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Down with cloning? Ja, oui,si, sim, da, ano, shr, yes!...

The formula for making PR pay is simple: you build brand equity (reputation, familiarity, tenure) and a loyal, profitable customer base. Get this right and PR will spur sales, increase market share and make a significant impact on return on investment. Get it wrong and it’s just a waste of time and money.  

The key to winning the war for brand equity and that essential long-term, profitable customer base is in a company’s positioning. Nothing new in that, except for the fact that in today’s dynamic marketplaces, companies need to position themselves multi-dimensionally to survive turbulent market environments. 

Out with the old marketing tricks

Once upon a time organisations were able to establish unique positions for themselves, their products and services by manufacturing their own images. They used inwardly focused, company-centric marketing tricks to manipulate customers’ perceptions: decide how you want to be seen, come up with a clever slogan, throw money at advertising it until recognition is achieved. They addressed the marketplace as static, with technologies, products and customer perceptions that were slow to change. 

But the age of information technology and multilevel access has put paid to all that. In two decades, customers have gone from being passive buyers to co-creators of products and services, engaged in active and continual feedback loops. It is not what you say about yourself that differentiates you, it is how you do business. It is no longer the case of being the biggest, but of giving the best service. It’s not how you see yourself that matters, but rather how you are seen in the market. 

The purpose and flow of communications between companies and their customers has revolutionised business. The days of the unknown and anonymous customer are over. Today’s complex, fast-changing marketplace is a battleground for companies over customers and their loyalty; products evolve, markets re-align, new technologies emerge and the competition attacks more rapidly – and aggressively – than ever before. New and established companies are all trying to grab customers and increase market share. Customers have never been more important, and neither have they been more spoiled for choice or more fickle.  

In with the new customer dynamic

This all means that standard approaches to positioning, via old marketing tricks, don’t and won’t work now. What is required is a different dynamic – the customer-base audit – to drive higher returns from business and from communications strategies, too. 

At its simplest, a customer-base audit facilitates the shrewd assessment and selection of the most profitable customers at appropriate stages of a company’s trading life-cycle. A lot of companies rigorously apply this analysis to their marketing and sales strategies, but, when it comes to communications, they lump customers into broad groups of trade accounts and convey the same messages to them all. 

Better PR consultants know the importance of tailoring messages to customer groups, distribution networks and end-user vertical market infrastructures, but customer differentiation and segmentation shouldn’t stop there. 

A company’s products, market life-cycle and communications must also match customer profitability. 

A good example that shows how customer-base audits are as important to communications as they are to sales is that of a plastics company involved in a number of industries: automotive, electronics and miscellaneous building and construction applications. Its marketing resources had been apportioned equally among its three customer groups: original equipment manufacturers (OEMs), large independents, and small fabricators - even though their customer profitability showed the OEMs, though fewer in number, generated 41 per cent operating margins while the hundreds of small fabricator accounts were running at a 14 per cent operating loss.  

Once alerted to this through a customer-base audit, the marketing spend was re-aligned and the messaging was projected to defend existing OEM accounts, to regain some that were lost and to win new, high profit ones. The skilful use of the customer-base audit in the communications programme clearly achieved quantifiable business results. 

However, it is not always that simple. This is why communications messaging needs to dig deeper and go a step further to match customers’ profitability with company, product, and market life cycle.  

Leverage, leverage and leverage again

General customer types – changeables, high profiters, and influencers – need to be  understood and identified. Changeable customers are sufficiently unhappy with their current supplier to welcome being wooed. They are receptive audiences and their acquisition can be a fraction of the cost of that to win over a competitors’ loyal customers. High profiteers are generally high profit earners themselves, concerned with quality and service more than price. Influencers have the greatest impact on a company’s long-term position. They consist of early customer advocates, industry “stars”, analysts, and journalists who can control the flow of information and opinion. 

These customer types can then be leveraged against the appropriate market life-cycle stage of the company: entry (and if so, early or late?), growth, maturity or decline.  Then, with a thorough understanding of the time lag from product launch or market entry to purchase and long-term loyalty, the basis for short- and long-term communications strategies that address competitive challenges and optimise opportunities can be made. 

Strategically using the customer-base audit in PR and communications can turn PR expenditure into a business investment. Each customer category can be targeted to enhance a company’s business; make positive impact on sales cost, contribution and value at varying stages of growth; and effect competitive re-positioning. Smart choices in customer selection and timing enable companies to channel investment resources, sales, marketing and PR into building the highest quality brand equity and customer loyalty. 

Timing and astute customer targeting are everything. Doing this effectively in one country takes specialist PR and marketing communications skills; internationally, it becomes even more critical because national markets, cultures and infrastructures compound the variables and complexities. 

All customers are not created equal, so don’t let your communications clone them. 

To learn more about how customer-based audits can cut the cost of PR and turbocharge returns, please it contact us. It won’t cost you a thing and will only take a few minutes of your time.