Download Free Ebooks on Share of Customer
Check out our latest downloads available free as PDFs or paid from Amazon as Kindle/iPad versions:
- The Youth Marketing Handbook (how do companies move from Share of Market to Share of Customer?)
- Influence: A Marketer’s Handbook (how does focusing on Share of Customer create word of mouth?)
Share of Customer: Defined
Modern marketing positions “awareness” as a key benefit in the net result of direct marketing techniques. On the other hand marketers find it challenging to extract a measurable indicator to gauge the effectiveness of emerging media such as blogs, podcasts and others that target the few, but the dedicated few.
Needless to say, “awareness” as a measure of your marketing effectiveness is going out of favour. We all know Cadillac, for example, but who buys it? Particularly with young consumers, awareness of a brand (like having a “good product”) is merely a starting point – a pre-requisite for entry to the game.
Apple’s CEO Steve Jobs has long touted the need for targeting “share of customer” as opposed to “market share”. Marketing campaigns have traditionally been commissioned to “increase our market share from 10 to 12%” without due consideration for the hidden cost to the brand and company long-term.
And it’s not just the new new that demonstrates the ineffectiveness of the old old. The New York Times maintains a 95% customer retention rate in the face of an industry standard 40% churn rate by focusing on being the most relevant publication for their core audience – the “elite educated urban class”.
Jamba’s Crazy Frog advertising is case in point. Targeting market share through high level publicity (e.g. heavy MTV rotation) creates awareness, but by the same token sows the seed for long term unprofitability – consumer trust in your brand will be inevitably be damaged by direct marketing tactics.
If you need to see the economics, consider these following facts discussed in the latest mobileYouth report:
- $20 billion – that’s the hidden cost of consumer churn to mobile operators annually. How does that compare to a 5% rise in data spend??
- 53% of your consumers would switch to a competitor if they were “concerned about your trustworthiness” (Golin Harris 2003)
- Trust – or lack of, is the #1 factor that determines whether young consumers choose you or your competitor (Harris Interactive)
- 78% of Germans – are irritated by TV advertising (GfK 2006)
- 56% of your consumers – report they avoid buying products from those that advertise too much (Kirby & Marsden 2006)
Seth godin also makes an interesting point today on his blog. “The more people you reach the more likely it is that you’re reaching the wrong people”
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