W3: Rust et al. (2010). Rethinking Marketing Flashcards
“Customer department”
The marketing department should be reinvented as a “customer department” that replaces the CMO with a chief customer officer, makes product and brand managers subservient to customer managers, and oversees customer-focused functions, including R&D, customer service, market research, and CRM
Key distinction between a traditional and a customer-cultivating company
One is organised to push products and brands, whereas the other is designed to serve customers and customer segments
Customer-cultivating company
Communication is two-way and individualised, or at least highly targeted. This may be more challenging for firms whose distribution channels own or control customer information
B2B companies
Focus on meeting customers’ evolving needs rather than selling products. While those companies are often advanced in their customer orientation, B2C companies are making notable progress. The might sell their brands if the customer needs change
Algorithms
Used to determine customers’ ‘next best product’ according to their profiles
American Express
For instance, American Express uses data analysis to offer customers new products based on their changing behaviour and manage risk. They also use their position between customers and merchants to create value across relationships, such as offering special rewards on purchases for customers who have moved into a new home
Chief customer officers (CCOs)
Increasingly common in companies worldwide. It must be a powerful operational position, reporting to the CEO. A successful CCO promotes a customer-centric culture and removes obstacles to the flow of customer information throughout the organisation. Organisational structures that block it must be removed. CCOs must create incentives to eliminate those counterproductive behaviours, e.g. silo thinking or competition for promotion. Ultimately, they are accountable for increasing the profitability of customers through customer lifetime value (CLV)
Customer managers
Identify customers’ product needs. Customer managers stop focusing on maximising their products or brands’ profits and become responsible for helping customers, and segment managers maximise theirs
Brand managers
Supply the products that fulfill the needs identified by customer managers. This requires shifting resources and authority from product managers to customer managers
Customer relationship management (CRM)
Has been increasingly taken on by companies’ IT groups. Yet, CRM is ultimately a tool for gauging customer needs and behaviours - the new customer department’s role
Market research
Different in a customer-centric company
Customer service
Should be handled in-house to ensure quality is high and help cultivate long-term relationships
Customer equity
Has the benefit of being a good proxy for the value of the firm, thereby making marketing more relevant to shareholder value
Customer equity share
A measure of the firm’s long-term competitiveness with respect to profitability
