Why Marketing Should Own Customer Loyalty


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Who Should Own Customer Loyalty

When I ask a room full of marketing professionals,

What is the role of marketing?

the typical responses are some variation of

“Getting customers into the sales funnel”.

When I then ask them

What role do they play in keeping these customers happy and loyal?

Most of the marketers indicate that it is not part of their role. When I then ask them –

Whose role is it?

I get varied responses –

Its the role of customer service or account management, sales  and not marketing.

What marketing teams don’t understand is that keeping customers happy and loyal should not only be the role of marketing, but should be a key focus area for marketing.

We all know that it is easier to sell to an existing, loyal customer than to convert a new prospect to a customer. Marketing spends a lot of money, time and effort to bring in new prospects into the sales funnel. By just spending a fraction of that time, effort and money, marketing can have an impact on customer loyalty.

By becoming custodians of customer loyalty, the marketing organisations will not only make their own jobs easier, but also get to know their customers better, which in turn leads to better insights about their customer behaviour, which then has an impact on new customer acquisitions.

Thus, just by taking ownership for customer loyalty, the effectiveness & efficiency of the entire marketing function goes into a positive feedback loop.

What do you think? Should marketing own “Customer Loyalty”?

Republished with author's permission from original post.

Mukesh Gupta
I currently work for SAP as Customer advocate. In this capacity, I am responsible to ensure that the voice of the customer is being heard and play the bridge between customers and SAP. Prior to joining SAP, I have worked with different organizations serving in different functions like customer service, logistics, production planning & sales, marketing and business development functions. I was also the founder-CEO of a start-up called "Innovative Enterprises". The venture was in the retail & distribution business. I blog at http://rmukeshgupta.com.


  1. Hi Mukesh

    How can marketing ‘own’ customer loyalty when it neither has responsibility for nor authority over those downstream parts of the organisation that are responsible for managing the customer after the point of sale?

    Graham Hill

  2. Glad you asked. Thanks for starting the discussion. The challenge faced by the issue you raise is this: the word “role” is a tricky one! Who “owns” a focus is also dicey. How about this, “The bottom line should be the role of the finance department” or “The Human Resources department should “own” diversity” or “Selling should be the role of the sales department.” I would suggest that “everyone in the organization” is the best answer for all of these examples.

    The late Sam Walton, found of Wal-Mart said, “The customer is the boss. He (or she) can fire everyone in the organization from the CEO on down simply by spending his (or her) money elsewhere.” That sentiment would suggest that the “role” and “ownership” of customer loyalty belongs to everyone. Deciding the department that best facilitates, enables, supports the achievement of customer loyalty varies from company to company. The CEO of Zappos would tell you that he is the chief customer loyalty officer.

  3. i think the customer and his loyalty is the role of everyone in a company and not just one company. It has been proven that one department alone can not handle this and break silos

  4. Simple rule: Everyone in the enterprise, irrespective of function, level, or location, ‘owns’ the customer experience, perceived value delivery, and customer behavior. Much of this builds from a customer-centric culture.

    W. Edwards Deming understood the role of culture in providing customer benefit and leveraging customer relationships: “Customer expectations? Nonsense. No customer ever asked for the electric light, the pneumatic tire, the VCR, or the CD. All customer expectations are only what you and your competitor have led him to expect. He knows nothing else.” This is the essence of differentiated value perception, and it is created, and reinforced, by each employee – – what I’ve defined as employee ambassadorship.

  5. Hi Chip, Gautam

    The suggestion that everyone owns the customer is wishful thinking at best and utterly meaningless at worst.

    As the old saying goes, ‘what gets measured gets managed, what gets managed gets done’. From a managerial perspective, unless loyalty KPIs (take your pick) are part of your personal balanced scorecard, against which you will be measured when it comes to your annual review, then you are not personally responsible for customer loyalty.

    The idea that all staff who come into contact with customers are responsible for their loyalty is grounded in Gummesson’s 1991 paper on ‘Marketing‐orientation Revisited: The Crucial Role of the Part‐time Marketer’. But as Gummesson showed in his paper and others have confirmed subsequently, making everyone responsible for customer loyalty is fraught with managerial difficulties.

