Customer Centric: what is it, benefits, and how to apply this strategy

Posted on June 30, 2020 by Paola Magni

A customer-centric approach is nothing new in businesses, but it is transforming the way companies work nowadays. It’s time to understand more about it.

Being customer-centric is not a new conception in the market. However, with the changes in customer behavior these days, it’s a strategy that is becoming more popular. It’s not only about focusing on the customers, but it’s also about making them the core of your business.

Some time ago, industries used to lead product-centered strategies, meaning that if a product wasn’t selling well, it needed to be renewed and improved. However, as time went by, marketing professionals started to notice the problem was not in the product, but in who was buying it. If you don’t have the right consumer, there’s no point in having the highest quality solution in the market.

Because of that, customer-centric is becoming more and more popular. As a matter of fact, this is far from being a brand-new concept. Companies have known it for ages, but it seems like the notion of it really started to gain attention in recent years.

Since customers now are more educated and informed, their expectations are getting higher by the day. If the company doesn’t find a way to live up to that, it will most likely not survive in the market. To genuinely build the right product and invest in the right marketing campaigns, following a customer-centric strategy is ideal.

What is customer-centric?

Also knowns as client-centric or customer-centricity, this is an approach that aims to put the customer in the center of everything. All strategies and actions the company makes are addressed to the customer. So, if an idea doesn’t fulfill the “will our customer want and like this?” aspect, it probably will be left aside.

Clients are the purpose of a company even starting to work and for that reason, they need to be satisfied with their acquisitions. That means paying attention to the consumer before, during, and after a sale happens — therefore, being directed related to customer experience. The goal is to provide the most positive experience possible.

For a business to have good results, being customer-centric shouldn’t be just a strategy. It should be the core of everything it’s done, creating a customer-centric culture inside the company. That way, every product, service, and publicity will happen around the consumer’s needs and pain points. Because of that, one of the most important things here is to know your consumer.

It’s more than creating a good product, it’s about developing something that’s so good and fit to the client that they don’t want to buy from anywhere else. This approach is to increase customer loyalty and retention rates.

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What are the benefits of customer-centric?

Aside from knowing the consumer and creating all the picture-perfect products and ads for them, there is much more we can talk about a customer-centric approach. All the benefits it brings to a business are surely in your interest, so this is what we’ll address next.

Increase the customer lifetime value

In recent days, new customers are more expensive than retaining the ones you already have. For that reason, when you work with a customer-centric method, you will eventually increase the customer lifetime value.

In other words, a strategy such as putting the customer at the core of the business will, consequently, give the clients more reasons to be loyal to the brand. That’s what the company needs to focus on: strategies to make current customers buy more and frequently.

Moreover, this will lead to an increase in retention rates and also in overall profits. In fact, a mere 5% increase in customer retention leads to at least a 25% increase in profits — but it can be up to 95%.

Anticipate customers needs

Every area in the market has its competition and it’s important to be known as the innovator. When a customer is at the center of strategies, the problems they have will be explored so the company knows what to look at when building their solutions. With a thorough data collection in real-time, it’s possible to anticipate customer behavior and offer accurate, original products.

Gain a competitive edge

With loyal customers and a real-time data collection strategy, your company will become a strong competitor. Every business will be looking at you as an example of what to do and how to achieve success.

With so much alike solutions and prices, positive customer experience will be the differential of the brand. It’s actually common to see people pay more on services because they offer a unique experience — rather than because of quality.

How to become customer-centric

Well, surely, put the customer at the center of the strategy is the first thing that comes to mind. But it’s about much more than that. To truly enjoy all the advantages of this strategy, there is a need to work with empathy. This means, basically, what we’ve been saying so far:

First look at the customer, then work on the product.

Since the rise of the internet, customer behavior has been in constant innovation. Every year companies need to renew their strategies so they can keep up with the changes. The good thing is technology has found its way to be one step ahead by creating data-collection platforms that help understand who is the consumer and how they act online.

