The Definition Of A Customer
BY MICHELLE THOMAS – DIRECTOR, INTEGRATED MARKETING
“Who are your customers?”
It’s a simple question. Can you answer it? Go ahead, I’ll wait.
It’s a question that I ask often at the start of our engagements with new clients. And by and large the answers I get sound something like, “skews female, ages 25-54, household income of $75k+, married with kids, lives in major US cities, buys on average twice per year, and has an average order value of $110.” That’s a great rundown on stats about the people who make purchases, but I still don’t get the answer I’m looking for.
And so I ask a couple more questions. “What does this tell me about ‘why’ someone purchased from you?” “What about the people who might be interested in your products, but who walked (or clicked) away and bought from your competitors instead? Do you think of them as your customers?”
WHEN DOES A CUSTOMER BECOME A CUSTOMER?
Businesses have never known more about their customers than they do today, and yet they ignore a large chunk of the most illuminating data. They often have a fundamental knowledge gap in what to do with data, how to interpret data, or even which data to use. Not surprisingly, this is why the question of “who is your customer” is often answered with a description grounded in general statements and averages.
Harvard Business Review recently published an article “Know Your Customers’ Jobs To Be Done” that talks about the need for brands to focus on behavioral circumstances rather than personal characteristics and attributes. While it’s easier to capture behavioral data, it’s more difficult to layer in circumstances to capture motivations and the why.
CALL FOR A BROADER DEFINITION
Most companies define a customer from the business’s needs and perspectives, rather than the potential customer’s needs, perspectives, and motivations. Let’s say that I subscribe to Brand X’s email program, I go to Brand X’s store to check out the latest products, and I follow Brand X in social media; I am engaging with the brand but I have not purchased. Each of my interactions with the brand is causal, filling a specific mission and need state. But the question remains: “Am I a customer or not?”
Getting to a broader definition of a customer does require time and energy from a variety of stakeholders. Here are three simple exercises to help get you started:
1. PUT YOURSELF IN YOUR CUSTOMER’S SHOES
A simple exercise to help you define who your customers are is to map out key points in the customer’s journey and track behavioral differences across the customer lifecycle. Do the missions and behaviors of your customers match your business definition? Are you accounting for customers who are interacting with your brand, but not buying? Do you know where the customer relationship starts and ends? Most companies define a customer (or potential customer) too narrowly: when the customer is already well along in their decision-making or transaction. Take the time to re-evaluate your customer definition with a focus on moving beyond a transaction-based definition to a relationship-based definition.
2. GET TO “KNOW” YOUR CUSTOMER
A helpful exercise to conduct is a Touchpoint Inventory that maps out how, where, and what data (both implicit and explicit) can be captured across customer touchpoints. Many companies start with preference centers to learn explicit information (e.g., birthday, gender, email cadence). Implicit information is typically gathered from data streams (e.g., website browse behavior, loyalty program engagement, promotional sensitivity) and often provides a better understanding of customer behavior. Ultimately these data points will support efforts to improve personalization based on the level of relationship and type of customer. Your customer experience strategy will be informed by data; show these customers that you know them.
3. ALIGN YOUR BUSINESS AND TECHNICAL DEFINITIONS
As you go through these exercises, you are likely to find that you have many different types of customers. Take for example the airline industry. A flyer might be defined as someone who has flown, but did not make the actual purchase. A buyer might be defined as someone who has purchased, but not flown. In this example, would you consider both the flyer and the buyer to be your customer? My advice to you is to forge a solid partnership between data engineers and data scientists to align on the customer definition and ensure that the customer infrastructure can support the overall customer experience vision. Business definitions will need to be represented by data and translated into technological systems in order for the business to action on them.
CUSTOMERS RE-DEFINED
As marketers and customer experience strategists, it’s time to stop thinking about customers like you would an on-off switch, or as simply purchasers or non-purchasers. Instead, start looking at the combination of customer behaviors and motivations. Ask this of yourself: do you want to be treated the way you treat your customers? If the answer is no, it’s time to get started! It’s knowing the “why” that helps fuel that broader definition, which is what the journey is all about!
