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A CMO’s Reflection on Customer-Centric Marketing Strategy in 2024

By Mindy Heintskill Last updated: 8 minute read Customer LoyaltyMarketing Guides

What is customer-centricity?

Unlike a product-centered model, where companies develop their products or services first and promotion strategy next, a customer-first methodology starts with understanding buyers’ desires and aligning business strategies accordingly.

Understanding This Approach

In today’s business environment, success lies in embracing a customer-first approach. But what does developing a customer-centric marketing strategy really mean?

The approach is rooted in placing customers at the center of all endeavors. It involves understanding their needs, preferences, and aspirations and customizing your offerings and marketing tactics accordingly.

This approach fosters robust relationships through tailored customer experience that cater to unique expectations.

By prioritizing your customers’ interests and delivering exceptional value, you can cultivate enduring connections founded on trust and loyalty.

This not only enhances consumer satisfaction but also bolsters customer retention rates.

Developing a Customer-First Strategy

My first experience was with a company called dunnhumbyUSA. I was fortunate to be among the team that first tapped into Kroger’s loyalty card data.

It seemed obvious that such robust behavioral data could create the insights required to truly win with customers. We used that data to fundamentally improve the way Kroger chooses its product assortment and store layout, sets its promotion and pricing strategies, and markets to its customers.  

We identified niche products and logical product adjacencies by looking at customer data.

Customer data also allowed us to ensure that the promotion strategy was most relevant to those customers who actually cared about promotions. And really importantly, it allowed Kroger and all of Kroger’s constituents to understand that there are many types of customers in their stores making many different types of trips.  

We built strategies to reinforce the actions the business needed to take to retain and grow various customer segments. I think the most memorable was what we called the “Loyal Customer Mailer”.

This direct mail piece included several coupons, chosen based on the detailed purchase behavior among Kroger’s most loyal customers. The mailer was structured so that half of the coupons were considered rewards, which meant the coupons were for products the customer had previously bought and was likely to buy again.

Additional coupons were for products that, based on the data, we believed the customer might like to try. And there was always one store coupon, typically a spend threshold based on the customer’s average basket size.  

We tested and analyzed the performance of each type of coupon and different mixes of coupon types. We learned that the store coupon was the most important offer. Without it, customers were less likely to use any of the other offers.

I recall the absolute shock among the CPG community when their product-level coupons were redeemed at rates above 50%! At that time, FSI’s (“Free Standing Insert” coupons in the Sunday papers) were the benchmark, and at best, they would solicit 3-5% redemption. 

It Can Be an Iterative Process

I was lucky enough to take what I learned at Kroger to Walgreens, where we used customer and market insights to launch Walgreens’ first customer loyalty program

Like Kroger, we leveraged the rich behavioral data to improve merchandising decisions. But unlike Kroger, we learned that in the drug channel, we couldn’t get the same response to a relevant set of offers sent to Walgreens’ most loyal (and promotionally sensitive) customers.   

Still better than an old-school FSI, the Walgreens offers were valuable and drove a positive return, but no matter how broad and high-value, we never saw the types of redemption we expected. 

After conducting additional customer research, the reason for this difference became clear.

Drug channel shopping trips are very often impulsive or even distressed. A customer is out of a few things and needs to get them quickly. There simply isn’t the same amount of planning or thought process that goes into a stock-up grocery trip.

Our deeper understanding of the customer journey made us adjust our expectations and marketing approach. We sectioned out loyal customers with an email on file and delivered coupons digitally to them.

The lower cost of email allowed us to dig deeper into the customer database, expanding reach while improving campaign ROI. Our longitudinal data analytics proved the program increased customer engagement and customer lifetime value.

At Times You Have to Be Flexible

After Walgreens, I moved into healthcare technology at a telehealth company. This was before the pandemic, so telehealth was hardly known and barely utilized.

Because of my previous experience, I knew that we needed to better understand customer behavior and attitudes, in this case, healthcare consumers, to determine how to introduce telehealth in a way that meaningfully addressed the triggers and barriers to adoption.   