Overall, some characteristics of a customer-centric business are:

use customer data to understand the customer base;
analyze who are the best customers and focus on products for them;
give special attention to customer success and experience;
practice audience engagement;
identity opportunities and make data-driven actions.

By using a Customer Data Platform, all information available about a brand’s consumers will be at easy access. From names, ages, and demographic to time spent online, and pages visited. The CDP can collect data from all channels and sources the company is connected with, such as website, online store, social media, payment systems, app, and so on. That’s why a customer-centric approach should be accompanied by a CDP solution.

The more you know about a customer, the better the chances are of having a successful customer-centric strategy. As a matter of fact, to implement this method in your company, it needs to go beyond marketing and sales teams. The entire firm should follow a customer-centric culture. This means customer support, product team, engineers, and whatever other sectors the company has will all be focused on learning and working around the customer.

In addition, it’s important to remember results don’t come overnight. This plan is a long-term project of building durable relationships and providing positive experiences over and over again. After all, customer acquisition costs are way higher than maintaining a devoted customer base. In order for that to happen, the brand needs to be in regular communication with the customer, whether over chats, email, or social media.

Customer-centric marketing

It’s was pretty much implicit that this approach could be used to marketing-related actions. For one, you can’t build a customer relationship without the help of the marketing sector. Indeed, performing an Inbound Marketing plan and delivering content is essential to establish bonds with an audience.

With the assistance of a Customer Data Platform, while being a customer-centric company, every moment of the customer experience can be thought of with minimum effort. Surely, it’s still something that requires the full attention of marketing professionals. However, they can focus more on planning strategies and content than on analyzing data and metrics.

The entire customer journey has to be worked in a marketing strategy. This means personalized content and ads will be sent at every stage of the journey. Even after a purchase is finished, marketing needs to be creating the right materials to send the customer. It’s the only way they’ll become loyal to the brand, maybe even turning into brand advocates and promoters.

Moreover, based on purchase history and engagement with the brand, personalized recommendations will have a great effect in strengthening the relationship. The essential is focusing on what the customer wants — something you’ll be able to do through data analysis.

How a customer-centric approach impacts sales

In the old days, a sales process was demanding for the salesperson. They had to know every little detail about the product or service and have the ability to negotiate to close as many deals as possible. Nowadays, with the customer-centric strategy, things have taken a turn.

Since the customer is the focal point, a sales rep is no longer the person who showcases the product and tries to sell it at any cost. In fact, they understand the customer pain points, wishes, and demands so they can perform as a consultant — demonstrating how certain products will help solve their issues.

Because of this, it’s just as important for a sales team to have access to CDP data as a marketing team. Customer data is crucial to understand their journey and what is the best way to act in each particular moment. Even though a customer-centric strategy doesn’t attract many new consumers, it does keep the existing client base more loyal. For this reason, identifying the most valuable customers, the ones that generate profits, is a way to assist sales professionals chose their target better.

Customer-centric and customer experience

You must have noticed that customer experience has been mentioned a few times throughout your reading. That’s because there is a relationship between customer-centric and customer experience. But what is it?

In general, customer experience is the relationship a client has with the brand. From their perception at the first contact to their satisfaction after buying a product, every step of the way is a potential influence on their experience. Therefore, a customer-centric company needs to bring a positive customer experience at every moment of the customer journey

Brands that apply Customer-Centric

For a better comprehension of how a customer-centric company performs (and their results), a few examples can be brought here. These three companies are stand-outs in working with their customers at the center of everything. However, there are many more to keep an eye on for inspiration, such as Nike — their empathy really shows in every marketing campaign they launch.

Amazon

If you have the habit of doing online shopping, you probably already got something from Amazon. Do you remember how was the experience? This is a brand that nobody can question the customer is at the center of their attention. Everything they do is to improve the customer experience.

Details like the 1-click purchase using data previously saved make a difference in obtaining customer loyalty. Besides, people are always talking about their delivery service — they are fast and accurate with their deadlines. Thus, customer satisfaction is never a problem in their hands.

