Customers: The Lifeline of any Business Jasdeep Singh, Ed.D.
Agenda – The Customer Profile and Its Uses
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How does someone become a customer?
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How and why should we segment customers?
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How and why should we segment populations?
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How does customer knowledge lead to sales?
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How does customer knowledge lead to profits?
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How do customers make decisions about your business?
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How to use communication channels with the marketing funnel?
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Value Proposition Map – Purpose of Marketing
According to the American Marketing Association (AMA) Board of Directors: Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
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What Makes Someone a Potential Customer? The Customer Profile! Customer Jobs ▪
Values align with business/service
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Business/service easily integrated into Behavior and Habits
Functional/Social/Psychological Needs from Product/Service ▪
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Functional: basic human need, practical Social: norms, status, group think Psychological Need: feeling, support, safety
Pains/Gains ▪
Pains: What is the problem people have; associated risks
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Gains: What is the solution or benefit
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Customer Segmentation The process of dividing possible customers into different groups based upon some similar characteristic Goal: Create more homogenous target markets ▪ Note: The chosen variable(s) used to divide the pool of customers should be something your marketing and service can address
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Example: Age Older customers value communication among providers, multiple outreach channels, and support with billing Younger customers value variety of appointment times, efficiency and effectiveness, price
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Example: Socioeconomics Insurance, internet access, community influence
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Example: Type of service needed (i.e. specialty) Community need Profit per procedure
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Who Are TAM/SAM/SOM?
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TAM: Total Available Market ▪
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SAM: Serviceable Available Market ▪
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The total pool of customers that may want/need your product/service
The portion of the TAM that is within your geographic and marketing reach
SOM: Serviceable Obtainable Market ▪
The portion of the SAM that you can reasonable capture
The SOM (target market) needs to be small enough to be allow for targeted marketing and communication but large enough to provide sustainable revenues.
TAM
SAM SOM
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Customer Knowledge – Sales!
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Customer Knowledge – Profit!
Focused marketing plan and effective use of resources (i.e. time, money) ▪
Increase customer retention ▪
Raise switching costs ▪
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Brand loyalty ▪
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The higher the monetary/psychological/social/time pain of switching away from your business the more likely they are to stay a customer Increase the tendency of customers to continue buying from a known/trusted business rather than a competitor
Alignment of services with customer needs
Decrease customer acquisition costs ▪
Consistent communication ▪ ▪
Messaging and services that speak to each customer Varied and persistent use of channels (i.e. email, social media, calls)
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Customer Purchase Decision Process
Problem Recognition
Post Purchase Behavior
Purchase Decision
Functional, Social, Psychological Needs
Information Search
Evaluation of Alternatives
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Customer Decision Making – Business Level
Match? Non-Compensatory Decision-Making Eliminate choices that do not meet specific criterion
Compensatory Weigh the positive and negative attributes of the choices; allow positives to outweigh negatives
Potential Points of Difference Attributes/benefits that customers associate with a business
Points of Parity Attributes/benefits that may not be unique to business but shared among businesses
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How do we get customers through the funnel?
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Proto Personna
A fictional “character” that represents your target audience. Purpose: Make target audience explicit and ensure a shared understanding by all involved ▪
Should be based upon research (or reflection of the parts contained within this lecture) ▪
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Customer profile, decision making process
Help identify, characterize, and reach your SOM Plan for customer experience Organize approach to funnel and monetize this audience based upon customer profile
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Reflection Questions
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What possible factors could separate a customer from a non-customer of your business?
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How can customer segmentation save you money if you are actually leaving people out of your marketing plan?
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Why is it important to have one, or two to three, clear proto-personas for your company? ▪
What challenges could you run into if you are unsure of your proto-persona?
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How does understanding a customer’s decision-making process allow you to better position your business?
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What are two metrics (measure of efficiency) that customer segmentation aims to improve?
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Why is it important that there be alignment between compensatory customer needs and your businesses potential points of competitive difference?
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