Marketing in a ‘Customer-driven’ company

Following on from my previous three posts on company culture drivers; this post looks at the ‘customer-driven’ company and how Marketing functions in this type of environment.

This is not about being customer focused, providing great customer service, creating value for your customers, listening to customers and all the other good things related to taking excellent care of your customers. This context of customer-driven is about companies who are slavishly dedicated to serving their customers to the extent that their business strategy and culture is driven by their customers.

The customer-driven company culture is prevalent in smaller companies where the founder started the company with a contract for the first customer, added more customers, grew the business, but essentially does what the customers want. There are however a surprising number of large and public companies who are basically customer-driven. A key characteristic is that the company is dependent on a relatively small number of customers for the vast majority of its revenue. So, while customers get ultimate service and attention, the company has limited scalability, high risk exposure to various changes in customer companies and limited control over product and go-to-market strategy.

“You can't just ask customers what they want and then try to give that to them.
By the time you get it built, they'll want something new.” Steve Jobs

These companies are likely to have a collection of ‘markets of one’ – i.e. each customer (or small sub-group of customers) is essentially its own market segment. While there is usually a common thread across these customers, they don’t comprise a market in the usual manner. These ‘markets of one’ and lack of the usual market scalability, heavily influence marketing options and approaches.

Marketing in these companies seems to be focused on two main areas:

1. Retention – while customer retention should be a high priority for all companies, it is particularly critical for companies that depend on a relative small number of customers. Marketing programs such as newsletters, free educational events, customer conferences, satisfaction surveys and featuring customers in trade publication articles appear to be most common. If customers pay recurring support or maintenance or other types of retainer fees, then marketing must run programs that emphasize the value customers receive from these fees.
2. Cross-Selling – marketing campaigns to sell more products and/or services to existing customers. The key is to focus on complementary or additive solutions relevant to each customer’s situation.
   

New customer acquisitions tend to be more opportunistic and generally not driven by a significant marketing campaign.

A good approach for improving marketing effectiveness in customer-driven companies is to reach more people in different roles in customer companies. But you shouldn’t just send the same stuff to more people – it should be personalized and/or role-based materials that connect to each individual’s responsibilities. This will enable developing greater exposure, more customer advocates, more buyers and ultimately better retention and more sales from existing customers.

Do you work in a customer-driven company as defined here – what’s your marketing approach?
(use the comment link below to share your thoughts on this topic)

Next post, a look at marketing in a market-driven company.
Copyright © 2009 The Marketing Mélange and Ingistics LLC. http://marketing.infocat.com

How is your company ‘driven’?

I frequently hear people categorize their company as being “customer-driven” or “we’re a sales-driven company” or “we’re definitely a market-driven culture” or something like that. I’m always tempted to ask 2 questions; “so what does that really mean for how you operate?” and “how does that impact your approach in marketing?” The curious thing is that when you do ask these questions you frequently get wishy-washy answers. So, being analytical and curious, I did some checking a couple of years ago to find out what these categories of how companies perceive they are driven really mean and more importantly, what it means for how you approach marketing.

Every business has a company culture, usually established by the founder/owner/CEO/executive team or similar chief person(s). One of the many facets of company culture is this categorization of how the business is driven. What you usually find is the chief person’s professional career is the primary determinant of the culture. Yes, other factors such as their background, education, culture, personal beliefs, etc. do play a role too, but their career experience seems to have the most influence. Therefore, a chief person who came up through the sales organization will generally establish a ‘sales-driven’ culture while someone with mostly customer service or consulting career experience may establish a ‘customer-driven’ culture.

Seems to me there are 4 major types of company culture drivers:

1. Competitor-driven
2. Sales-driven
3. Customer-driven
4. Market-driven

Sure there are other drivers such as product, engineering, innovation, etc. but IMO they’re a subset of one of these majors. While none of these are necessarily wrong or bad, there are ramifications for the organization overall and associated limitations that may not be readily apparent in some of these.

Companies could evolve through different cultures as the business matures and evolves in the marketplace – for example, a company founded on a competitor-driven premise of providing cheaper alternative products, may move to sales-driven as their market share increases and eventually to market-driven with their own product innovations establishing market leadership.

My next 4 posts on this blog will explore each category in more detail and discuss the implications for marketing supporting each type.
Copyright © 2009 The Marketing Mélange and Ingistics LLC. http://marketing.infocat.com