Being customer led makes for better businesses. It’s as simple as that. While digital advances mean that the customer’s world is being inexorably re-imagined, the customer needs to be kept close. However, as businesses struggle to keep on top of the growing mass of customer information stored in disparate siloes, it can result in customers living in a different universe to your brand. This is a costly mistake.
The Forrester Report ‘The Insights-Driven Business’ forecasts that insight-driven businesses will grow from $333 billion in revenue in 2015 to $1.2 trillion in 2020 — making up an astonishing compound annual growth rate between 27% and 40%.
With global growth being less than 4%, that means insight organisations are projected to grow at least eight times faster than global GDP. So, where will this increase come from?
If your business is not growing in double digits, then your competitor’s growth is coming from you. True insight organisations are building market share by taking customers away from un-insightful, non-listening, non-responsive businesses. Google, Tesla Motors, Netflix, Nando’s and Bauer Media are all building brands around their fans. Customer closeness doesn’t happen accidentally.
At Vision Critical we help over 600 global brands to turn their customers into the most powerful innovators, product designers, marketers and influential buyers. We help organisations in media, retail, CPG and beyond to build vibrant customer insight communities.
A great example is Bauer Media Group, which manages a global portfolio of more than 600 magazines including Heat and Empire, over 400 digital products and 50 radio and TV stations including Kiss and Magic. The group has a 7,500-strong customer insight community called ’The Inside Panel’, which helps generate a better understanding of consumers, creating more appealing advertising and content.
For example, on a recent film pitch, Bauer found out from their community members that Kiss radio listeners were most educated on the background of the film and so found detailed information more interesting. In comparison, the Heat audience were more excited about the female lead. The result was Bauer has been able to recommend tailored creative messages to each audience to maximise the impact of the film. The Inside Panel has been used frequently to formulate film pitches since re-launch and has equated to over £250,000 worth of business in the last seven months.
From the features you would like on a new toaster, to what makes you watch a new movie or box set, to what to call your Christmas Sandwich – customers are massively powerful brand touchstones. What used to be perceived as customer survey spam can now be really engaging and help brands to grow relationships.
Vision Critical’s Customer Relationship Intelligence software improves customer relationships. Embedded within the platform is Relationship MemoryTM which enables you to uncover insight without starting from scratch every time, asking repetitive questions or even without having to ask any questions at all. The 600 insight companies using the Vision Critical platform learn more in less time, with less effort and achieve higher customer lifetime value.
The importance of understanding customer relationships
Most companies know what their customers buy, when they purchase and where. But few truly understand why those customers buy and why customers choose to have a relationship with companies to begin with.
Business leaders need to step back and more clearly define what customer relationships mean to them. A clearer understanding of customer relationships helps align the tools a company uses with the strategy it is pursuing. Defining customer relationships is a necessary step in delivering what customers truly want—and driving business results.
The Oxford dictionary offers two notable definitions of relationships:
1. “the way in which two or more people or things are connected or the state of being connected,”
2. “the way in which two or more people or groups regard and behave towards each other.” We believe that the second definition is the most useful in the context of the brand-customer relationship.
Let’s consider the metaphor of personal relationships. The value of relationships with friends and family isn’t based on the amount of money they spend when they are with you. It’s not even based on the number of interactions you have with them. A colleague or acquaintance you see every day probably isn’t more valuable than a friend or a family member you see infrequently. The value of relationships is based on something much deeper.
Does more data equal better relationships?
To keep up with rising consumer and market expectations, an ever increasing number of companies are now prioritizing becoming customer-led. The race towards customer-centricity is driving some the biggest trends in business technology. The customer relationship management (CRM) market, for instance, reached $26.3 billion in 2015—up 12 percent from the previous year. Another trend is business intelligence, which experts believe will reach $20.8 billion in market value by 2018.
One motivation for adopting these technologies is the data they provide—data that, companies hope, will help them strengthen their relationship with customers. But is the underlying assumption correct? That data is key to more meaningful customer relationships?
Possibly not. As explained above, interactions alone don’t showcase the true value of relationships.
Why then do the tools companies use to get closer to their customers focus on the number and size of transactions? Many systems, such as CRM, measure the number of transactions a customer has with a brand. Loyalty programme software does something similar – tracking how much people spend with a company.
These tools are important in understanding the customer journey, but they have a blind spot: they mistakenly assume that transactions are synonymous with relationships. But, in fact, customer relationships aren’t defined by a series of transactions. A brand’s ability to meet rising consumer expectations depends on having an authentic relationship with its customers. Without that, it becomes prohibitively expensive to deliver better products, improve customer experience or create effective campaigns.
About the Author
Simon Harrington is EMEA Managing Director at Vision Critical.
Simon leads Vision Critical’s EMEA teams, overseeing all sales, marketing and research initiatives in the region. Prior to joining the team, Simon was a customer of Vision Critical, and built one of the most successful insight community ecosystems during his time at CBS Outdoor and Exterion Media.
With over two decades of senior management experience in media, retail and sales, he is an expert in delivering real business impact and developing commercial strategies using customer intelligence. Simon is transforming our EMEA business from a customer insight business primarily targeting market research professionals to a SAAS technology business offering CMO’s a customer relationship intelligence platform designed to drive customer engagement & build deeper relationships thereby increasing lifetime customer value.