Consciously deploying social in your customer management strategy


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In our earlier reports, Professor Merlin Stone and I explored some basic models of customer management, ranging from key account management, product marketing, relationship marketing through brand and service, to spot buying and even auctioning (traditional and online). However, these are what we call
“component models” – in practice companies combine these models in very complex ways. Their success comes from:

  • How they balance the different models, in different markets or market segments
  • How effectively and efficiently they deploy them, relative to their competitors
  • How the experience they provide to customers through the models they adopt delivers employee and customer commitment to the brand
  • How quickly they evolve them to meet the needs of changing markets, product substitution, digitisation, regulations, competitive pressures, etc.

Perhaps the most interesting thing about models is that they are not necessarily deployed consciously, in the sense that the company uses the terms used here, or interprets their success or failure to successful deployment of particular models. We liken this to the example of Moliere’s Le Bourgeois Gentilhomme, who was ecstatic when he learnt that he was speaking “prose” because he had no idea he was doing it. For example, excellent management of
large customers may come from formally deployed models of key account management, as at IBM, BP or DHL, but might also come from a sales team that is organised geographically, but trained and motivated to give excellent service to customers, while prioritising their time according to the likely revenue of each customer. One might argue that Walmart Asda’s policy of a wide product range and high availability at low prices to customers delivered by close attention to logistics and relationships with suppliers, results in a classic pure retail customer management policy that is one of the best. Tesco combines this approach with more customer focus (e.g. a “light” relationship) with some success, though it has to be careful to ensure that the approach does not add cost and so make it hard to compete with Asda. Asda and Tesco are two high performing retailers with different business models.

However, there are also some component models that tend to reappear, whatever other models the company has combined. For example, strong branding seems to unite the successful adherents of many different models. This is because for nearly all models, branding is a necessary condition for success, though not a sufficient condition. The appropriateness of the customer experience actually delivered, through the product and service, is critical to profit sustainability, and this is where the disciplines of branding, CRM, product and pricing, HR, channel management and logistics all overlap and need to be
aligned. Customers who don’t like your brand won’t buy products from you even if you are cheap, perhaps particularly not if you are cheap, or at the other
extreme won’t trust you and enter into a relationship with you. That’s why you must understand how customers feel about the brand, and in particular how
customers who spend a lot on the category feel about it. Increasingly it seems, their emotional loyalty (i.e. their ‘engagement’ or ‘commitment’) needs to be
examined, not just whether the product and pricing is right. Furthermore, if a model is deployed “unconsciously”, then even if it succeeds
for years, the risk is that if market conditions change and so the “ideal” model changes, the company may not react appropriately. Thus Xerox in the photocopier market for long pursued a policy of complex, innovative products, with many add-on variants. Imperfect reliability was underpinned by excellent service. They were challenged by the Japanese model of standard products, all features included, highly reliable until end of life (which came sooner), but much lower cost. It took Xerox ten years to react to the new model, but meanwhile their senior management was focused on measures related to their old model, such as service revenues. Put simply, the line of sight used by senior management depends on the explicit model. When this changes, or when the implicit model is stronger, senior managers may be managing the wrong things, because they are looking at the wrong things.

Note too that the model may be multilayered, with people at one level of the organization thinking it is one model, and at another level thinking it is
another. For example, in some retailers with loyalty cards, those managing the loyalty card operation believe they are managing according to a relationship
marketing model, but senior managers are happy with the success gained from the “same old retail model”– which may or may not work going forward.

We see this phenomena happening today in many companies with the advent of ‘social’. Social is disrupting traditional models of customer management, but few organisations are recognising it. Many of those that at least recognise the potential importance of ‘social’ continue to use traditional customer management model measures and organisational approaches. ‘Social’ is customer centricity on steroids! The ‘social’ philosophy needs to go to the heart of the business, as many posts on this blog and others point out. The socially enhanced customer model encourages purposeful transparency, interaction, participation and engagement with customers. We say purposeful because the purpose is to engage and sell, not just engage. It increasingly relies on real time, or near real time communications, which provide contextual, relevant, engaging communications, not ‘interruptions’ to a customer’s day. This means new data sources and combinations, new technologies, new ways of working, new ways of measuring and a new way of thinking. Call us to talk more about how your company can adapt its customer management model.

Republished with author's permission from original post.

Neil Woodcock
Neil is Chairman and CEO of The Customer Framework Ltd. and visiting Professor at Henley Business School. An honours graduate, he worked in B2B sales & marketing with Mobil Oil, B2C marketing with Unilever and consultancy services with Andersen Consulting & McKinsey. Neil has written 5 books on customer management, is on the editorial board of leading journals and is an Honorary Fellow of the IDM.


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