Most people consider customer experience the ultimate goal for companies and marketers, but according to Wharton marketing professor Peter Fader, customer experience isn’t for everyone.
It’s no secret that modern customers are all unique. They have different preferences and also different value for brands. As Fader says, not all customers are created equal. Some will be loyal to the brand and purchase every new product, while others will only purchase items on sale and could dabble in other brands. While both types of people are customers, it’s definitely more worthwhile for the brand to invest in the loyal customer who makes bigger purchases. When it comes to customer acquisition and retention, brands should focus on quality, not quantity. Ten brand-loyal customers who recommend the product to friends and make repeat purchases are better than 20 customers who only purchase when it’s cheap and convenient. Fader talks about this idea in his new book with Sarah E. Toms, The Customer Centricity Playbook: Implement a Winning Strategy Driven by Customer Lifetime Value.
Today’s customers realize they aren’t always treated the same as all other customers. Some customers get VIP treatment and special offers, while many others don’t. Customers understand the difference and realize that companies are simply rewarding customers that deserve it a little more. You can learn more about this idea in a talk at Google on customer centricity found here.
That’s where customer experience comes in. Different customers have different kinds of relationships with brands. Fader uses the example of Stitch Fix, which offers a completely different box of clothes to each customer to create a one-of-a-kind experience. As technology and personalization continues to improve, Fader says that customized approach will become the rule more than the exception.
In order to best grow and nurture a relationship with customers, brands need to understand what tactics are most effective, and it’s not the same for every customer. Some customers might respond well to a rewards program, while others may resonate more with customer experience. Companies can’t pick one tactic and think it’s the best thing for all customers all time. A large-scale customer experience campaign might only move the needle for some customers in some circumstances instead of being the ideal solution for every customer. Fader says the best brands use a variety of tactics because they understand their customers and the value they provide.
ustomer experience is still crucial to brands and can have a tremendous impact in creating loyal, long-term customers. However, as companies try to connect with customers, the key is to understand their value and preferences and build relationships in the way that best works for each person.
Listen to Professor of Marketing, the Wharton School of the University of Pennsylvania Peter Fader on the Modern Customer Podcast.
Blake Morgan is a keynote speaker, futurist and author of “More Is More.” Sign up for her weekly customer experience newsletter here.