The Marketing Bureau

Marketing is dead. At least, that is, the somewhat narrow concept of Marketing practiced by many businesses. In today's information overloaded society, traditional concepts of promotion don't work.

Thanks to almost instant access to data, products and services are becoming commodities at an alarming rate. Buyers are smart. They know what they want and they don't believe the hype. 

What’s a marketer to do? Be different? Offer services no one else can? Be the lowest priced? 

Unfortunately, for many, these strategies are not practical.

Few companies have the economies of scale or scope to be price leaders (and only one company in any sector can be the price leader). And at the other end of the spectrum, in the niche markets, there often is not enough business to survive (and that is a particularly significant marketing barrier in our tiny economy)

How is your business impacted?

If your business is like most, you need to win in the middle market. But this is the place where the competition is greatest and differentiation is most difficult. In the middle market, the key to winning is to focus on the one thing your competitors can never beat - creating irresistible customer relationships. Competitors can copy your products, services and lower prices but they can never duplicate the relationships you have with your customers. Strong relationships are your one and only source of meaningful, sustainable competitive advantage.

For marketers, the implications are obvious. Create and nurture life-long bonds with customers - implement a process of relationship marketing. The difficulty to be overcome with this concept, however, is the current relationship marketing paradigm that is present in many businesses – it is too often seen as a tired, simplistic marketing mantra chanted by academics, consultants and gurus that , to the extent that it offers real value as a concept, is “already being done to death in our company”.

This, however, is likely to indicate a business taking a one dimensional view of the concept and implementing it at the level of the monthly newsletter and the personalisation (by adding an often misspelt customer name) to what were previously mass marketing communications – “Dear Mr Brain Meredith, As one of our most valued customers we are delighted to offer you a substantial discount on our newly launched…etc. etc.” This is not relationship marketing. It’s mass marketing with names on.

There are many justifications for, and benefits inherent in, a carefully designed and implemented relationship marketing strategy. Here is just one of them that is quite compelling: 

During your grocery shopping lifetime you will spend approximately $500,000 on groceries. That money could buy you a couple of Ferraris (one each for you and your significant other). Would your relationship expectations be the same in both cases?
Probably not.

Yet they should be.

Both businesses should recognise your overall worth to their business (over time and not based on one transaction). The concept is called Lifetime Customer Value.

Both businesses should be at pains to understand your wants & needs, your motivations, your decision making process.

Both should be keen to develop a relationship, over time, that is designed to meet your carefully diagnosed requirements not just once but time after time after time.

Ferrari may well do that. Your supermarket probably won’t.

And there’s no good reason for that except the “Stack it high. Sell it cheap” mentality that has dominated grocery retailing for the past three decades. I admit that it is changing but, boy, is it slow! The message for business is a simple but compelling one. Its time to grasp and implement the relationship marketing concept and have it replace the rampant, week-to-week, short termism which, apart from any other considerations, is significantly reducing shareholder value in this country’s businesses.

The new paradigm is about value based propositions based on, above all else, the development and nurturing of long term, sustainable relationships with high value and high return customers and predicated on the basis of an understanding of real and carefully diagnosed customer needs and wants.

Learn the concept, principles and disciplines of Relationship Marketing and then go do it. And that means so much more than a monthly newsletter with a misspelt customer’s name.

So Make Sure You Spell Your Customer’s Name Right!

Brian H Meredith