The world
majorly runs on trends. Marketing had a trend, and now has a new trend. This
article is about how marketing used to be and how marketing is now.
What is marketing?
Marketing, as defined by Professor
Barbara Kahn of Wharton Business School, is the study of a market. A market is a place where an exchange
happens. In a market, there are two entities at play; the seller and the buyer.
At different times, the market is in favour of one of the entities. It could be
in favour of the seller; this market is usually called the seller’s market,
product-focused market or product-centric market. When the market is in favour
of the buyer, it is called the buyer’s market, customer-focused market or
customer-centric market. A company could either be product-centric or
customer-centric.
How marketing used to be
Marketing
used to be splendid for businesses; it used to be product-centric.
Product-centric market is one where the sellers have a say in the market. The
buyers accept whatever the sellers give to them. The buyers actually conform to
the behaviours of the sellers. The seller’s goal is to increase market share.
Most do this by selling volume and cost reduction, in order to increase
revenue. Growth in a product-centric market comes by extending the product,
either by innovating and coming up with new products/services on a generic view
of the market or by selling the products in a new geographical location. The
sellers conquer their competitors by product expertise; by being the best, by going
to new markets and by creating new products/services that puts them ahead of
their competitors. Well normally, most companies run on this mode of operation,
which is not totally bad. As a matter of fact, to most companies, this is just
business. But marketing has a new trend, and whoever doesn’t follow the trend
stays in the dark. Companies and businesses around the world have moved from
this type of business to a new trend, and as companies move to this trend, a
customer’s perception of a particular product value increases, and for other
companies to win the customers back, or even be called a worthy competitor,
they have to move with the trend and level with or surpass what the customer’s
see as fair value, because customers have become smarter and well informed as a
result of the technological age that we are in.
How Marketing is now
So what is
this new trend of marketing? You might have already guessed it. It is
Customer-centricity.
A
customer-centric market is one in which the marketers focus on the consumers of
their product/service. In this case, the seller doesn’t just come up with
something just generic and expect everyone to react the same way; instead they
try to understand the customers, they try to know what the customer’s needs
are, they try to find out who is buying what and why. So the seller’s main aim
is to identify the customer, identify his need and try to meet that specific
need. The only problem with this is that there are usually a whole lot of
customers and every customer has a separate need and you would only run out of
business if you try to give every customer what he/she needs. But giving every
customer what he/she needs is not customer centricity. Customer centricity is
first about identifying your customers and knowing the customers who have more
value and those who have lesser value. This process is called market segmentation. Market
segmentation involves analysing your data and coming up with information that
shows you who is who and what customers you should target. After identifying
and targeting the right set of customers with respect to their needs, benefits
and behaviours, you then position your market around your target customers and
try to meet their needs. You then become customer-centric to your target
customers and product-centric to your other customers.
In
customer-centric marketing, profitability is gotten from customer acquisition,
customer retention and customer development. The seller fights for customer
share not market share, and this is done by creating value. When you offer
value to a customer, they are usually willing to pay a premium price for your
product. This results into more customer acquisition. As a result of the value
offered, customers tend to be loyal, and this pays off in the long run. The seller
continues to provide products that meet the needs of the customers and this
makes them come back and that is called customer retention. Customer
development is achieved by generating more value from the customer. An example
of the way this is done is by cross selling. Cross-selling occurs when a
customer buys something and the seller offers something else to go with it, for
example, a customer buys a laptop from a computer store and they ask the
customer if he wants a laptop bag to go with it. In most cases, the customer
buys the laptop bag as well.
How do you achieve customer-centricity?
There are
only three ways to achieve it:
- Data
- Data
- Data
Ok I lied,
there’s only one way, it’s by data analysis. Data analysis helps you to
identify your specific market segments and identify what the exact need is, how
you can give extreme value to your customers, and how you can get extreme value
from your customers. You have to do a market research, you have to get data,
you have to analyse data, interpret data, and make timely important decisions
to move your business forward.
Well if you
have only four customers, the truth is you can easily interpret what you have
and say let me pay more attention to customer A and customer B and be
product-centric to customer C and D, but if you have more customers with more
needs, then you obviously need a tool to help. The process of understanding and
interpreting your data to make timely and important decisions is called
business intelligence, or popularly known as B.I. Businesses practicing
customer-centric marketing are business intelligent. B.I tools help you
automate the process of understanding your data and help you make better
decisions. You cannot over emphasize the need for business intelligence in
making your business grow.
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