7 Rules of Marketing that Get Results

by Temel Aksoy

  Of course, there are universal laws and rules for marketing. That’s why it’s possible for a marketer living in another country to learn from a book written in the United States or Australia. But if the job is to be done properly, there is no substitute for understanding the culture of the target people.

  62. Eve

  ry Brand Must Be Customer Oriented

  Companies tell everyone how customer focused they are with the “mission, vision and values” statements they put on their websites and hang on walls. Almost every company uses the same language to express this, but very few companies actually do what they say.

  And yet they need to, if they wish to survive. Back in 1955, Peter Drucker said, “Because the purpose of business is to create a customer, the business enterprise has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.” (See Cohen in References.) The most important issue Drucker addressed is that the customer (consumer) is the reason every company exists, and he repeated this in almost every article he wrote (details in chapters 1 and 2).

  Companies with a focus on the customer know that meeting customer needs is their raison d’être. True customer-focused companies are the ones that stand with their customers in moments of difficulty. How customer focused a company is can’t be measured by how charming it is during a sale. A more important measure is how well the customer (consumer) is treated when they want to return the product they purchased or need help resolving a problem.

  In their well-known article on market orientation, Bernard Jaworski and Ajay Kohli emphasized the importance of three features required for a company to be customer focused:

  First, a company must realistically define what it means to be “customer focused,” and then it must define how every department serves the customer.

  Second, to be able to make good on its customer-oriented promise, the company must develop appropriate processes. Its information systems and approval mechanisms must be designed accordingly. This endeavor can’t be left to chance or personal initiative.

  Third, there must some agreement about how customer orientation will be measured. The company must determine in advance what criteria will be fulfilled, and it must monitor its outputs in a systematic fashion to stay current.

  Many companies fall short of fulfilling step one, the most important step in this process. This was an issue I faced when providing consultancy for one of Turkey’s largest automotive companies. Its goal was to get every department to adopt and implement the “my customer is my priority” principle. We had a meeting with the human resources department to address the issue, and they said, “We don’t serve the customer. This goal is irrelevant to us.” I had to register my own protest. I asked them who paid their salaries and tried to explain to them that every department in every company exists to serve the customer.

  Other concrete systems and tasks must be coordinated to align everyone around the common cause and make customer focus a reality that affects the company’s daily practices. Jaworski and Kohli say that the following are required to be a customer-oriented company:

  Companies must create a structure that ensures cooperation between departments.

  Every department must contribute to the decision-making process.

  Every employee must have access to information that allows them to see the big picture.

  Employees that work in support departments and those who have no meaningful contact with the end user, such as R&D, manufacturing, accounting, finance and human resources, must be aware that the customer (consumer) pays their salary.

  Everyone in the company must learn that their personal goal is to create value for the customer (consumer).

  This sounds like a lot of work, but the advantage is clear: simplicity. It’s easy to make decisions in a customer-oriented company. In a customer-oriented company, all divergences of opinion, from manufacturing and distribution to finance and marketing, are resolved by taking into account what is good for the customer (consumer). Obviously, the company will consider how much the decision will cost, but the most important thing is how the customer (consumer) will benefit from the decision.

  Jeff Bezos says, “Here at Amazon we make money not by selling things but by helping customers make purchasing decisions.” When a company describes its business in these terms, it has found the best criteria for all of its actions. In this sense, the customer (consumer) is the most trustworthy and accurate guide.

  There is a nice anecdote about Amazon founder and CEO Bezos that’s circulating in marketing and management circles. They say that Bezos leaves the chair at the head of the table in all board meetings empty. He asks that all of the executives imagine an Amazon customer is sitting in that chair. Every decision made in the meeting is, in the end, submitted for review to the customer sitting in the empty chair. If the customer approves it, then it’s put into effect. I don’t know if there is any truth to this rumor, but it sounds like something Amazon would do, because Amazon is describing itself as the most customer-focused company on earth, and it’s indeed an exemplary organization that practices what it preaches.

  It takes a lot of work and time to be truly customer oriented. If a company intends to achieve this, it must set realistic goals for itself. But it’s worth the time and effort, because the advantages of the companies that are truly customer oriented can’t be easily implemented by their rivals.

