Organizations that are successfully executing customer-centric strategies while seeking competitive edges and innovative strategies do one thing in common that will lead to their long term success:
They place the customer as the prime reason for every action they take within the organization. From the accounting department, through production and sales, into marketing and even the executive boardroom the customer is the most important focus for each and every activity that occurs.
In order to do this effectively the organization must develop a marketing plan that creatively incorporates customer values on many different levels.
The Marketing Plan
The successful entrepreneurs know that they have an advantage over the larger companies when it comes to the customer. They have the ability to get to know each and every client by collecting as much information about their spending habits, as well as their personal preferences and then utilizing that information to make the customer feel special. The larger companies often are focused on a greater mass-market target and cannot target individually, but the small companies run by the smart people, know how essential it is to take the time to get to know the customer and everything about them.
The Marketing Mix
Every successful marketing plan must encompass at least the following four essential points through answering these questions:
1) Product – What kind of product or service will meet the target market needs?
2) Place (Distribution) – How can we get the product/service to the customer in an efficient and timely manner?
3) Price – What kind of pricing system will best fit the needs of the market to induce maximum sales profitability and maximum customer satisfaction?
4) Promotion – What kind of marketing strategies will be most successful in getting the message to the target segment?
Do all marketing strategies need to be expensive? Not anymore. Even the company of one can develop excellent affordable marketing plans by utilizing guerrilla marketing strategies.
Guerilla Marketing Strategies
L. Conrad Levinson wrote a book about “guerrilla Marketing” a few years back where he explained how small companies can battle the bigger, more slow-moving entities through cheap marketing tactics. The prime points he specified are as follows:
1) Find a niche market and fill that market. – Trying to be everything to everyone will fail.
2) Don’t just sell, entertain the client. – Provide added-value experience through “atmospherics”.
3) Be unique in your product, service, and how you offer. – This will get you remembered and the customer will come to you to see what is different.
4) Create a business identitythat the customer can relate to. – People like relating to things.
5) Connect with customers on an emotional level. – It has been proven that 72% of all purchases are made on impulse regardless of how much prior research is done on a product in advance, therefore target the impulse triggers: emotions.
By focusing everything on the customer, the guerrilla marketer will create an unforgettable experience for the customer which will bring them back.
Small companies can utilize very few resources and develop comprehensive market research in order to design their business plan. The internet is an excellent way of collecting cheap, detailed information on the market segments that the company wants to get involved in.Perform the due diligence to collect as much information as possible on the market, the segment, the clients, the products and the services bydefining theproblem and thenthinking about how to solve that problem. Here are some steps on what kind of information to collect:
1) Collect the market data on individuals. – The ultimate market niche is “one to one” where companies can target individuals to design products that meet their special needs. Dell Computers is an excellent example of this kind of marketing.
2) Provide detailed product and service information to the customer. – This will allow them to make comparisons on the rival offerings and give feedback to the company.
3) Improve service through following through on customer complaints. – It is difficult to “fix” something that is right, but it is important to “fix” something that is wrong. If you accept complaints gracefully and then act on them, solving them and reporting back to the client, you can improve the product/service and show them that their voice was important. This customer-centric feedback will impress the customer.
4) Astonish customers through exemplary service and products. – Don’t just sell them something they need, make them so absolutely happy with the product that they utilize the most powerful marketing technique: word-of-mouth to spread the word to their friends. Dissatisfaction kills business far faster than satisfaction produces it.
5) Know the customer’s buying cycles and time releases. – Develop a “Just in Time Marketing” system to decrease wasted costs through inventory control and bring only that which the customer wants to the market when they want it. This is an excellent way to cut costs and gain a competitive advantage.
6) Calculate the long term value of each client. – It is possible to determine which customers are profitable and which are not through simple calculations. Spend more time and effort on your profitable clients, and let the less-profitable ones go away to the competition. Frank Purdue developed a very good way to determine how much buying power his average customer had over their shopping lifetime and he then developed a system that focused on them.
7) Collect personal information about the customer. – Learn what customers like and dislike and increase their target likes. Get to know their names and thank them personally at the cash register to make them feel special. Use membership cards for this purpose. Note the names on credit cards at the register and offer thanks (e.g. “Thank you Mrs. Dill, please come again.”). Make the customer feel good about coming into the business and making a purchase.
It is possible through data mining techniques to gather huge amounts of “competitive advantage data” through mining, or looking through the customer buying habits on the data base and making relational correlations to products and services. Use that information wisely to improve the circumstances for the customer.
Pinpoint Target Marketing
Larger companies tend to market more to the masses. If a customer’s tastes are different, they must compromise their needs and buy something that is not exactly what they want. The smart entrepreneur can exploit this hole in the marketing plan by pinpointing a target market that is very specific, determining how they can fill that hole by meeting the specific needs of the customer with their product or service. They can then create a clear image of the target and jump in to excite the customer.
