As a Brand audit company, we work with clients who want to improve their brand and Marketing efficiency. Quite often – over 30% of the time, brands underperform because of the lack of customer closeness.
Small, especially local businesses that work face to face with customers can manage customer closeness better than brands that are slightly bigger, and where sales and marketing are mostly happening online.
Customer closeness is an important aspect to understand for modern brand managers and marketers. Based on the hundreds of related brand audits we did and based on the continuous market research we do, we can tell a thing or two about customer closeness.
Definition and the concept of customer closeness
Customer closeness is defined by the level and quality of the emotional connection between a brand and its customers. Customer closeness is achieved by organized efforts to understand customer needs and aligning both brand and customer experiences to fit the needs of key customer segments.
What are the benefits and of investing in customer closeness?
- Customers will listen to your marketing
- Increase in repeat sales
- Increase in brand loyalty
- Increase in brand referrals
- Increase in brand experience
- Increase in conversion rate
- More efficient sales
- Shorter sales process
- Significantly higher marketing efficiency
Before getting into the details of customer closeness management, it is important to look back and reflect on the 2010s. A lot has happened in terms of brand-customer relations in that decade, which shaped how close customers actually want to be to companies.
When customer closeness became “too close” and made customers distance from brands
Customer closeness was a hot sales, marketing, and branding topic in the early 2010s, at the beginning of the digital disruption era. Keeping customers close and personal was a fantastic strategy to retain potential clients and avoid the increasingly expensive online consumer acquisition frenzy.
Back in the early and mid-2010s, customer closeness management was focused on the relationship between companies and buyers. The vaguely defined workflows included customer feedback collection, workshops, various loyalty, and “insider” programs. In most cases, companies wanted to develop real-life, personalized face-to-face experiences with their customers through personalization.
In just a few years, data became the backbone of customer closeness optimization. Companies of all shapes and sizes implemented customer data harvesting strategies, and that data was used to create personalized customer experiences. In the mid-late 2010s, when digital customer data collection practices became widespread, both consumers and governments became increasingly concerned about privacy issues.
With data-based guest profiles being too precise, more and more people started to feel that companies know too much about them. This triggered mass adoption of ad-blockers, VPNs, and other tools to keep companies away from collecting their online information. Large companies like Google, Facebook, and data brokers involved in mass data collection faced significant backlash related to disrespecting privacy rights.
GDPR and other laws were conceptualized to counter this process and protect people from getting data exploited.
Customer closeness today: how close do your customers want to be with companies?
In a nutshell, customers have the right, tools, and authority to manage how close they want to be to certain brands. In fact, with GDRP and other legal circumstances in place, personalized marketing communication can only start with the approval of the potential customer.
Customers can opt-in for cookies, marketing communication, emails, and all sort of personalization if they want to – but can also opt-out if they are no longer interested.
Based on our brand audits and recent 100,000-feedback market research, we can share the following statistics:
- 87% of online shoppers welcome marketing communication from up to 3 companies
- 79% of online consumers do not want to receive personalized marketing communications from any brand
- 64% of online customers ignore most marketing communications they receive
This information shows that most people do not want to receive marketing messages from companies, as 87% will only welcome communications from up to 3 brands.
Why do people distance themselves from online marketing communications of brands? Here are the most frequent responses:
- Annoying – too frequent communications
- Irrelevant – not relevant to customer needs
- Desperate – this belittles the perceived value of the brand
The conclusion is clear: in order to build customer closeness, a brand needs to be interesting and relevant enough to get the continued attention of target customers.
As people can opt-in and opt-out from marketing at any time, the only chance for companies to develop customer closeness is to be:
- Relevant
- Reputable
- Interesting
How to make your brand and marketing communications relevant and interesting to target customers?
The ultimate goal of marketers is to make their managed brands positioned like the best possible solution for specific needs and problems. Be it food craving, a new laptop or mobile phone, fashion brands that reflect social status, or cars, every company aims to be seen as the best in what they do.
The question is: to whom your brand would be the best?
Vegan meat alternatives will not attract steak lovers, small hatchback cars with superb practicality will not be decided by SUV drivers. Hotels and resorts specializing in certain themes and lifestyles will not be attracting everyone either.
The market research results show that most people do not want to be close to brands, other than 2-3 companies they are truly interested in. This is a strong indication of a need for quality over quantity, which is determined by customer preferences and interests, instead of the marketing qualities of brands.
One of the basic principles of any successful marketing setup is segmentation, and drilling down to customer personas. Developing relevant brand and marketing communications that ultimately build customer closeness is based on segmentation and a deep understanding of needs and expectations by each key segment.
The single most effective tool to acquire this business intelligence is continuous market research. The process of brand and marketing optimization cannot be done without regular brand auditing.
Customer closeness starts with understanding your customers
The process of understanding your customers starts with extensive market research, followed by organizing existing consumer data into customer profiles, segments and optionally creating customer personas.
Understanding your customers takes:
- Market research
- Creating customer profiles
- Segmentation
- Customer personas
What is a customer profile?
A customer profile (sometimes referred to as a consumer profile) is a document that lists pain points, interests, buying patterns, and demographic characteristics of a company’s customers. Building a customer profile can help you run better marketing campaigns that, in turn, increase your profits.
What is customer segmentation?
Customer segmentation is the practice of dividing a company’s customers into groups that reflect similarities among customers in each group. The goal of segmenting customers is to decide how to relate to customers in each segment in order to maximize the value of each customer to the business.
What is a customer persona?
A customer persona (also known as a buyer persona) is a semi-fictional archetype that represents the key traits of a large segment of your audience, based on the data you’ve collected from user research and web analytics.
Structuring customer information this way enables a clear understanding of what specific, well-defined groups of customers want to hear about, what their problems are, and what would make a brand relevant and useful for them.
Achieving relevant marketing communication, product, and service presentation is a 50% win to achieve a healthy level of customer closeness.
Companies that get relevant marketing right are scoring 80% better in customer closeness measurement compared to brands where marketing communications is decided and managed without a strategy.
How to know if your brand and marketing are relevant to your customers?
As mentioned earlier, brand audits are the industry-standard method of evaluating the relevancy and perceptions of brand and marketing communications.
Regular brand audits provide specific insights regarding how to target customers perceive the brand and marketing of a company, including credibility, content, relevancy, and further important aspects.
Fortune 500 companies have systems in place for continuous brand auditing. For small and medium-sized businesses serving less than 500,000 customers at a time, or with a target market smaller than 1,000,000 customers, occasional brand audits are perfectly sufficient.
Most of our SME and startup clients do a brand essentials audit, and a marketing communications audit on a quarterly basis to benchmark their performance and see if their perception of the market has improved.
Customer closeness beyond marketing
The efforts to achieve and maintain customer closeness should not stop after making sales. The strategy needs to cover the entire customer cycle. Customer lifecycle management or CLM is the measurement of multiple customer related metrics, which, when analyzed for a period of time, indicate the performance of a business.
- Reach
- Acquisition
- Conversion
- Retention
- Loyalty
An excellent Hubspot article elaborates this in detail: https://blog.hubspot.com/service/customer-lifecycle-management
The ultimate goal of understanding your customer is to serve them better. There will always be some amount of trade-off between what a customer ideally wants and what a company can deliver, but by truly understanding what your customer values, you can create processes and procedures that serve them more efficiently. Through active listening you can ensure the right message at the right time is delivered to the right person.