  63. Exc

  eeding Customer Expectations Is a Marketing Myth

  A company’s raison d’être is to meet customer (consumer) needs (details in chapter 1). This is why every brand makes a value proposition in exchange for money. This fundamental truth of economics is based on the fact that the benefit provided by the company is equivalent to the money it receives (Value = Benefit/Price = 1) (details in chapter 17). Therefore, every company that provides benefit greater than the price is sacrificing profitability because it’s providing a benefit for which it receives nothing.

  Satisfying customer (consumer) expectations is an area where companies often make such a misstep. The psychological state called satisfaction is the difference between what the customer expects and what the company delivers. Sales slogans like “unconditional customer satisfaction” or “going beyond the expectations” unnecessarily raise expectations. The higher a customer’s expectations are, the more likely they are to be unhappy, regardless of what the brand provides. Ironically, brands that raise the bar create dissatisfaction by their own hands.

  Worse yet, they don’t need to attempt this goal; people don’t expect satisfaction beyond their expectations from brands anyway. Studies involving 75,000 people conducted by researchers Matthew Dixon, Karen Freeman and Nicholas Toman in North America, South Africa and Europe proved that companies received no benefit from exceeding customer expectations.

  Similarly, the results of research on sales of brands that fulfill their promise compared to those that exceed expectations show that neither of these two approaches has any effect on customers’ purchasing behavior.

  “Satisfying customers beyond their expectations” is empty marketing jargon, both in terms of the economic impact and how customers respond. It is a marketing myth.

  BRAND EXPERIENCE

  64. Exp

  erience Marketing

  One of the concepts employed most frequently by marketers is the concept of “delivering customer experience.” But, like all abstract concepts, “delivering experience” usually means something different to the speaker and the listener.

  Delivering experience is a relatively new phenomenon, the result of economies shifting toward services sectors. Today, in all advanced countries, agriculture accounts for less than 10% of the economy, while industry is less than 30%. Activities other than agriculture and industry consist of services: retail sale
s, banking and insurance, transportation, communications, tourism, restaurants and entertainment. The services sector now accounts for roughly 60% of the total economy in developed countries. In this sense, all developed economies are service economies. As a rule, the more developed an economy is, the less it relies on agriculture and industry. Two things become more noticeable in every developing economy:

  First, services constitute a greater share of the economy.

  Second, both products and services become more customized.

  The “experience economy” is a term first used by consultants B. Joseph Pine and James H. Gilmore in an article they published in the Harvard Business Review (1998). According to the authors, the increase of the weight of services in the economy and the customization of products and services constitute the experience economy, while marketing for this economy is called “experience marketing.” In experience economies, people consume more services and more customized products.

  The best example of product and service customization is the “i” symbol that Apple uses for its phones. This symbol indicates that even though everyone’s telephone might look similar on the outside, the apps, music and photographs loaded on these phones are unique to the user.

  The essence of experience marketing is loading products with more services and making them more customized. However, people who talk about experience marketing usually emphasize the “sensory” elements that emerge in this economy at the expense of its essence. They argue that giving customers a good experience requires an appeal to the five senses, but, contrary to what is thought, experience marketing isn’t restricted just to sensory marketing. Experience marketing is an approach that involves offering people customized products and services that—naturally—may contain sensory elements.

  An example: In the field, coffee is a commodity sold by the ton. When the same coffee beans are blended with coffee beans from different areas, ground and packaged, they become a product sold by the pound at the supermarket under a brand name. The company that provides this service adds value to the coffee in the field because it has found coffee beans that meet customer expectations, blended them, ground them, offered them in attractive packaging and made them available in stores where people can buy them. The branded coffee sold in the market is more customized than the coffee in the field, so both its value and its price are higher.

  When this same coffee is part of an appeal to our five senses at a venue with nice furniture, pleasant music and the intoxicating smell of fresh coffee, it becomes an experience and is sold by the “cup.” The experience of drinking coffee in a cafe is so customized that no two experiences are exactly the same. The customer’s name is written on the cup. This coffee is more valuable and expensive than that sold at the market.

  From the commodity in the field to the brand in the store to the experience in the cafe, the added value of coffee and the degree of customization increases at every step. The experience economy is one that enriches and customizes products with services. Economies grow due to high-added-value products and services. (See B. Joseph Pine and James H. Gilmore for more details.)

  This type of added value is happening all around us. In the early days of the automotive industry, customers didn’t have the option of customizing the features of the vehicles they purchased based on personal preferences. But today, it’s practically an industry standard for automobiles to be custom manufactured, from the leather on the steering wheel to the seat covers. We live in a time when customization of products, from the coffee we drink to the computers we use, is becoming more and more widespread. This customization applies to both products and services.

