Customer Care as a Deliberate Strategy
By Theo Muller
Theodore Levitt describes the purpose of business as ......
"...to find and keep customers and to get existing buyers to continue doing business with you rather than your competitors".
Compare this definition with how Al Ries and Jack Trout describe marketing in their book "Marketing Warfare". They say that,
"...the true nature of marketing today is outwitting, outflanking, outfighting the competition. In short, marketing is war, where the enemy is your competitor and the ground to be won is the customer. As with real war, there is no one way to fight a marketing war. Rather there are four: defensive, offensive, flanking and guerrilla warfare. Knowing which warfare to fight is the first and foremost decision you can make".
Trout and Ries on the one hand and Levitt on the other, are in pursuit of the same goal namely sustainable business. However, it seems though that the way and methods to achieve the goal is different. Levitt advocates a customer centred strategy which is finding out who your customers are, knowing what they want and supplying them with what they want in such a way that they want to come back for more. The purpose is to create happy loyal customers and the result is control over competitors. After all the strongest weapon to fend off competitors is a satisfied loyal customer.
Trout & Ries create sustainable business via competitor focused strategies. The purpose is to beat the competitor at all cost.
If I was on a debating team arguing the pros and cons of these marketing strategies, I would probably feel more comfortable in supporting Levitt's approach especially from a corporate cultural perspective.
Building something up has positive connotations - creating something better, or improving something has a positive nurturing influence on those who are doing it. Positive synergy creates enthusiasm, commitment and an atmosphere and culture that is conducive to growth and development.
Ries and Trout's warfare strategy by contrast breaks things down - even if it is only the enemy. It is a negative approach which encourages a culture of destruction, immobilisation and obliteration. How is it possible, I ask myself, to develop happy loyal customers in an environment which is negatively focused on cutting the competitors off below the knees?
I go for Levitt's marketing approach any time!
What these two marketing strategies highlight is that any marketer needs to be wary of competitors - there is no doubt about it - a keen marketer cannot afford to blink because the competitor may just do some nasty things under the cover of that brief darkness.
Successful marketers regularly measure the performance of their organisations in terms of customer perception and experience. They also carefully measure their competitor's performance. There is a direct correlation between customer loyalty and the vendor's overall performance. If that performance measures up to or indeed exceeds expectations, then the competitor will have to work extremely hard to get a foot in the door. On the other hand if there are signs of weakness in the performance - and performance is measured in product and service quality as well as the delivery thereof - the vendor exposes himself to competitive intrusions.
Let's look at the illustration below:
The vertical bar on the left hand side represents the customer's importance rating of a certain product or service attribute or set of attributes. In this case the customer has attached a score of 9 out of 10 where 10 represents very important, essential and 0 not at all important. Essentially the importance score represents the customer's expectation of service delivery.
The vertical bar on the right hand side represents the vendor's performance score. Here the customer gave the vendor a score of 7 out of 10 for performance in the fulfilment of the same attribute or set of attributes. 10 is excellent performance and 0 is poor performance.
It could be argued that 7 out of 10 is good, certainly better than average performance. However, in this example the customer expects a performance level of at least 9 out of 10 from the suppliers so anything below 9 leaves the supplier exposed to competitive attacks. The astute marketer not only knows the weaknesses in his/her organisation's service delivery, but moves heaven and earth to close the gap.
Levitt's way of closing this gap is to focus on customer needs, to fulfil these needs in terms of customer expectations but, if at all possible, achieve a level of performance that exceeds the customer's expectations.
That brings us to an interesting dilemma. If as a vendor or supplier, your aim is to exceed customer expectations, the question is, by how much? There are two known theories here:
The WOW-criers want you to exceed customer expectations by a factor that causes the customer to cry out loud WOW!!! - how did you do that? There are marketing "guru's" who have built their entire careers on preaching the Wow way of doing business. Paul Dunn and Winston Marsh or Brad Sugars can tell you many wow stories - usually set in typical retail situations.
Ken Blanchard (of "One minute Manager" and a lot more fame) on the other hand is more exact. He says that as a vendor or supplier you should try to exceed customer expectations by no more than 1%. How he settled on that number I don't know but it seems a bit mean to me.
Anyway, the point is clear. In performing a service, no matter what it is, as a supplier you should always aim to fulfil customer expectations and preferably exceed these expectations. But there is a cost involved in exceeding expectations and the informed marketer should know what this cost is. Consider the illustration below:
The vertical bar on the left is again the customer's importance rating of a set of service attributes. Here the customer attached an importance rating of 6 to these attributers. The bar on the right is the vendor's performance level and in this example the vendor was given a performance score of 9. This is probably very much WOW territory as the vendor exceeds expectations by as much as 50%. What the customer is really saying here is that we don't think that these aspects of service delivery are all that important but, Mr/Mrs vendor, you firm or company is doing really well here.
A real life example is entertainment. A number of service providers still think that marketing is synonymous with providing entertainment to customers i.e. lunches, functions, afternoons on the golf course, travel and free tickets to rugby games. Our research tells us that customers attach a lower importance rating to entertainment than is generally being perceived by vendors. A typical importance score by customers of professional service providers for entertainment related attributes is between 6.5 and 7.0. Performance in this area from research that we have done varies between 8.0 and 8.5.
The WOW criers may be happy with these results but the likes of Ken Blanchard will say that these service providers go overboard. Whilst not committing myself to either viewpoint, I do hold the view that the responsible marketer should at least know that there is a cost associated with over-performance and what these costs are. Knowing what the actual costs are, it then becomes a strategic decision to either wear them or make whatever changes are deemed necessary. A perfect legitimate decision in my opinion would be to trim the entertainment budget back and to channel the "cost savings" into an area where the company has been under-performing, or put it to the bottom line.
- The wise marketer regularly measures his/her firm's performance of service delivery with the express intent to make improvements.
- A regular check on the competitor's performance is critical for maintaining a competitive advantage.
- Always aim to exceed customer expectations but be aware of the cost of doing so.
- Customer care is a deliberate effort and carries a price tag.