Moving from campaign centric to customer centric can’t be done without universal currencies
What does currency have to do with customer strategy? As it happens … a lot. Much like any endeavor of an economic nature, one of the major foundational components of customer strategy is a common language; a universally accepted set of operational protocols that enable different business functions and groups to organize and rally around a central construct; in this case, the customer. The key term here is universally accepted. For example, it’s not just about having the ability to measure; it’s about having a set of agreed upon measures that the whole organization operates around. You can’t carry five different kinds of currencies in your pocket and expect to use them all together in exchange for food at the grocery checkout.
There are three critical customer currencies that all organizations must have to achieve competitive differentiation through a Connected CRM (cCRM)™ business strategy:
- Segmentation – Many companies still view customers within the context of the functions and products of their discrete work groups. Each department discusses customers from a different perspective, such as customer needs, value, risk, behavior, etc.
The lack of a definitive, enterprise segmentation strategy that defines how the entire organization will look at customer sets – and how experiences will be tailored to those customers – will result in a fractured and inaccurate view of the customer. This impedes the organization’s ability to make sound decisions. A single segmentation approach, or currency, allows the organization to rally around a common understanding of customers and engage with each customer segment in a consistent and logical way.
- Customer value – The 80/20 rule (Pareto’s Principle) applies to a number of business measures, not the least of which is profitability. Generally speaking, 20% of a company’s customers (often even fewer) drive 80% (or more) of the value or profit. So consider the power of understanding the current and potential value of each customer and leveraging it to create experiences that align ideally with that value. This level of optimization can’t take place without relevance and vigorous, holistic measurement.
The customer value currency accurately represents a true measure of financial value, either directly (in terms of revenue or profitability) or indirectly (like engagement metrics). It contains multiple dimensions, such as life-to-date, future, and potential value. To be effective, it must have organization-wide alignment and buy-in.
- Measurement – The measurement currency is basically about having a common framework by which we make decisions as an organization. It comprises the set of key performance indicators and metrics that will be used across the organization, as well as a definition of incrementality to help drive decisions within those metrics. An integrated measurement solution allows us to deliver consistent estimates for each primary metric, across measurement levels and dimensions.
A consistent measurement currency is used across the organization to reduce friction in decision making and, ultimately, creates more value. Without a universally agreed upon measurement methodology, there’s just no way to decide anything.
A lack of customer currencies can be one of the biggest obstacles, creating the “glass ceiling” that impedes the transition from a campaign-centric to a customer-centric mentality in your business strategy. True cCRM simply can’t be done without them. You must decide who you want your customers to be. You must understand the value associated with those customers — and the cost of acquiring and keeping them. And you must optimize within and across segments, within and across channels and media, based on a strong and agreed-upon set of KPIs and measurement framework.
Currencies matter. Alignment matters. But, as with any cCRM undertaking, their development can be a work in progress. They don’t have to be perfect, but they need to exist in order to create the unifying force that brings the cCRM strategy together.