Is Your Business Customer Focused Or Transaction Focused? 3 Ways to Tell

The idea that “the customer is always right” is often credited to early 20th century retailer Harry Selfridge. This was counter to the prevailing attitude in retail at the time, which was caveat emptor, or “buyer beware.” The idea that the customer should come first was a tectonic shift in the business landscape, providing the launch point for modern retailing.

Purists may point out the difficulty in ingraining this attitude in a business, as certain customers will use any means necessary to get a better deal. LL Bean recently dropped its unlimited returns policy because of fraudulent returns, despite its century-long touting of “100 percent satisfaction guaranteed.” But in truth, the “customer first” maxims were never about deference to the customer. Really, they were more about changing the relationship to be a level exchange of value and to give customers the respect they are due.

Modern brands have made customers central to their business, yet it is typically a set of segments or personas that sit at the center, rather than individual customers themselves. To compete based on customer experience in today’s market, “customer focused” businesses need to elevate their game to put individual customers in the center. This means truly understanding and responding to consumers based on all that is knowable about them – their demographics, their past interactions, their channel preferences, and their intents.

For brands to know their customers is only part of the puzzle. Customers will gravitate toward those brands that use these insights to offer customers the best, most personalized experience.  If your brand isn’t doing it correctly, someone else will.

The best brands will also recognize that the customer is a moving target, with increasingly dynamic and real-time customer journeys.  It now takes more than meeting expectations at a single interaction point, but instead requires offering a positive and consistent experience across every physical and digital touchpoint. A customer should feel brands know them and are putting them first at every stage of their journey, whether they walk into a retail store, interact on a mobile device, or read a piece of direct mail.

How can you tell if your business is customer focused or transaction focused? There are three key questions to ask.

  • Is there a unified customer profile that is continually updated and accessible? Brands can collect extensive customer information, but it’s not valuable if they are unable to access it. Streaming behavioral data needs to be integrated into the customer golden record if it is to be usable. Data in a data lake needs to be cleansed, matched, and integrated to be used in analytic models.  Anonymous consumer identities need to be resolved to market to them. An up-to-date single customer view needs to be available to the front line to best serve customers in the moment of need.  These needs can all be resolved with a customer data platform (CDP), a new type of operational data environment that ingests an enterprise’s data from all sources and provides a customer golden record available at low latency to all touchpoints and users across the enterprise.
  • Are customer analytics used to drive real-time customer decisions? Today, every brand collects massive amounts of data about their interactions with customers. The key lies in gaining insights from that data and then applying it to a customer interaction. Only by gaining a deep understanding of customer behavior and motivations can brands understand their own customers. Truly customer-focused companies will take those insights and use them to make decisions that impact the customer at their moment of engagement. This could include changing the mix of messages provided to consumers or tweaking offers to more accurately target customers at specific journey stages.
  • Can marketers orchestrate interactions across all online and offline channels? Even if brands understand all their data and use it in advanced analytics, the customer experience will fall short if interaction touchpoints are managed as silos. Marketers need the ability to orchestrate customer journeys from a single point of control, and in real-time. This single point of control over data, analytics and business rules is key to driving relevant and personalized engagement. This enables consistent interactions across online and offline channels, so customers can have a seamless experience that includes their web browser, mobile device, physical product, in-store, and direct mail experience. Without all those working in concert, the customer-focused concept falls apart.

It no longer matters whether the customer is “right” or not. What matters instead is that brands put the individual consumer’s needs at the center of their business and make choices based on that information. Brands that satisfy their customers’ needs will enjoy a higher customer retention and a better brand relationship. According to Aberdeen Group, companies with extremely strong omnichannel customer engagement have an 89 percent customer retention rating among companies, compared to 33 percent for companies with weak omnichannel customer engagement. And Forbes Insights recently found that data-driven marketing organizations are 5X more likely to achieve a competitive advantage in customer retention (74% vs. 13%). Using data to drive personalized engagement is critical in the modern era, especially as the customer experience becomes more and more vital to long-term enterprise success.

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