Missing Customers Lately? Try Getting Back to Basics
It seems that a great confusion has arisen in the process of brands doing their branding these days. Allow me to sort this out. A brand, in itself, is not marketing a brand is who you are. And marketing, in itself, is a means to an end; marketing and innovation exist to draw customers. Unfortunately, these distinctions seem to have blurred, or even switched places, in the minds of many companies. In their relentless drive to maximize shareholder value, many brands have left the customer out.
I'm certainly not the first one who's noticed this confusion. Jack ("Neutron Jack"Â) Welch of GE has pointed out that "shareholder value is a result, not a strategy. Your main constituencies are your employees, products and customers."Â Welch's observation holds true regardless of whether the brand is business-to-business (B2B) or business-to-consumer (B2C); in the end, it's all about business-to-people (B2P, if you'll indulge me). And so, these days, as we reap the grim harvest of the last year's financial news ââ¬imprudent lending amidst insider dealing, bankruptcy, accusations, claims and counterclaimsââ¬ we can see that the misconduct of big brand names has changed the perceived value exchange of B2B brands. In the process, it has transformed the meaning and context of trust.
Look no further than the banking industry if you want an example. Historically,banks focused on acquiring, growing and protecting their clients' assets, and by lending money and making profit out of the assets under management. But, long about 2000, the value relationship between banks and clients abruptly changed. It switched to banks trading their own products at the expense of their clients. Seemingly overnight, the base of the compensation model shifted to how much money you could make by the volume of products sold, not the number of clients under management. The outcome, of course, is something we all know.
Trust is a crucial ingredient of all brands and their reputations' but that contract of trust has been shattered. Stocks do not have a memory-recall button, but investors and customers do. That's why fewer than half of all Americans have a favorable opinion of business today.
Compounding the brand fatigue that has besmirched many B2B brands is the belief that customer-centricity can be achieved by companies entering B2C's Temple of Mammon and bedecking themselves with happy logos, comforting language and stock photos of smiling people, all to lift them from their somnolence as staid corporations and market them as genuine, complete, crystalline and pure. (The irony, of course, is that many B2B brands are anything but sweet, friendly and pure.)
The financial breakdown has not only eroded consumer trust, but it's also shifted where consumers place it. Our notion of trust has moved from trust in "the company" as such to trust in the people who run the company. Today, as brands refer to market share, profit share, revenue share, etc., they're overlooking that what they're truly competing for is share of trust.
To succeed in this era of mistrust and cynicism, B2B brands will have to make several adjustments. First, they must identify who they truly are and why they are in business. This will provide a picture of their future, their organizational style and the direction they need to take. As Jim Collins writes, âââ¬ÅâAll good-to-great companies began the process of finding a path to greatness by confronting the brutal facts of their current reality.âââ¬Â
The second priority is to understand that if customers don't believe in you, they're not going to come. So, what messages are you delivering that they can believe in?
Third, there is a brand's culture. According to research by Bain, the average company loses more than half its customers every four years. The two determinates of value
creation in business are how tight the ship is run and the closeness of the relationship with the customer. Don't forget that it costs five times more to acquire a new customer than to hold onto the one you already have. Retaining your customers can be achieved only by developing a culture that espouses shared responsibility, shared benefits and shared values.
That last one is critical. Understand that people and businesses live their lives in the future not the present. Whilst many B2B brands have attempted to shift from being functionally oriented to emotionally oriented brands, the real leap is in being values-centric brands. It is no longer enough for B2B brands to define themselves in terms of what they are; they must make a commitment ââ¬environmentally and sociallyââ¬about who they want to be. The current mind-set misguidedly encases itself in the moment; it forgets the prosperity of the past and, worse, ignores our ability to shape the future.
John Maynard Keynes identified sinking confidence and pessimism as causal to sustaining and deepening economic recessions. The psychology of investors and ordinary consumers is in many respects more critical than what might be described as "objective economic conditions."Â The time is now for influential companies to gather and take on the responsibility of advancing the common good as an antidote to the debilitating fear that will assuredly delay economic recovery. Finance might be the brains of corporations, but brands are the heart.
Dean Crutchfield is the Chief Engagement Officer of Method (www.method.com). He can be reached at firstname.lastname@example.org.