Marketing must Prevent Customer Value Starvation to Increase Profits

0
40 views

Share on LinkedIn

The role of marketing is to create value for all stakeholders according to Phil Kotler. Stakeholders include the owners, customers, employees, partners, society and environment.

I want to talk about how marketing can create long term value and not short-term value focused on selling more. What is bothersome to me is that all of us have horror stories about our experience with our suppliers, be they banks, insurance companies, white good companies, laptop and mobile companies etc. The problems are payment related, information related (sometimes getting wrong information on the website), service related, complaint related, solving problems, understanding products and other difficulties. Why is this? Why isn’t this being corrected as a priority. How can companies be customer centric, give good experience and value if these problems persist?

One basic problem exists in many companies which is Customer Value Starvation reducing value to customers. And companies don’t even recognise this problem as they are too busy chasing high faluting ideas. This prevents them from focusing on those niggling issues that all of us consumers face.

To create value for shareholders, companies have to first create value for the other stakeholders. You cannot create value for shareholders if there are no stakeholders: particularly customers. You and your company live in a society, and have to pay heed for the good of society and the environment, and for employees and partners.

The process is that the company creates value for the customer to be profitable. This is where marketing comes in.

What is the value that the customer is looking for from the company? How does the company provide that? Is it on cost or benefits to the customer? What is more important to the customer? What can we make more important to the customer (decommodification)?

When we add value to the customer, he comes back and adds value to us: By buying, by buying more, by telling others, by re-buying.

Sounds simple. Why does it not work? Why do many customers remain unhappy? They cannot reach companies to get help, to hold their hands, to get proper information, or being serviced well, by service people or pickup people or delivery people (who come without appointments), for not being able to complain or having your complaints listened to, attended to.

How many customers have the same problem? Why does the company not solve these problems?

Here lies the major issue.

Generally, these problems seem trivial to the top management, because they are so busy tackling far bigger issues, market expansion, a new plant, financing etc etc. They ignore Customer Value Starvation.

The people who have to deal with these ‘trivial’ (not so trivial in my opinion) problems are low level or front-line staff often poorly trained or poorly equipped and with no authority to really solve these problems. And the problems prevail. They never get solved and will cause others a problem.

Ask yourself how many seemingly trivial problems your supplier causes you, and how much time it takes to do this. This is a waste of time for the customer. Just as much, it uses enormous time of company reps, and costs them money.

Take some examples.

I am trying to get an additional credit card. The link the company sends me does not work, and I cannot tell anyone that it does not work, because their staff cannot understand and keep insisting the link works….so where am I left? Suspended? I try to get an additional credit card through Citibank. The website does not work properly and I cannot download or fill a form. Whom do I complain to? I ask my relationship manager. She says get a form from the branch, fill it. After visiting the branch, I fill it and send it to the branch, with photocopies of address proof and tax information. I am told I have to come to the branch again to prove I am legit, even though I have an account there. Moreover, she could have told me to do this on the net. Being a senior citizen does not help me with the bank.

A friend tried to renew a SendinBlue mass mailing account. It did not accept his Amex or Citi card. His associate also tried to renew the account through his debit card. Same problem. We tell SendinBlue about this. They raise a ticket. The answer is check with your bank. We are perfect.
Finally got through to someone who could listen and she had our account re-set, and we could pay right away (was this magic)? Why is the customer always wrong?

I wrote an article about my experience with Air India https://www.businessworld.in/article/Air-India-Whither-Goest-Thou-Tata-How-To-Create-Value-/05-06-2022-431459/

I gave many ways to improve. Not an iota of response. However, I also spoke about seats not working. Unbeknown to me, because not working seats were sold, business class customers were relegated to economy. The regulator found out and fined Air India who then got serious about this problem. Why not of their own volition?

Here are my questions. Why doesn’t anyone care? Why do they duck the problems? Why isn’t there a mechanism to correct these problems and improve customer value? What is preventing it? Do the companies think this is not important? Do they feel it does not matter?

