2011: are you ready to move beyond the 4Ps and the 4Cs to embrace the 5Hs?

In the period of 1950s the concept of the marketing mix was introduced and this led to the birth of the 4Ps: Product, Price, Place, Promotion.    This has been extended  to include another 3Ps: People, Process, Physical Evidence.

With the birth of the Customer age in the 1990s Robert Lauterborn proposed the 4Cs: Customer, Cost, Convenience, Communication.  Whilst this is a move in the right direction it is not enough.   To my mind it smacks of the abstract, the intellectual, a machine way of thinking and talking.  A move forward yet still within the Newtonian paradigm of the universe (including human beings) as a gigantic clock.

How about embracing the 5Hs: Human, Heart,  Honesty, Hospitality and Harmony?

Human:

Get that you are dealing with flesh and blood human beings and treat your customers as human beings.  Strive to treat them with the best of our humanity: kindness, benevolence, humaneness.

Being human, we notice, even if it is at a subconscious level, when these qualities are present or not.  Given the choice we walk towards organisations that have a human look and feel:  that are humane and treat us as human beings not machines.

How about starting with a small step that makes a huge difference: speaking with a human, conversational, voice?

Heart:

As the expression goes “Have a heart!”.  What does that mean?  In a word it means compassion.  The ability and willingness to put yourself in the shoes of your customer.  To see life through her eyes, to experience what she is experiencing.  It means following the golden rule “Treat your fellow man/woman in the manner in which you would like to be treated if you were in his/her shoes?  Go further and embrace the platinum rule “treat your customer as he/she would like to be treated”.

How about following Zappos and making it easy for your customers to reach out and speak with you?  To reach out to you – via chat, click to call etc – when she is shopping and needs guidance or reassurance?  To reach out to you when she needs help in using your product or service?

How about making it easy for customers to make complaints?  How about making it easy to return faulty goods?  And so forth.

Honesty:

Let go of the spin and be honest with people in a tactful way.

Human beings stay clear of people who they find to be dishonest.  When you are honest I may not like what you say yet I will respect you for being honest.  Tell it as it is – upfront – it will save you a lot of pain later on: sooner or later your true colour will show especially in this densely connected world.  When I catch you being dishonest (including omitting stuff that you do not want me to know) then I no longer trust you.  If I don’t trust you then you are going to have to pay in way or another if you want to do business with me.

Put bluntly put as much focus on the steak – the product, the service, the reality – as you do to the sizzle of advertising and other marketing messages.   Another way of saying this is to say ensure that there is a harmony between the sizzle and the steak.

Hospitality:

Be a good host, be hospitable – to prospects, new customers, existing customers and customers who have either left or are on their way.

When you are being a good host you take the time and trouble to think of your guests and their needs.  You do your best to welcome them, to make them feel at ease, to introduce them to people that they will find interesting or useful. And when the time comes for them to leave, a good host will see them to the door and wish them well and mean it!  How about behaving the same way with your prospects, new customers, existing customers etc?

How about inviting your customers into the business?  To listen, to share, to collaborate on new product ideas, product development, marketing communications, customer services and so forth?  Incidentally, the important part about ‘social media’ is not the media, it is the social.  In a social environment your character, your reputation and your manners speak so loudly that few listen to your words.  A good host is mindful of this and acts accordingly.

Harmony:

As human beings we love harmony and we strive after it.  Harmony is pleasing as it gives us peace of mind.  So how about focusing your efforts on creating harmony?  What does that mean in practice?  Lets take a look at the dictionary definition: “the just adaptation of parts to each other, so as to form a complete, symmetrical or pleasing whole”.

How about a harmony between the promises made and the experience delivered?   How about orchestrating harmony between all the silos that impact the customer experience?  How about harmony between the short-term and the longer term?

It is my belief that if you don’t get the social part – that is the human desires for beauty, for meaning, for connection, for honesty…. – you are going to be increasingly lost in the 21st century.    Maybe I am deluding myself.  What do you think?

2011: time to merge marketing and customer services?

Many years ago I worked for International Distillers & Vintners (IDV), a company that sold premium branded alcoholic drinks to the supermarkets, restaurants, clubs, cafes etc.  One of the challenges that the salesmen encountered was that almost always they were on the back foot.  As soon as they started the sales discussions (for new orders) the customer invariably brought up the issues he was experiencing with the company: not getting the products on time, receiving the wrong products, receiving the wrong quantities, pricing, discounts, billings….  This made it really difficult for the salesmen to sell.  The salesmen had to apologise and sort out the problems first and then talk about sales.  Or they had to promise to sort out the issues and offer even bigger discounts to get the customer to place the order.

It seems to me that we have arrived at the same situation in the B2C.  Anyone with access to the internet can share their views and their experiences with, and on, any organisation.  And everyone with access to the internet can read those views and experiences.  This puts the B2C marketer in the same position as the IDV salesmen.  If the marketer is going to succeed then he/she either has to sort out the customer issues or give a big discount to tempt people to buy.

Surely the sensible option is to sort out, even prevent, the issue that are resulting in poor customer experiences and a negative word of mouth.  Who has the access to this information?  Who knows what customers are ringing up about?  Who knows why they are ringing?  Who knows what business policies, practices and operations are failing the customer?  The Customer Services function.

