Customer Focus strategy is the first step to rapidly expanding your business. In a world where a customer can find anything they want at the price they want and have it delivered in a couple of days, you can’t deliver merely a great product and expect exceptional results you have to hone in and create a deeply resonant customer focus strategy and customer experience.
I refuse to join any club that would have me as a member.
Groucho Marx
In life and in business playing to your audience is the fastest and happiest way to success.
In life, we spend alot of time focusing on delivering for those that we consider ourselves beholden to. We make our way to social engagements we don’t want to be at, we buy things we don’t want to impress or satisfy others. But truly focusing on the audience that cares most about you is what will make you happiest because they are the happiest when you are happy.
In this post, I’m actually going to talk about the business side of that idea but hopefully, you can find some meaning for it in your life. But first, a story!
How I learned to play to my audience
The year is 2006-ish (I never really remember dates in my life) and I had my first leadership club in my school’s Black Student Union. I was the PR Chair which was great because I wanted to go into marketing as a profession anyway.
I had so many ideas about what I wanted to do and how I was going to do it. However, just like everything else in life, I got punched in the mouth and the plan went to hell.
I was tasked with getting more people to meeting and events held by the club and getting more students engaged. As a young introverted social butterfly that seemed like an easy challenging task. Getting people to come to a meeting once was easy but getting them to come back again was hard.
I noticed one very important thing while I was “researching” at an on-campus party. All those people who told me they couldn’t show up for a meeting because they were busy studying or some other school-related thing found time to show up to those parties.
*Lightbulb* I couldn’t turn our meetings into parties every week but I could throw a party every week.
At another school who I won’t name but for those who read this and want to know where I got the idea the school sits on the highest of seven hills. That school had a weekly event where the student body gathered and had fun together which built camaraderie and relational ties.
I stole the idea (my girlfriend at the time happened to attend that school too so I stole it from her) and started it with the help of a few other students at my school. I called it “The Union” a weekly event (read: party) where people would come, hang out and connect with other black students on the majority non-black campus.
Sounds great right? A big party in the middle of the day sounds awesome and like everybody would be there, right?
Not right! Not too many people showed up and I felt defeated. As I’m walking around with my head down and apologizing to everyone for putting on a bad event, an upperclass(wo)man and a person who I’m still friends with to this day told me something that changed my perspective on everything I did for the rest of my time in college and to this day. Hence this article!
She told me to “focus on the people who show up and not the people who don’t” I’ve been telling people to play to their audience ever since!
Why Play to your Audience?
That sounds like a simple concept but so many people are focused on casting a wider and not narrower net in hopes that they will grab more customers from the marketplace and that’s just not the case.
I’ll tell you why but first let me clarify what I mean.
When I say “Play to your audience” I’m saying to create a customer focus strategy that narrows in on the customers in your business who love your company, love what you sell, and want to buy it in larger amounts and more often than other groups of customers. That sounds like a simple concept but so many people are focused on casting a wider and not narrower net in hopes that they will grab more customers from the marketplace and that’s just not the case.
We live in a hyper-connected world where I can find anything I want, any way I want, in whatever region I want it in, down to the most minute details if I’m willing to search long enough.
With the ability to search at that level of detail comes pickiness from customers because why should they settle for good enough when they can find exactly what they want?
Small businesses have a huge opportunity to compete with large businesses in this new market because large companies can’t provide the level of specificity and detail that such a large customer base would require….
Larger companies have already started adjusting to that change but it’s much more challenging for smaller businesses who lack the resources to provide that level of detail. And that’s where small businesses are missing the opportunity in the market.
Small businesses have a huge opportunity to compete with large businesses in this new market because large companies can’t provide the level of specificity and detail that such a large customer base would require. Imagine an individual Walmart carrying a product that only 100 people in their local market wanted per month. It wouldn’t make sense for a company that large to carry a 100 unit SKU. The cost of carrying and selling that product just wouldn’t make sense in their stores since they have to serve such a diverse customer base.
But a smaller business could carry that product at a highly profitable level. In fact, small businesses could curate a group of products that only a small group of customers need and still be highly profitable. This leads to a company being the go-to source for a specific set and type of products for a specific set of customers which creates a tribe of customers with your company as the leader.