Too many marketers and the CEOs opt for new, seemingly good ideas of improving things, in providing delight, fostering loyalty but they forget the basics. Get the basics right and everything will fall into place. You customers will not complain. Your complaint handling costs will go down and your customer retention will go up. (this equates to more profits!)

So, my next question is, who is responsible for solving these problems. The answer is no one. This is where marketing should step in. Isn’t the role of marketing to create value. Why don’t they take over and stop these fundamental, niggling problems that cause grief to customers?

 Here are some ideas:

  1. Appoint a problem noter and a problem solver particularly on what the customer sees. For example, does the website work, is the information accurate, is it easy to navigate? Do my links work? Why is the customer complaining? Can I check if his problem is genuine? How can I solve it?
  2. Also, do not stop at solving individual problems. If the problem is systemic, change the system so that others do not have the same problem. Remember, that very few customers complain and even fewer do something about it, like I am trying to do.
  3. What causes staff to get frustrated? Use Customer Centric Circles to solve employee problems, and you will solve many customer problems also. These Circle are discussed in 5. below
  4. Do not run companies with functional thinking but with a heart. Most customers will accept problems if they are brought into the loop. Use co-creation and co-operation to do this.
  5. Be serious about eliminating Customer Value Starvation and simple, niggling problems
  6. And to change attitudes of the front-line staff, use the Customer Centric Circles approach as told in my book Total Customer Value Management. This gets the front-line people to take responsibility and help them influence senior management to change systems and procedures for the benefit of the customer and to streamline things for the customer, and make operations more efficient.

 We demonstrated this at Godrej pest control, and

  1. Service calls by service people went up from 3 to 4 per day,
  2. Sales went up by 30% because of better coordination and faster response, thereby increasing customer value.
  3. Less pressure on price
  4. Incorporated a courtesy system to be courteous internally and externally
  5. Achieved better team work and cooperation
  6. Call officers achieved a 30% increase in referrals. Call officers better at handling irate customers
  7. Better feedback of customers by the technicians
  8. Inspection reports are better making it easier for technicians to follow up
  9. Less irritation of customers
  10. More involvement of top managers.

You can see the great value of Customer Centric Circles from the results shown above. These are documented in my book, Total Customer Value Management.

Next you can help employees and front-line people to become more aware and incorporate the 7A’s in their work. Don’t try to get to customer delight on day 1 that may impact only a few customers. That will come with time. However, get the basics right and you will reach the top. Work on this! The 7A’s are:

Awareness: Leaders and executives and frontline people must be aware of things around them, they must be curious, they must want to know more, they should notice more.

If executives do not notice the staff not wearing masks or poor air conditioning, how can you change the situation?

Attitude: Your people must have a super attitude, positive, forward thinking and multi-dimensional. Able to be strategic and innovative to practical. Some executives are functional in thinking, and this needs to change. Mind-set plays a major role.

If you promise, your attitude must make sure you follow through.

If you do not try to get things rectified, then problems get larger. If you do not notice (awareness) or do not care (attitude) how can things be rectified?

We have run customer centric circles to get front line people and staff to take charge and talk about problems and solutions. Attitudes change as people become aware of what they are doing wrong and what they should eb dong, Customer Circles have worked at Tata’s, Birla’s, L&T, Godrej etc.

Ability: Much of this is innate, but some comes from learning and experience. A great mind-set helps here. Ability is important to be caring, for wanting to help customers.

Agility: This comes from a mind-set and mental make-up

Adaptability: Being able to change with circumstances

Anticipation: Being able to be ahead of others by forward thinking and view. Part of this comes from a 6th sense which is developed in your mind

Ambidextrousness: Capability of doing more than one thing at a time; capacity to think of different things.

You will be on your path to reduce Customer Value Starvation.

Customer Value Starvation can Kill is a book I have written with Walter Vieira to make marketers understand and prevent Customer Value Starvation. 

LEAVE A REPLY

Please enter your comment!
Please enter your name here