If that is not reason enough to merge these functions and put them under one department, I can think of several more:

  • Marketing actions impact the customer and where they impact the customer negatively it is the people in customer services who get to know about it first;
  • Marketing spends considerable sums of money with market research agencies to better a better picture of customers yet the customer services function is interacting with many thousands of customers on a daily basis and can provide customer insight as well as conduct research;
  • The performance of the Customer Services function has a direct impact on the word of mouth that is taking place online and offline and WOM is marketing;
  • The new role of the Marketing function is the design and orchestration of a superior customer experience and in that role the Customer Services function plays a key role;
  • By fusing with the functions together it may encourage marketers to actually speak with real customers rather than reading about customers as abstractions in market research reports;
  • The fusion will allow the Customer Services function to escape the relentless focus on cost-cutting and making its treasure (customer insight) available to a function that has more clout; and
  • From a customer perspective it makes a difference if the left arm (Customer Services) knows what the right arm (Marketing) is up to.

In the new world, where we trust TripAdvisor more than any hotel, Marketing and Customer Services are two sides of the same coin.  When one side of the coin is ugly it really does not matter how beautiful the other side is – the coin, as a whole, is not attractive as one in which both sides are beautiful.  I am convinced that the potential for synergy – where 1+1 > 2 – is there.

What do you think?  What have I missed – apart from the fact that it is unlikely to happen any time soon?

Why do folks from Marketing lead CRM and Customer Experience efforts?

Time after time I have found that CRM and Customer Experience efforts are housed under the Marketing function and led/driven by folks from Marketing.  This practice is unquestioned: it is simply taken for granted that Marketing is the function that is most intimately connected with and has the best understanding of customers.  Is that actually so? Let’s take a deeper look.

The Customer Services function is taking one call after another from customers. In a large multi-national that ends up with millions of calls every year. And each of these calls has involved a verbal interaction between the customer and the company representative taking the call.  It can even be argued that the Customer Services function can be viewed as an R&D laboratory that can provide useful information on which customers are calling, what customers are calling about, what matters to customers, how well the organisation is doing in terms of acting on and meeting the needs/wants of customers.  And in the process this function can surface both what is broken in the organisation (from a customer perspective) and opportunities.

The Field Services and Technical Support Services function are in similar boat to the Customer Services function.  These function interact – face to face visit, telephone conversations – with and are thus directly exposed to the customer.  The Field Services folks actually enter into the customer’s home.  So it clear that the engineers / technicians will get a good grasp of customers: who they are, their needs, what is not working, opportunities to create new products/services for customers etc.

Lets take a look at the Sales function.  Who can argue that his function and the people are in intimate contact with customers.  These people know who is buying, who is not buying, which products are moving and why, what matters to customers, what changes need to be made to attract/convert more customers, what competitors are up to etc.  Any sales person who is not adept in interacting with customers will not last long in his/her role.

Onwards to the Finance function.  This function is responsible for the oversight of money flows between the customer and the organisation.  As such the Finance folks tend to know which customers are good credit risks, who pays on time, who has to be chased, when to chase customers etc…..

Now lets take a deeper look at the Marketing function.  Who in this function has a face to face conversations with customers?  How about telephone conversation?  Or even email conversations?  The closest that folks from marketing get to customers is when they sit in on a focus group.  What does this tell them?  It simply tells them what a group of disparate people will say in a laboratory environment.  There is ample research to show that what people say and what people do can be dramatically different.  And also the answers you get depend highly on the context – change the context and you get different answers to the same questions.  The other means of the Marketing folks getting customer insight is through market and consumer research carried out by the marketing agencies.

So if it is not the wealth of interactions – conversations – the Marketing folks have with customers then what else do they have that qualifies them to lead/own/drive CRM and Customer Experience efforts?  Perhaps it is their mindset – lets take a look at that.

What is the typically Marketing mindset – the one that is actually in practice not the one that is talked about by academics in marketing texts?  Is it not one of ‘manipulating’ consumption – getting people to buy what the organisation has to sell at the terms that are acceptable / beneficial to the organisation?  And most Marketing functions have done a great job of that.  Put differently, Marketing functions can be great at creating, disclosing and promoting stories (true, false or in between) that germinate in people minds thus encouraging the first trial.  This is called getting new customers – customer acquisition.

What is Marketing’s impact or expertise in retaining customers?  How will even the state of the art (personalised, relevant, timely) piece of marketing communication drive me to continue to do business with the company if I am dissatisfied with the existing product, the difficult to get in touch with Customer Services, or the Field Service folks that don’t turn up on time to fix the issue?

Are the folks in Marketing even aware of the issues that I have with the company?  Do they care?  If so can they actually do anything about it?  Is the Marketing function respected and does it wield influence over the Sales, Customer Services, Field Services, Logistics and Finance folks?  In many organisations the answer to the last question is no.

What does the Marketing function actually focus upon when a new customer comes on board?   The better armed Marketing functions have Customer Insight teams that build statistical models to predict what to sell next, and when, to which customers.  These up-sell and x-sell efforts may or may not work.  That all depends on what the rest of the organisation is doing (Sales, Customer Services, Logistics, Field Services, Finance) in terms of delivering on the first promise that Marketing made to the customer.

I cannot see a logical basis for the Marketing function to own/lead/drive CRM and Customer Experience efforts.  Contrary to the popular understanding Marketing is not a customer centred function.  And the folks that work in Marketing do not have a better understanding of customers.  Arguably they have less than the folks in Sales, Customer Services and Field Services.

What are your thoughts on the matter?  Your reasoning?