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November 2015
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4 posts from December 2015

Uncanny attachment to a non-person

Josh Barro is creeped out by people who get emotionally attached to their suppliers. He thinks people are foolish to expect real friendship from a company, but I think companies are made of people, and if those people recognize and appreciate us, then it adds to our quality of life.  IStock_000020168756XSmall

Where I think he's right is that companies are subject to economic pressures which their customers may not perceive. Our favorite supplier could be bought by a competitor. We may feel disappointed but we really can't count it as a betrayal. When my favorite bookstore was bought by Barnes & Noble years ago, I did my best to avoid Barnes & Noble. I wanted to punish them for discontinuing a business model that was probably unsustainable. Being loyal to a company means wanting them to be profitable. 

NY Times: Sorry, but Your Favorite Company Can't Be Your Friend, 2015-Dec-11 by Josh Barro

A hallmark of communal relationships is that they are not based on exchanges of comparable benefits. That doesn’t mean you are supposed to freeload off your friends, but it does mean if your friend drives you to the airport, you are not supposed to give him $80 — you are supposed to do him a favor later, when he needs help from you.

Since companies are ultimately in the business of charging their customers for products and services, they are likely to end up violating the communal relationship norms they establish, with charges for services rendered intruding on the friendly nature of the relationship.

At SunGard, CX leadership is about modeling and reinforcing customer focus everywhere

As CX leader Milista Anderson sees it, having a Customer Experience department is a disadvantage. Unless everyone in the company understands they are responsible for the customer experience, the customer's experience is in jeopardy. 

Loyalty360: SunGard Encourages Adaptability, 2015-Nov-20 by Steve Taggart

Anderson explained that assuming a dedicated CX role means taking on three personas: A teacher, a preacher, and a screecher. In other words, creating better CX requires a leader to teach others about what great customer experience looks like, preach the message over and over in order to begin the companywide shift, and “screech” loudly enough to create change.

“I don’t have a customer experience team behind me, and I don’t want one,” Anderson said. “I would rather create evangelists out of everyone else in the organization than to have a full customer experience department.”

In pursuing better customer experience as a company leader, Anderson stressed the importance of forming relationships throughout every part of the company.

Growing versus sustaining a brand

New research by Professor Byron Sharp, which is valid, shows that the bulk of purchases do not come from "loyal" customers. His marketing theory is that business growth must be based on attracting the attention of non-loyal customers and non-customers. He also spends quite a lot of time making fun of marketers who promote brand loyalty as the path to success. 

So I feel compelled to respond. If you share my fascination, do watch this 15-minute video from Professor Sharp. 


You'll notice that his criticism is that marketers become focused on creating and catering to "brand fanatics." But also notice that he recommends marketers focus on the "light buyers." So he isn't really saying "don't market to customers." At the point of purchase, most people are influenced by "top of mind" awareness. In the Financial Times, Ian Leslie points out that it comes down to support for traditional mass advertising, away from highly targeted (digital) campaigns. 

As a marketer, I'm amazed at how Sharp and his supporters have taken well-known facts about the economics of marketing and turned them into a platform for ridiculing marketers for trying to make marketing more effective. 

There's not a marketer in the world that wouldn't place a commercial on the SuperBowl if she could afford it. Higher brand awareness is wonderful, solving so MANY of our growth problems. 

Sustaining a brand is not a simple procedure of building brand awareness and availability among the potential users. Using the resources we have, we have to find leverage which will allow us to grow profitably. Converting light users to heavy users is a strategy even Professor Sharp can endorse. The most cost-effective way to do it is to find out exactly who those light users are and target the marketing to them. Oh wait, that's customer marketing. Hmm...

Financial Times: How the Mad Men lost the plot, 2015-Nov-6 by Ian Leslie

Sharp’s first law is that brands can’t get bigger on the back of loyal customers. Applying a statistical analysis to sales data, he demonstrates that the majority of any successful brand’s sales comes from “light buyers”: people who buy it relatively infrequently. Coca-Cola’s business is not built on a hardcore of Coke lovers who drink it daily, but on the millions of people who buy it once or twice a year. You, for instance, may not think of yourself as a Coke buyer, but if you’ve bought it once in the last 12 months, you’re actually a typical Coke consumer. This pattern recurs across brands, categories, countries and time. ...

Brands are not the rich sources of differentiation marketers like to think of them as, but short cuts through the complexity of decision-making. Most consumers aren’t aware of, or interested in, the difference between Nescafé and Kenco and don’t want to spend longer than they need to thinking about which they prefer. They just want to get coffee and get home. Marketers are usually surprised to hear this and find it hard to accept — they like to imagine that people who buy their brand are deeply attached to it. But the data show that even people who regularly favour one brand over others will pick a competitor if it happens to be more easily available or cheaper that day. In the words of Sharp’s mentor, Professor Andrew Ehrenberg: “Your customers are customers of other brands who occasionally buy you.”

Jason Hirschhorn: "Wouldn't it be cool if the psychiatrist worked like a SUBWAY rewards card. You get points for every revelation. Parent issues. 10 points. Trust issues. 5 points. Friendship issues. 5 points. Work issues. 2 points, etc. I'd be sitting next to WOODY ALLEN in the first class platinum waiting room. Free sessions as far as the id, ego and super-ego could see after about a year..."