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Lack of customer understanding can undercut companies

Companies may think they're doing a terrific job with personalized marketing, but studies show customers have another view. It's time to understand your customer.

The gap between marketers' perceptions of how well they are doing and how customers feel remains incredibly large...

and risky.

While companies seem to think they're doing a good job of interacting with customers, thanks to personalized marketing and attempts to engage consumers as brand ambassadors, their customer understanding may be lacking.

According to almost 90% of the 1,135 marketers surveyed as part of IBM's Listening to the Customer: 7 New Research Findings, personalizing the customer experience is critical to their success. Despite this, nearly 80% of consumers stated that the average brand "doesn't understand them as an individual."

And according to a brand study by Bain & Co., the characteristics of winning brands, or companies, center on the cultivation of deep customer understanding:

  • Winning companies invest to understand what can truly bring new users to their brand.
  • They rely on deep insights about consumers to guide innovations.
  • Winners build brand memorability by steadily and repeatedly reinforcing and nurturing the brand around consumer-relevant needs and occasions.

Using customer understanding to grow

Winning companies invest to understand what can truly bring new users to their brand.

As a 95-year-old company, Vita-Mix Corp. is a market leader in a competitive industry. It attributes growth rates of up to 52% to understanding that the company's customer is at the heart of everything they do.

According to Jodi Berg, fourth-generation president and CEO of Cleveland-based Vita-Mix, here are a few of the company's guiding principles:

  • "We really feel the best way to get new customers is to never lose a customer we already have. ... We focus on customer retention by building relationships with them."
  • "We have a philosophy that we aren't actually hiring a new customer when we sell a machine -- we are hiring a new salesperson."
  • "We would only reach out to you if we felt you were a good candidate to hear our message."
  • "At the leadership level, you make sure everyone understands the direction you're going in. You stay focused; align everything you're doing in the organization to set the playing field."
  • "After we develop strategic objectives, we go back to the team and say, 'How does this feel? Does this work? Do you understand it? Does it make sense? Will you be able to apply it so that people know whether we're on track or not?'"
  • "We do a lot of market research and have a lot of conversations with our customers. We focus on understanding what the challenges are and what is really happening in stores. We also know what people are eating, how they are eating and how they want to interact with the machine, and we work on those challenges."

Takeaways: Customer understanding is key

1. Marketers have to define the brand message, not dilute it. As IBM's Listening to the Customer: 7 New Research Findings noted, there is "a massive perception gap between how well businesses think they are marketing and the actual customer's experience."

2. When making a purchasing decision, consumers need to clearly understand a company's brand advantage. When brands are side by side in the moment of a purchasing decision, it is perception and understanding that will sway a consumer toward or away from a brand.

3. Brand identity needs to be consistent with consumer values. Brand marketing needs to be deeply rooted in consumer relevancy to present a unified, clear brand statement that is not only understandable, but also acceptable to core concerns.

If consumers do not have a clear understanding of who you are as a brand, they have no awareness of what you are trying to sell to them. Equally important: If you aren't laser-focused on customer understanding, message relevancy is impossible.

For more on marketing engagement strategies, see Ernan Roman Direct Marketing.

Next Steps

Customer personalization is a key business differentiator

Mobile marketing requires that you know your customer

Is your digital content strategy up to snuff?

This was last published in February 2016

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