Tag: customer-centric

Businesses strive to change consumers to become customers. In today’s marketing, two key concepts often come into play: customer persona and market segmentation. Both are crucial for businesses to understand and target their market effectively, yet they serve different purposes and offer unique insights into the customer base.

Customer Persona vs. Market Segmentation

A customer persona is essentially a detailed profile of an ideal customer based on market research and real data about existing customers. It goes beyond basic demographics to include psychographics, such as attitudes, aspirations, and behavioural traits. A persona is a semi-fictional character that embodies the characteristics of a company’s ideal customer, helping marketers visualise and understand the motivations, desires, and challenges faced by their target audience.

On the other hand, market segmentation divides a customer base into groups based on shared characteristics, such as demographics, geography, behaviour, and psychographics. Segmentation allows businesses to categorize their customers into distinct groups with common needs or preferences, enabling more targeted and effective marketing strategies.

The main difference between the customer persona and market segmentation lies in their focus and application. While customer personas provide a deep, narrative-driven understanding of an individual customer type, market segmentation identifies and categorises broader groups within the market. However, these two strategies are not mutually exclusive; they can complement each other. Segmentation can help identify the different groups within a market, and personas can then be developed to represent the needs and behaviours of each segment.

Customer persona vs market segmentation – Who should choose which?

Businesses and marketers must assess their unique needs and market dynamics to determine how to choose or integrate these two strategies for their marketing efforts.

Businesses that benefit most from customer personas require a deep understanding of individual customer experiences to tailor their products, services, or marketing messages. These include companies in highly competitive markets where personalised marketing is crucial, such as e-commerce, software as a service (SaaS), and content creation platforms.

Marketers who rely on market segmentation strategies want to scale their strategies across diverse customer bases. This approach benefits businesses with a wide range of products or services that appeal to different demographics or companies operating in varied geographic locations. Market segmentation is vital for large retailers, multinational corporations, and organizations to allocate marketing resources efficiently across different customer groups.

While customer personas and market segmentation are distinct concepts, they are interrelated and both essential to a comprehensive marketing strategy. Customer personas allow for a nuanced understanding of the customer’s world, while market segmentation provides a structured approach to categorizing the customer base. By doing so, they can create more resonant and effective marketing campaigns that truly speak to their customers’ needs and desires.

Customer Persona Case: “Tech-savvy Steve”

Your Clicademist provides a detailed illustration of how to use customer personas below. We will post about how-tos for market segmentation separately.

Background:
Steve is a 30-year-old software engineer living in a metropolitan city. He holds a Master’s in Computer Science and works for a leading tech company. Steve is single, enjoys a good work-life balance, and has a disposable income that he likes to spend on the latest tech gadgets.

Demographics:

• Age: 30
• Gender: Male
• Marital Status: Single
• Location: Urban city
• Occupation: Software Engineer
• Education: Master’s in Computer Science
• Income: $95,000 per year

Psychographics:

• Values efficiency and productivity
• Enjoys staying up-to-date with the latest technology trends
• Prefers quality over quantity
• Seeks gadgets that improve his daily life and work performance
• Willing to pay a premium for innovative features

Goals:

• To streamline his daily tasks both professionally and personally
• To maintain a competitive edge in his career by leveraging new technologies
• To invest in smart home devices that offer convenience and security

Challenges:

• Finding reliable sources of information for unbiased tech product reviews
• Balancing the desire for the latest tech with the need for practicality and budgeting
• Integrating new devices seamlessly with his existing ecosystem

Media Consumption:

• Follows tech blogs and podcasts
• Active on professional networking sites like LinkedIn
• Uses tech forums to stay informed and contribute to discussions

Purchasing Behavior:

• Conducts thorough research before making a purchase
• Prefers online shopping for its convenience and variety
• Influenced by expert reviews and peer recommendations

Preferred Marketing Channels:

• Email newsletters from trusted tech news sources
• Targeted ads on social media platforms
• Webinars and online events featuring new tech launches

How Can Marketers Engage?

Steve is looking to upgrade his smartwatch. He starts by reading articles on the latest models, comparing specs, and checking user reviews. He values a watch that can seamlessly sync with his other devices, has a long battery life, and includes health-tracking features. After narrowing down his options, he looks for the best deals online, checks for additional warranties, and makes his purchase.

