Analysing Customer Strategy-18Jul2016

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Analysing Customer Strategy

Analysing Customers

Customers are essential to any

organisation engaged in corporate

strategy.

It is important for an organisation both to

understand its customers and to develop

policies that will encourage them to stay

with the organisation.

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Analysing Customers (Cont…

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Analysing customer strategy: the main elementsCUSTOMER COMPANY

Characteristics:

important customers

and loyalty

Trends

Segmentation

Concentration of size

and purchase

Reputation

Types of customer:

domestic, industrial,

service

Personal selling

Advertising

Branding

Promotions

Customer-driven

organisation

Product or service

Pricing and value for

money

Reputation

Branding

Differentiation: e.g.

patents, services

Exceptional service

Architecture

CHANNELS OF

COMMUNICATION

Sponsorship

Public Relations

Word of mouth

Independent endorsement

The product itself


Customers buy the organisation’s products or

services and in this way realise the value that

the company has added to its products.

Customers are thus vital to corporate strategy

development. Indeed, the well-known

marketing writer Theodore Levitt is on record

as saying:

The purpose of an enterprise is to create andkeep a customer.

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As a deliberate part of their corporate strategy,

some organisations have set out to become

driven by the customer. There are three main

strands to this approach to strategy: Understanding the customer;

Responsiveness by the organisation to customer

needs;

Provision of real value for money by the

organisation.

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The essence of such a strategy is that it

goes way beyond the functions of the

organisation that have traditionally had

direct contact with the customer – that is,

marketing and sales.

The concept is that everyone becomes

involved.

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Some examples of customer-driven

strategy:-

Understanding the customer:

Direct customer contact at many levels.

Widely disseminated research on key

customer findings, e.g. on segmentation.

Knowledge of why customers choose the

organisation.

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Responsiveness of the organisation to

customer needs: Regularly receive and act upon customer

satisfaction surveys.

Responsive to customer complaints and

suggestions.

Track key customer data on company

image.

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Provision of real value for money Monitor quality relevant to the positioning of

products in the market place.

Conduct comparative surveys of competitive

prices and service offerings.

Rewards inside the organisation based on

performance with customers.

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In the development of customer strategy,

customer analysis will often move rapidly to an

examination of market segmentation.

Market segmentation may be defined as the

identification of specific groups (or segments)

of customers who respond differently from

other groups to competitive strategies.

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The advantages of identifying a market

segment include: Strength in (and possibly dominance of) a

group, even though the overall market is

large. It may be more profitable to have a

large share of a group than a small share of

the main market.

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Closer matching of customer needs and the

organisation’s resources through targeting

the segment. This will provide sustainable

competitive advantage.

Concentration of effort on a smaller area, so

that the company’s resources can be

employed more effectively.

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Conclusion

Having established the segments,

strategic customer analysis then

proceeds to identify the usefulness of

each segment. It is not enough for a

segment to be different. There are four

important characteristics of any segment

if it is to be useful in strategic customer

analysis:

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Conclusion (Cont…

Distinguishable. Customers must be

distinguishable so that they can be isolated

in some way.

Relevant to purchasing. The distinguishing

criteria must relate to differences in market

demand. For example, they may pay higher

prices for higher quality.

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Conclusion (Cont…

Sufficient size. If the segment is too small,

then it would not justify the resources

needed to reach it.

Reachable. It must be possible to direct the

strategy to that segment.

It is important to assess the future growth

prospects of the segment.

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References

Corporate Strategy. Lynch, R. (1997)

London: Pitman Publishing.

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Contact Details

Conrad Sebego-Principal Associate

Email: [email protected]

Mobile: +27(0)82 468-5060

Fax: +27(0)86 613-8318

Address: 13 Baobab Street, Noordwyk, Midrand, 1687

Website: http://www.c-and-n-inventions.com

mailto:[email protected]

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Analysing Customer Strategy-18Jul2016