  65. Fou

  r Approaches of Customization

  In general, customization can be divided into four categories, according to the work of Pine and Gilmore:

  Cosmetic Customization In this case, the product or service isn’t customized at all; the only difference is in how the product is presented to the customer. When Coca-Cola put the most popular names in every country around the world on their cans, giving shoppers the opportunity to choose a can that bore their name, this was an example of cosmetic customization.

  Adaptive Customization This name implies precisely what it is. Products and services are offered in a standard fashion but customized by featuring different accessories and parts that can be added for each customer. An example is the customized coffee that Starbucks offers. Starbucks coffee comes with or without milk, with or without flavoring, and hot or cold, depending on the customer’s preference. This approach to customization manifests itself not at the manufacturing stage but at the point of sale.

  Collaborative Customization Examples of collaborative customization are automobiles manufactured to customer specifications or apartments finished to customer tastes. In this approach, the company offers the customer a prototype, then manufacturing follows the customer’s stated preferences. Customization takes place not in the design phase but in the manufacturing phase.

  Transparent Customization As Pine and Gilmore say, “Transparent customizers provide individual customers with unique goods or services without letting them know explicitly that those products and services have been customized for them.”

  This approach is applicable in cases where the needs of the users are openly stated, observable or predictable. Transparent customization means custom production for the customer from beginning to end. Hotels like Ritz Carlton or online sites like Amazon customize their offerings according to past preferences of their customers. This customization is less intrusive and the opposite of cosmetic customization.

  66. Sen

  sory Marketing

  To design an effective customer experience, marketers need to understand the human mind and how it perceives and interprets the world. Humans are constantly gathering information via their five senses, and the brain processes this information subconsciously. The human brain is constantly recording the temperature, sounds, smells and sights present in its surroundings. The information collected by the five senses shapes our sensory world. People make most of their decisions subconsciously based on their mood (details in chapter 12). Sensory marketing, therefore, is the practice of appealing to the five senses to influence consumers’ moods—hopefully, in a way that benefits the brand.

  There is a science to this type of marketing. Numerous studies have shown how the senses affect the decisions people make. According to a study by Lawrence E. Williams from the University of Colorado, people holding a warm beverage are friendlier to people they meet at that moment, whereas people holding a cold beverage are more reserved. A warm beverage encourages people to have a warm and friendly outlook.

  According to studies by Charles Spence and Vanessa Harrar from Oxford University, people make decisions about a meal before they even taste it, based on its appearance, smell and presentation. The taste of food isn’t determined just by the appearance or smell, either, but also by the texture and the sound the food makes when it is chewed. The five senses operate through constant interaction. No one likes the way a food smells but dislikes its taste or likes the taste but hates the smell. For a potato chip to taste good, it must make a crunching sound.

  The same studies showed that the color of food and beverages also provides information about the taste. When Spence and Harrar gave hundreds of Oxford students different colored candies and ask them what they tasted like, they reported that different colored candies tasted different, even though all of the candies actually had the same flavor. People’s sense of taste is not informed only by their tongues, but by their eyes and nose as well.

  In fact, taste is determined not just by the color, texture, appearance and smell of food, but even by the knives and forks people use when eating it. Most of the people who participated in the research conducted by Spence and Harrar thought that food eaten with the small spoons generally used to eat desserts tasted sweeter. A s
imilar study found that cheese tasted saltier when eaten with a knife instead of a fork and that coffee from a white cup had a more intense and bitter taste. This is why tea and coffee aficionados are obsessive about their favorite cups. Similarly, University of Michigan marketing professor Aradhna Krishna, who has conducted research on the senses, found that wine consumed from a thin wineglass tasted better than that from a regular glass.

  The above studies talk about food items, but the basic concepts extend to the entire sensory world. Sensory marketing can work for most products or services. For example, many people like the smell of leather or “new car smell.” Others may feel more amenable to browsing in a book shop if classical music or jazz is playing. All of the information collected by the five human senses, whether it’s the aroma of coffee wafting on the breeze outside of a coffee shop or the sound made by a car door, is associated directly with the world and doesn’t pass through the filter of reason.

  The more a brand appeals to senses, and the more synergy it creates between the senses, the more it will influence its users. When a product has a unique smell, appearance, taste, texture and sound, the product (and therefore the brand) anchors itself to multiple points in the human mind to create a stronger impression.