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Transformation talks series: How to capitalize on customer attraction
Jun 19, 2023
With mounting expectations from multiple stakeholders in a volatile business environment, retaining customers can be crucial for your company’s long-term success. To thrive in this age of customer attraction, your business should focus on what matters most — understanding consumer behaviors and preferences, investing in capabilities and values that resonate with customers, and nurturing a customer-centric culture.
Many companies are still confused about how to operate in constant uncertainty. They often take reflexive actions aimed at reducing costs, such as cutting workforce, discontinuing products and services, and relocating production and sourcing. These actions not only have limits, but they can strain customer relationships and decrease market share, making it easier for competitors to take over. Instead, your company should embrace the elements of customer attraction and explore strategic investments that can maintain momentum over the long haul.
Capabilities and values are the keys
Rather than scattered spending aimed at out-teching the competition, making real progress requires understanding how consumer behavior is evolving and leveraging the greater knowledge we have of customers. To capitalize on customer attraction, companies should take meaningful actions in two main areas: capabilities and values.
Examples of capabilities include dynamic pricing and situational awareness (in response to such disruptions as inflation and supply chain issues), subscription-based economics and anything as a service (XaaS). Amazon Web Services (AWS), for instance, provides a comprehensive suite of cloud computing services on a subscription basis, allowing business customers to pay only for what they use without investing up front in hardware and infrastructure. This aligns with customers' preferences for scalability and flexibility.
Values-based actions include requiring measurable outcomes from climate change investments; clear, accurate reporting of how the business meaningfully addresses economic inequality; and an unequivocal commitment to social justice, including accountability to customers. For example, outdoor clothing company Patagonia’s commitment to sustainability and social responsibility includes reducing its carbon footprint by sourcing renewable energy, using recycled materials and promoting fair labor practices in its supply chain. This values-driven approach has resonated with customers, leading to increased brand loyalty and sales growth.
Embracing customer attraction can require a mindset shift. Instead of seeing customers as a cost to be managed, consider them an asset to be nurtured. Create a customer-centric culture that permeates all levels of the organization, from strategy to execution to tangible results and business growth. Doing so is critical for driving growth and outpacing competitors in the age of customer attraction.
Learning from other companies
How have other businesses successfully capitalized on customer attraction? One example is Peloton, which reshaped fitness by providing an interactive and immersive experience through its connected exercise equipment and online classes. Peloton rode the growing trend of at-home workouts and desire for a personalized and convenient fitness experience. By leveraging technology, Peloton has attracted a devoted following and disrupted the traditional gym industry.
Warby Parker is another example. It helped change the eyewear business by providing affordable and stylish glasses and sunglasses both online and in stores. The company has been able to leverage e-commerce to provide a customized shopping experience for customers. By emphasizing price, style and social responsibility, Warby Parker has won loyalty and disrupted the traditional eyewear industry.
These companies show how you can better demonstrate your understanding of customer attraction by recognizing consumer needs and preferences, by using technology and by emphasizing personalization, convenience, affordability and social responsibility. When you invest in capabilities and values that resonate with customers, your business can both achieve sustainable growth and competitive advantage while making a positive impact on society.
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