In the privacy of your own room, with no one prying into your innermost thoughts and feelings, what word best describes your real attitude towards your customers? Is it a denigratory term such as “punter”? Or “target”, perhaps? Or just that faceless, anonymous entity called a “consumer”?
In some cases, it may even be “king”, but here’s a thought. As we look towards a marketing future shaped by challenges such as globalisation and the emergence of digital TV, the Internet and e-commerce, the biggest challenge of all won’t lie in mastering new trends, tools or techniques, but within marketing’s very mindset: the assumptions marketers make about the nature of their relationship with customers.
A core assumption underlying most modern marketing is that it is an extraction industry. Just as mining and farming generate profits by extracting wealth from the natural resources given to us by nature, so does marketing. The difference is marketing’s natural resource is not rocks or soil but something we call “the market” and marketers have to maximise the money their companies can extract from this market: from customers.
Despite ubiquitous rhetoric to the contrary, most marketing still “concerns itself with the tricks and techniques of getting people to exchange their cash for their product”, as marketing guru Ted Levitt complained 40 years ago. “The customer is somebody ‘out there’ who, with proper cunning, can be separated from his loose change.”
Tomorrow’s movers and shakers in marketing will be those who transcend this extraction mentality. By avoiding the pitfalls it creates, they will discover new opportunities.
One major pitfall is the “us” and “them” barriers it sets up between marketers and their customers. Marketing is not something marketers do with their customers, but to them; for marketers’ purposes, not their customers’. Which obviates marketers’ endless quest for loyalty. As business strategist John Kay points out: “If we treat others in an instrumental and calculating way, they are likely to respond in an instrumental and calculating way.”
Indeed, according to Michael Lanning, a former McKinsey consultant, marketing rhetoric about discovering and meeting customers’ needs is often nothing more than narcissistic egotism in disguise.
When marketers look outside the organisation to focus on customers, they do so only in so far as it helps to solve their own internally-driven problem: how to close a sale. Even when they crown customers king and declare “everything we do is driven by you”, all they are doing is staring into a “managerial mirror” framed by their circumstances and their objectives.
Marketing’s customer-focused rhetoric, he argues in his new book Delivering Profitable Value, “only amounts to asking the customer to hold the mirror for us while we continue to gaze into it”. And because “thoroughly self-absorbed egotists can only understand relationships in terms of themselves… [they] fail in many relationships and can’t understand why”.
These are hardly flattering descriptions and seem a tad unfair. After all, how are companies supposed to survive without “separating loose change from their customers”? And how better to do this than by meeting customers’ needs better than anybody else? Marketers may seek to maximise the revenues they glean from their customers, but the way they do it actually benefits these customers.
Nevertheless an alternative mindset is emerging, although it is still articulated in a number of different ways. In his book “Customer Intimacy”, Fred Wiersema, co-author of “The Discipline of Market Leaders”, exhorts marketers to “abandon the old us-versus-them mindset to embrace a single common insight” – of the mutual benefits generated by “the co-operative pursuit of results”.
Likewise, hi-tech marketing guru Regis McKenna asks marketers to “treat customers like partners”, while Michael Dell, founder of Dell computers, focuses on what he calls information partnerships. By making it possible for suppliers to share openly critical business information with customers, the Internet will “transform economic value”, he says.
“A manufacturer will no longer be able to afford to treat a supplier like a vendor from whom every last ounce of cost-saving must be wrung. Nor can a customer be treated simply as a market for products and services at the best possible price,” he writes in The Economist’s World in 1999. “Instead, both suppliers and customers will come to be treated as information partners, jointly looking for ways to improve efficiency across the entire spectrum of the value chain, not just in their respective businesses.”
Wiersema, McKenna and Dell assume such partnerships mainly apply to business-to-business relationships, and McKenna and Dell see them in terms of new communications technologies. But the notion of customer-as-partner has a much broader application.
Once you escape the transaction trap – focusing only on closing the sale – it’s obvious that, if they wanted to, consumers could bring a whole range of things other than cash to the party – things denied to the company which lives by arms-length transactions alone.
These things include information, ideas and insight; interest, passion and enthusiasm; time; physical labour; resources (such as, say, private cars used to transport goods); and the ability to communicate to other customers.
They could help companies solve all manner of problems – from market research, design and research and development, through to product assembly, service delivery, logistics and communications – much more easily, quickly, and cheaply. One trivial example – when Ikea customers transport and assemble their furniture, they willingly take on jobs normally done by the retailer/ manufacturer.
But the emerging mindset requires customers not only to buy products or services but to become partners. Brands come to represent people, relationships and attitudes rather than products and services.
Win-win outcomes are no longer simple corollaries of the transaction, they have to become a linchpin of the interaction. Customers can no longer be “acquired”, they have to be recruited.
Marketing communications move from “Buy Me!” to “Join Me!”. And no matter how clever their marketing techniques and tools, brands that fail as partners risk being left on the shelf.