    Hope is not a strategy. In most organisations, making everyone responsible for the customer’s loyalty is an utterly hopeless strategy.

    Graham Hill

  6. Very interesting question. Who indeed should “own” the customer — loyalty, experience, relationships …?

    I agree with Graham that if everyone owns something then no one does. It’s also true that everyone needs to have a sense of ownership appropriate for their role.

    Marketing owning customer loyalty might work in some organizations (B2C?) but not others.

    In a recent survey I found a tendency for “leaders” (above average business performance) to favor the CEO or a CCO as the overall owner of customer relationships. Laggards tilted a bit to marketing, service, or none. But the differences were small.

    Maybe “accountable” would be a better thing to assess. Who is accountable for customer loyalty and how are they measured and rewarded? If loyalty is impacted by multiple functions then each function should have some “skin in the game.”

  7. Hi Bob

    Bain & Co research on ‘Who Has the D(ecision)’ highlights the problem with Chip, Gautam and Michael’s idealistic suggestion that everyone owns customer XYZ (fill in your description of choice). The research highlights that there are a number of key roles in decision making; the key ones for this discussion being the ‘Decider’ who is responsible for the decision to be customer-centric and the ‘Performer’ who has to be customer-centric. The CXO may decide that everybody is responsible for the customer, but that does not mean that customer facing staff will ever get to perform their wishes. As Parasuraman et al showed in their 1985 paper on ‘A Conceptual Model of Service Quality and its Implication’, there are a number of gaps that prevent the CXO’s wishes being implemented; the key ones being the gap between the the CXO’s wishes and customer operating procedures and the gap between customer operating procedures and how they are interpreted by customer-facing staff during interactions with customers.

    Practically all, if not all of my clients express a desire to put the customer first. Their CXOs talk about it all the time. But as survey after survey shows, none of them actually manage to put the customer anywhere near first.

    There is a huge gulf between customer-centric theory and practice. Wishing it were otherwise won’t change anything.

    Graham Hill

  8. Graham, you take me literally. Everyone owns the Customer is absolutely necessary (don’t get hung up on the word ‘own’) This means everyone has a responsibility to the Customer. The question is who is the coordinator or the point person.
    Generally in companies, the CEO says, oh yes, we are taking care of the customer. Joe Blow from marketing or from Customer Service is in charge. This person is ineffective because he has no authority, nor is there a culture or a departmental responsibility for the customer…
    In my book Total Customer Value Management I outline the possible customer tasks for each department. So for example, finance knows that they have to react to and correct any customer billing complaint. They are part of the customer billing correction team, coordinated bu Joe Blow.
    This exists in many companies I work with, and works well

  9. Hi Gautam

    If you look at the annual reports of most companies they prattle on about being customer-centric. But if you look at the their CSAT, NPS or CES scores you find that they are not very customer-centric at all. For example, Bain & Co research on ‘Closing the Delivery Gap’ asked CXOs whether they thought their companies delivered a superior customer experience. Over 80% of them agreed. The survey also asked their customers the same question. But only 8% agreed. Quite some service delivery gap!

    Fixing billing problems that shouldn’t have happened in the first place is not going to help any company become customer-centric.

    The research on business profitability casts doubt on the value of customer-centricity anyway. But that is a whole different question.

    Graham Hill

  10. Walking past the repeated finding that CSAT, NPS, and CES don’t connect well to the dynamics of customer emotion, memory, and behavior, the fact that there is a gap, nay a chasm, between customer perceptions and the views of customer value delivery by employees in most companies isn’t much of a revelation. In the SERVQUAL model, one of the mist significant, and least explored, perceptual gaps identified by Berry, Parasuraman, and Zeithaml is that of customers and employees, at all levels, functions, and locations. It not only exists, the insights generated through identification of these gaps can speak volumes.