Disney

Disney is a brand that embraces lots of different products and services, such as animated movies, TV channels, and amusement parks. Nonetheless, it’s noticeable how all of their actions are directed to their clients. They work hard to keep their customer-centric culture remarkable. This means customer-centric works beyond digital strategies.

The thing is, people can see the value in the brand. They happily pay more to go to Disney’s park then they would to go to any other park.

Slack

Even though this isn’t such a recognized brand as the other two, it’s still worth mentioning their method of work. Slack is a cloud-based communication company that is rapidly growing. Their approach is totally concentrated on the customer experience.

Instead of having a group of professionals that knows every single detail of the product, they focus on certain areas of expertise. That way, when a customer contacts the team with a question, they are redirected to an expert in the area.

Plus, customer service and product development work in union to always update the service as they notice customers’ needs. Slack is a brand known to be open to feedback from their clients, so more than gathering data, they are regularly monitoring brand mentions so they can meet customers’ expectations.

How to measure the success of a Customer-Centric strategy

So, you’ve established a customer-centric approach in your company and got everyone working towards it. How do you know if you’re having the desired results? There are three metrics that will give you the answer: churn rate, net promoter score, and customer lifetime value.

Churn rate

First of all, the churn rate. This metric is related to the number of customers who no longer interact and buy your products. To measure it, it’s necessary to divide the number of customers who left in a certain time period (1 month, 6 months, 12 months, and so on) by the average number of costumers in the same time period. If you lost 10 customers out of 100, for example, your churn rate will be 10%.

Since you want your customers to keep engaged and buying from you, in order to have a successful customer-centric approach, your churn rate needs to be the lowest possible.

Net promoter score (NPS)

The NPS, or net promoter score, is about measuring customer loyalty. There is one simple question that revolves around this metric: “how likely are you to recommend us to friends?”. And, in a 0 to 10 scale, people can be classified as detractors, passives, or promoters.

Detractors: From 0 up to 6, they are the first kind, the detractors. It means they are not happy with the product or service and are likely to share negative experiences.
Passives: Between 7 and 8, customers are happy, but not loyal.
Promoters: Lastly, when the classification is 9 and 10, people are most likely brand promoters. This means they are not only satisfied with the brand, but also share positive experiences about it.

Once these data become available, the calculus should be the percentage of promoters minus the percentage of detractors. The results need to be higher than 70%, but ideally, for a customer-centric company, they need to be around 80% to 100%.

Customer lifetime value (CLV)

The customer-centric strategy is based on creating a long-term healthy relationship with the customers. So, measuring the customer lifetime value, or CLV, is a way to see if your plans are having positive outcomes.

The calculus is multiplying total revenue by the time of the relationship with the customer (total revenue X average customer lifetime).

CLV measures the revenue a customer generates to the company for as long as they are paying customers. This is the best metric to understand before and after results when applying the customer-centric approach to your business.

Here at Arena, we have the best CDP solution for your business. With our real-time data collection, you’ll be able to know exactly who is your consumer and how to work thinking about them. Learn more about our solutions by talking to a consultant.

The Difference Between Data Management Platform (DMP) and a Customer Management Platform (CDP)

Posted on June 22, 2020 by Paola Magni

A data management platform works as a warehouse, collecting, organizing and activating third-party data in a single place. Keep up and find out how to benefit from it!

Data is a crucial resource in this business era. However, it can be useless if the company doesn’t know how to professionally manage all that amount of information, wasting thousands of dollars advertising to an incomplete or insufficient database usage.

In a digital world of first, second and third-party information, a Data Management Platform, also known as DMP, can transform piles of databases into profitable resources. Take a look!

What is a Data Management Platform (DMP)

Customer experience is not a linear walk. They will leave crumbs of information all the way along their relationship journey with a company. That process results in the accumulation millions of data throughout the years from multiple sources.

Most times, those data can seem random, incoherent or fragmented. That may happen when there is no right management of it.

Then, some questions become trivial:

Who are the visitors on my website?
What are they looking for?
How can you have direct contact with them?
Why they are not making deals with me?