Customer Centricity and how it helps
What I’m attempting to convince you of is that the marketplace expects your company to pander to them. To be customer-centric and to focus specifically on them and their needs and wants. To be so hyper-focused that it seems like you serve no one else.
For example, a few years ago Shea Moisture, a popular have card brand that focused on selling products to black women decided to do exactly what a company should do and expand their market wider. They created an ad that focused on diverse types of curly hair i.e. they wanted to expand their market to include more types of hair from different women with different backgrounds. They weren’t wrong for doing so at all but there was a huge backlash from their current customers who felt abandoned by them.
Shea Moisture’s customer base felt like they made products specifically for them and as such their customers got so upset when they thought they were going to stop focusing on them and get different customers. Which of course wasn’t the case at all. A smarter move would be knowing how deeply entrenched your customer base is with you and launching a new brand focused on a new group of customers. That way you expand and grow your company and also appease your current customer base.
Customer centricity actually can help your business in several ways.
Lower Marketing Costs
You’ll be able to lower your marketing expenses by focusing on a much smaller and narrower audience. And because that market is so narrow you can be much more personalized in your messaging and therefore achieve much higher Quality and Relevance Scores in Google Ads and Facebook Ads respectively.
Lowering those scores tends to lead to lower ad spend which then leads to lower customer acquisition costs overall.
Better ROI on marketing campaigns
Lowering your ad spend will help you increase the efficiency of your ad campaigns. Also, because you are promoting a more narrow and personalized message you will increase your conversion rates both on your site and in brick and mortar locations because you are sending warmer and more eager traffic to the locations.
Improved sales and pricing
Another great thing that will happen for your business is that you’ll be able to raise prices.
I know that one sounds crazy but hear me out.
Different people value things at different levels. Customer centricity is all about finding the customer who values your business the most and then providing the value they desire.
For a customer who values your business highly, paying the additional price is warranted and in fact, its desired. They feel like they are working with an expert on what they need and thus paying a little more is worth it for them.
Now since you’ve increased prices and you’ve increased your conversion rates you will also start to see a compounding effect that will multiply your sales.
You might be thinking that this sounds too good to be true but stop that it’s not I just explained how it works. Don’t be naughty! Stay focused with me!
An additional aspect of focusing on a narrower audience is improved customer retention.
Increased customer retention
Everybody knows by now that it’s so much easier to sell to a current customer than it is to sell to a new customer. A Harvard Business School determined that a 5% increase in customer retention can lead to a 25%-95% increase in profits.
It also increases the Customer Lifetime Value or each customer with leads to long term increases in revenue and profits.
Are you starting to see the pattern of compounding that happens when you focus on the people who want to be there?
More efficient operations
By focusing on a narrower customer based we can improve the most important metrics that have to do with our operations.
Net Promoter Score: NPS(Probably the most important metric in Customer Centricity)
Customer Effort Score: CES
Customer Satisfaction Score: CST
This is actually the meat and potatoes of a customer-centric strategy.
If you’re interested in learning more about these metrics and how they can help your business schedule a quick call with me
But how does it improve operations?
Well, let’s think of a call center that deals with customers all day. A customer-centered business will have fewer calls overall through the facility because customers will be more satisfied.
However, the occasional mistake will happen and in those instances, there will be less needed solutions to the problem because of how narrowly focused the business is. This same strategy would apply to every value-added step in the value chain of the business. We also could potentially reduce the number of value-added steps because of the narrowed customer base.
Leading to faster and more efficient operations that are both high-touch and data-driven. While also being extremely cost-effective.
Lower operating costs
More efficient operations tend to mean that costs will be lowered. Because we serve a more specific customer base that also means that we can reduce the diversity of the product offering and reduce variability in service. Both tend to be major inventory costs for small businesses.
We can remove even more operating wastes from the value chain by using this strategy.
All in all, focusing on a hyper-specific customer group is a powerful method of greatly increasing your business without necessarily having to invest a ton of money into huge operational and marketing changes that will cost a ton and possibly not increase the ROI of your investments.
Reductions in costs and increased revenue
What to do next?
If you’re interested in becoming more customer-centric download my Marketing Strategy Playbook.
If you’re interested in talking to me about how you can apply these principles to your business take the first step with a CX Ops Review.
