Courting the empowered customer
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?