Not all “selling” is equal, which is why taking a product-centric approach can ultimately cost retail brands hundreds of thousands of dollars in lost revenue. However, when retail brands focus on what their highest value customers are buying – then they can quickly accelerate their profits, increase brand loyalty and significantly boost customer retention.
Here are three key reasons why customer-centric marketing works:
Mass selling cuts into profits.
When you “sell to the masses” you lose a high level of customization you can offer to your customers. This often forces you to ignore many of your high-value customer segments. With less personalization available, you are limited to the price point you can charge, inevitably shifting all of your attention to driving high sales volumes, upsells and increasing your margins.
Not only does this put a strain on your sales and marketing functions, but you’re losing out on a huge opportunity to engage and provide value for your most loyal customers.
High-value customers buy more.
In retail, customers with a high lifetime value typically account for two to five times more sales than any other customer segment. And, they can drive 20 times more profit for retail brands than other average customers. By analyzing your lifetime customer value, you’re able to quickly pinpoint those customers who have been loyal to your brand and find ways to market specifically to those segments.
These customers tend to buy more from you, more frequently, and they generally use fewer discounts on their purchases. That means you can generate larger profit margins by focusing on and providing value to those customers that already are loyal to your retail brand.
Product-centric drives prices down.
Focusing too much on the products you’re selling as opposed to who you are selling to, puts you at a big disadvantage. This may inevitably move your retail brand into a price war, and it prevents you from cashing in on noticing new, emerging consumer preference shifts.
Product-centric marketing treats all customers the same. However, customer-centric marketing focuses keenly on your highest value customer segments and how and what they consistently buy. Taking this “people-first” approach will enable retail brands to speak directly to their most loyal consumers and get them to buy even more over their lifetime.
If your marketing strategy is treating your customers as a “one-size-fits-all” then you need to make the powerful shift now before the market prices you out. Instead, it’s best to focus on attracting and retaining high value customers, so you can keep your pulse on what they want and maximize their lifetime value.