Because we didn’t have access to robust behavioral data, we instead conducted very rich qualitative research. This was the first time in my career that qualitative research was the lead source of insights.

I learned that when planned and conducted well, this type of data and insights can be even more meaningful and actionable than behavioral data.

We developed simple messaging and tested and learned over time what cadence, quantity, and channel mix worked best. By leveraging the customer-first approach I learned in retail, we successfully drove awareness and demand for telehealth capabilities.  

5 Key Lessons I Learned

How to create a marketing strategy focused on the customer?

When I reflect on my experience, a few common themes emerge. I hope they can be helpful if you are also on that journey.

1.Dive Deep into Your Customers’ Preferences

To effectively cater to your target audience, it’s crucial to grasp their desires, pain points, and motivations.

Utilize market research, analyze consumer data, and gather insights through surveys or interviews. This will enable you to conduct meaningful market segmentation with actionable insights.

2.Adjust Your Product and Service Offerings Accordingly

Once you better understand your customers, it becomes clear where the gaps are and how to address the unmet needs. We used customer data to fine-tune Kroger’s product assortment to increase customer satisfaction and sales.

3.Tailor Personalized Marketing Campaigns

Customize your messaging accordingly once you have your customers’ profiles and good product and service offerings. Personalization goes beyond using their names. It involves delivering relevant content based on their interests and behaviors.

Without the behavioral data and tailoring the coupons based on that, the Loyal Customer Mailer would not have been such a success.

Nowadays, many cutting-edge marketing automation tools or customer relationship management systems (CRM) exist to help with this endeavor, including personalized emails or targeted ads. Additionally, you could select social media influencers and affiliate publishers based on your target audience, such that the user-generated content is already tailored.

4.Deliver Exceptional Customer Service

Outstanding service is key to any successful customer-centered strategy. Equip your team with product knowledge to provide accurate information during client interactions.

Respond promptly across various channels, such as phone calls or social media platforms, ensuring each touchpoint leaves a positive impression. This step alone might make or break your net promotor score.

5.Gather Customer Feedback

Actively seek customer input through surveys, focus groups, or online review platforms. Analyzing this feedback provides valuable insights into areas needing improvement while highlighting strengths.

Final Thoughts

Embracing a customer-led approach in marketing yields real, measurable benefits for businesses. By putting your customer’s needs and preferences first, you can craft an experience that not only satisfies but also fosters loyalty.

As a result, you will have improved customer satisfaction and retention rates and elevated brand reputation and credibility, all of which lead to boosted sales performance.

About the Author: Mindy Heintskill

Mindy Heintskill Headshot
Mindy Heintskill

Mindy Heintskill is currently an independent business advisor who focuses on developing growth strategies and go-to-market plans for start-ups and growth-stage companies.  

Mindy’s recent experience includes serving as Chief Marketing Officer at SonderMind, a company that is redesigning behavioral health.

Before SonderMind, Mindy served as Chief Growth Officer at MDLIVE, where she was responsible for sales, account management, and marketing, and provided leadership on matters related to partnerships, pricing, and company strategy, along with responsibility for industry and consumer insights. 

Mindy joined MDLIVE as Chief Marketing Officer in April 2019 and was promoted to Chief Growth Officer in October of 2020.  

Prior to MDLIVE, Mindy was a Group Vice President at Walgreens, where she was responsible for driving customer behavior among Walgreens’ 90 million Balance Rewards loyalty program members, as well as the associated sales and profit impacts. 

Mindy joined Walgreens at the director level in 2011 as a leader on a newly established loyalty team. Her responsibilities increased over time to include customer insights, B2B insights and direct marketing businesses, personalization and email marketing, digital product and UX/CX. 

Before joining Walgreens, Mindy focused most of her career on customer loyalty, insights, and personalization, primarily working with retail and consumer goods companies.

She spent seven years at dunnhumbyUSA, where she successfully leveraged Kroger’s customer data to inform strategies and solutions that markedly improved comparable sales for five consecutive years.

Mindy began her career at Kimberly-Clark in consumer sales and quickly pivoted her focus to insights-led sales strategies for shared success between Kimberly-Clark and its retail clients.