CEOs surveying the 2011 landscape will face ten major challenges. In this blog, we examine the first five of these ten "game-changers." We'll look at the second half of the list in our next blog.
CEO CHALLENGE #1. Accept that the balance of power between buyer and seller has changed… forever.
Customers will call more shots and set more agendas in 2011 than ever before.
The poor economy and unprecedented consumer empowerment due to the web and social media have significantly increased customer demands for relevance and value. The “center of power” has forever shifted from the marketer to the customer.
WHAT TO DO: Identify new ways your company can provide clearly defined, competitively differentiating value both at the point of purchase and throughout the customer’s lifecycle.
CEO CHALLENGE #2. Completely re-think how you view your customers.
Abandon the old view of customers as limitless commodities that can easily be replaced. As the level of marketing “clutter” increases, it will become harder and more expensive to replace customers in 2011.
WHAT TO DO: Make Customer Lifetime Value an essential business metric.
Additional insights are contained in Ernan's manifesto “Don't You Want To Do Real Marketing?” published by 800-CEO-Read.
CEO CHALLENGE #3. Stop chasing the “quickie.” Build relationships.
The name of the game in 2011 will be customer Retention, not just customer Acquisition. The long-term relationship is what really matters. That will only happen if you use the initial sale as a paid opportunity to prove your value.
WHAT TO DO: Shift the allocation of budget and resources from the traditional focus on Acquisition to a balance between Acquisition and Retention. Change compensation plans from an Acquisition/new sales focus to reflect Retention and repeat customer purchases.
CEO CHALLENGE #4. Communicate with customers and prospects through multiple channels.
More and more customers in 2011 will demand multichannel communications that are both relevant to the customer and driven by that customer’s opt-in media preferences.
One channel will no longer be enough to ensure engagement. According to Jamie Nordstrom, President of Nordstrom Direct, they are cultivating “people who shop at Nordstrom in more than one way, since multichannel shoppers spend four times, on average, what a one-source shopper spends”.
WHAT TO DO: Emphasize the value of opting in to a relationship with your company, via all media and channels. Then personalize the communications per individual opt-in preferences, so the value and relevance is obvious.
CEO CHALLENGE #5. Create uniquely powerful Opt-In preference-driven databases.
We are seeing an important new trend: privacy sensitive consumers are recognizing that in order to receive or access increasingly relevant information, they must share increasing amounts of information about their preferences. If they trust the marketer and see a useful value proposition, consumers will Opt-In and self-profile their preferences and expectations. Clients such as Microsoft have achieved significant increases in response and revenue due to Opt-In preference-driven communications and offers.
WHAT TO DO: Re-think your marketing so that it provides unquestionable value from the consumer's point of view. Conduct research to identify the value propositions required to engage customers to Opt-In. You also need to learn what questions are appropriate to ask at different points in the customer lifecycle.
As a result of providing increasingly relevant information and offers, customers will in turn provide you with their increasingly detailed Opt-In preferences. This will result in the creation of a uniquely accurate, detailed database that gives you a powerful competitive advantage.
In our upcoming blog: The next 5 of The Top 10 Marketing Challenges for CEO’s in 2011.
