Ries and Trout (Marketing Warfare) brought us the vernacular of
the military establishment. Tom Peters (In Search of Excellence)
gave us a more peaceful approach by urging us to listen to
customers. Corporate management has been reading the words
without digesting the essence of the statements. The result is
they're still focusing on pulling in new customers month after
month and quarter after quarter, and leaving existing customers
to fend for themselves.
As they view the battles of the marketplace through the
wrong end of the telescope, company management emphatically states
that they know what customers want and need. These are the
people who proclaim that they have the pulse beat of the market-
place despite the fact that they haven't been on a customer sales
or follow-up call for six months.
Management has flown over the battlefield, but hasn't made
the time nor found it necessary to spend time in the trenches
with their foot soldiers--sales, support and service. They've
spent so much time focusing on beating the competition that
they've lost sight of their ultimate goal--winning customers.
Corporate managers should listen a little closer to Ted Levitt,
former editor of Harvard Business Review, as he continually told us,
"the purpose of business is to create and KEEP a customer."
Rather than changing their service and support for existing
customers, companies continue to blame the competition for "stealing"
people away. And all the while they are perfectly straight-faced
and saying:
* "We already know who our customers are."
* "Our business comes from word of mouth."
* "Everyone knows us."
* Business is great, so we don't need to market."
Knowing Customers
If you know who your customers are, don't you think that
just maybe your competitors know them, too? Of course they do!
And if the truth were known, the best competitors not only
know your customers, but they spend time with them listening to
their wants, needs and concerns. They don't approach their
business using hit and run tactics such as lower prices or next-
generation technology.
Instead, they focus on winning that customer over by
providing advice, assistance, support and service. And while
you're out trying to win over a new customer, you quietly lose an
existing one.
But wouldn't it have been better and more economical to
retain that customer you "already knew?"
It may have cost $1,000 to keep the customer, but it will
cost $5,000 simply to replace them. It's little wonder marketing
costs continue to rise.
Word of Mouth
The second greatest lie in marketing is that the company
relies on word of mouth advertising to attract new business. The fact is
that everyone relies on word of mouth to get new customers. Ford
does it. McDonald's does it. IBM does it. Coca-Cola does it. Hershey does it.
In fact, for years Hershey was proud of the fact that word
of mouth was the only marketing activity they had. The problem
was they lost customers and marketshare. They had to become more
aggressive and more visible in their marketing and communications
efforts.
Word of mouth is a powerful tool, but you have to look at
all aspects of word of mouth.
For example, noted marketing expert Bill Davidow recently
noted that TARP (Technical Assistance Research Programs) pointed
out that only one out of every 25 unhappy customers complained to
the manufacturer. That's great, since none of us like to hear
complaints.
Unfortunately, those other 24 unhappy customers did tell 10
people about their dissatisfaction.
The fact is that since we feel we "deserve" to be satis-
fied, we don't voice our satisfaction at the same rate. In fact,
satisfied customers only tell five others.
In short, relying solely on word of mouth marketing and
communications is a losing battle.
Everyone Knows Us
"Everyone" in the computer and communications industries knows Compaq, Lotus, IBM, Cisco, 3COM, Dell, Nortel, Ascend, Hewlett Packard and a
few other prominent names. Likewise, "everyone" knows Ford,
McDonald's, United Airlines, Panasonic, Toyota, Coke, Porsche and
similar names.
Unfortunately, everyone doesn't know the name of every
small, medium or even many large organizations.
Ford, McDonald's, Coke and IBM regularly carry out extensive and
expensive name recognition research projects. At no time has any
of them scored 100 percent in the area of name recognition. In
many instances, when the name was known it was for the wrong
reason.
This is especially true in industries, which change so
rapidly and so radically.
If your company has been in existence for five years it
probably doesn't look anything like it did back then. Chances
are you've had a "few" management, product and distribution
changes over the years, with more planned for this year and next.
The way the "known" companies mentioned earlier stay known
is by consistently and aggressively marketing and communicating
their message(s) to the marketplace. They manage their risks and
they manage their opportunities, rather than having the risks and
opportunities manage them.
They manage risks and opportunities by listening. They
listen to existing customers, prospects and lost customers. They
find out who these people are, what their needs and wants are,
their likes and dislikes and their decision-making processes, as
well as the options they consider.
With this kind of information, they are in a position to
significantly minimize risks and optimize opportunities.
It's no wonder they win more frequently, have greater sales
and continue to increase their marketshare.
Business is Great
The biggest problem with this industry is that it
goes in cycles. And all to often, management of second and third
tier firms use the peaks and valleys as excuses for their
marketing and communications activities.
When the company is on top of the mountain, business is so
good that the backlog is almost unbearable. They have more
business than they can "ever" handle. Hence, they don't need to
be aggressive in their marketing and communications. In fact,
they have to "keep a lower profile" because they couldn't satisfy
the customers' needs even if they sent a certified check with the
order.
When the company is in a valley, business is so bad that
they can't afford the "luxury" of marketing or communications.
Instead, they need to conserve all of their resources and focus
all of their efforts in immediate sales.
Despite the overwhelming statistics by the Business and
Professional Advertising Association (BPAA) and leading market
research firms that show solid marketing has a cumulative effect,
management views the marketing budget as an expense rather than
an investment. At the first whisper of problems or given the
weakest excuse, they will slash their marketing and communi-
cations budgets.
The marketplace's consistent winners, however, understand
that solid marketing and communications develops growth for their
firms in the future. And any retreat from that position can
likewise have a negative effect on growth. The winners
performance also shows that when downturns occur, they are less
severe for them than their knee-jerk competitors and they recover
more quickly.
In other words, they are in a better position to manage
their growth and their market dominance.
Levels of Expectation
When it comes to planning and managing growth, too many
firms think in terms of a one-year plan or, worse yet, a one-
quarter plan. Too many companies seem to take pride in their organi-
zation's ability to produce immediate, innovative and sweaty
solutions to perplexing adversity.
At the other end of the spectrum, the chairman of Japan's
giant Mitsui Corporation was once asked if his organization had a
long-range plan, and his response was yes--a 200 year plan.
By keeping short-term and long-range plans in proper
perspective, a company can continually fine-tune their marketing,
products and communications efforts.
Using these plans as war room plans, management has to
continuously and fearlessly spend time at the front to get inputs
and ideas from customers, prospects, sales people, service
engineers and support technicians. Then they can judge all of
their activities from the Pentagon and the foxhole.
They must continually come out from behind the protection
of their desk and make decisions based on the reality that
people, not technology or lofty plans, sell products and people
buy products. Then the "facts" won't get in the way of their
success.
# # #
Marketing Warfare - To learn more about this author, visit Andy Marken's Website.
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