The Marketing Model: Old vs. New - Customer Relationship Management

The historic components of traditional marketing thought have been the so-called 4 Ps—product,price,promotion,and placement. While it’s probably needless to say that these are still to be considered as part of a philosophical marketing portfolio,what has to be said so that old school marketers hear it is that there is little value in thinking in those terms any longer. They are part of a world where value was based on products produced and services provided— so many years ago. With the 4 Ps as the predominant marketing logic,the perceptions of marketing campaigns immediately calls up to a customer words like hype,buzz,spin,b.s., corporate shills and . . . you get the message.

There are three competing logics that need to be clearly distinguished so that marketing departments can get on with their new roles as the entry point for conversation. I’m going to briefly go through each so there is no longer any excuse except all the excuses that are being used to not do what’s necessary now.

Broken:Product-Centric Marketing Logic
Product-centric marketing was based on the communication of tangible value through the attributes of a product. Remember this one? “Winston tastes good,like a cigarette should.”The idea behind this thinking is that companies win by producing superior products and enhancing those products’ features over time. The success is measured by how well they are able to communicate these features to customers to get the response they are looking for—which of course is the purchase of the product.

However,in an era where international commerce is increasingly easy and e-commerce a norm for business,this differentiation is increasingly more difficult. Where a “good tasting cigarette” might have been a reason for success,now, because cigarettes can cause cancer and because “good” is not enough of a product differentiator to stimulate any response with an increasingly sophisticated customer,these kinds of pitches,even for health-friendly products,don’t carry any weight.

As Robert F.Lusch and Steven Vargo point out in their seminal work,The Service-Dominant Logic of Marketing:
Products are merely means to an end. To help customers achieve their ultimate goals and outcomes,products and services need to be integrated into customer solutions that solve the complete customer problem. [Author’s note: the personal agenda of the customer] This move toward solutions demands a different mindset.

Broken: Company-Centric Marketing Logic
This always looks better than a product-centric approach to marketing but isn’t really at all. The basis for this thinking rests with the idea that the company is more important than the customer. Where it differs from product-centric marketing,it attempts to satisfy the customer by utilizing the firm’s resources to get across the message that the company feels the customer wants to hear. This is more brand than customer focused. The brand isn’t based on the relationship that the company has with the customer,it’s based on the presentation of the corporate message with the customer viewed as the passive recipient of that message. The communications are one-way and en masse. There is no differentiation for the customer,except as defined by customer segments. But the logic is not a service-dominant one. The customer is not served,except on a branded platter.

The supposed value of this kind of logic rests in brand propagation and the identification of the consumer with the brand. But it sadly ignores the customer’s need for value. The brand is still built around the products or solutions that the company provides,rather than the kind of equity built around the trust in the company.

New Marketing Logic: Customer-Centric
The 21st century demands a new,more workable customer-centric marketing logic. Rather than focus on the product offering or the brand per se,it emphasizes those interactions that assist the customer in achieving multiple desired outcomes. These would vary according to unique customer needs and specific contexts. That assistance would take the form of offerings that create a personalized value for the customer.

What makes this different from the other two approaches is that the skills,knowledge made available,and the processes available to the customer are part of the engagement of that customer. They are no longer just a product of internal operations—they are a value-add to the customers who need them.

All in all,the new marketing logic follows what I’ve deemed since 2006 as principle number one of CRM:“Value and values are given and in return,value and values are received.” The new marketing needs to be a long-term commitment that involves the customer,especially influential ones (more on that later) with the company. The company needs to be proactive about this too. The customer is moved into the sphere of “value-in-use.” Marketing doesn’t just engage in the old logic of product pushes and brand messages,but becomes an agency that helps customers derive value from multiple,ongoing interactions with the firm and its products and services. Marketing becomes a department that not only makes sure the customer is aware of products and services that are available but becomes the source of content that is of value to the customer.

For example,Kohler and Company has an interactive website where you are able to design a kitchen or bathroom using the product catalog. But rather than just doing that,they provide content to the prospect who is interested in the design. Content that covers latest trends in kitchen appliances or financing options so that you can afford that astonishingly expensive remodeling of your kitchen that staggers your imagination and life savings. The content is part of how marketing engages the customer. They are providing knowledge,a source of competitive advantage. I know that if I want to get the details on the creative and practical side of designing these Kohler specialty rooms,I can set up my own My Kohler.com “space” and I can get all the content I need to understand my options and think through my plan.

By making knowledge instead of product the source of competitive advantage,the customer’s willingness to engage is increased. But keep in mind this is still only one-way communication. There is so much more to be thinking about.

In the new marketing model,sales and marketing are not the only aligned departments. There has to be a commonly constructed purpose that makes mutual sense for a relationship between marketing and customer service.

Before you get all twisted about this,think about it this way. Part of marketing’s responsibility,forced by this social change,is engaging the customer in a conversation. One way they can do that is to figure out what the customer is saying outside the company’s four walls. That means monitoring and listening to the conversation going on about the company. Once they’re able to hear it,they will,with the right tools,be able to figure out who are the most influential people doing the talking. This will affect how those particular garrulous customers are treated by the company. That will impact customer service,marketing offers,and all in all the relationship that the mini-lord of conversation has with the company.

If I know that the influencer is someone who is negatively impacting others because of a wrong that the company committed,I can perhaps fix it and,if it’s timely enough,can turn it around,as did one clothing apparel company. One of their customers was a strong negative influencer located by the marketing department folks monitoring Facebook for possible problems. She was head of a small but growing group of gripers on Facebook. Because marketing found her,they were able to recruit her to a customer advisory council,reversing her stance and impacting her membership in a much better way as a result.

The new model is always aligned around the ongoing experience that the customer has in his or her interactions with the company. Marketing becomes the seeker of conversation,the teller of stories,the purveyor of content,and the one at the door shaking the customer’s hand before anyone else. They not only talk to the customer,they listen to them and act accordingly. Marketing moves from being the pusher of product,or the brand protector,to the initial contact for customer engagement and value creation.

What are the best ways to take this new marketing model and run with it? As they said in the Broadway musical The Wiz,time to “ease on down the road.”


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