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1. Source: marketing.wharton.upenn.edu
TYPES OF MARKETING STRATEGIES
Product
Centricity
Customer
Centricity
Seller’s market Buyer’s market

2. 60%
of marketers allocate < 20%
their budget to nurturing
customer relationships
Source: adage.com

3. 60%
of marketers allocate < 20%
their budget to nurturing
customer relationships
70% of marketers allocate < 20% of
their people to this goal
Source: adage.com

4. “A PRODUCT CENTRIC ORGANIZATION
IS ONE THAT IS FOCUSED ON THE
PRODUCTS IT BRINGS TO MARKET
RATHER THAN THE CUSTOMERS THAT
BUY THOSE PRODUCTS”.

5. Source: marketing.wharton.upenn.edu
Product
Centricity
TYPES OF MARKETING STRATEGIES
Focus on Company
(inside-out)

6. Source: marketing.wharton.upenn.edu
Product
Centricity
TYPES OF MARKETING STRATEGIES
 Offer what the firm has
Focus on Company
(inside-out)

7. Source: marketing.wharton.upenn.edu
Product
Centricity
TYPES OF MARKETING STRATEGIES
 Generic product
 Offer what the firm has
Focus on Company
(inside-out)

8. Source: marketing.wharton.upenn.edu
Product
Centricity
TYPES OF MARKETING STRATEGIES
 Generic product
 Offer what the firm has
 Lowest cost
Focus on Company
(inside-out)

9. Source: marketing.wharton.upenn.edu
Product
Centricity
TYPES OF MARKETING STRATEGIES
 Generic product
 Offer what the firm has
 Lowest cost
 Market ShareFocus on Company
(inside-out)

10. THE GOAL OF PRODUCT-FOCUSED MARKET IS:
SELL AS MUCH AS WE CAN

11. “CUSTOMER CENTRICITY IS ABOUT
IDENTIFYING YOUR
MOST VALUABLE CUSTOMERS,
INCREASE PROFITS FROM THEM AND
FIND MORE LIKE THEM,”.
Peter Fader

12. “CUSTOMER CENTRICITY HAS A
SPECIFIC AIM: MORE PROFIT FOR
THE LONG TERM”
Peter Fader

13. Source: marketing.wharton.upenn.edu
Customer
Centricity
TYPES OF MARKETING STRATEGIES
Focus on Customer and
Competitor
(outside-in)

14. Source: marketing.wharton.upenn.edu
Customer
Centricity
TYPES OF MARKETING STRATEGIES
 Offer what the customer
wants
Focus on Customer and
Competitor
(outside-in)

15. Source: marketing.wharton.upenn.edu
Customer
Centricity
TYPES OF MARKETING STRATEGIES
 Differentiated product
 Offer what the customer
wants
Focus on Customer and
Competitor
(outside-in)

16. Source: marketing.wharton.upenn.edu
Customer
Centricity
TYPES OF MARKETING STRATEGIES
 Differentiated product
 Offer what the customer
wants
 Customer knowledge
Focus on Customer and
Competitor
(outside-in)

17. Source: marketing.wharton.upenn.edu
Customer
Centricity
TYPES OF MARKETING STRATEGIES
 Differentiated product
 Offer what the customer
wants
 Customer knowledge
 Customer shareFocus on Customer and
Competitor
(outside-in)

18. CASE STUDY: BEST BUY
Best Buy wants to focus on customers’ individual wants and
needs— to become “that trusted advisor capable of
helping customers use technology the way they
dreamed,” says Anderson.
Source: Principles of Marketing

19. CASE STUDY: BEST BUY
“We started this [customer-centricity] journey by learning
how to see the differences in the desires of our
customers, and then learning how to meet them,” says
former CEO Brad Anderson.
Source: Principles of Marketing

20. CASE STUDY: BEST BUY
Best Buy’s “customer-centricity” strategy serves its best
customer segments better while sending less
attractive customers packing.
The result: Sales are jumping despite the recently gloomy
economy.
Source: Principles of Marketing

21. So, which are the best customer?

22. “A VALUABLE PROSPECT WHO
HAS A HIGH REVENUE AND
RETENTION POTENTIAL AT
LOW COSTS”
Steffen Zorn

23. CUSTOMER VALUE
Cost per
acquisition
customer
Value per
customer
CONTRACT 1
Customer lifetime value

24. CUSTOMER VALUE
Cost per
acquisition
customer
Value per
customer
CONTRACT 1
CONTRACT 2
Customer lifetime value

25. CUSTOMER VALUE
Cost per
acquisition
customer
Value per
customer
CONTRACT 1
CONTRACT 2
CONTRACT 3
Customer lifetime value

