Why is customer-centric marketing still more talk than action?
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- Ranjay Gulati, customer-centricibm, CSC, Marketing Innovation, solutions marketing, David Moschella, EMC, Michael Shrage, Customers, Innovation, Other Solutions Issues,
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Michael Shrage’s recent Harvard Business Review post, Great Customers Inspire Great Innovations, got me thinking:
Why, amid so much evidence of the power of customer-centric business, are so many companies still mired in inside-out operations? Why do we hear so much talk but see so little action?
Shrage’s post reminds us that behind most great innovations lie customers and clients that made those innovations possible. "Busicom, a scientific calculator company, for example, commissioned Intel [in 1969] to design a chipset for its new programmable calculators. That led directly to Intel’s breakthrough creation of the microprocessor." On a much broader scale, "Wal-Mart’s incessant and relentless demands for ‘everyday low prices’ transformed every supplier it touched."
Shrage’s post also reminded me of an essential book from way back in 2003 by IT industry analyst David Moschella, Customer-Driven IT. Taking off from the familiar point that the tech industry was always led by vendor-based innovation, Moschella outlined the fundamental shift underway in the early 2000s toward customer-driven innovation in industries ranging from media and financial services to health care and education.
Ranjay Gulati’s more recent Reorganize for Resilence provides similar testimony, evidence, and examples of the power of customer centricity for solutions development, marketing, and sales (you can watch my partner Steve Hurley’s interview with Ranjay on our new YouTube channel).
Shrage, Moschelle, and Gulati are actually making a critical point beyond the normal blah-blah about listening to customers and strengthening relationships. As Shrage notes, even this approach (which is typically more talk than action) is not enough. Rather:
"The essential question is who are the customers that come with the problem sets and parameters that push you to rethink, or redefine, your business? Which customers and clients does your firm celebrate as innovation partners -- and why?"
What amazes me, though, is why B2B marketers aren’t investing more in serious programs to build key customer relationships, generate deeper customer insight, and build stronger customer collaboration at least as a foundation to help drive that necessary innovation.
After all, it’s not just academics and pundits like Shrage, Moschella, and Gulati pounding their fists. IBM’s latest survey of more than 1,500 large enterprise CEOsaround the world showed that 95% of top performing organizations identified getting closer to customers as their most important strategic initiative over the next five years.
It is happening to some extent, of course. In B2B technology, where I spend most of my time, a number of companies are putting some real money where their mouths are. For example:
More often, however, I see situations where the rhetoric far outpaces the reality:
Needless to say, all three of these companies, like most of their peers, prattle on endlessly that "we're all about the customer."
For B2B marketers interested in moving beyond the rhetoric, there are some obvious next steps:
If all this investment means cutting back in other areas, well, that's the price of truly changing strategy and priorities.
As always, though, it's the mindset that matters most.
I was reminded of this for the umpteenth time last week while pulling together some research around customer reference programs for a client. Most tech companies have a reference program, but far too many are focused transactionally on getting customer testimonials and promoting success stories. There's relatively little attention to actually learning more about customer needs, strengthening relationships, and building collaborative innovation (with some notable exceptions, of course).
These are your best customers, folks! If you're stuck in selfish transaction mode with them, there's a long way go to in getting to customer centricity.
Am I right to be so critical? What's working for customer-centricity on your end?
Photo credit: everywhereisimagined
Originally posted on ReputationtoRevenue.com
The 3 main answers that I would suggest to the question of "why customer-centric marketing still involves more talk than action" are: (1) Solution is about educating the customer and addressing their specific problem and hence deeper relationship is involved, (2) The offering itself is more complicated than traditional products, and (3) The type of management that a sales person have to face in solution is, more often than not, the executive-level management. As mentioned in other blog post about customer references, B2B marketers focused on high value solutions know that customer evidence is like gold. Therefore, a clearly defined value propositions and messaging on emphasis on the business benefits that our solutions will bring to our customers should be incorporated in the company's "customer testimonials" and white paper on "success stories", so it will not be seen as "pure promotion", which is the main concern in this article.
As Prof. Gulati said in his interview with Solutions Insights, there is no one size fits all solution to organizational structure when it comes to solutions business. Some organizations succeed from a complete restructuring of business functions, others from organically connecting different functions to break silo barriers. The latter might be the simpler, faster way to transform a business into a solutions business, thus perhaps the action most companies choose to take. While many companies may be doing well in their business, is their solutions model robust within the organization? In the “Decoding the DNA of a Successful Solutions Marketer” article written by Solutions Insights, solutions marketers found that changing organizational cultures and behavior to align with solutions strategy as the most difficult challenge they are facing. I think organizational restructuring is the fundamental first step for a company to change organizational cultures and behavior. I personally do not have a strong faith in the non-extreme organizational structure. Without a total change, disruptive mindset change, it is all too easy for people to go back to their familiar patterns. Cross collaboration allows the people/function to stay within its silos, only taking away the doors of the silos, but not breaking the traditional silos. Having cross-functional collaboration may work in the shorter term, but it is not a strong pillar to creating a solid solutions model. I wished the research had gone further investigating what kind of organizational structure do they adopt in transforming into solutions business. I am curious to know what organizational structure the ones facing the greatest difficulty changing cultures and behavior have.