To attract customers like Steve, marketers should focus on providing detailed and technical content that highlights the innovative aspects of their products. They should engage with him through professional channels and offer in-depth information that aids his research process. Additionally, providing a seamless online shopping experience with clear comparisons and easy review access will resonate with Steve’s purchasing habits.

This customer persona example illustrates how businesses can create a detailed profile to understand better and target their ideal customers. By knowing “Tech-Savvy Steve,” a company can tailor its marketing strategies to meet his specific needs and preferences, ultimately leading to a more effective and personalised marketing approach.

A customer persona is pivotal for marketers to understand and connect with their target audience. It is the first piece of the building blocks of customer-centric marketing practice. If a business aims to maximise customer lifetime values (CLV), start with the customer persona.

What is a customer persona?

It is an archetypal representation of a subset of the customer base, embodying similar goals, needs, expectations, behaviours, and motivation factors.

Here are two examples.

Persona 1: Budgeting Beth – Financial App User
A financial management app company creates a user persona named “Budgeting Beth.” Beth is a 30-year-old accountant living in an urban life. She is tech-savvy and always looking for efficient ways to manage personal finances. She represents the App’s ideal user – one who values financial planning and seeks tools to help achieve her monetary goals.

Persona 2: Networking Nick – Sales Leads Generator Persona
A professional networking platform developed a salesforce persona named “Networking Nick.” Nick is a 40-year-old entrepreneur who is too busy to attend networking events but is eager to connect with other professionals to grow his business. His goal is to generate sales leads with maximum time efficiency.

These personas are not mere guesses or assumptions about customer characteristics; they are crafted through a structured process involving detailed market research using qualitative and quantitative methods.

Nor is a customer persona to stereotype consumers. Its creation is based on data collected via diligent research.

How to create a customer persona?

Creating personas is a strategic approach that allows businesses to understand better and cater to their target audience. The personas are crafted using insights from customer interviews, social media analysis, and behavioural data from the platform.

The creation process involves analysing data from current users, conducting surveys, and holding focus groups to understand the typical characteristics of the most engaged users.

In Budgeting Beth’s case, the resulting persona helps the App company tailor its marketing and product features to include more personalised App options and investment tracking, which resonated well with Beth’s profile. Marketing campaigns are also designed with messaging that speaks directly to Beth’s needs, resulting in higher engagement rates.

Customer personas serve as a valuable resource for gaining insight into the market and formulating strategies that resonate with the target audience. They extend beyond basic demographic information to include interests, needs, and pain points, enabling marketers to tailor messages and design a seamless customer journey.

How can customer-centric marketers use customer personas?

Marketers can use customer personas to identify specific needs and pain points for different customer segments, tailoring marketing strategies more effectively and enhancing customer engagement through personalised experiences, in the following steps.

1. Define Target Audience: Begin by defining who your ideal customers are. This involves identifying the customer types that interact with your brand and understanding their unique characteristics.
2. Gather Data and Insights: Conduct market research to collect data on your target audience. Use empathy maps and surveys designed for personas to gather rich, insightful data that will inform your persona creation.
3. Create Detailed Customer Profiles: Develop comprehensive profiles for each persona, detailing their preferences, behaviours, motivations, and challenges. This will serve as the foundation for your customer-centric strategies.
4. Personalise Communication: Use customer persona insights to personalize your marketing messages and communication across channels. This personalisation can lead to more effective marketing campaigns and increased conversion rates.
5. Optimise Customer Journeys: Apply the knowledge of customer personas to optimize the customer journey at every touchpoint. Ensure that each stage of the journey is designed to meet the expectations and needs of the persona it represents.
6. Measure and Adapt: Continuously measure the success of your customer-centric strategies and be willing to adapt. Use customer feedback and performance data to refine your personas and journey maps for better alignment with customer expectations.

Customer personas are indispensable tools in customer-centric marketing. They enable businesses to empathise with their customers, tailor their marketing efforts, and ultimately provide a positive purchasing experience that fosters loyalty and growth. By diligently applying customer personas to the marketing process, companies can achieve a deeper connection with their audience and drive business success.