    In our customer experience consulting assignments, we often conduct research with customers to understand their perception of experience and value elements. We also conduct parallel research with employees, to get their perceptions (in rating form) of how they think customers view the company’s performance in these same areas. Results, in perceptual gap form, are often astounding but rarely surprising. We expect to see these gaps in groups like IT, Engineering, HR, Finance, etc.,where there is less customer interaction baked into their jobs, but we also frequently find it in customer touching groups; and that’s a significant issue.

    Generally speaking, the more customer centric an organization is, in real world actual practice, the narrower the gap, or perceptual difference, between employees and customers. Again, this applies to all functional groups, management levels, and locations. Deming well understood the value of cross-enterprise customer behavior ownership and the precepts of employee ambassadorship, and another of his quotes goes something like “Everyone in an organization has one of two jobs. They either directly support the customer, or they support someone who does.”

    Is this idealistic? Far from it. Companies that are sales-centric, process-centric, or product-centric may perform reasonably well on the traditional, antecedent metrics Graham identifies; however, they will never attain a high level of customer centric performance. Cross-enterprise customer obsession produces true customer advocacy and brand passion behavior, and a corps of employee ambassadors who are in tune with, and deliver consistently excellent perceived value and experiences to, customers.

  11. Dear All

    My premise of starting the discussion was the following:

    – Ideally, everyone in an organisation should be accountable for customer loyalty, but this has proven to be too difficult to implement in most organisations.
    – So, the best alternative, that I have seen work is – one function takes the lead and then works with everyone else to ensure that the result of the work that the organisation does is towards creating loyal customers
    – Now, if you think about which function would benefit the most from having loyal customers and has the potential to bring about such change is the marketing organisation due to the following capabilities that they have:

    1. They are the team that paint the vision of what the customers can expect when they bring their business to the organisation, and hence know exactly what the customers expect.
    2. They are the function that can share this vision internally within the organisation as well, so that other functions within the organisation can actually create processes to go beyond the customers expectations and delight them.
    3. Marketing is a function that is closely aligned with the C-suite and have a first hand view of the vision of the organisation itself.
    4. Marketing as a function can play a pivotal role in creating new products and services for the existing customers (as they know these customers and their worlds really intimately, at least all good marketing teams know).
    5. If the orgnisation is geared to delight customers and convert them into loyal customers, the job of marketing becomes the easiest job in the organisation.

    These were just my views based on which i had created the post..

    I know that there has to be someone who needs to take the lead, the question then to ask is, if not marketing, who? and why?

    Any suggestions there?

  12. It’s certainly wise to have an executive-level position, i.e. a CXO or CCO, designing, coordinating, and managing centricity initiatives. That said, customer-centricity must be deeply embedded into the cultural DNA of the enterprise for it to succeed; and that means everybody, from the CEO to the file clerk, owns customer value delivery. And, as we’ve seen with companies that ‘walk the customer-centricity talk’, customer focus is built into every job description.

  13. Michael, I am glad you have gone against the attempt to sub departmentalise the Customer in a company (Mukesh Gupta’s make the Customer one part of marketing)
    Does the Customer deserve to have a company ensure there is a specific department for him/her just as IT is a department, or Manufacturing or Marketing. Is the Customer important enough?
    And if yes, and all of these departments are working for the Customer and his happiness, and to prevent him from leaving.
    That is why I had written that the operations department should become the Customer department and the COO should become the CCO or the Chief Customer Value Creator.http://customerthink.com/a-step-in-value-creation-implementation-the-customer-department/
    There are some in this blog who want to wish the Customer away, the company is more important. Let’s get rid of Customers and concentrate on the company. Let’s see if this will make the company more successful. And don’t come back and say this is ridiculous! It is just as ridiculous as not giving the Customer his proper place in the hierarchy and the thinking of the company

  14. Hi Michael

    I note with a smile on my face your use of a self-referential proof when you suggest that ‘Companies that are sales-centric, process-centric, or product-centric may perform reasonably well on the traditional, antecedent metrics Graham identifies; however, they will never attain a high level of customer centric performance’. But that is merely for amusement.

