Rethinking Marketing

Cultivating Relationships
Ahead of Building Brands

Presented By : Bijoy E.V (bijoyev@yahoo.com)

Venue: IBS-B
Date: 2011 (Dec 18 – Dec 21)
Ref: Roland T. Rust, - Christine Moorman, and Gaurav Bhalla
Idea in Brief
Most of the companies are still depend on mass media
marketing to drive impersonal transactions

As an alternative
Companies can interact with customers with the help
of Powerful technologies like D/W for understanding
and interacting with customers
Which can help to radically reorganize in
“Cultivating Relationships” ahead of building
brands.
.
Basic Changes in Views
Shift from pushing individual products to building long-term
customer relationships.

• Marketing Department to “Customer Department”

• Replaces the CMO to Customer Officer
• Brand Managers to Customer managers

• Shift the firm’s focus

Product Profitability to Customer profitability
Different Approach
Idea in Action ( Cont..)
Key distinctions

Traditional and a Designed to serve

customer- customers and customer
cultivating company V/S segments
Communication is two-way and
organized to push individualized, or at least tightly
products and brands targeted at thinly sliced segment
Cultivating Customers
• IBM – Energy efficiency or server consolidation, and
coordinates its marketing efforts across products
for a particular customer

• IBM’s insurance practice - IBM’s Insurance Process

Acceleration enables customer and industry specialists to
build fast and flexible processes for Insurance

• Tesco - Investments in analytics that have improved customer

retention, data-collecting thru loyalty card.
• American Exp - Spending ability to a trusted circle. Offering
special Membership Rewards
New Roles & Responsibilities
• CCO
• reporting to the CEO
• designing and executing the firm’s customer relationship strategy
• promotes a customer centric culture and removes obstacles to
the flow of customer information
• Increasing the profitability of the firm’s customers, as measured
by metrics such as customer lifetime value (CLV)
• Customer managers
• Ultimate expression of marketing - Identify customers’ product
needs.
• Brand Managers, under the customer managers’ direction, supply
the products
Proposed Org: Structure
Change In Prospective
In house-Impact
• Market research.
• Touch customers—including finance (the source
• Scope of analysis shifts from an aggregate view to an individual
view of customer
• Shifts its attention to acquiring the customer input that will drive
improvements in customer-focused metrics
• Research and development.
• Customer must be brought into the design process, Eg: Nokia
Beta labs, P&G.
• Customer service
• In-house to ensure long-term relationships. (Eg: Delta Airlines call
centre locations)
Building CLV
1. Companies need to focus less on product profitability and
more on customer Profitability
2. Pay less attention to current sales and more to CLV
3. Shift their focus from brand equity (the value of a brand) to
customer equity (the sum of the lifetime values of their
customers).
4. Pay less attention to current market share and more
attention to customer equity share – more relevant to
shareholder value.
Key Note

Deriving this Competitive way to serve customers.

Transformation must be driven from the top down. But however

daunting, the shift is inevitable.