26. CUSTOMER VALUE
Cost per
acquisition
customer
Value per
customer
CONTRACT 1
CONTRACT 2
CONTRACT 3
Customer lifetime value
Low cost

27. CUSTOMER VALUE
Cost per
acquisition
customer
Value per
customer
CONTRACT 1
CONTRACT 2
CONTRACT 3
Customer lifetime value
Low cost
Premium price

28. CUSTOMER VALUE
Cost per
acquisition
customer
Value per
customer
CONTRACT 1
CONTRACT 2
CONTRACT 3
Customer lifetime value
Low cost
Cross selling
Premium price

29. CUSTOMER VALUE
Cost per
acquisition
customer
Value per
customer
CONTRACT 1
CONTRACT 2
CONTRACT 3
Customer lifetime value
Low cost
Referral
Cross selling
Premium price

30. RESEARCH FIDINGS: COMPANY GROWTH = 3 TYPES OF CUSTOMER LOYALTY BEHAVIORS
Source: HBR

31. RESEARCH FIDINGS: REDUCING DEFECTION
Source: HBR

32. RESEARCH FIDINGS: ACQUISTION THOUGH REFERRAL
Source: Philipp Schmitt, Bernd Skiera and Christophe Van den Bulte
 Researchers compared two groups
of customers acquired,10.000
customer, by a leading German
bank over a three year period.
 All of the first group were
customers acquired through
the bank´s referral program
 The second group comprised a
random sample of customers
acquired through other means
such as direct mail or advertising
over the same period of time.

33. RESEARCH FIDINGS: ACQUISTION THOUGH REFERRAL
Source: Philipp Schmitt, Bernd Skiera and Christophe Van den Bulte
25%
Referred customers are more profitable
 Researchers compared two groups
of customers acquired,10.000
customer, by a leading German
bank over a three year period.
 All of the first group were
customers acquired through
the bank´s referral program
 The second group comprised a
random sample of customers
acquired through other means
such as direct mail or advertising
over the same period of time.

34. RESEARCH FIDINGS: ACQUISTION THOUGH REFERRAL
Source: Philipp Schmitt, Bernd Skiera and Christophe Van den Bulte
25%
Referred customers are more profitable
18%
Referred customers are more loyal
 Researchers compared two groups
of customers acquired,10.000
customer, by a leading German
bank over a three year period.
 All of the first group were
customers acquired through
the bank´s referral program
 The second group comprised a
random sample of customers
acquired through other means
such as direct mail or advertising
over the same period of time.

35. RESEARCH FIDINGS: ACQUISTION THOUGH REFERRAL
Source: Philipp Schmitt, Bernd Skiera and Christophe Van den Bulte
25%
Referred customers are more profitable
18%
Referred customers are more loyal
16%
The difference in customer lifetime value varies
according to customer
 Researchers compared two groups
of customers acquired,10.000
customer, by a leading German
bank over a three year period.
 All of the first group were
customers acquired through
the bank´s referral program
 The second group comprised a
random sample of customers
acquired through other means
such as direct mail or advertising
over the same period of time.

36. RESEARCH FIDINGS: ACQUISTION THOUGH REFERRAL
Source: Philipp Schmitt, Bernd Skiera and Christophe Van den Bulte
25%
Referred customers are more profitable
18%
Referred customers are more loyal
16%
The difference in customer lifetime value varies
according to customer
60%
The referral program pays off
 Researchers compared two groups
of customers acquired,10.000
customer, by a leading German
bank over a three year period.
 All of the first group were
customers acquired through
the bank´s referral program
 The second group comprised a
random sample of customers
acquired through other means
such as direct mail or advertising
over the same period of time.

37. What does the customer want?

38. Apple’s research uncovered a key
insight about how people want to
consume digital music—they want
to take all their music with
them, but they want personal
music players to be
unobtrusive.

39. Why you must understand
customer want?

40. VALUE MAPPING
COST
BENEFITS
higher
lower
inferior superior
WHY WE MUST UNDERSTAND CUSTOMER WANT?

41. VALUE MAPPING
COST
BENEFITS
higher
lower
inferior superior
INFERIOR
VALUE
SUPERIOR
VALUE
WHY WE MUST UNDERSTAND CUSTOMER WANT?

42. VALUE MAPPING
COST
BENEFITS
higher
lower
inferior superior
INFERIOR
VALUE
SUPERIOR
VALUE
fair-value
line
WHY WE MUST UNDERSTAND CUSTOMER WANT?

43. VALUE MAPPING
COST
BENEFITS
higher
lower
inferior superior
INFERIOR
VALUE
SUPERIOR
VALUE
fair-value
line
Low value
customer
High value
customer
THE LACK OF INFORMATION
WHY WE MUST UNDERSTAND CUSTOMER WANT?

