“Rethinking Marketing” – Gaurav Bhalla
Sadly, marketing is a fractured discipline. Too many adjectives – inbound, outbound, guerrilla, digital, social, social media, etc. – have splintered what should and must be its fundamental focus – the customer.
In 2009, Roland Rust, Christine Moorman, and myself published an article titled “Rethinking Marketing” in Harvard Business Review.
The main point of the article was that because companies can interact directly with customers, they must radically reorganize to put cultivating relationships ahead of building brands. Thus, we felt, in order to compete, companies would shift from pushing individual products to building long-term customer relationships.
Our suggestion was a simple one: Reinvent the marketing department as a “customer department” that replaces the CMO with a chief customer officer, makes product and brand managers subservient to customer managers, and oversees customer-focused functions including R&D, customer service, market research, and CRM.
Our hope was that companies would shift their focus from product profitability to customer profitability, measured by metrics such as customer lifetime value and customer equity. We strongly felt that businesses would start putting cultivating relationships ahead of building brands.
The illustration we used depicted the shift from a product-management-driven to a customer-management driven company:
At the time, we also felt that the marketing organization would change. The traditional marketing department would be reconﬁgured as a customer department that puts building customer relationships ahead of pushing speciﬁc products.
In our view, product managers and customer-focused departments report to a chief customer ofﬁcer (the CMO becomes the CCO), and support the strategies of customer or segment managers:
At the same time, we recommended companies develop new metrics for this new model:
The question to ask today is: what happened?
We argued that the change would not be easy:
The IT group will want to hang on to CRM; R&D is going to ﬁght hard to keep its relative autonomy; and most important, traditional marketing executives will battle for their jobs. Be-cause the change requires overcoming entrenched interests, it won’t happen organically. Transformation must be driven from the top down. But however daunting, the shift is inevitable. It will soon be the only competitive way to serve customers.
But we never anticipated that organizationally so little would change so slowly.
As we pointed out in our article, too often the CCO is merely trying to make a conventional organization more customer-centric. In general, it’s a poorly deﬁned role—which may account for CCOs’ dubious distinction as having the shortest tenure of all C-suite executives.
Sadly, the revolution didn’t happen. Companies confuse gimmicks and the all out pursuit of the latest management fad as prerequisites for getting closer to the customer and for improving business performance. Careful examination will reveal that despite “getting closer to the customer” having been a high priority for both CEOs and CMOs for several years now, and despite significant increases in both marketing and marketing research spending – two disciplines designed to enable a company get closer to its customers – few companies can truly claim to have achieved this goal.
Here’s what we did instead:
- we embraced technology instead of the customer.
- we cut costs and focused on reducing overhead
- we created value for executives, but not for the customer or employees
- we insulted our customers with infuriating customer experiences
In truth, we should say – “the customer doesn’t matter.”
This article started by lamenting the excess baggage marketing is carrying – a heap of ever-growing adjectives. The caretakers of the discipline – practitioners and academics alike – will be well advised to heed the late Harper Lee’s advice in To Kill A Mockingbird – “Atticus told me to delete the adjectives and I’d have the facts.” Let’s delete the adjectives. Then perhaps we’ll be able to see, understand, and serve the whole customer, not just the parts that suit our purpose.
Gaurav Bhalla is the CEO of Knowledge Kinetics, a customer value innovation company.