Maximizing customer value means cultivating long-term customer relationships. In the past, producers customized their offerings to each customer. The tailor fitted a suit and a cobbler made shoes for each individual. The industrial Revolution ushered in an era of the mass production. To maximize economies of scale, companies made standard goods in advance of orders and left it to individuals to fit into whatever was available. Producers moved from built-to-order marketing to built-to-stock marketing.
Companies are now moving away from wasteful mass marketing to more precision marketing designed to build strong customer relationships. Today’s economy is supported by information businesses. Information can be used to differentiate, customize, and dispatch with great speed and accuracy.
As companies have grown proficient at gathering information about individual customers and business partners (suppliers, distribution, retailers), and as their factories are designed more flexibly, there has been an increase in customizing market offerings, messages, and media. Mass customization allows a business to meet each customer’s needs on a mass basis through individually designed products, services, programs, and communications. While Levi’s and Lands End, were the first clothing manufacturers to introduce custom jeans, there are now numerous many players in the mass customization market:
There are four imperatives for cultivating existing customers:
1. Find out and know who they are. Web-based systems, point-of-sale systems, and call centers allow you to measure metrics that help characterize who your most important buyers are. Determine the customer-related data that are right for your business. Collect and track that data regularly.
2. Personalize promotions. Customers today expect to receive customized offers. By customizing promotional offers—pricing, new products, bundled offerings—you showcase your knowledge of those customers while strengthening the bond you have with them in the process.
3. Give the best customer service. Keep in constant contact with customers. Check on how well you are servicing them. Assess how they like the products they’re buying and the service they’re receiving. Always be cordial and as accommodating as possible.