44. VALUE MAPPING
COST
BENEFITS
higher
lower
inferior superior
INFERIOR
VALUE
SUPERIOR
VALUE
fair-value
line
Low value
customer
High value
customer
Fair value (1)
THE LACK OF INFORMATION
WHY WE MUST UNDERSTAND CUSTOMER WANT?

45. VALUE MAPPING
COST
BENEFITS
higher
lower
inferior superior
INFERIOR
VALUE
SUPERIOR
VALUE
fair-value
line
Low value
customer
High value
customer
Fai value (1)Fair value (2)
THE LACK OF INFORMATION
WHY WE MUST UNDERSTAND CUSTOMER WANT?

46. VALUE MAPPING
COST
BENEFITS
higher
lower
inferior superior
INFERIOR
VALUE
SUPERIOR
VALUE
fair-value
line
Low value
customer
High value
customer
Fai value (1)Fair value (2)
Fair value (3)
THE LACK OF INFORMATION
WHY WE MUST UNDERSTAND CUSTOMER WANT?

47. Source: marketing.wharton.upenn.edu
Nordstorm is a retailer, it is famous for HOW it sells – with
truly outstanding customer service. In 1975, an unhappy
owner of a set of worn-down tires walked into the Nordstorm
outpost and asked to return them.
Nordstorm DID NOT SELL TIRES at all. But the store granted
the request anyway. Because they want to know as the store
that not only SAYS the customer always right, but actually
BELIEVES the customer is always right.

48. Is the customer always right?

49. Conclusion
Fair-value
solutions
Reduce
Defection
Valuable
customers

50. Conclusion
Fair-value
solutions
Reduce
Defection
Valuable
customers
#1 - Which is the most valuable customer?
RFM, Cluster Analytics, Social Listening

51. Conclusion
Fair-value
solutions
Reduce
Defection
Valuable
customers
#1 - Which is the most valuable customer?
RFM, Cluster Analytics, Social Listening
#2 - How to fine them and more like them?
STP process, Cluster Analytics

52. Conclusion
Fair-value
solutions
Reduce
Defection
Valuable
customers
#1 - Which is the most valuable customer?
RFM, Cluster Analytics, Social Listening
#2 - How to fine them and more like them?
STP process, Cluster Analytics
#3 - What dose the customer want?
Research, 5W1H, Value Map, Social Listening

53. Conclusion
Fair-value
solutions
Reduce
Defection
Valuable
customers
#1 - Which is the most valuable customer?
RFM, Cluster Analytics, Social Listening
#2 - How to fine them and more like them?
STP process, Cluster Analytics
#3 - What dose the customer want?
Research, 5W1H, Value Map, Social Listening
#4 – How to increase profit from them?
Cross selling, Low Cost, Premium Prices, Referral

54. PRODUCT-CENTRIC & CUSTOMER-CETRIC
Product-centric Customer-centric
Strategy Goal Best product Best solution
Main offers New products Personalized package
Most important Most advanced customer Most profitable, loyal customer
Structure Organizational concept Product team Customer team
Processes Most important New product development Customer relationship management
Rewards Measures Number of new product
Market share
Customer lifetime value & Referral
lifetime value
Customer Share/Retention
People Approach of personnel Power to people who develop
products
Power to people with in-depth
knowledge of customer’ business
Mental process How many possible use of this
product?
What combination of product is the
best for this customer?
Sales bias On the side of the seller On the side of the buyer
Source: marketing.wharton.upenn.edu

55. REFERENCES
Research:
- Acquisition Methods and Customer Lifetime Value – Steffen Zorn (2009)
- How Valuable Is Word of Mouth? – V. Kumar (2007)
- Why Customer Referrals Can Drive Stunning Profits – Philipp Schmitt (2011)
- Branding in the Digital Age: You’re Spending Your Money in All the Wrong Places – David C. Edelman (2010)
- Zero Defections: Quality Comes to Services – Frederick F. Reichheld (1996)
Article:
- Why Aren't More Companies Shifting to Treat Their Best Customers Best? – Adge.com
- A Customer Loyalty Measurement Framework – Business Broadway
- The change in Marketing – Barbara Kahn (2015)
- Moving from Product-Focused to Customer Focused Brands – Barbara Kahn (2015)
- Not All Customers Are Created Equal – Peter Fader (2015)
eBook:
- Understanding Digital Marketing – Damian Ryan
- Principles of Marketing – Philip Kotler
Further reading: https://twitter.com/hashtag/CustomerCentricity?src=hash