As previously discussed, one of the most important things a company can do is to develop a long-term personal relationship with each customer through the use of a variety of tools. As clients continue to return and make repeat purchases the per-customer cost for advertising decreases dramatically. It costs five times as much to get one new customer to buy as it does to get a repeat customer to make the same purchase.
By creating these personal relationships the customer will give the company a huge amount of data that can then be fit into the marketing plan so that the needs are met even better than before. As we get to know the client, they will provide us with more personal information which can then be used to provide personal marketing to each and every client (birthday discounts, anniversary sales, etc.) Their feedback is one of the most valuable “purchases” that the company can make therefore it is essential to invest in every action possible to gain their confidence. Once again, make the customer feel special, important, and satisfied. Small companies have the means to do this while large companies tend not to. Capitalizing upon this difference will allow the smart entrepreneur to gain a bigger customer base and improve profits.
Plotting a Market Strategy and Building the Competitive Edge
Companies that want to develop a competitive edge focus on the customer in the following ways:
1) Focus on the customer, not the product. – 67% of all lost business is due to a rude employee. 96% of all dissatisfied customers will never tell the company why they are dissatisfied and 91% of them will never buy again. 100% of unhappy customers will tell at least nine people of their dissatisfaction and this is a huge loss to business. Poor treatment loses 15-30% of all gross sales so by cutting the losses in profits through expending money, time and resources on creating very happy customers, in the end the company cuts costs and improves profits. It is essential to build this into the employees on a very deep level so the concept is not just “lip service”. Ask the customer what can be done to improve.
2) Develop quality in products and services, not as the company defines it, but as the customer sees it. – This must be a Total Quality Management development that works its way through every single aspect of the business and every single relationship. There must be a continual drive for quality improvement in everything.
3) Make the experience as convenient as possible for the consumer. – Develop convenient locations for the customer to shop. Make the shopping hours convenient and appropriate to the market segment. Offer special services such as valet parking or a pick up and drop off service. Make payment easy and pain free. Be polite, efficient and speedy in every transaction. Allow employees to make their own decisions to solve problems rather than always having to look for a supervisor. Focus on the customer.
4) Concentrate on innovative products/services. – This is importantin order to continually excite the customer and keep them coming back for more. It also keeps the rivals one step behind. This is one of the greatest strengths of entrepreneurism.
5) Dedicate every aspect of the business and every single personnel in the company to service and customer satisfaction. – Astonish customers. Listen to them. Define superior service in their mind. Set standards and measure the performance against them. Hire the right employees and train them. Use technology to improve service. Reward employee superior service to empower them to work harder on customer satisfaction. Get top management support and not just lip service. View the customers as an investment and not as an expense.
6) Emphasize speed in every aspect of the business. – Most individuals have “no time” to wait and would rather go somewhere else than waste a minute or so anywhere in the purchase experience (parking, looking for goods, asking questions about prices, checkout, bagging, etc.). Reengineer all processes in the business to speed things up by cutting out waste. Create cross-functional teams to solve problems creatively and innovatively. Set difficult to achieve goals and push for them, sticking to the schedules. Redesign the supply chain (Wal-Mart is the God of supply chain efficiency). Use the latest technology to speed up all aspects of work.
It is absolutely essential that the company ingrains this into the essence ofeach and every employee in the business. This includes the executives, the managers, the HR department, accounting,the line workers; everyone must be devoted to the customer be prepared to do whatever it takes to delight them.
Understanding the Product Life Cycle
It is essential for a successful marketing attack to understand that like people, all products have a lifecycle that affects the profitability from sales:
1) Introduction Stage. – Customers are hesitant at first but then excited. The company must spend a lot of money at this stage on product development, marketing and distribution. This is a capital-heavy time.
2) Growth and Acceptance Stage. – Product becomes known and marketing costs decrease. Repeat purchases increase raising profitability to the maximum level.
3) Maturity and Competition Stage. – Other companies enter the market to take a piece of the pie. Profits peak here because more money must be spent on marketing tools to keep the customers from defecting to the competition. Competition forces prices down, and organizations need to find ways to cut costs in order to maintain profits.
4) Market Saturation Stage. – At this stage the market reaches maximum saturation, costs must be cut to continue profitability. Profits decline and the product loses some appeal.
5) Product Decline Stage. – New and more innovative products enter the market to replace the older products. Customers migrate to the newer technology and improved quality, service and lower price. The product enters the death phase and profitability is usually negative.
The entrepreneur that understands this cycle will be able to develop a timely exit strategy in order to leave the market before they start to lose more than they make, and before the rivals leave, forcing the barriers to exit higher. This strategy must be planned during the overall strategic marketing plan that the company develops into the business model.
Everything discussed above has one common thread: the customer is king and all attention should be focused on making the customer as comfortable, as happy, and as satisfied as possible while not only meeting their needs, but exceeding them. There are many ways to achieve this outcome and all of these tools should be employed to exceed the needs and expectations of clientele.
“To prosper while exceeding the needs and expectations of clientele and associates in all aspects of cooperation through mutually beneficial Win-Win agreements.” – Intrmarket Solutions Mission Statement