    What you have failed to provide is any proof that being more ‘customer-centric’ will make a company more profitable. There is plenty of evidence from earlier research by the Marketing Science Institute and others, that a company being customer-centric results in it being less profitable than one that is market-oriented.

    As the old saying goes, ‘In God we trust, all others bring hard data’! Where is your hard-data?

    Graham Hill

  15. Hi Gautam

    I tend to agree with you that the Marketing department, although the rightful philosophical custodian of the customer’s interests, all too often puts their interests in second place behind the Company’s. Marketers tend to be driven by the need to create warm leads for sales. Often, the only tools they have at their disposal are the ‘place’ and ‘promotion’ levers of the traditional 4P marketing mix. This makes them a poor choice of custodian of the customer’s interests.

    Looking at how most of my clients over the past 25 years of running and consulting with large corporations there probably is no one department that has a sufficiently large involvement in and interest in being the rightful custodian of the customer’s interests. The logical conclusion is that rather than bestow custodianship on an existing department, that a new CCO role be created with responsibility for the end-to-end customer experience and authority over other departments. This type of CCO is sadly, a rare beast indeed.

    We must not forget however that customers are means to an end – profitability, or free cash-flow for the more financially literate – and not the end in themselves. Companies should search for the pareto-optimal point where mutual value exchanged between customers and the Company is the optimum for the Company. Succeeding in contemporary business is as simple and as difficult as that. At least the ones that I have run or consulted with.

    Graham Hill

    Graham Hill

  16. Wow – your post has certainly sparked some fierce and invaluable debate Mukesh. In my opinion, the ‘ownership’ of Customer Experience/Relationships/Loyalty comes down to three things:


    The organisation needs to understand that the ultimate leader of the organisation is accountable for the experiences customers have with his/her business. You could argue that it the Board of Directors are ultimately accountable collectively.

    The responsibility for delivering and improving the Customer Experience is without question collectively the remit of the Board of Directors. The CMO should be responsible for developing a customer focused marketing strategy. The COO should ensure that all operations work seamlessly together to deliver the customer journey in line with customer expectations and the marketing strategy. The CIO should ensure that technology is continuously being deployed to align to the delivery of the customer journey etc…

    Leadership whilst coming again from the collective is most powerful when ‘championed’ by one leader in particular. Increasingly this is resulting in the appointment of ‘independent’ Chief Customer Officers or Chief Experience Officers, although this is still in its infancy. On occasion, these individuals still retain responsibility for the delivery of part or parts of the customer journey.

    So should Marketing ‘own’ customer loyalty? Depending on the organisation, it may be appropriate for the CMO to be the CX lead on behalf of the board, but as others have said, no one individual or function can ‘own’ the customer experience.

    Thank you again for sparking the debate!

  17. What does it suggest when so much energy and discussion is devoted to labeling (CSM, CRM, CXO, CCO, CMO, CCVC), definitions, and org charts? I wonder if the finance, sales or operations worlds spend a lot of time agreeing on what disciplines are called, crafting proper definitions, and figuring out who owns what? Just a thought!

  18. Hi Ian

    Should we even be focusing on customer loyalty at all? There is plenty of evidence that loyal customers are not always the most profitable, or even profitable at all.

    Shouldn’t we be focus on on the most valuable customers instead?

    Graham Hill

  19. Hi Chip

    I can assure you they do. I suggest that it is human nature to want to name the parts just as much as it is to work out how they fit together.

    Graham Hill

  20. And should we not make our most valuable customers loyal (oh no! they will become less valuable)
    And labels are more important than really helping Customers

  21. Hi Gautam

    You miss the point. Loyalty is only a proxy for profitability. The research suggests not always a very good one. Shouldn’t we focus on profitability rather than loyalty, or any of the other proxies that come in and out of vogue?

    You do want your company to be profitable, don’t you? I do wonder.

    Graham Hill

  22. Another very good question Graham – I do not disagree – focusing on your most ‘valuable’ customers would infer that a business has clarity of proposition (in my opinion). This does not mean that you intentionally treat those that are deemed to not be valuable in an inappropriate way. I do agree that businesses should invest their energy and resources in the customers that are core to their strategic goals. If this in turn makes these valuable customers more loyal – then a business should have a sustainable business strategy going forward.

