“Winning customers’ hearts by creating and delivering compelling customer value is the single most effective strategy for acquiring and retaining customers and growing earnings; something that Peter Drucker said should be the fundamental goal of any business. It is also, hands down, the best investment a company can make in its own future growth and success.”
This is according to Gaurav Bhalla, author of the Harvard Business Review article “Rethinking Marketing”, as he discussed how companies must radically reorganise to put cultivating relationships ahead of building brands at a GIBS forum on Tuesday, 11 February 2014.
Gaurav aims to show companies how to win customers’ hearts by excelling at customer value creation. In his discussion he highlighted the importance of encouraging companies to adopt a disciplined process to innovate continuously, by identifying the obstacles that prevent innovation from flowing freely, and by keeping the company focused on continuous customer value creation that results in new value for the customer and in sustainable profitability.
Placing strategic bets
“Value is not constant”, says Gaurav. “It declines over time as ‘value black holes develop’ and the only way to avoid this is to invest in innovation.” Many elements contribute to making a company innovative and to making innovation programmes successful. However, it is also important to realise that not all innovative ideas will land success and marketers often find themselves in a game of placing strategic bets on innovations that are probabilistic, but not guaranteed. These strategic bets are vital to any enterprise as when they are successful they increase value, which in turn leads to more customers and essentially, business growth.
Balance the voice of the customer with the voice of the company
Gaurav believes that marketing should be an organisation-wide obsession, with every individual in the company nurturing customers by listening and responding to their needs. This should result in a shift in mindset, to marketing as a service with marketers existing to serve the customers and not merely to sell products and services. Many companies face the complex dilemma of balancing the voice of the customer with the voice of the company– this is a very delicate dance but getting it right differentiates a customer-centric company from a product-centric one.
Reimagining the marketing department
According to Gaurav, the CMO’s job has not changed – every company needs to give the world a reason to do business with them. However, the marketing department must be reinvented as the “customer department” that replaces the CMO with the ‘chief customer officer’. This change shifts the firms focus from product profitability to customer profitability. “Although this is becoming increasingly common in many companies today, it remains a poorly defined role” says Gaurav.
To end off Gaurav referenced a quote from Lou Gerstner, former CEO of IBM, “Putting the customer first should not just be a slogan; it should be the thing every successful enterprise should live by every day.”