Analysis is the study of the ways people purchase decisions with regard to a product, service or organization. The most common approaches to customer behaviour are cognitive, behaviourist and psychodynamic. The cognitive approach to consumer behaviour emphases on information processing capabilities of consumers. According to this approach, the customer’s environment and social experience can provide them with processed information, in which the outcome results in individuals behaving in a certain way. Thus, information from external sources can impact customer manners in different ways. As for the behaviourist approach, it is more associated with external factors and events, yet customers may not be totally aware of the effect of the external environment. For example, practical application of this approach can be witnessed in Nescafe products, where its integrated marketing strategy raises certain patterns of behaviours amongst target customers, in which customers believe that a consumption of a cup of Nescafe in the morning is an essential. The third approach is the psychodynamic approach, which consists of all psychology theories that perceive human functioning according to the interaction of the person’s drivers and forces. In the field of customer behaviour, the psychodynamic approach is associated with the behavioural approach, however the psychodynamic covers greater scope than the latter (Dudovskiy, 2015).
The value-based segmentation is where the household is used as the unit of analysis in this approach. 9 profitability groups are resulted from base division, partitioned on visit frequency. In contrast with the value – based segmentation, this behavioural-based segmentation refers to the individual as the unit of analysis. In order to be involved in the base, a customer should have completed a purchase, has visited the stores twice at least and has purchased at least 5 items in the past year. In lifestyle-based segmentation, the individual is also used as the level of analysis. However, lifestyle segmentation systems depend on prior individual categorization and products they are expected to buy. Finally, the activity level based segmentation is applied where the analysis is applied at the individual level and takes a 15-month period to classify customers as ‘active’, ‘normal’ or ‘passive’ in terms of purchase and frequency (Cooil et al. 2007). Being orientated toward consumers is more than just delivering a successful product or operating a contact center. For the business it is a cultural way of life and influences everything from employee engagement to customer service.
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Customer-centered businesses live and breathe their customers and have unforgettable experiences with a specific focus. They are creative, and they are doing good in the world. Such businesses are transforming their markets and are therefore met with success and sales increases. Brands with exemplary consumer service produce 5.7 times as much revenue as their rivals. Financial benefits and good customer-focused communities are created by businesses investing in customer service. Amazon as well as Zappos are excellent examples of customer-centric companies that have spent years building a community around the consumer and their needs. Their dedication to providing consumer service is real – in addition, if they do not fit into their consumer-centric culture, Zappos is willing to fire employees. There are many levels and dimensions in cultures which make them very resistant to change. Values which demonstrate enduring orientation are at the deepest levels. Customer-centered enterprises are kept together by a core principle that each decision starts with the consumer and anticipates opportunities for advantage. The standards that are common values regarding acceptable or desired actions are a more open level of a community. A growing practice within customer-centered organizations is that staff are supporters of customers (Shah, et al., 2006). Another distinctive quality forms the ability of the individual employee to exchange knowledge with his other compatriots, so that the whole organization is in a better position to meet the needs of the customer. Conversely, in many companies a damaging practice is that sales 'own the customer,' which significantly impedes exchange of knowledge. Customer-centered societies are further influenced by values, and people use mental models to make sense of a complex, fluctuating business fact. There are two distinctive assumptions within consumer-centered companies that knowledge comes from working with consumers and that customer loyalty is the secret to long-term profitability (Shah, et al., 2006).
Cultural change is the product of behavioral change. While culture is typically the most significant barrier to change, there is little proof that initiatives directed specifically at changing a culture are likely to succeed. Shift in culture is accomplished by changing behavior habits and helping workers understand how they benefit from the new behaviors and enhance performance. As in every change plan, there must be dedication, determination and constant contact from senior management to resolve the unavoidable impediments. But if there is a sense of urgency and a clear strategic argument the chances of success are greatly improved. Therefore, it is possible to consider change in the structure and processes of the company and base the benefits on metrics focusing on customers (Shah, et al., 2006).
An ideal customer-centric organization implies integration and coordination of all organizational operations to achieve superior customer satisfaction. This is as opposed to a traditional product-centered organization structured around functional silos and identified by product categories or type of product. These organizations are to have general managers and sales managers assigned to each type of company or general. As such, the organizational structure and personnel are ill dependent on the form of product(s) that are being manufactured and distributed (Shah, et al., 2006). There is still room for learning after setting up a customer-centered organization and quality improvement to maintain the performance success and strategic advantage achieved by customer centricity. The learning cycle and quality improvement will also drive creativity in customer-centered firms. Past research has shown that a customer-centered culture is more conducive to the innovativeness of a company in the entire business structure than in products or services alone (Shah, et al., 2006).