  23. Hi Ian

    As George Orwell might have said, ‘all customers are equal; but some customers are more equal than others’. For most companies, a minority of their customers will be very profitable. The majority will be profitable in various degrees. And a minority will be very unprofitable. Some of them ruinously unprofitable. There is no reason – economic, legal or moral – why ruinously unprofitable customers should be treated the same as very profitable ones. In fact , I would treat them very differently indeed.

    I would identify opportunities to cross, up- and on-sell to them at the same costs to make them more profitable.

    I would identify their costs-of-service and look for a way to pass them on to the customer.

    I would identify cheaper channels to move them to.

    I would identify cheaper operating models to move them to.

    If all that fails, I would look for ways to say ‘Goodbye!’ to them.

    Customers are primarily there for the benefit of companies, not the other way round. It is a mere detail that the company must provide ‘service’ (in a service dominant logic way) to customers to gain that benefit.

    Optimising the value of different customers (of different value) requires companies to adopt a portfolio approach to value management. As Johnson & Selnes describe in a paper on ‘Customer Portfolio Management:´Toward a Dynamic Theory of Exchange Relationships’, the most incremental value will not necessarily come from those customers who are already the most profitable, (they may already be spending all their money with you), but from those with the most potential to become more profitable. And as Harri Terho’ thesis on ‘Customer Portfolio Management:´The Construct and Performance’ confirms, companies who manage their customers as a portfolio outperform those that just manage their customers for profitability.

    Food for thought for all the libertarian ideologists promoting their pet theories about customer loyalty, customer advocacy and customer-centricity.

    Graham Hill

  24. Proof that customer-centricity and customer focus helps organizations monetize at a consistent and high level (rather irrespective of who, at a senior level, coordinates initiatives across the enterprise?? How’s this (from two posts written several years ago):

    Customer-centric organizations are invariably quite disciplined and proactive, and this actively contributes to their success. Every aspect of a company’s offering — customer service, advertising, packaging, billing, products, etc. — are all thought out for consistency. They market, and create experiences, within the branded vision. IKEA might get away with selling super-expensive furniture, but they don’t. Starbucks might make more money selling Pepsi, but they don’t. Every function that delivers experience is ‘closed-loop’ and 360 degree, carefully maintaining a balance between customer expectations and what is actually executed.

    In his 2010 book, Marketing 3.0: From Products to Customers to the Human Spirit, noted marketing scholar Philip Kotler recognized that the new model for organizations was to treat customers not as mere consumers but as the complex, multi-dimensional human beings that they are. Customers, in turn, have been choosing companies and products that satisfy deeper needs for participation, creativity, community, and idealism.

    This sea change is why, according to Kotler, the future of marketing will be in creating products, services, and company cultures that inspire, include, and reflect the values of target customers. It also means that every transaction and touchpoint interaction, and the long-term relationship, needed to carry forward the organization’s unique character, must be a reflection of the perceived value represented to the customer.

    Kotler picked up a theme that was articulated in the 2007 book, Firms of Endearment. Authors Jagdish Sheth, Raj Sisodia, and Daniel B. Wolfe labeled such organizations “humanistic” companies, i.e. those which seek to maximize their value to each group of stakeholders, not just to shareholders. As they stated, right up front (Chapter 1, page 4):

    “What we call a humanistic company is run in such a way that its stakeholders—customers, employees, suppliers, business partners, society, and many investors—develop an emotional connection with it, an affectionate regard not unlike the way many people feel about their favorite sports teams. Humanistic companies—or firms of endearment (FoEs)—seek to maximize their value to society as a whole, not just to their shareholders. They are the ultimate value creators: They create emotional value, experiential value, social value, and of course, financial value. People who interact with such companies feel safe, secure, and pleased in their dealings. They enjoy working with or for the company, buying from it, investing in it, and having it as a neighbor”.