A data management platform (DMP) is a tool to filter all those pieces of information into organized profiles for audience segmentation or insights for decision-making.

After that, your company will know exactly who they supposed to talk to; how these audiences behave; what is the best approach along the sales funnel to them; if the investment made in advertisement campaigns has the appropriate segment and more.

You can even create cross-media analysis, which is when multiple platforms, on and offline, can support the same campaign.

How Does a DMP Work?

Operating as a central intelligence system for digital marketing, a DMP creates a perfect definition of your ideal customer by organizing millions of information into demographic, consuming habits, interests and so on.

You can obtain new forms of segmentation through DMP, such as a non-dependent on the context or content one. This new segment is now based on the profile of the audience, regardless of the advertisement subject or the platform displayed.

To function, a data management platform operates in four steps:

Collect

It all begins with data collection, third-party information acquired by relevant partners with similar or identical market spaces. These data can be provided from CRMs, customers’ registration, e-mails, website data, previous purchases and whatever more relevant material is available.

Even though DMP is made to operate third-party data, it also supports some first-party data to improve the information given.

Organize

In this step, the DMP classify the info into categories, grouping them as clusters. Clusters are a type of audience segmentation that combines customers with similar marketing sales behaviors in one file.

For example, it is possible to create a group of customers who has made most of their purchases by ad clicks, or those who spent a certain amount of money in a product or service related to yours, who has more visits in a specific category in a website that might fit your business, etc.

Activate

Now, it is crucial that the data management platform used is agnostic, which means it will be compatible with any digital platform. So, if the company wants to run a campaign for the brand in social media, websites, search engines, etc, it will be just fine. The activation itself happens when the campaign is on.

Learn

By analyzing the return over the investments made on the ads, it will be possible to understand the depth of cluster segmentation. The company will have more domain over the results acquired since the data is much more precise than any other type.

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What Can You Do With a Data Management Platform?

One of the main benefits a DMP provides is the cluster: high-detailed information about customers so you can create hyper-targeted ad campaigns, delivering more conversion rates and increasing the ROI of your company.

Using a DMP, you’ll be able to create accurate segmentation, making the proper usage of your third-party data by giving your audience the right message.

Practical Example

Imagine you run a dental clinic and want to expand your qualified leads base for a specific segment, let’s say dental implants. That is one of the most expensive procedures you have and it is not salable to any type of customer.

Typically, you would create a campaign based on people interested in dentistry or dental implants in a wide range, fitted in average age, near your clinic.

With a DMP, the depth of your segmentation reaches this: men and women, from 40 to 70 years old, who have downloaded some white papers about dental implants, researched a number of keywords that demonstrate the need for professional information and live within 5 km of the clinic.

Here are some possibilities your company can reach with this type of segmentation:

Retargeting: easily implement personalized retargeting campaigns based on specific activities and behaviors online.
Prospecting: integrate with third-party data sources for the acquisition of anonymous data, achieving greater precision and scale in online campaigns.
Website optimization: use your own or third-party data to provide customized content to different consumers when they come to your page.
Audience intelligence: cross your first-party data with other third-party to learn more about your audience and reach the people most likely to convert.
Better ROI: use an analytics tool that centralizes online campaign performance data to determine which audience segment performed best and where to focus your efforts in the future.
Productivity increase: eliminate the bottleneck of needing IT to reach out for your data and have all your teams able to take them out, ready to use.

DMP Benefits for Companies

So far, we have seen in order to escalate your business, having the right audience to talk to is fundamental. This is market intelligence. Your company can no longer have a vague idea of who their customer is. It is necessary to personalize and amplify to get the following benefits:

Cost-Effective Advertising Campaigns

When you have this level of audience segmentation, you can spend every dollar of your budget on better-targeted prospects. Get the return on the investment you need to.

Lower Technology Investments

To run a DMP, you won’t need an extra support. Your whole team, from customer success to follow-up sales, can easily operate the system. As we mentioned before, there is no need for IT.

