Court­ing the em­pow­ered cus­tomer

Finweek English Edition - - COVER - BY JES­SICA HUB­BARD

While the pro­file and behaviour of the av­er­age con­sumer/cus­tomer has un­der­gone a rad­i­cal shift, most busi­nesses have failed to make a par­al­lel shift in their behaviour and meth­ods in or­der to stay cur­rent (and prof­itable). While there are dif­fer­ing opin­ions as to how com­pa­nies should ad­just to the new play­ing field, few could ar­gue that com­pla­cency would be a fa­tal mis­take.

When Fin­week sat down with Bradley Sug­ars, the founder and chair­man of global group Ac­tionCOACH, he high­lighted the fact that busi­nesses need to ditch the old way of ‘busi­ness as usual’, and re­think the way that they ap­proach and re­tain cus­tomers. BUY­ING CUS­TOMERS “Chas­ing cus­tomers, and us­ing tra­di­tional mar­ket­ing meth­ods, is the old way of do­ing busi­ness,” he ex­plains. “Buy­ing cus­tomers is the new way to run your busi­ness.”

One of the key tenets of this ap­proach is by look­ing at each cus­tomer as a true as­set. It fol­lows then, that by re­gard­ing cus­tomers as an as­set, they re­quire sig­nif­i­cant and con­tin­ual in­vest­ment.

As Sug­ars points out, go­ing out and ac­tu­ally buy­ing your cus­tomers is sim­i­lar to buy­ing an as­set – and in some cases, can be equated with ‘value’ in­vest­ing.

“You want to get the best cus­tomers pos­si­ble at the low­est pos­si­ble price, ex­pect­ing that cus­tomer to spend re­peat­edly with you over the course of sev­eral years, or a ‘ life­time’,” he says. “Buy­ing cus­tomers is a revo­lu­tion in think­ing.”

This all sounds great, in the­ory, but as with any­thing that prom­ises to yield great prof­its, it re­quires do­ing the hard yards. It is in the very im­por­tant early stages of re­search and num­ber crunch­ing that many busi­nesses fail to set them­selves up to ef­fec­tively win and re­tain cus­tomers in the long run.

Such ba­sics in­clude know­ing your own num­bers, un­der­stand­ing your tar­get mar­ket, and what it will take to run a prof­itable busi­ness ev­ery month.

IN­VEST­ING IN MAR­KET­ING An­other ma­jor prob­lem that Sug­ars iden­tif ied is t he re­luc­tance to ac­knowl­edge the role and im­por­tance of mar­ket­ing.

“Mar­ket­ing needs to be given much more credit,” he says. “Small busi­nesses, in par­tic­u­lar, don’t un­der­stand mar­ket­ing, and it’s an easy one to just put on the shelf. Yet mar­ket­ing is an in­vest­ment, not an ex­pense, and busi­nesses should de­vote re­sources to a proper mar­ket­ing plan – re­gard­less of their size or sec­tor.”

THE CUS­TOMER EX­PE­RI­ENCE Once a busi­ness is up and run­ning and has im­ple­mented ro­bust mar­ket­ing ini­tia­tives (and hope­fully at­tracted new cus­tomers), one of the most dif­fi­cult on­go­ing chal­lenges is to re­tain at­ten­tion and loy­alty in a highly com­pet­i­tive and over­crowded busi­ness en­vi­ron­ment. With tech­nol­ogy at their fin­ger­tips, cus­tomers and con­sumers switch to new prod­ucts and ser­vice providers with­out f linch­ing. So how does one suc­ceed in the face of in­creas­ingly pow­er­ful and proac­tive cus­tomers?

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