic Wellness Takes Center Stage: The webinar highlights a significant shift towards holistic wellness, underscoring that 70% of consumers are willing to pay a premium for products and services that cater to their comprehensive wellness needs. This trend is driven by an expanding definition of wellness that encompasses sleep, relaxation, nutrition, mental health, and fitness, primarily within the comfort of one's home.
Technology and Personalization are Key: With 78% of consumers desiring wearable technology to be integrated with other tech, the webinar emphasizes the critical role of technology in the wellness industry. It showcases a growing interest in wearable devices for immersive wellness experiences and the importance of personalized wellness routines, with 97% of app users seeking customized wellness plans.
Body Positivity Remains Crucial Amid Changing Trends: Despite emerging trends like the use of Ozempic and discussions around body image, the webinar affirms the continued relevance of body positivity. A majority of consumers, 61%, still value seeing diverse body types in marketing campaigns, signaling that body positivity is as important as ever in fostering healthy lifestyles and consumer confidence.
For even more takeaways and industry insights, be sure to watch the full webinar today!