First, Second, and Third-Party Data Combined

No data is left behind. Even a messy pile of customer information can turn into gold here. As this platform gathers and organizes party data, every piece of a database is important, nothing is wasted.

No Data, No Success

Regardless of the type of industry you are in, uncountable amounts of information are huddled and enter your company through different doors: billing spreadsheets, sales reports, feedback offered by different media, social networks, loss or conquest of new markets, CRM, etc.

Such a thing must be used to leverage business marketing strategies. That is the reason why it is so important to generate an efficient information collection, organization and analysis on a daily basis of a company, as DMP does.

From this, a strategy can be developed over decisions based on information, including those related to strategic and operational marketing. That is the Data-Driven Marketing.

Data-Driven Marketing

Data-Driven Marketing helps, for example, to create a guideline for campaigns using DMP clusters. Besides highlighting the features/benefits/quality/etc of a product or service, it enables a work of relevant engagement with your consumers, delivering exactly what they want.

As a result, communication is enhanced by user experience and becomes more aligned with the needs of its audience.

Strategies will be able to still cohesive and aligned even when using a larger number of channels. Marketing campaigns have been running more frequently in social networks, which is the place where interaction has a leading role.

It keeps getting more essential to own proper knowledge of the market slice you are in. Its audience and characteristics indicate the way your company should brand, advertise and sell their product.

Big Data

When we reach for the definition of Big Data, we find a true technological revolution, making more possible to qualify the results obtained. Big data is a master process of analyzing and interpreting a great volume of data stored somewhere remotely.

Information is available everywhere online in a non-confidential way. No matter how large the amount of information is, Big Data can reach and group them according to interests.

Big data can be used in several business routines. However, to use it properly, it is mandatory to have not only knowledge about the technology, but also to identify which are the touchpoints in your company that will be impacted by its implementation.

By that, it will be possible to make a more efficient allocation of resources and increase the return over the investment in those data analysis solutions. And that is how a Data Driven culture is established.

Thus, the company must act so all teams understand the importance of data integration in the definition of strategies and work based on that!

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How a DMP Can Boost Marketing and Sales Results

Marketing and sales work as the core of the data management platform. This is where it starts, through hyper-segmented audiences. One of the biggest mistakes –– and frequent too! –– of digital marketing campaigns is having an incorrect or too wide segmentation.

Besides impacting those who are not part of your true audience –– and might cause a bad reputation for you ––, there is going to be a significant waste of your marketing budget that may harm your ROI.

Every click or scroll on the screen can generate data. When your marketing strategy is aligned to DMP guidance, you hand over to sales team customers ready to spend their money.

DMP and Sales

At this stage, sales have a unified perspective over the data and better cards to play, such as real-time interactions.

This is a priority in marketing and sales now. A high-performance sales team, which are those with the upper sales amount, increase the chances of achieving their mark by real-time interactions with the customer.

But we are not talking about aggressive and unprepared approaches here. Sales’ strategy must contemplate the best ways to do it based on who is the audience. By that, the integration of the DMP with marketing and sales is crucial for higher performances.

The Main Differences Between DMP and CDP

There are a lot of similarities between Data Management Platform (DMP) and Customer Data Platform (CDP). But there are also some very specific characteristics we need to keep them well established. Here they are:

Data Collection

One of the main differences between CDP and DMP is that DMP uses cookies to track users’ movement and target marketing strategies more efficiently. DMP was developed to search for data on advertising networks.

On the other side, CDP is a technological advance that gathers customer data from different sources and use it to generate more appropriate content, email marketing or offers.

Objective

DMP was designed to create deeper segmentations for the marketing strategy. CDP focuses on improving conversion rates and customer engagement, creating a richer consumer profile with more information.

CDP is also able to capture information from different channels and devices, in an automated way.

Therefore, investing in a CDP or DMP allows you to transform your company, employing more resources and intelligence to the business, and promoting your brand to a great and higher level of reference and success in the market.

How about starting now? Arena has a Customer Data Platform solution for your company. Build your clusters, make better advertisements, and talk straight forward to the audience you need. Click here and visit Arena’s CDP page!