Focus on customers who matter most

3/30/12

If you believe, as I do, that the golden rule of content marketing is getting the right person the right story at the right time, then you’ll agree that Peter Fader's Customer Centricity starts with one of the most critical pieces: the customer. Except that according to him, there is no "customer."

The central premise of Fader’s book, part of the Wharton Executive Education Essentials series, is that the "customer" is actually a set of heterogeneous customers who vary dramatically from broad, classically defined customer segments. Instead, he argues that the organizing principle of customer analysis should be based on customer lifecycle value (CLV). Why? Because determining those with the highest CLV, and then working to understand why they do business with your company, is the path to a more profitable, defensible, and enduring business model.

Evidence and a fair warning
Fader outlines broad trends in advancing technology, globalization, and deregulation as removing barriers to competitive market entry and product development. He also notes the rising power of consumers—those who want what they want, when they want it—and the ease of collecting data on these same demanding consumers as compelling reasons that a product-centric approach is at risk, while a customer-centric approach is paramount.

Despite repeated warnings that the customer-centric approach doesn't always work, the operational challenges are significant, and return on investment will take time to manifest, he advocates that customer-centric companies will gain a strategic advantage over product-centric companies that don't understand their customers. By knowing the CLV of individual customers and understanding their common threads and drivers, marketers can focus their efforts on their most profitable segments, and should be able to determine what can and should be spent to capture and retain those types of customers in the future.

From noise to music
As more and more brands heed the call to become publishers, and add their content to the ever-increasing stream, the noise will only get louder, and the goal of attracting, engaging, and retaining your audience more intense. Ultimately, the result will be more distracted, tuned-out consumers across a more fragmented media landscape. By understanding your most important audiences—where they gather and what they care about—marketers will be able to maneuver through the stream, satisfying the informational needs of the customers who matter most to their businesses. In doing so, they can make informed content marketing decisions, ensuring a competitive advantage in this increasingly crowded area.

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