Customer relationship management (CRM) aims at increasing the sales of the organization by supporting customer satisfaction, which could be achieved through different strategies such as relationship marketing. Examples of customer retention practices:
- Onboarding Program Onboarding. Program is a customer retention function that allows new customers to know how to use the product of service to be sell. A company representative teaches customers instead of learning alone and thus trainings are given upon the customer needs. This practice has poved to be time-efficient and goal achieving.
- Customer Feedback Loop. The ideal way of improving the business and serving better products is obtaining the customer feedback which is to be shared with the rest of the organization. This loop offers a system of collecting, analyzing and distributing reviews and surveys of customers.
- Communication Calendar. Proactivity with the team’s communication is a must, even if customers aren’t reaching out with feedback. Reestablishing the connection with customers who are recently not interacting is an efficient way to maintain a good relationship with the customers. A communication calendar has proved its efficiency through engaging customers and giving them opportunities to ‘upsell’ and ‘cross-sell'. This calendar tracks customer communication and is a good way to improve it.
- Customer Loyalty Program. It is important to focus equally on customers who are about to churn and loyal customers as well. It is essential to maintain fairness in the effort given to loyal customers and people who don’t love the brand. This practice gives loyal customers a chance to get rewarded. The higher they interact with the brand, the more they get rewarded.
- Customer Advisory Board. Because the most loyal customers are the most valuable ones, they are the ones who can make suggestions to improve the brand. Thus, creating a panel of loyal customers helps fine-tune products and service at the seller’s business.
- Corporate Social Responsibility Program. The seller’s company does not just consist of its product or service. Customers pay enough attention to everything sold by the business to its target population. Any inconsistency noticed by the customers between what the company messages or delivers can make customers identify the ingenuity of the service (Shabana, 2013).
Added value is way to add customer experience but is not always about money and discounts. For example, if a product was not delivered on time, a customer may not be interested in future discounts or continue to purchase the product. What is added value? First off – it’s not always about money, or discounts. Of course, these do add value but they are far from the only way to add to a customer experience and sometimes won’t have the desired effect. Think about it, if you’ve had a bad experience as a customer – maybe a product hasn’t been delivered on time – a discount on a future purchase may not be that well received. Perhaps a simple message explaining the issue and providing an accurate update on the situation (and an apology) would be more valuable to you as a customer at that moment of time. Having said that, offering a discount or voucher will probably give your communications greater clout in certain circumstances. The key is knowing when what is more suitable. For example, in a recent Experian survey on personalisation we asked consumers how they felt about brands using their personal data to tailor their marketing. One of the most telling insights was that consumers were much more accepting of personalised communications on their birthdays if that data was used to add value and provide a benefit.
In that same survey on personalisation we asked people for the most acceptable uses of their personal data and the top responses were all instances of brands providing value to customers – but the definition of value differed depending on the customer’s situation. Other results included 27% of respondents being happy for their data to be used to provide information on products similar to past purchases and 21% saying they’d be happy for their data to be used for prompts for items that may need to be purchased on a regular basis. Clearly customers see these as valuable. So what is value?
In order to answer that question we have drawn up the below characteristics of value. We consider all of these are justifications for getting in touch. If you find yourself writing or building something that does not comprehensively tick at least one of these boxes then stop, you’re not adding value and you need to rethink why you’re doing it. Understanding your customer is the key to adding value In order to apply the correct value to the correct customer at the correct time you need to have a thorough understanding of your customers and a flexible approach to interacting with them. The ability to do that relies on having accurate data and having that data compiled so that you have a complete and robust view of each customer, plus the necessary tools and systems in place to implement your messages. You need to know your customers in order to add the relevant definition of value to improve their customer journey and experience. You should always look to add value because if you’re not, all you’re really doing is talking about yourself. Even your most loyal and valuable customer doesn’t want to hear you talking about yourself. They want to hear about themselves and all the great stuff they can have, do or get involved in. Being orientated toward consumers is more than just delivering a successful product or operating a contact center. For the business it is a cultural way of life and influences everything from employee engagement to customer service. Customer-centered businesses live and breathe their customers and have unforgettable experiences with a specific focus. They are creative, and they are doing good in the world (Gilliland, 2019). Such businesses are transforming their markets and are therefore met with success and sales increases. Brands with exemplary consumer service produce 5.7 times as much revenue as their rivals. Financial benefits and good customer-focused communities are created by businesses investing in customer service.
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