The marketing concept, developed nearly 250 years ago, is beautiful in its simplicity:
“The marketing concept is the philosophy that firms should analyze the needs of customers and make decisions to satisfy those need.” —NetMBA
Anyone in the modern business world with half a brain will read this and say “Well, duh, of course we need to focus on the needs of the customer.”
No one will really disagree with you, at least at the top levels of management, and you’ll often find liberal lip service paid to the idea of customer service, customer experience, customer engagement, how the customer is the foundation of our world…
And yet, it all often seems like a bunch of noise. It seems like lip service in the worst way.
Because, despite the assertion by the article above that, collectively, we have moved beyond producing products and providing services for the sake of production, that we have moved beyond hard selling, that we, as a society of business owners and operators, are so super focused on customer service, despite all of this, we, as consumers, still, regularly and consistently, experience terrible customer service, awful customer experiences, pitiful attempts at customer engagement, and then are astounded, as business owners, when our customer retention levels suck.
Why the disconnect?
The Marketing Concept Is Hard to Put Into Practice
The marketing concept has been understood, and in force, for many decades. In today’s world, we are achieving ever greater levels of marketing acumen, knowledge, and finesse. We understand, more deeply than ever before, the processes at work in a consumer’s head when they interact with a brand.
New technologies, like social media, have given us unprecedented access to the consumer, to their needs, their desires, but even far beyond that — to their daily lives, to the breadth and depth of their activities, interests, opinions, needs, customer service interactions, and on and on — access they’ve given us basically for free.
We have more resources than we could possibly imagine, allowing us to craft unprecedented customer experiences that inspire people to not simply identify themselves with a brand, but to tie their very self image to a brand (a truth both powerful and terrifying), and yet we still see these horrible customer service experiences taking place, we still see churn rates that are too high, we still see retention rates that are too low, and we still see, basically, companies getting away from the marketing concept and returning, mentally, to the business practices of the 1920s or the 1950s.
So what’s happening here? Is the problem the modern customer? Are people just setting their expectations too high? Is it the market itself? Are we just marketing to the wrong people? What’s wrong with these damn customers?!
Getting Away From the Past Is Hard — It Means Getting Away From Our Nature
To really understand what’s going on here, we need to look at how things used to be — our friends at NetMBA describe how brands went about their business in the ancient times of the 1800s to about the 1920s.
They operated (likely unconsciously) in accordance with the production concept, which goes a little something like this:
“The idea that a firm should focus on those products that it could produce most efficiently and that the creation of a supply of low-cost products would in and of itself create the demand for the products.” —NetMBA
Then, basically, much of the needs of the developed world were met over a period of decades, and you couldn’t just produce something efficiently and effectively and just expect it to sell.
So, in the 1950s, we got the sales concept:
“Companies not only would produce the products, but also would try to convince customers to buy them through advertising and personal selling.” —NetMBA
Though the marketing concept was first conceived over a hundred years previous to all this nonsense, it took a long time for companies to even think about applying it.
The reason is simple — focusing on the customer is hard, but focusing on the product or service is easy. A customer-service focus has to start at the top, but it really and truly has to be a team effort. It has to go far beyond lip service. It can’t be something that is discussed in a meeting once a month and forgotten, while the majority of the work is spent on the product or the service itself.
But that’s very difficult to do — most companies are so entrenched in what they do, the product or service that they provide, that it’s next to impossible to wrench themselves from that work. So they create disparate teams — one to focus on customer service, one to focus on the product or service, but the disconnect persists, because the product and service team cares little for the customer, and the customer service team expects perfection out of the product.
And the team that generally gets the most resources and the most focus is the team that creates the product or service — the foundation of the business, right?
And somewhere along the way, the customer gets lost.
The firm is focused on the product or service, on what they do best, and the customer becomes an afterthought. As though they wake up one day and say “Oh yeah, we gotta find someone to buy this.”
How can great customer retention come from such an attitude? Of course it gets lost along the way! Because the customer isn’t the reason for the existence of the firm in the first place — the product or service is. The firm cares more about what it does best than about who it serves and what they need. Which is fine as long as everyone needs what you produce or provide, but not so fine when something comes along and disrupts your industry.
Customer Service, and as a Consequence, Customer Retention, Become Afterthoughts Because of a Focus on Product/Service
Customer service is something that many modern firms a) think about a little bit and spend little time actually working towards and b) only consider after they have come up with the product or service they want to sell.
The marketing concept would tell us that this is entirely wrong, that instead of coming up with a product or service and then figuring out how to get people to purchase it, we find a market, identify what that market needs, make the market and the people who compose it the sole focus on the entire business, and then consider what product or service we can provide to that market.
But you probably didn’t do this — or your boss didn’t do it, or your C-suite didn’t do it, or whatever. Most firms don’t do this at all. They come up with the idea first, the product or service they think they can provide, and then they build it, and then they get a team around them to support it, and then they go out there and try to find some people to sell it to.
That might be backwards, but doing it the other way requires an incredible buildup of capital and talent and a will to risk quite a bit on something that might not be proven.
Doing it the other way — creating a product or service and then selling it, is human nature. Human nature tells us to do what we do best and, if someone wants to pay us for it, fantastic, but if not, we keep on truckin’ until we find someone who will. It’s extremely difficult, and scary, to say “Well, let’s look at a market, at the people who compose that market, and figure out what they need, and then see if we can create it.”
