Chapter 1
Why Marketing Needs to Adapt
Why do marketers need a new approach?
With the rise of social media, marketers entered an era of heightened exposure in which any kind of product or brand failure has the potential to echo virally and at lightning speed through the marketplace. This vulnerability has intensified the pressure on companies to treat customers better and to share information with them in a more transparent manner. And the information sharing has evolved to include the active solicitation of feedback to incorporate at increasingly earlier stages of the product cycle. Many refer to this period as the âage of the empowered customer.â In this book I'll explain how it's also poised to be an âage of the marketer.â
This heightened exposure has certainly benefited the customer, but it has also benefited those companies that have organized themselves to harness customer feedback to quickly improve their products and services. Those companies that can meet and exceed customer expectations (that is, create a great customer experience) have a competitive advantage. Because marketers play a critical role as a conduit between the customer and the company, they are positioned to have a greater role in the business than ever before. In fact, if they get it right, they have an opportunity to serve as the steward of the overall customer experience.
Many marketers are starting to recognize this possibility. But few would claim to be close to achieving this stewardship role. The truth is, there are far more companies that don't get it right. If anything, they are undermining the customer experience. But let's consider for a moment what kinds of customer experiences trigger criticism and harsh responses. No doubt some of these examples will ring a bell for you:
- The company whose software you use to organize your photos does a major relaunch of its site with no warning, and suddenly you can't find all of your photos. You visit their community to find that many users are having the same issue, but no one seems to have a definitive answer on how the new system works.
- You buy a product from the manufacturer, only to have one of its retailers offer you the same product at a discount a week later. You e-mail customer support; they are unaware of the promotion and unwilling to offer you a refund.
- You reach out for customer support on Twitter, go through the process of mutual âfollowingâ so that you can direct-message and then explain the issue, only to get redirected to another channel where you have to start all over again.
- You research a product online and find some great reviews, but you've also spotted some dismal ones, and the company has not responded to the concerns. You reach out on social media to hear from the company, but they don't respond.
- You visit an online clothing retailer and browse its entire sweater catalog. The company follows up with a series of e-mails containing offers, but none are for sweaters. You then pass by one of the company's retail stores on your way to work and discover that there was a storewide sale over the weekend.
- You call one of your phone service provider's retail locations to ask if it does handset exchanges in-store. The representative says âyesâ and tells you to come over, but when you arrive you discover there's an hour wait for service. The clerk asks for your phone number but then tells you that you have to stay in the store in order to keep your appointment. When your turn finally comes up, the clerk informs you that in-store exchanges are subject to a restocking fee that does not apply to online exchanges.
Every one of these examples is the result of a failure that is dueâat least in partâto marketing platforms and practices that have not kept pace with innovation and customer expectations. They represent a disconnect between marketing and the group responsible for developing the product or service. None of these, moreover, is a small failure, because even a single poor customer experience can do long-lasting harm to the company's reputation (especially if you haven't delivered a particularly great experience in the same period). What's more, within every one of these examples there are many opportunities for the company to deliver a consistent and great experience that could differentiate it and establish loyalty.
These are hardly isolated examples. Many companies suffer from these same flaws. Comcast is frequently held up as a poster child for customer complaintsâcomplaints over customer service, billing practices, and the customer experience on its websites. In fact, so long is the list of complaints that there's even a Twitter hashtagâ#comcastoutrageâwhere the disgruntled can vent. At the heart of the complaints is frustration over Comcast's approach to its core service: The company forces customers to buy services in bundles that include many items that they simply don't want. Granted this can be an effective way to get customers to try new content, but Comcast has taken it to such an extreme that it actually infuriates customers.
The fact is that Comcast's approach has for years been out of sync with the market's direction. And that is why services like HBO diversified and joined forces with younger Comcast competitors that are allowing customers to buy just what they want, when they want it.
An empowered marketing organization that was aligned with the rest of the company would have early on recognized this as a problem with the marketing mix (in this case, the mix of products and prices). It would have engaged with the core service team to address it. In companies where marketing is disconnected, marketing is relegated to amplifying the success of good productsâwhich often don't need much helpâor doing damage control by spinning the facts in the best possible light (if the product is bad). Either represents a reactive, if not impoverished, approach to marketing from which the stewardship of customer experience is out of reach.
To put this in perspective, consider that just 30 years ago, we were still living in the so-called broadcast era of marketing, when brand perception could be managed quite effectively by marketers. Then, innovation was often driven by marketing, and product development had less influence; it was there to execute. Companies could get away with this approach because consumers had little ability to share their experiences freely or amplify their voices above the companies' megaphones. So companies faced less pressure to improve their products and services. On top of this, the broadcast system constituted an ecosystem that favored a smaller number of bigger brands competing for attention.
What's remarkable is how quickly things changed. Greater access to affordable development tools, combined with the rise of social media, drove the pendulum to the opposite extreme. It happened with such force that at the most innovative companies innovation is now more often driven by product management. The problem now is that companies have gotten so good at innovating quickly that they can readily replicate each other's products and services. What they cannot replicate as easily, however, is a consistent and great customer experience. This fact is what's driving the pendulum back toward the middle where the group managing the product or service development and the marketing group need to collaborate closely in order to compete effectively in the marketplace.
Companies like Comcast are sitting on top of an enormous opportunity, though, because they have relationships with the majority of customers in their market spaces. And those customers have feedback and ideas that Comcast could transform into valueâif Comcast could only overcome its unbalanced approach to product development and marketing. Indeed, it's got a lot of work to do: Millennials do not see Comcast as the innovative content-delivery platform that it once was. Rather, they are apt to think of Comcast as an entrenched company that lobbies the government to maintain unfair (i.e., monopolistic) access to the market.
The fact is that Comcast has enjoyed a de facto monopoly for a long time, and that has insulated it from the need to treat customers well. It's as if the company is still operating in the broadcast era. Comcast may be profiting from this insulation, but in the process, those functions that would make it competitive in a nonmonopolistic market have atrophied. To thrive in the future, Comcast will have to undergo a major transformation in order to compete with the wealth of innovative alternatives now available on the content distribution side of their businessânever mind facing off against the new entrants whose aim to establish alternatives to landline-based Internet connections would threaten Comcast's monopolistic access to customers.
In fairness, Comcast seems to be recognizing these challenges; the company has already appointed new management with a stated goal of focusing on customer experience. And it is making progress. Managing a turnaround will not be easy, but it is possible if the company embraces a new approach to both innovation (new service development) and marketing that is balanced and collaborative. This book is about that new approach and how it aligns product and service development with marketing. This approach is designed to help companies like Comcast understand their customers better, harness their feedback, and design for customers' evolving needs. It's not a new multiyear strategic plan, rather it's an approach that delivers one small victory after another in a battle to stay relevant.
What Does Modern Marketing Feel Like Today?
Modern marketing is fundamentally about competing on the basis of the customer experience. Doing so effectively requires new practices and platforms; throughout this book, I map out the path to modernizing marketing. My intention in using this term is to underscore a company's ability to compete on the basis of customer experience.
To get a sense of the direction marketing is taking, consider this hypothetical example, based on a real product and its real issues. You're a successful millennial with a top job at a growing company based in a major metropolitan area. You're in the market for a new car, but you harbor mixed feelings about new cars because they're hard on the environment. So you've decided on an electric car, which reflects your environmentally conscious values. You're hoping you can fin...
