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This chapter is from the book

The Zen of Customer Share

Western culture tends to look at life as if it were a 100-meter dash, while Eastern culture tends to look at life as a 26.2-mile marathon. In the West, we are driven to deliver results today. In Eastern Culture, goals and results are often viewed over generations and decades. (See Table 9.3.)

TABLE 9.3 Acquisition More—Retention Better

 

Cultural Orientation

Marketing Orientation

Revenue Goals

When Hungry

When Tired

Market Share

West

Mass

More

Sell

Sell

Customer Share

East

One-to-One

Better

Eat

Sleep

© 2001Customer Share Group LLC


A market share orientation typically takes the view that business is conducted as a series of millions of little battles to be won or lost, while value is gained from outside the core—by acquiring new customers. A customer share orientation, on the other hand, takes the view that business is conducted as a war that is fought over a lifetime and takes advantage of energy that has already been created, perhaps even by a prior generation. Customer share marketing redirects that energy, leveraging years of brand loyalty and goodwill to create more value from inside the core—by retaining and growing business from loyal customers.

In Western culture, the system of financial support overwhelmingly supports attacking the enemy (competition) to win sales today rather than methodically enlisting the help of thousands of individuals, who are loyal to your brand, to defeat the enemy over time.

Historically, for every $100 we spend on advertising products and services, less than $20 is dedicated to retaining the customers we already have. That's $80 out of every $100 dedicated to acquiring new customers—convincing prospects to try our products and services for the first time or to switch back from a competitor's product. An inordinate amount of time and money is spent trying to find and convince new customers, while the customers that we have already acquired are greatly ignored.

To a large degree, this thinking is backwards. More often than not, marketers reward the hardest to find, hardest to acquire, hardest to keep customers with discounts and premiums, while the most loyal customers, who for years have paid full freight for products and services, are not rewarded for their loyalty. Doesn't it make sense to reward the most loyal of all customers?

The airline industry figured that out decades ago. The time is now for other industries to begin to look at their customers by level of contribution, rewarding the most loyal based on their level of annual contribution to the company. Doesn't it make sense for Unilever to view their revenue sources this way—from most valuable to least valuable?

What would happen if we turned the marketing tables and spent $80 out of every $100 spent on marketing on the retention of customers instead of on the acquisition of customers? What would happen if we invested heavily in the customers and repeat customers in the two inner circles in Figure 9.1? What would happen if the majority of marketing spending was designed to grow the business from existing customers by providing relevant incentives for them to buy all relevant product categories from the same marketer?

FIGURE 9.1 Waging war outside and inside.

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