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Being Customer Centered

Over the past several years, the buzz keeps growing about "customer experience." As with most buzz terms, there's a high level of misunderstanding about what the term really means --- and even more important what it means to business. 

 

In this month's paper, we help you understand what customer experience is and how it relates to brand experience.

 

We introduce two principles for being customer-centered and provide good reasons to adopt them, with their strong influence in gaining and retaining customers. 

 

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Customer Manufacturing Update
July 2015

Dear Mitchell,

 

Here is your July Customer Manufacturing Update

This month's article is actually on customer-centricity. This topic continues to garner a lot of press and many companies espouse a belief in following this approach. We thought a re-look at a paper we first published on this topic 10 years ago would be worthwhile because it is still spot on (and it shows how forward thinking we can be).

Give Being Customer-Centered  a read, or a re-read if you are a long-time subscriber.
Your Help Is Appreciated 

Many of you have a copy of one or more of our three books: It's Not Rocket Science; The Secret To Selling More; and Value Acceleration.

 

We would really appreciate you posting a review of any of these books on Amazon.com for us. To make it easy each title above is linked to the appropriate page on Amazon.com

 

Thank you in advance for your help. 

 

What You Sell Is Not What People Are Buying

 

However, that strategy is not universally true. Many years back General Motors was "found out" for building virtually identical cars and putting different brands on them. This tarnished the perceived value of the supposed higher-end brand. They then changed their approach.

Could be that if people were made broadly aware of the identical-ness of their beloved jeans in my example above, it would tarnish that brand too.

 

All that being said, people buy more than the "thing" and even if you show them their choice is "wrong," they are likely still going to make the same one. We were reminded of this again in reading about a study published in the Proceedings of the National Academy of Sciences. The journal reported on a study of violin choices by world-renowned violinists.

 

Most, if not all, master violinists would love to own an 18th century Stradivarius violin. These "gold standard" violins are believed to be superior, for unknown reasons, and can command millions of dollars when sold.

 

The study reported that in a controlled, blind test in more than one playing environment, violinists actually chose new violins over the Stradivarius most of the time. They felt the new violin was a superior instrument.

 

Can we expect this valid, repeatable study to diminish the value of the Stradivarius and cause violinists to choose the new violin over the Stradivarius given a choice? Can we expect the market value of the Stradivarius to drop? We doubt it.

 

It may seem to be irrational to pay more for an 18th century instrument, which is provably inferior to the newer instrument that costs materially less money. But to believe that you show a lack of understanding of what is being bought.

 

If you want to get higher prices for your products and services, stop being rational. People are irrational about their pricing decisions, but they are predictably irrational. And one thing is flat-out true: People will pay more for what they are buying than what you are selling.

 

The Channel Is Not Your Customer

 

Most CPG (consumer packaged goods) companies call the channel (retailers) their customers, and the end-customer is referred to as the consumer. Nice way to differentiate the two, but it's created a generation of marketers that are customer-focused and consumer illiterate.

 

In truth, most big retailers know more about consumers than do many CPG marketers and thus the retailer not only has bargaining power due to their size, but knowledge power because the CPG marketer knows too little about the consumer, due to their "customer-centric" focus.

 

This was brought home again in an article in Advertising Age on how Kimberly Clark is getting serious with their digital coupon tracking. Really, just now? Unfortunately yes.

Paper coupons have always presented a problem of not knowing who redeems them, and whether they are helping to create new users or simply offering existing consumers a discount. It's been known that a huge percentage are never redeemed.

 

The advent of digital coupons several years ago should have fixed all that. It didn't because marketers simply used them as a low-cost "paper" coupon. The delivery method was less expensive and the consumer carried the printing costs. Big win here as the cost of delivering coupons dropped. However, the key knowledge of who used them and how was not improved. Why not? Perhaps, because marketers are just too focused on their retail customer.

 

The following excerpt from the article sums it up:

"K-C has begun regularly tracking not only how often and where people redeem digital offers, but how widely they share them with friends and through which social channels, according to Dan Kersten, senior consumer-promotion manager for Kimberly Clark. It's also starting to analyze which of its consumers are most influential in spreading offers to friends, and at which retailers they have the most impact. So instead of (fully anonymized) consumer-data sharing being a one-way street from retailer to manufacturer, K-C is compiling deal data that it can share in the other direction."

 

Why did it take so long for a great company like Kimberly Clark to catch on? And why are they leading the pack after several years? Marketers need to get back to understanding the consumer. Retailers carry what the consumer wants to buy. If CPG (or other companies) abdicate that knowledge to the channel (retailer/distributor/wholesaler), brand value will diminish and private/house brands will rise. Brand marketers (house or otherwise) have to understand the consumer.

 

Nothing else matters near as much.

 

 

Back to the Future?

 

In October of 2009 we posted on our blog about the revival of so-called 1-1 or personalized marketing, and our suggestion that it was not really "new." And we don't mean just because Peppers and Rogers published The One on One Future back in 1993.

 

However, while the promise of personalized marketing has not been fulfilled, it continues to be the "future." (Reminds us of an expression in the semiconductor industry, that Gallium Arsenide was the technology of the future and always would be. Of course with the advent of LEDs, the material did finally have its day, but we digress.)

 

In a recent study by Adobe, CMOs said that personalization was a key to the future of marketing. Maybe this time. However, it should be noted that in the same survey almost half of the CMOs say they are trusting their gut to drive their marketing investments.

 

The more things change, the more they stay the same. 

 

Free Reading Guide

If you have a copy of our book Value Acceleration, you can download a free reading guide to help you and your team get the most from the book. (And btw, the book is also available in a Kindle edition.)

We appreciate your feedback to help improve these

Updates. If there are others you feel would benefit from this issue, use the Forward email link just below on the left.

 

Sincerely,

 

MGSig

Mitchell Goozé

 

Customer Manufacturing Group, Inc.

www.customermfg.com 




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