Start with the Customer and Work Backwards?
Successful marketing strategy. Should it ‘always’ start with the customer and work backwards? In the 21st century and amidst the burgeoning digital age it’s a question which arises many times, every day, in companies, large and small, across the globe. For many years now we have known the importance of focusing on building crucial relationships with customers that help us to dominate the market. The question is ‘Are we now entering a NEW Age of the Customer‘?
It is clear that a host of the most successful businesses are increasingly adept at bringing the customer into the company as an active participant at the development stage. There are many companies that can be cited as shining examples of how by putting the customer at the helm of marketing strategy you can grow rapidly and dominate the marketplace.
However, just as the strategy of starting with the customer and working backwards has been enormously profitable for many different types and size of business, it is NOT the magic bullet for infinite growth and profitability. Other factors come into consideration such as the emergence of new competition, advances in technology and evolving customer preferences.
Dell Computers was a staggering success in the late eighties and into the nineties. At this time in the UK if you walked around the offices of companies both large and small, invariably you would see the Dell logo gleaming from the back of a laptop or more probably staring back at you from the monitor of a desktop PC.
The spectacular success of the Dell Corporation was because of its ability to ensure that their computers could be configured according to customer specifications and directly delivered to them. It was what the home user and the business customer wanted: highly configurable, cost effective computers. By working backwards from what the customer desired, Dell was also able to reduce it’s own inventory costs and create a streamlined supply chain management system, that eliminated the middleman mark-up!
In addition, at that time the personal computer industry was notorious for abysmal and unreliable customer service. Dell transformed customer service by utilising it’s direct relationships with customers to pioneer the concept of customer ‘support’. The company didn’t rest until the calibre of it’s ‘customer’ service was rivalled only by the quality of its products and it’s speed of delivery.
A persuasive opening gambit then of the potential of a business strategy whereby ‘it all starts with the customer’! However, to reiterate our earlier made point, if we come up to the present time (2013/2014) we can Google (or, search!) Dell and read about why ‘Dell Is in Really Big Trouble’, and ‘The struggling PC maker’.
Its impossible to tell whether Dell rested on their laurels? What can be established though without repute is that market leadership can catch a consumer’s attention and can be an important factor for the customer to consider, but there is more than one leader in almost every market segment.
Positioning begins with the customer. Customers think about products and companies in relation to other products and companies. What really matters is how existing and potential customers think about a company in relation to its competitors.
There is a definition of relationship marketing which goes something like this: ‘Relationship marketing is a strategy designed to foster customer loyalty, interaction and long-term engagement’. All well and good, but in my opinion too narrow and myopic. If we genuinely set-out to pursue a strategy that starts with the customer and works backwards then we need to think outside of the realms of repetitive customer contact, spurious social media competitions and repetitive, faceless customer communications.
Instead, we should be thinking of the wider strategic benefits of what a strategy that begins with the customer and works backwards can deliver. We should be focusing on and exploiting the competitive advantage that can be gained by this approach, the internal cost savings that can be won by this strategy, and the satisfaction that employees feel from serving and delighting customers.
It all starts with the customer is a business philosophy that should empower and guide the whole organisation. It is more than just a function of the marketing department: it is a way of doing business. The goal should not be to fool the customer, but to integrate the customer into the design stage of the product or service, and to create lasting, profitable relationships that develop and sustain competitive advantage.
Paul Brewster. April, 2014.