Rethinking Marketing

Cultivating Relationships Ahead of Building Brands

Presented By : Bijoy E.V (bijoyev@yahoo.com)Venue: IBS-B Date: 2011 (Dec 18 – Dec 21)Ref: Roland T. Rust, - Christine Moorman, and Gaurav Bhalla

Idea in Brief

As an alternative

Companies can interact with customers with the help of Powerful technologies like D/W for understanding

and interacting with customersWhich can help to radically reorganize in

“Cultivating Relationships” ahead of building brands..

Most of the companies are still depend on mass media marketing to drive impersonal transactions

Basic Changes in ViewsShift from pushing individual products to building long-term

customer relationships.

• Marketing Department to “Customer Department” • Replaces the CMO to Customer Officer• Brand Managers to Customer managers

• Shift the firm’s focus Product Profitability to Customer profitability

Different Approach

Idea in Action ( Cont..)

Key distinctions

Traditional and a customer-cultivating company

organized to push products and brands

Designed to serve customers and customer segments

Communication is two-way and individualized, or at least tightly targeted at thinly sliced segment

V/S

Cultivating Customers• IBM – Energy efficiency or server consolidation, and

coordinates its marketing efforts across productsfor a particular customer

• IBM’s insurance practice - IBM’s Insurance Process Acceleration enables customer and industry specialists to

build fast and flexible processes for Insurance

• Tesco - Investments in analytics that have improved customerretention, data-collecting thru loyalty card.

• American Exp - Spending ability to a trusted circle. Offeringspecial Membership Rewards

New Roles & Responsibilities• CCO• reporting to the CEO• designing and executing the firm’s customer relationship strategy• promotes a customer centric culture and removes obstacles to

the flow of customer information• Increasing the profitability of the firm’s customers, as measured

by metrics such as customer lifetime value (CLV)• Customer managers• Ultimate expression of marketing - Identify customers’ product

needs. • Brand Managers, under the customer managers’ direction, supply

the products

Proposed Org: Structure

Change In Prospective

In house-Impact • Market research.• Touch customers—including finance (the source• Scope of analysis shifts from an aggregate view to an individual

view of customer• Shifts its attention to acquiring the customer input that will drive

improvements in customer-focused metrics• Research and development.• Customer must be brought into the design process, Eg: Nokia

Beta labs, P&G.• Customer service• In-house to ensure long-term relationships. (Eg: Delta Airlines call

centre locations)

Building CLV

1. Companies need to focus less on product profitability and more on customer Profitability

2. Pay less attention to current sales and more to CLV3. Shift their focus from brand equity (the value of a brand) to

customer equity (the sum of the lifetime values of their customers).

4. Pay less attention to current market share and more attention to customer equity share – more relevant to shareholder value.

Key Note

Deriving this Competitive way to serve customers.

Transformation must be driven from the top down. But however daunting, the shift is inevitable.