Developing a Customer Focus

David Ciancio, Global Head of Customer Strategy, Dunnhumby

A good approach to developing a customer focus is to build models “from the person upward.” By developing a customer focus, for example, Kroger became the only retail supermarket company to grow like-for-like sales even during the recession. 

Companies often look at the wrong data, focusing on unhelpful data points like customer profitability. In doing so, retailers lose sight of the customer and what motivates them to make purchases: low profitability is not the customers’ fault. Customer data enables the right customer insight which drives customer management to grow long-term customer loyalty. 

In dunnhumby’s experience, customer data has challenged assumptions that loyal customers give most of their spend to one retailer, that customer acquisition is the key driver of growth for either retailers or brands, that consumers are truly brand loyal, or that customers behave differently across geographies. 

Moreover, the definition of "store" is changing for customers, as mobile devices are now seen as store locations. The geometric decrease in store size demands a geometric increase in personalization if a retailer or brand hopes to remain relevant. Marketers need to meet customers wherever they are in space and time.

Summary by Alicia Baik, Ph.D. Candidate, Department of Economics, University of Virginia

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