How many of you have experienced failed or improper implementation of say a CRM or a rewards program in your career?
Chances are very high if you have worked in B2C companies that tend to have a more traditional campaign style of marketing.
You might have wondered why because there was a best-in-class CRM system, some state-of-the-art tech stacks, frameworks, and great-looking slides. What was the missing block?
Grant it, I would be oversimplifying things if it was just one thing, but more often than not we tend to ignore the concept called “Value Exchange”.
“In today’s data-driven world, brands that can collect and use data effectively have a significant advantage over their competitors. But data is only valuable if it’s used to create value for customers.”
Forrester defines data value exchange as “an arrangement — sometimes an explicit contract but typically an implicit understanding — in which a consumer allows a company to use their data in proportion to the value that the company creates for them.”
Let’s dive in
In today’s data-driven world, brands that can collect and use data effectively have a significant advantage over their competitors. But data is only valuable if it’s used to create value for customers.
That’s where value exchange comes in. Value exchange is the process of giving something of value to someone in exchange for something else of value. In the context of marketing, value exchange can be used to build relationships with customers and to create a more personalized and relevant customer experience.
There are many ways to create value exchange for customers. Some common examples include:
- Offering free trials or demos: This allows customers to try a product or service before they buy it, which can help them to decide if it’s right for them.
- Personalizing the customer experience: This can be done by using data to understand what customers want and need, and then tailoring the customer experience accordingly.
- Providing rewards and incentives: This can encourage customers to continue doing business with a brand, and it can also help to build loyalty.
By creating value exchange for customers, brands can build stronger relationships and improve the customer experience. This can lead to increased sales, customer retention, and brand advocacy.
So, how do you create value exchange for your customers? Here are a few tips:
- Start by understanding what your customers value. What are their needs and wants? What are their pain points?
- Create value that is relevant to your customers. The value you offer should be something that your customers actually want and need.
- Make sure the value you offer is fair and equitable. Customers should feel like they are getting a fair exchange for their data.
- Be transparent about the value exchange. Let customers know what data you are collecting and how you plan to use it.
- Build trust with customers. Let customers know that you will protect their data and that you will use it responsibly.
You can create value exchange for your customers and build a stronger brand.
Data-Driven CX Programs Drive Revenue and Profit Margins
In addition to the benefits of value exchange mentioned above, there is also evidence that it can help to increase profits and revenues.
A study by McKinsey found that companies that use data-driven marketing can increase their revenue by up to 20%. Another study by Harvard Business Review revealed that companies that build trust with customers can increase their profit margins by up to 25%.
Marketing is a function that has one clear goal – to put consumers at the center of their world and be as market-oriented as possible. Just like building a strong communication plan with a positioning and messaging framework which is built around customer needs and barriers, a modern marketing setup needs to start with the customer.
We call it Value Exchange!
The views expressed in this article are personal, and not necessarily those of the author’s employer.