Is customer-centric culture more important than immaculate marketing?by
Can a company with a customer-oriented culture thrive without a robust marketing strategy?
A customer-oriented culture is widely recognised as a key part of business success, with the potential to boost a company’s reputation like nothing else. There’s no doubt of its power, particularly in this digital age where interactions with brands are shared with thousands at the touch of a button – whether they’re good or bad.
We’ve probably had our own experiences with brands that may have dramatically changed how we perceive a brand, or perhaps even our buying behaviour. We cannot ignore the importance of taking a customer-oriented culture seriously in a business environment. The benefits are obvious, but could it be more important for business success than having the right marketing strategy?
The debate between a customer-oriented culture and getting your marketing strategy right is disadvantaged from the outset – of course, you want both. But if they went head to head, what would win?
I recall a business debate hosted by The Worshipful Company of Marketors (“The Marketors”) that debated this very topic, and chief executive for business in the community Amanda Mackenzie OBE argued for the idea that a customer-oriented culture was more important than the right marketing strategy.
She made the valid point that culture is the basis upon which you build a successful company and a powerful brand; she described it as the ‘heart and soul of a company’. Though I agree this can be the case, and that there is nothing fundamentally wrong with aspiring to a customer-oriented culture, an organisation’s focus on the customer needs to be part of an integrated marketing strategy in order to serve its most useful purpose: generating business revenue.
The very word ‘orientation’ implies a leaning towards something – in this case, customers. Any leaning or bias towards something needs to be handled carefully to ensure that it doesn’t become destructive. Imagine a general who has a bias towards the cavalry; if he’s constantly bringing in the cavalry rather than the infantry or the artillery, he’d lose battles. A balance needs to be met to ensure that other objectives are not made a lower priority as a result, particularly a marketing strategy, that would enable an organisation to identify the key focuses required to create business success.
Organisations such as banks or those that work in the telecoms or financial services industries all have a commodity product, so employees need to be motivated to provide exceptional service and customer experience. This is understandably crucial. But today, in a saturated marketplace where so many products are similar, a strategy identifying key differentiators, unique selling points or unique ways to present products is what enables a company to stand out amongst the crowd and gain market share.
Shareholder value added
I am reminded of what was once one of the friendliest, most customer-oriented companies in the world – British chemical company, ICI. Its employees were devoted to the company; its culture playing a large part of this, no doubt. Unfortunately, it was evident that ICI’s competitors, such as DuPont, Siemens and Hoechst, better implemented market segmentation and their own value propositions as part of an integrated marketing strategy.
The result? These competitors are still thriving and prospering, whereas ICI was defunct in 2008. In spite of its customer-oriented culture, the company did not have a robust marketing strategy, which would have contributed to its downfall.
This isn’t an isolated example, either; over a 30-year period, almost every highest earning FTSE company went bankrupt or were acquired – customer-oriented though they were - they lacked a professional marketing strategy1. A Harvard Business Review article said that of 30,000 new products launched in America, 90% failed because of poor marketing2.
The key way to achieve success in the corporate sector is to create shareholder value added (SVA), the value-based performance measure of a company's worth to shareholders. Gaining SVA is done in four main ways: investing in projects that earn more than the cost of capital, increasing returns from existing investments, reducing resources allocated to projects that earn less than the cost of capital and by reducing the cost of capital overall.
These four ways can be translated into marketing strategy by a company to reap results, but a customer-oriented employee at every customer touch point, for example, is not going to be able to achieve these things – particularly not in a quantifiable, measurable way.
In my experience of business consultation at corporate board level, I know a company is going to fail when I ask directors to list their key target markets in order of priority, and all they can do is write down their products. It’s even worse when I ask them to write down their sources of differential advantage against each target market and they can’t do it – I know they are doomed! This is a deep-seated problem that a customer-oriented culture cannot solve.
To recognise the inherent value of a customer-oriented culture, particularly upon customer loyalty and reputation, is an absolute necessity, but it is through identifying its limitations and focusing on the role it plays within an integrated marketing strategy that business success is achieved.
Any organisation that cannot explain quantitatively why customers should adopt their product or service is eventually doomed to failure. This is the role of a marketing strategy.
1McDonald M (2009) Marketing Accountability, Kogan page pp14-15
2Christenson C, Cook S, Hall T (2005) Marketing Malpractice: the cause and the cure, HBR Dec pp 74-83
Professor Malcolm McDonald is a Liveryman of The Worshipful Company of Marketors and is Emeritus Professor of Marketing at Cranfield University. He was a Professor of Marketing & Deputy Director of Cranfield University School of...