What is Customer-Centric Marketing?

January 29, 2018 — by MediaMath    

It’s seems like obvious advice to tell marketers to focus on the customer. After all, the whole idea behind marketing is to influence the customer’s actions and decisions.

In practice though, many marketers aren’t executing customer-centric marketing, they’re employing campaign-focused marketing or maybe marketer-focused marketing. What’s the difference? In customer-centric marketing, you are first and foremost focused on the customer, their behaviors, their experiences, their needs. With campaign-focused marketing, the focus is on you, the marketer, and your business outcomes. It’s about what you did and what results you got.

That may seem like a subtle difference, but right now there’s a split between the two approaches. In his 2016 Letter to Shareholders, Amazon CEO Jeff Bezos dismissed product-focused and technology-focused businesses in favor of “obsessive customer focus.” That focus has certainly helped Amazon shake up the market. Customer-centric marketing doesn’t mean forgetting about your business outcomes. But it does mean first focusing on the customer such that you satisfy the customer first, which will lead to better outcomes for your business. Here’s a look at what you need to bring that kind of customer-centricity to your business.

The Strategy for Customer-Centric Marketing

Customer-focused is the second of our six pillars of effective marketing (the six in order are data-driven, customer-focused, omnichannel, integrated customer engagement, optimized messaging and comprehensive understanding). Of this half dozen, customer focus demands the most major mind shift for marketers.

In short, the idea is to take a step back from standard marketing processes. In terms of planning, optimization and measurement, consider the customer first. For example, stop comparing how this year’s Halloween campaign did versus last year’s or worrying about how much to spend on mobile versus display on Labor Day. Those are the wrong questions since they are campaign-focused. Make planning & optimization decisions at the customer level (and in real time) — should Jane Doe receive a display ad or a mobile ad when she is researching Halloween costumes? Should she be served an ad for BOGO or for free shipping? Instead of looking at campaigns for June and July, for instance, run a longitudinal analysis over a six-month period to see how all of your 18 campaigns performed in the aggregate against your customers’ behaviors. Did you positively influence your customers’ behaviors during that period? And how much did you influence them — did your marketing lead to incremental impact? That will tell you if your marketing was effective.

In general, customer centricity means thinking about the products and solutions you are using in terms of their customer-actionability — for instance cross-device implementation, sequential marketing, predictive analytics, incremental lift, multi-touch attribution. You are looking at the success of your overall marketing engagements, not a snapshot of how one campaign or one aspect of a campaign performed. The goal is to optimize customer behavior.

How to Implement Customer-Centric Marketing

One primary difference between marketer-focused marketing and customer-centric marketing is the metrics you’re tracking. There are three ways to track changes in customer behavior. On the upper funnel, you’re looking at incremental brand perception. Tools for measuring brand perception include brand perception surveys, which should be focused on the perception change, not awareness and consideration changes, as perception change is what drives behavioral change.

On the lower funnel, the relentless focus should be on incremental return on ad spend (ROAS). Such analyses are based on randomized control trials (CRTs) like the ones used in medical testing. A CRT measures the effects of exposure by including a holdout group (often around 20% of the potential audience) to see if the ad actually influenced a desired behavior.

In the mid funnel, customer-centric marketers are looking for key performance indicators (KPIs) that correlate to incremental ROAS. For instance, clicking on a display ad actually has a low or negative correlation to making a purchase. That’s because display clicks are usually fraudulent, accidental or made by serial clickers. Mid-funnel indicators are specific to your business and your customers, so running correlation analysis to understand which customer behaviors/signals lead to incremental ROAS is imperative. And then run campaigns that focus around driving those particular customer behaviors. Opening emails, reading a blog post, visiting a product page and signing up for a loyalty program are all examples of behaviors that could have a positive correlation for your business.

Note that these metrics are very different from the typical KPIs involved in a marketer-focused marketing campaign, where marketers choose to optimize and measure their campaigns against customer behaviors that aren’t driving true business outcomes like click-throughs, engagement and impressions. Focusing on these not only means that you are not driving business outcomes, but it also leads to frustration for your customers as you try to drive them to behaviors that are irrelevant to the intent of their engagement with your business.

Reorienting marketing around this customer-centric mission requires a radical shift in planning, execution and management. It also means more cross-team collaboration than you usually find in marketing departments organized around functions, channels or the funnel.

The benefits are tremendous in terms of less waste, enhanced customer relationships and, ultimately, strong business growth. If you’re frustrated with your current marketing, then maybe it’s time to try a new approach and shift the focus to the customer first.