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Customer Manufacturing Update |  |
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Dear Mitchell,
Welcome to the March 2006 Customer
Manufacturing Update. This month's
Update focuses on the power of process
management in improving marketing performance.
If you have friends or colleagues who would appreciate receiving this e-zine, feel free to forward a copy to them using the "Forward e-mail" link at the bottom of the e-zine.
Any competitive firm today has world-class manufacturing, operations or service delivery (whether in-sourced or out-sourced). Yet marketing and sales still operate at levels of performance that your grandfather would be familiar with. With the demand for "accountability" in Marketing on the rise, more of the same is not going to cut it. In this month's white paper we discuss the concept of applying time-proven process management methods, which have transformed other business processes, to marketing and sales.
We never cease to be amazed at the way good marketers can find to differentiate their products. Even to the point of ... well you decide. Champagne is now available in the U.S. in cans. (Our French subscribers, if they didn't know, are really scratching their heads at this one.) Francis Coppola and his Niebaum-Coppola Winery has introduced the Sophia (named after his daughter) brand of champagne in a can. So you don't get the wrong idea, it comes in a 4-pack not a 6-pack. And the 4-pack has very upscale packaging (check out the picture) and it's priced at $20 But it is still champagne in a can! Then again, customers think it's cool, because it's different and, apparently, the champagne is quite good. (Again with deference to our French readers, "good" may be a relative term.) In the meantime, at the other end of the beer and wine spectrum we have the beer crowd, who are busy creating $100 bottles of "beer." To be fair, only Sam Adams Utopia is priced at $100 making it the world's most expensive beer. Limited to 8,000 bottles, some have sold for $200 on eBay. However, Stone Brewing, Dogfish Head, and Anheuser-Busch have created premium bottled beers selling at $9 to $16 per bottle. Let's see, beer now costs more than champagne. What are we going to do with our "champagne taste" and "beer budget?" We guess we'll have to rethink the use of that phrase. So what do we make of all this? Simple, be different in a way that matters to your customers. Don't let existing paradigms keep you from thinking differently about what your customers might value. (This e-zine is so complete, we have been able to use paradigm, opine, and obfuscate [they come up later in the e-zine] all in one issue.)
Making Marketing "accountable" has become a hot topic in the last year. So, now the experts are trying to decide "accountable for what." We have read numerous articles recently where the topic of what marketing should be accountable for is discussed, as if this is a difficult subject. We know of in-depth surveys that have been done asking CMOs and CEOs what marketing should be accountable for. The sad truth is that the answers are all over the place. Given that a consistent, useful definition of Marketing seems to be illusive, maybe what Marketing should be accountable for is illusive for the same reason. All that notwithstanding, and for long time readers of our "manufacturing" oriented approach to the demand-side of the business (marketing/sales), it should be no surprise that we don't understand the difficulty on the one hand, and recognize that the difficulty in defining accountability is a "root cause" of Marketing's poor performance. Since every process is perfectly constructed to achieve the results it is getting, it is no wonder that the marketing/sales process (Customer Manufacturing) is so intermittent in most companies. If you can't define the output, how can you improve the process? To us what Marketing is accountable for is quite simple to define: The creation of loyal, profitable customers. That's it. (We will concede that in some publicly traded companies, hyping the stock [oops bad choice of words] may also be Marketing's responsibility in addition to, or to replace, it's actual job.) Since we believe that Fred Reichheld has found a very useful way to measure customer loyalty, and many experts have opined (we didn't think we used this word much, but we just noticed that we have used it two months in a row) on how to measure customer profitability, measuring Marketing Accountability seems straightforward to us. But maybe we've been thinking about it too long, or perhaps the need to obfuscate (another useful word) is getting in the way of action. Anyway, if you see it differently, please let us know.
We are aware that while espousing Customer Service and Customer Centric does indeed make good copy, actual performance may be increasingly falling short of the mark ... again. It appears that more and more companies in both the B2B and B2C arenas, particularly the latter, while definitely interested in their customers as a revenue source, are inversely interested in customers as the people behind the dollars. This inverse love/hate relationship is reflected in policy, practice, conduct, and attitude. While the American Customer Satisfaction Index did rise slightly in the 4th Quarter of 2005, if is still below its high point, and it is primarily a B2C index in any event. Much has been written about the value of treating customers great, and many companies do make it a focus of their mission statements. But, as the economy improves, too many begin to take their customers (perhaps soon to be former customers) for granted. According to a study done by the University of Michigan, the stock of publicly traded companies with higher customer satisfaction scores out performed the S&P 500. While this may not be concrete evidence of the value of treating customers well, it is an additional data point. So, why don't more companies leverage the value of great customer service? Probably because the cost of providing customer service can be quantified and the cost of not doing it is harder to quantify. Consider the movement of customer service call centers off-shore. By itself this is not a problem, but too many companies have contracted with poor performing call centers to further "save money." This is an example of knowing the cost of something without knowing its value. We'd like your input on this subject. What have you seen? What has your company experienced? Please share your personal or business experiences with us via e-mail or telephone. We, with your permission, will share the stories we get and, if we get enough to develop some conclusions, we'll share those as well.
We appreciate any feedback you can provide to help us make sure these Updates give you value each month. Feel free to respond to this e-mail with any comments or suggestions for future topics or ways we can make these Customer Manufacturing Updates more valuable to you.
Thank you for your interest, and if we can provide
any
additional assistance in sales, marketing, strategy, or
innovation to help you increase your sales,
let us know.
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