It’s difficult and scary because there are many unknowns — and what if you identify a need but you don’t have the skillset to provide it? What if you didn’t read the market right and things fall apart? What if no one buys?
And that’s just for those trying to break into a market.
Established businesses struggle to work on the marketing concept because they’re deeply committed to the product or service
It’s worse for large corporations who already have gargantuan infrastructure, who can’t just wake up one day and say “Well, let’s look at a market, and, you know, I know we’re a giant telecom and all, but gee, this market really seems to lack quality custom housing providers — should we break into that?”
That’s a good way to get your sanity questioned and summarily fired — it’s not at all reasonable.
Instead, you must find a happy medium, pairing what you do well with the needs of the market and then following up with excellent customer service and customer experience. The main connection between the marketing concept and customer service is this — if you’re not providing what the market needs, you are, by definition, not providing the best customer service possible. Which means, by definition, that your customer experience isn’t going to be the best and your customer retention is going to suffer.
But focusing solely on the needs of the customers means you might not be able to deliver the best possible product or service if your skills don’t match those needs.
So, you have to meet in the middle.
Your Nature Will Tell You to Focus on What You Do Well — The Happy Medium Is Finding a Way to Do so While Considering Your Customers
The truth is, the marketing concept is an ideal. We should absolutely be putting our customers first by basing our entire business around the needs of the market, but that’s not always reasonable or possible.
We should absolutely be providing the best possible customer service, creating amazing customer experiences, thinking about their needs and how to inspire brand loyalty, and all the rest, but, at the same time, basing the entire business around the customer and the market itself, while it would be great if we could do so, is extremely difficult.
For established businesses, especially large corporations, it’s often far too late, and change is slow and methodical — it might take a decade to even begin to create a tectonic shift in customer experience, to focus the business on the needs of the market and put the customer in the center, and it may take a long time to address the failings of customer service that have become endemic in a particular industry.
Telecoms is a perfect example — a business that employs hundreds of thousands of people across dozens of countries can’t change in a fortnight. If customer service is bad, if the focus is on making sales and not providing for the needs of the customer, that’s going to take a severe effort from the top down to change.
But it can change, and it has to change, because the marketing concept has a crucial teaching hidden inside:
The business that doesn’t focus on the customer is the business that ultimately fails. Not putting the customer as close to the center as possible is a wound that festers, that will ultimately become fatal.
And even giants can fall when a disease becomes terminal.
Businesses That Think Their Product or Service Will Always Be Needed Often Fail — The Needs of the Customer Dictate What a Business Should Offer
The service or product you provide is not guaranteed, it’s not guaranteed to always be needed, to always be wanted, to always be relevant, or to always be as critical to your customer as it is today. Blockbuster is a perfect example of this. There was a point in time where they provided a critical service on a massive scale. No one could have imagined (except Netflix, apparently) that streaming digital services would replace the physical renting of movies.
Blockbuster got complacent. They were production-and-sales minded. They thought “Hey, we do this one thing, we do it really well — if the customers don’t like it, who cares! Someone who values it will always be around because our service will always be needed.”
The best part is this — they had the chance to buy Netflix, but they turned it down. They just couldn’t imagine that the customer would ever want to give up the experience of going out to rent a movie.
They focused on the product or service that they did best, the thing they had perfected over the years, and they refused to ask what the customer actually wanted, what people really wanted out of their movie-watching experience.
They thought people’s needs would never change, that renting movies physically would always be a need.
And obviously, that was wrong.
The big telecoms companies saw that they couldn’t become complacent. We’ve seen a huge pivot in the last 50 years from landlines to cell service — the telecoms understood the needs of the customers and altered their offerings.
This necessitated learning new skills and needing to become experts in the cell arena instead of in the landline arena — all their expertise had to be shifted, drastically in some respects, but they made the change and changed what they were good at so they could meet the needs of the customer.
They still focused, in a way, at what they were good at, but they met in the middle to find the needs of the customer as best they knew how.
Now, they still experience serious customer service issues and churn, but the telecoms that focus heavily on customer service, instead of the product, tend to come out on top. People don’t give a damn how good your network is — they give a damn about being able to get a new phone or service contract quickly, about being treated like a human being, about getting their problems resolved.
The telecoms did something, 20-some-odd years ago, that falls directly in line with the marketing concept — they looked at a market, they looked at its new need (cell phone service), they looked at what they were good at and what they could provide, and they met in the middle. Now, it took a long time for cell phone service to get to the point where it was what the majority of customers wanted, and even now, there are many things that the market wants that these behemoths can’t or don’t provide, but every year, they get a little closer. Data used to be something you had to pay heavily for, and the same went for text messages, and even minutes of talk, but those have all gradually become unlimited as the needs of the market have been recognized and met by the telecom giants.
Find the Happy Middle, and You and Your Customers Will Be Happy
The truth is, you’re likely not going to be able to come up with something amazing that’s going to wow a market and come out of nowhere — that’s a one-in-a-million occurrence.
You have a particular set of skills, your firm does a few things really well, and it just doesn’t make sense to change that completely to meet the need of a customer.
However, there’s always a way that you can look at what you have, look at the needs of the customer, and find a place where they intersect. To match your skills to a market, to look at the market and customer base you serve and say, “We are great at this, they need that — how can we meet in the middle?”
The firms that do this are successful. The firms that don’t fail.
Don’t be a firm that fails.