The Definition Of A Customer
BY MICHELLE THOMAS – DIRECTOR, INTEGRATED MARKETING
“Who are your customers?”
It’s a simple question. Can you answer it? Go ahead, I’ll wait.
It’s a question that I ask often at the start of our engagements with new clients. And by and large the answers I get sound something like, “skews female, ages 25-54, household income of $75k+, married with kids, lives in major US cities, buys on average twice per year, and has an average order value of $110.” That’s a great rundown on stats about the people who make purchases, but I still don’t get the answer I’m looking for.
And so I ask a couple more questions. “What does this tell me about ‘why’ someone purchased from you?” “What about the people who might be interested in your products, but who walked (or clicked) away and bought from your competitors instead? Do you think of them as your customers?”
WHEN DOES A CUSTOMER BECOME A CUSTOMER?
Businesses have never known more about their customers than they do today, and yet they ignore a large chunk of the most illuminating data. They often have a fundamental knowledge gap in what to do with data, how to interpret data, or even which data to use. Not surprisingly, this is why the question of “who is your customer” is often answered with a description grounded in general statements and averages.
Harvard Business Review recently published an article “Know Your Customers’ Jobs To Be Done” that talks about the need for brands to focus on behavioral circumstances rather than personal characteristics and attributes. While it’s easier to capture behavioral data, it’s more difficult to layer in circumstances to capture motivations and the why.
CALL FOR A BROADER DEFINITION
Most companies define a customer from the business’s needs and perspectives, rather than the potential customer’s needs, perspectives, and motivations. Let’s say that I subscribe to Brand X’s email program, I go to Brand X’s store to check out the latest products, and I follow Brand X in social media; I am engaging with the brand but I have not purchased. Each of my interactions with the brand is causal, filling a specific mission and need state. But the question remains: “Am I a customer or not?”
Getting to a broader definition of a customer does require time and energy from a variety of stakeholders. Here are three simple exercises to help get you started:
1. PUT YOURSELF IN YOUR CUSTOMER’S SHOES
A simple exercise to help you define who your customers are is to map out key points in the customer’s journey and track behavioral differences across the customer lifecycle. Do the missions and behaviors of your customers match your business definition? Are you accounting for customers who are interacting with your brand, but not buying? Do you know where the customer relationship starts and ends? Most companies define a customer (or potential customer) too narrowly: when the customer is already well along in their decision-making or transaction. Take the time to re-evaluate your customer definition with a focus on moving beyond a transaction-based definition to a relationship-based definition.
2. GET TO “KNOW” YOUR CUSTOMER
A helpful exercise to conduct is a Touchpoint Inventory that maps out how, where, and what data (both implicit and explicit) can be captured across customer touchpoints. Many companies start with preference centers to learn explicit information (e.g., birthday, gender, email cadence). Implicit information is typically gathered from data streams (e.g., website browse behavior, loyalty program engagement, promotional sensitivity) and often provides a better understanding of customer behavior. Ultimately these data points will support efforts to improve personalization based on the level of relationship and type of customer. Your customer experience strategy will be informed by data; show these customers that you know them.
3. ALIGN YOUR BUSINESS AND TECHNICAL DEFINITIONS
As you go through these exercises, you are likely to find that you have many different types of customers. Take for example the airline industry. A flyer might be defined as someone who has flown, but did not make the actual purchase. A buyer might be defined as someone who has purchased, but not flown. In this example, would you consider both the flyer and the buyer to be your customer? My advice to you is to forge a solid partnership between data engineers and data scientists to align on the customer definition and ensure that the customer infrastructure can support the overall customer experience vision. Business definitions will need to be represented by data and translated into technological systems in order for the business to action on them.
CUSTOMERS RE-DEFINED
As marketers and customer experience strategists, it’s time to stop thinking about customers like you would an on-off switch, or as simply purchasers or non-purchasers. Instead, start looking at the combination of customer behaviors and motivations. Ask this of yourself: do you want to be treated the way you treat your customers? If the answer is no, it’s time to get started! It’s knowing the “why” that helps fuel that broader definition, which is what the journey is all about!
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