In a world where the importance of digital is overtaking all other forms of communication, marketing is also shifting its base online to reach out to more customers with relevant offers. As this blog is being written, definitely, traditional marketing is unviable, and even then, rather outdated. While it might still hold ground to certain types of industries, traditional marketing or product-centric marketing relies on making presentations, offering opinions and heavily on the product.
Focused primarily on marketing products and creating high-quality outputs, product-centric marketing seldom focuses on customer needs. Emphasis is placed on developing advanced, newer products and introducing them into the market irrespective of their demand. Investments in R&D are rather huge, and new product lines are constantly added to the portfolio. These strategies might still be adopted by large enterprises. But in the recent light of events and with millennials voraciously consuming digital information, market survival will force them to rethink their strategies, for better sustenance. With a myopic vision of the market, they ignore the changing market conditions and pay little attention to customer fulfilment. Overall, product-centric companies don’t work towards meeting the customer’s needs and challenges but depend on presenting a product to customers who have not yet realised that they need it.
The downsides of product-centric marketing
Product-centric marketing can become a trap. Products may come and go depending upon trends, susceptible to shifts in consumer behaviour. While it seems like the natural outcome of business processes, the problem lies in the approach.
Difference in approaches:
The figure above best explains the traditional concept of marketing, which ties a product to the consumers’ activities, rather than the other way around. The hook is to sell a product by convincing, persuading, handling objections and overcoming resistance. All sale activities are closer to the seller’s or manufacturer’s timelines, who are competing to stay busy.
Why does traditional product-centric marketing not work?
Product-centric marketing might fail due to several challenges revolving around the product’s viability, cash flow investments and finally, non-acceptance into the market
Inadequate Product-Market Fit
When sellers focus only on the product, it goes out of style, even before they have fully launched it. This means the commodities have not only failed in gaining the right market fit, they haven’t even met the demands of the customers. If consumers don’t want the product in the first place, however niche it might be, it will be of no value in the market.
Primarily, products are not built around the users’ perspectives. It is an attempt to alter consumer behaviour in order to enforce the saleability of the product. The process involves a lot of time and money where most of these are spent grooming the customers. This would only mean burning cash till the product gains momentum.
Risk of failure
Product-centric marketing comes with a flipside. The risk of failure is quite high, especially if the herd does not follow the product right from the beginning. Customer acquisition can be a big challenge.
Now, for the customer-centric approach
What exactly is the customer-centric marketing strategy?
A customer-centric approach focuses on the customers’ positive experiences before and after the sale, thus, driving repeat business. Customer loyalty is enhanced, and business growth is improved.
Imagine a constellation of stars and on the same lines, imagine the customers’ journey. Each of these stars is a distinct opportunity to connect with the buyer – that is customer-centric marketing. Take stock of the consumers’ holistic experience to tailor experiences that revolve around the brand. It means, just offering good customer service may not be enough. This requires identifying the channels on which customers engage with the brand, content experiences offered at critical touchpoints and finally, optimising the touchpoint to connect it with other information and insights to consistently improve end-user experience.
The above precedent is a great way to show that every potential user is important and companies must align themselves with all their customers.
Examples of customer-centricity
Customer-centric companies identify the needs, challenges and pain points of the customers through constructive market research, behavioural data tracking and demographic segmentation. More mature marketing will divide customers according to psychographic profiles. Customer lifetime value is maximised, as every customer turns into a profitable asset. These companies go above and beyond providing just good customer support and service. That is why repeat customers are high and recurring revenue is augmented.
Why does customer-centric marketing work?
Limited barriers to market entries
As mentioned above, the key to customer-centric marketing lies in research. Due to this, the market is easily penetrable since offerings are tuned to help consumers understand what they need. The company flourishes in no time once the appropriate spot is found.
Customer-centricity does not end with launching the product or service. It is about customer sustenance. The approach is life-long, and while keeping an eye on the customers’ changing needs, the product also has to evolve simultaneously. Longer brand sustainability is garnered when the focus is on relevance.
The customer’s mindset is reflected across all aspects of your marketing when solutions are built, keeping in mind the positive sentiments they feel as privileged company partners. This way, brand affinity lasts for generations to come.
Key differences Product-Centric vs. Customer-Centric
Having defined both marketing approaches in the previous sections, we can identify their key differences as follows:
Other differences worth considering:
To choose between the traditional product-centric approach, as against a customer-centric approach, companies must first understand their business offerings well. This also does not mean that product success should be ignored. Sustainability is fortified when the business is built around customer needs. Brand trust cannot be built overnight. It is a continuous journey of perseverance that creates leaders in a niche.