Forrester Customer Experience Forum 2017: Sticking to Valuable Customer Segments
NEW YORK — To provide value to their customers, companies must first get a better handle on segmenting their customers and understanding which groups are most worth their time, money, and efforts, speakers stressed on day two of this year’s Forrester Customer Experience Forum (CXNYC) at the Hilton Midtown ManhattanHotel.
Companies must grasp a customer’s potential lifetime value—which in many cases means the amount of revenue they can add to a company's bottom line over the course of their relationship—suggested Brandon Purcell, a senior analyst at Forrester. "All customers are not created equal," he said. "You should invest in experiences for customers who give a hoot, and invest in providing experiences to customers who are worth the money." He outlined some rules of thumb for taking data from customers and turning it into insights that can help companies better serve customers and retain them for future business. You can put customers into tiers based on their lifetime value and their propensity to churn, and from there determine next-best actions to offer your most valuable customers to keep them around. “Aim for progress, not perfection,” he suggested.
The same basic principle holds true for companies hoping to draw in, and hire, new talent, said Alexandra Cavoulacos, cofounder and COO at The Muse, an online resource for job seekers and employers. Cavoulacos pointed out that one of the biggest mistakes companies can make when trying to promote a culture that values its customers is trying in to appeal to everyone. "If you try to attract everyone, you don't end up with a culture." And, she noted, company culture is key to creating authenticity that results in more satisfied clients.
This has also been the philosophy driving Airbnb's technology platform, which is designed to appeal to travelers who are seeking an alternative to the standard and familiar hotel-going experience, suggested Leigh Gallagher, assistant managing editor at Fortune, and author of The Airbnb Story. According to Gallagher, the company came about at a time when the swath of customers often classified as Millennials were getting sick of the "overcommodotized and overpriced" offerings of large hotel chains. Seeking authenticity and unique experiences when going to new locations, customers are able to get that from a company that operates on the notion that "anyone can belong anywhere" and aims to allow anyone to "travel like a human."
Evan Minskoff, head of brand and global growth strategy at Tumblr, joined Gallagher on the main stage and recommended "knowing your customers and knowing their motivations." "I know it sounds kind of wonky, but figure out what makes them tick," He said. "Figure out if it's the comfort, the confidence, the thing that they use your brand for, past the functional, that really is what they are coming to you for and why they will date you for a long time and not others in this space. And do that how you will—through segmentations, ethnogratphic work, hardcore LTV [lifetime value] work, and really commit to that, and come up with execution plans that tether everything from your copy and your creative and your messaging to the diverse array of the portfolio of marketing channels—from push, to email, to in-app messaging—that go out there, and continue to innovate that way."
Select Comfort's Sleep Number, a "sleep technology company," has followed this advice. According to Melissa Barra, chief strategy and customer relationship officer at Sleep Number by Select Comfort, the outfit has benefited from understanding that it shouldn't try to appeal to all people in the market for a new mattress, but to those seeking to improve their lives and health through "quality sleep." Every decision the company makes, for this reason, is geared toward giving each of their customers the means they need to get better-quality sleep. "We talk a lot, inside the office at Sleep Number, about innovation with purpose. And to offer purpose to us means to deliver quality sleep," Barra said. "For us, that starts...with what is the outcome consumers are looking for? What is the end solution? And that's to be able to enjoy their lives, and do everything that they do in a better way. And at the center of your health and wellness is sleep. Everything gets better if you sleep better."
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