The Importance of Customer Value in Marketing

There's a wonderful, awful statistic that should terrify you: no-one would mind if 75% of brands disappeared tomorrow. I don't think that means people wouldn't care if the company didn't exist; however I can completely believe most people would by happy if 75% of all advertising and marketing  vanished tomorrow.

Imagine what Facebook, Twitter, your favourite publisher websites and our cities would be like if there were no advertising or marketing. That idea is what you're fighting against. People actively dislike  most of what our industry does. We clutter up the world with ads and messages that intrude into people's lives and make them miserable.

And why? Well, I believe it's because our industry has let customer value slip from its mind.

Defining Customer Value

As a quick précis, customer value is the return on investment a customer experiences on taking any action associated with a brand.

The investment side of this can be anything from time spent engaging with brand advertising, marketing or other related materials, to money given in exchange for a product or service, to personal data given for advertising. Common examples of the return on that investment would include the product or service purchased, knowledge gained as a result of the brand interaction, or free access to something that would otherwise be paywalled.

Thus in a very real sense, every interaction a person has with any element of your brand can be thought of as having a measure in terms of customer value.

The Customer's Internal Analytics

As a result of this, you can therefore think of customer value as your customer's internal analytics for interactions with your company. How good is the pay-off vs their expectation of it. Does it match, exceed or perform below their conceptualised version of the outcome?

I strongly believe that the reason most people don't care about brands is because most brands don't care about people in any sense beyond the economic, transactional value they hold.

For us as marketers to have a useful, sustainable relationship with consumers, we need to first start by creating things because they're genuinely useful, rather than because they'll deliver a short-term benefit to us. This kind of consumer-focused mindset is increasingly rare, with businesses focused more on quarterly reports than long term, multi-year strategic planning. However, that same common, short-term mindset that has led to things like Mashable being sold for $50 million, the failure of Snap's Spectacles or the deaths of organisations like Pebble and Blockbuster. On the other hand, businesses that focus on customer value and holding a long term view include Amazon; Disney; Microsoft;; HelloFresh; John Lewis; Dove; Tide; and possibly newcomers like Gymshark; Stripe; Starwood Hotels; Singapore Airlines or the Ghost blogging platform.

All these businesses exist in worlds with many other players - people choosing them over their competition isn't a given. So they compete by creating an increase in expected value in the minds of their customers. Perhaps the best example of this is Netflix. The benefit to the consumer is obvious - high on-demand programming, streamed over the internet, with no adverts, and exclusive content, for a reasonable monthly cost.

The Value of Added Value

When they sign up to Netflix, the customer gets everything they're expecting, for a known price. But there are other benefits too - every time Netflix announces an exclusive series, or recommends a new show you enjoy, or you discuss the latest series of The Crown or House of Cards or Chef's Table with your friends, that's extra, serendipitous value you aren't expecting to get. It adds value on top of what you thought you were paying for, with unexpected bonuses that you won't want to lose.

This is why product differentiation, added value, perceived quality, post-purchase user experience, intangible benefits and so on are so important. They add weight to the positive brand experience the customer has, adding to the customer value. The price paid is only one small part of the equation.

It's Why Messaging & UX Matters

More than anything else, we push for a strategic approach to marketing. Because when you plan why you're executing, rather than just what and how, you can deliver greater benefit to greater numbers of people.

Not everyone is going to have the same experience of your company. People purchase for different reasons, and you need to have separate marketing and customer experience paths for those different groups. To have continued relevance and a positively perceived brand, companies must ruthlessly focus on delivering the best possible experience to their customers.

It's more than the right message, to the right person, at the right time, in the right way. It's about the experienced value, the positive benefits, the social connections and the emotional connection a customer has.

That's what the quarter of brands people care about have in common.