The Basic S4 (S**4) Building Blocks to Creating and Implementing an Effective Customer Strategy

4S - Customer Strategy Building Blocks

4S – Customer Strategy Building Blocks


The following blog article will succinctly and effectively answer the following questions as related to developing and deploying an effective customer strategy:

  • What are the basic building blocks of an effective customer strategy ecosystem?

  • What is the function of each process in this customer delivery ecosystem?

  • What are the critical questions that must be answered by each function in this ecosystem?

  • How can you develop an effective customer strategy that delivers maximized customer satisfaction simultaneous to maximized profitability?

  • What is the checklist to ensuring your customer strategy and delivery is effective?

The Building Blocks of the Customer Strategy Life Cycle

The Building Blocks of the Customer Strategy Life Cycle


Above are the basic building blocks to delivering an effective customer experience.  Each process is designed to work in an ongoing continuous ecosystem (loop) in order to deliver a personalized customer experience that matches the customer’s current and future needs, preferences, etc.

Let’s examine each process and how it supports the overall infrastructure model.

  • Segment – the analogy for the segment process is that the more and differentiated customer knowledge you have, the better you will be able separate customers into unique needs groups in order to deliver a unique experience that they truly value.

  • Separate – Once you have effectively segmented your customers and prospects into unique needs groups, you can then start to separate them in order to deliver differentiated and 1-on-1 treatments that are uniquely valuable to each of those customer segment groups.

  • Satisfy – The next step in the process is to deliver content and programs that deliver value, not only to the needs of the overall segment group, but also delivers value to every customer sub-segment within the overall segment group via program sub-segment delivery structures. This is accomplished by delivering customized 1-to-1 customer programs that effectively leverage the unique customer insights gathered (history, needs, preferences, likes, dislikes, previous pain points, etc.).

  • Stratify – The last step in this foundational process is to develop program that migrate customers from low value segments to ever increasing higher value segments. The goal of this process to increase customer’s overall spend, overall share of wallet with the company and overall loyalty and brand ‘stickiness’ such that migrating to a competitor and defecting becomes increasingly difficult. In addition, the migration of customer to higher value segments should also increase the customer’s brand advocacy ranking such that there is a correlation between higher value customer segments and their likelihood to be more likely brand super-advocates {see blog on this topic titled “Achieving Market Leadership by Effectively Managing Customer Loyalty and Advocacy ” : Achieving Market Leadership by Effectively Managing Customer Loyalty and Advocacy  }

The 4S Customer Capabilities

The 4S Customer Capabilities


Critical Questions Answered by Each Process in the Above Customer Delivery Ecosystem:

  • Segment – What specific data elements and insights can we leverage or collect to increase our ability to develop unique customer treatment groups.

  • Separate – Which customer groups does it make sense to develop and deliver differentiated treatment strategies based on profitability models?

  • Satisfy – What are the optimal customer treatment strategies that can simultaneously optimize customer profitability, loyalty, brand advocacy and customer growth objectives?

  • Stratify – How do we deliver a progressive and tiered customer program to differentiate ourselves vs. our competitors and grow our market share?

Summary: You might read many complex articles on what a good customer strategy should be based on, but the above basic foundational building blocks are a simple way to start thinking about your customer ecosystem and what corporate capabilities need to be put in place to deliver effective customer and market success.

Managing Customer Life Stages and Events Can Super-Charge Your Marketing Effectiveness

Why Knowing Your Customer’s ‘Life Stage’ & Associated Events are Crucial to Delivering Effective Marketing

{Click on Chart for a Larger Image}

Life Stage Overview

Customer Life Stage Marketing Can Help You Deliver the Right Promotions with the Right Offers, at the Right Time and Via the Right Channel

Here are some important questions to bring into perspective how important it is to track and recognize your customer’s life-stages and events:

  • Would you forget to celebrate a school graduation for an important relative?
  • Would you forget to celebrate the birthday of a spouse or significant other?
  • Would you forget to recognize the birth of the first child of a couple that is close to you?
  • Would you miss noticing the retirement of a person that is very special to you?

If not, then why would you miss these important milestones for your valuable and long-time customers as these all represent significant and extremely meaningful life-stage events for them?!

A Statement on Life-Stage Marketing to Remember: “Marketing without Considering Your Customer’s Life Stages is Comparable to Marketing to Them With A Blindfold On”

For this reason, your segmentation strategy must take into account an array of customer profile variables including customer life stages. The following chart depicts how customers follow normal life stages and are grouped into life stage segments. As customers evolve to the next life stage segment, their consumer spending evolves and generally increases until they reach the most mature life stages. {Click on Chart for a Larger Image}:

Customer Life Stage Segments

Customer Life Stage Segments

As your customers age and evolve through their normal life-cycles, their customer profile changes along with this evolution including:

1) Needs & Preferences

2) Propensity to spend at higher levels 

3) Desire for higher quality products and services

4) Growing insensitivity to higher product pricing in exchange for premium service

The next chart highlights the significant life stage events that are associated when a customer migrates from one life stage segment to another. These are the life-events you should track and recognize in order to build stronger and more meaningful relationship with your customers. Customers have reported that they feel “appreciated” or “valued” 31% more from companies that take the time to acknowledge a significant life stage event vs. those who do not recognize these events.  {Click on Chart for a Larger Image}:

Customer Life Stage Events

Customer Life Stage Events

How do you obtain insights into the above major customer life events? The simple answer is that you ask them. Customers are very willing to share their preferences and life events since volunteering this information builds the potential for a better relationship with your company. This also demonstrates that, as a company, you care and listen to your customers. 

By using preference and life event subscription portals, world-class companies allow their customers take control of their relationship with your company by self-reporting their contact preferences (preferred topics they want to hear about, maximum frequency of communication, preferred communications channels, exception events that allow you to contact them even when there is a previous “do not contact” preference set,  etc.). These same relationship preference portals also allow customers to report either known or as they occur life stage events (birthdays, anniversaries, expected graduation dates, job promotions, etc.) in exchange for being recognized and appreciated (discounts, upgrades) for supplying this relationship enhancing and sensitive information.

The next chart illustrates how customer’s needs for products and services evolves as they migrate through their natural customer life stages. By offering products and services that are right for the customer’s associated life-stage, companies can experience a much higher offer acceptance rates (8-47%).  {Click on Chart for a Larger Image}:

Types of Products Offered Should VMatch Customers Life Stages

Types of Products Offered Should Match Customers Life Stages

The following chart illustrates how your marketing promotions and offers must be in total alignment with their life-stage segment needs.  {Click on Chart for a Larger Image}:

Marketing & Promotional Offers Should Match Your Customer's Life-Stages

Marketing & Promotional Offers Should Match Your Customer’s Life-Stages

The above two charts depict how both products and offers must be in total alignment with your customer’s life-stage in order to be effective. This ensures products/services and marketing offers are at the right time, with the right content and are at the right time and via the right channel (by collecting and managing life-stage channel preferences). {Click on Chart for a Larger Image}:

Customer Life Stages Segments with Matched Products, Offers, Spend

Customer Life Stages Segments with Matched Products, Offers, Spend

Bottom-line: If you are not taking your customer’s life stages and associated events into your segmentation and marketing strategy, then you are marketing with a blindfold on and not recognizing what is most important or relevant to your customers. A large US bank where I implemented this life stage segmentation schema and associated customer life-stage marketing management program witnessed a 25% increase in customer offer acceptance as well as a 18% increase in overall customer loyalty as measured by the reduction of customer defection rates.

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