Date Added: February 2006
To optimize profits, organizations need to connect brand- and customer-centric marketing. Connecting these strategies will increase customer loyalty because they are aimed at affecting customers' attitudes and behaviors. Research recommends that companies should focus on retaining customers through their repurchasing intentions, observing actual repurchases, or determining if customers should continue an active relationship with the firm.1
Brand-centric marketing helps customers better understand and improve their preference of an organization's products or services rather than switching to a competitor's products and services. The goal is for customers to remember a brand directly from memory - unaided awareness. In contrast, customer-centric marketing is popularized through satisfaction and needs/requirements, which focuses on efforts to improve customers' perceptions of their experience relating to an organization's products or services. Customer-centric marketing is focused primarily on improving levels of customer satisfaction and developing customer loyalty, whereas brand-centric marketing's primary focus is on acquiring customers.
As customers become more familiar with a particular brand, they continue to become more satisfied and invest incremental dollars with that company. Also, the stronger a customer's brand preference is, the greater the customer's revenues and profitability to that particular brand will be. As long as customers remain loyal to the brand, they create a brand-customer relationship. This relationship generates more profit for the organization, and loyal customers may be less likely to easily move to a competitor's products.
Figure 1 (below)2 demonstrates how loyal customers may look to your organization. Typically, the vast majority of customers are "in the middle" of the chart. On a scale of 1 to 10, customers between 5 and 8 are most likely to switch to another brand. These "middle" customers make up more than 80% of the customer base. So, it makes strategic sense for organizations to ask, listen, and learn to find what it takes to get those customers between 9 or 10, thereby becoming loyal customers. The strategic leverage comes from finding the actions that organizations need to retain these customers by proactively meeting their needs - before these needs become wants. The goal is to get customers above 9, or between 9 and 10, where the extremely loyal customers are. This will lead to increased productivity and success within the organization.
1 Keiningham, Timothy; Aksoy, Lerzan; Perkins-Munn, Tiffany; and Vavra, Terry. "The Brand-Customer Connection." Marketing Management: July/August 2005:33-37.
2 Hellman, Karl and Whitelaw, Stephen. "The Middle Ground of Untapped Profits." Marketing Management: July/August 2005:45-46.