Seeing the business through the eyes of the customer, and measuring performance based on customer value created.
Larry Vincent
Professor of the Practice, Marketing
What is the core purpose of marketing?
Marketing’s Purpose
Acquire, retain, and develop customers who maximize the organization’s capability to achieve its financial objectives and sustain its competitive advantage.
The Marketing Mix (4Ps) is our starting point
Product What we offer (features, quality, design, brand)
Price What we charge (pricing strategy, discounts, payment terms)
Place Where/how we sell (distribution channels, locations, accessibility)
Promotion How we communicate (advertising, sales, PR, digital)
But CRM is the Long Game
Customer Relationship Management (CRM) is the practice of designing and delivering programs that increase the value of customers to increase the value of the firm.
How should we measure marketing performance?
CMOs are Bullish on Marketing Analytics Investment
But Give Average Marks on Effectiveness
Chasing the (marketing analytics) squirrel
Photo Credit: Midjourney
Metric-Centricity
The reason many marketing analytics investments under-perform is because they’re either measuring the wrong thing or they’re too short-term oriented.
Customer-Centricty
A strategy that aligns development and delivery of a company’s products and services with current and future needs of a select set of customers in order to maximize long-term financial value to the firm.
Creating Customer-Centricity
Managing Customer-Centricity
How many resources are used to acquire and retain good customers vs. others?
Customer profitability
The difference between revenues earned from the customer relationship and any associated costs over a specific period.
What counts as “associated costs”?
Direct cost of products and services consumed
Indirect service costs–customer support, returns, etc.
Acquisition costs
In some instances, dedicated labor costs (i.e., account rep)
Customer experience
The degree to which customers are satisfied and enjoy their buying journey.
Customer Perceived Value
Common Experience Metrics
Customer satisfaction (CSAT)
Churn
Intent to purchase/repurchase
Net Promoter Score (NPS)
Psychological Drivers
To become truly customer-centric, we have to focus on the psychology that underpins choice and usage patterns.
How do customers choose?
And how do we research and measure the psychology of choosing?
The Customer Buying Journey
The Customer Buying Journey
Measuring Recognition
Unaided Recognition
Aided Recognition
The Customer Buying Journey
The Customer Buying Journey
The Customer Buying Journey
The Customer Buying Journey
The Customer Buying Journey
NPS
What Does and Doesn’t Get Measured
What is the Difference Between a Customer and a Consumer?
Customers, Buyers, and Users … Oh My!
The Classic CBJ is Focused on Customers and Very Rational
The Utilitarian Model
Would you ever expect this to be the process?
The Hedonic or Ego-Expressive model
When woul you expect this to be the process?
The Low-Involvement or Habitual Model
Choice Models
Keep in mind that each of the models we discussed so far are related to the customer behavior of choosing.
Contextual Examples
Where would you place Disney+, Snap, and SoulCycle?
But what about usage?
Usage Models are Critical to Managing Customer Relationships
