Customer Centricity: Establishing Connections

February 5, 2013 0 By

By David Loshin

In our last set of posts, we looked at the relationship of location to a strategy for customer centricity, and one conclusion we can draw from that discussion is the value of organization into groups for better understanding what drives customer behavior. To say it a little differently, if “birds that flock together” are “of a feather,” it suggests that “feather-similarity” defines a set of one or perhaps more relationships that are of interest to your organization.

This is probably not a concept that is unfamiliar within your organization. Many
companies have diligently attempted for many years to track at least one
specific group relationship: the household. Simply put, a household is a concept
representing the collection of individuals that share a residence, along with
all of the attributes and characteristics.

The concept of household is particularly relevant in business scenarios in which
products or services can be up-sold or cross-sold by broadening the delivery to
a collection of individuals based on the choice of a single group
decision-maker. Here are two examples you are probably familiar with:

• Mobile communications – Once a household decision-maker has opted to contract
with a mobile telecommunications provider, that provider looks to cement the
customer commitment by leveraging promotions for purchasing additional devices
and services for others members of the household.

• Retail businesses – A retail company will want to know the make up of the
household to better direct market items targeted at filling the needs of the
different individuals for whom the head of household makes purchasing decisions.

In general, understanding the makeup of a household helps in devising marketing
strategies based on the characteristics of the group rather than of individuals.
For example “household income” might be a better indicator of a family’s wealth
than looking at the annual income of either the husband or the wife.

And the notion of a household can be abstracted in reference to other sorts of
collections of individual customers, and in the set of posts, we will look more
at the customer centricity concepts associated with connectivity and grouping.