Businesses battle to enhance customer lifetime value (CLV), which represents the total worth of a customer to a company over the entirety of their relationship. The key to maximizing CLV lies in effectively leveraging consumer touchpoints.

An old-time brick-and-mortar merchant relies on the shopfront as the primary consumer touchpoint. The CLV hinged on whether or how often customers would revisit.

Digital marketing technology has created a plethora of new virtual consumer touchpoints. They span the various stages of interaction between a customer and a brand, and they play a pivotal role in shaping the customer’s perception and experience.

Your Clicademists have followed the evolution of digital consumer touchpoints. We suggest that whereas everyone is essential, some are more so than others.

The more essential digital consumer touchpoints

One of the most impactful touchpoints is digital engagement, including transactions and fulfilment, facilitated by e-commerce channels. As highlighted by McKinsey, digital engagement provides companies with valuable data on consumer behaviour, which can be used to optimise marketing and product development. The importance of these touchpoints has induced Amazon Prime and numerous delivery services. For instance, Delivery Hero, an online food delivery service from Germany, has made CLV their core steering metric. It focuses on understanding customers intimately and engaging them with tailored offers to their context and needs.

Another significant touchpoint is social media, a leading digital platform for consumer interaction. According to Matomo Analytics, social media and video-sharing platforms are crucial for promoting customer loyalty and improving brand reputation. Forbes Advisor released a 2023 survey indicating that social media apps have become a popular medium for purchases among users aged 18 to 44, underscoring these platforms’ importance in the customer journey’s pre-purchase stage.

Moreover, Forbes Advisor suggests that customer-incentivising touchpoints can effectively increase CLV. Offering perks such as free shipping or freebies for reaching a specific order amount encourages additional spending and enhances the overall customer experience. Various SaaS businesses have successfully employed this strategy, which offers temporary upgrades or trials to entice customers.

While some touchpoints may significantly shape the customer experience and brand perception, others play a subtler role in the customer journey.

The Lesser but Not the Least Digital Touchpoints

In the intricate web of consumer touchpoints, not all interactions hold the same weight in influencing customer lifetime value (CLV). Understanding these lesser touchpoints is crucial for businesses aiming to streamline their efforts and allocate resources effectively.

Lesser touchpoints often involve passive or post-purchase interactions, which may not directly contribute to immediate sales but still impact overall customer satisfaction and retention. For example, product catalogues provide information, but they are often less influential than the active engagement of a sales call or a well-crafted digital advertisement. Moreover, a customer reading a thank-you letter after a purchase might appreciate the gesture, but it is unlikely to be a decisive factor in their purchasing decision. Similarly, while

Another touchpoint considered less critical is the customer portal for checking order status. While it is an essential service feature, it does not actively engage the customer in a way that enhances CLV unless it is part of a broader, more interactive customer service strategy. Self-service options such as knowledge bases and product how-tos also fall into this category. They are important for customer empowerment and satisfaction but are not typically decisive in the initial stages of the customer journey.

Moreover, indirect interactions such as word-of-mouth and reviews, while they can have a significant impact on brand perception, are less controllable by the company and thus may be seen as less critical touchpoints to manage directly. These interactions are mediated by consumer-controlled offline or online channels and can vary widely in their influence.

It is important to note that while these touchpoints may be less important in driving immediate sales, they contribute to the overall customer experience and can indirectly influence future purchasing decisions and loyalty. Therefore, while businesses might prioritize more impactful touchpoints, they should not neglect these subtler interactions.

Actionable Recommendation: Mapping Customer Journeys

Identifying and optimizing these touchpoints requires a deep understanding of the customer journey. Qualtrics Experience Management recommends integrating records to create a comprehensive customer journey map, measuring revenue at each touchpoint, and adding it together over the customer’s lifetime. By doing so, businesses can pinpoint where the customer creates the most value and tailor their strategies accordingly.

Businesses should focus on optimising essential touchpoints that directly contribute to customer acquisition and retention while maintaining a holistic view of the customer journey. By understanding and managing the less critical touchpoints, companies can ensure a cohesive and satisfying customer experience that supports long-term CLV growth. Optimising these touchpoints requires an approach that balances resource allocation with the potential impact on the customer experience.