    For these authors, a truly great company is one that makes the world a better place because it exists. It’s as simple as that. In the book, they have identified about 30 companies, from multiple industries, that met their criteria. They included CarMax, BMW, Costco, Harley-Davidson, IKEA, JetBlue, Johnson & Johnson, New Balance, Patagonia, Timberland, Trader Joe’s, UPS, Wegmans, and Southwest Airlines. Had the book been written a bit later, it’s likely that Zappos would have made their list as well.

    The authors compared financial performance of their selections with the 11 public companies identified by Jim Collins in Good to Great as superior in terms of investor return over an extended period of time. Here’s what Sheth and his colleagues learned:

    – Over a 10 year horizon, their selected companies outperformed the Good to Great companies by 1,028 percent to 331 percent (a 3.1 to 1 ratio)

    – Over five years, their selected companies outperformed the Good to Great companies by 128 percent to 77 percent (a 1.7 to 1 ratio)

    Just on the basis of comparison to the S & P 500, the public companies singled out by Firms of Endearment returned 1,026 percent for investors over the 10 years ending June 30, 2006, compared to 122 percent for the S & P 500, more than an 8 to 1 ratio. Over 5 years, it was even higher—128 percent compared to 13 percent, about a 10 to 1 ratio.

    If I’m picking more current and well-researched books on this general topic, my first selection would be Conscious Capitalism, a recent volume by Raj Sisodia (co-author of Firms of Endearment, Wharton School Publishing, 2007) and John Mackey, co-CEO of Whole Foods Market. In addition to organizations like Whole Foods, the Conscious Capitalism ‘movement” (http://www.consciouscapitalism.org/) includes senior executives from companies like Southwest Airlines, Costco, Google, BazaarVoice, First United Bank, The Container Store, Patagonia, UPS, Trader Joe’s, and dozens of others.

    As stated in their book, “Conscious Capitalism is a way of thinking about capitalism and business that better reflects where we are in the human journey, the state of our world today, and the innate potential of business to have a positive impact on the world. Conscious businesses are galvanized by higher purposes that serve, align, and integrate the interests of all their major stakeholders.” This sounds reasonable, even high-minded; but, does it monetize?

    Mackey and Sisodia have directly addressed this issue, i.e. how well the conscious capitalism firms have fared financially, in their book (see pp. 277-278). Not surprisingly, conscious capitalism is also good business. They looked at the investment performances of the Firms of Endearment (FoE) companies versus the S&P 500 during the 1996 through 2011 period. Here’s what they found:

    Return Rate:

    Fifteen Years

    FoE – 1,646% cumulative, 21% annualized
    S&P 500 – 157% cumulative, 6.5% annualized

    Ten Years

    FoE – 254% cumulative, 13.5% annualized
    S&P 500 – 30.7% cumulative, 2.7% annualized

    Five Years

    FoE – 56.4% cumulative, 9.4% annualized
    S&P 500 – 15.6% cumulative, 2.9% annualized

    For those who are skeptical about the superior performance of values-based, more customer-centric and ‘human’ approaches representing exceptional returns, and believe that taking a longer view is needed to provide more assurance, it should be recognized that the 2006 to 2011 period includes both the financial meltdown and the slow recovery.

    Bottom line: Being human, as well as being customer-centric, is good for the balance sheet as well as for stakeholders. As Southwest Airlines founder Herb Kelleher has observed “A humanistic approach to business can pay handsome dividends, even in a somewhat benighted industry like air passenger service.”

    This isn’t libertarian or idealistic. It’s real-world, and despite the perspectives of skeptics whose motivation seems to be challenge just for the sake of throwing rocks at the bee hive, its results are well and strategically proven.

  25. Graham, again you must re-read what I said: I only said we should retain our most profitable customers. Is there a debate in that?

  26. Hi Gautam

    I am in total agreement; we should retain our most profitable customers.

    The challenge is what to do with the other ones, particularly the ruinously unprofitable ones. What do you suggest over and above what I already proposed?

    Graham Hill

  27. I am glad that the post sparked off this debate… Thanks to everyone who contributed to the discussion…


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