CEO at C Space
The following article is based on an episode of Outside In, the customer centricity podcast.
Some people believe that marketing is losing its influence. Customers are no longer persuaded by traditional marketing tactics like branding and advertising. Customers have a lot more to choose from, and it’s the actual products and services that differentiate a brand, not its marketing.
If we take a wide-angle view, marketers tend to operate with two different goals: to generate profit by meeting customers’ needs better than the competition; and, to distinguish a brand from its competitors. But, what’s more important: meeting customers’ needs or differentiation?
Obsessing over differentiation only serves as a distraction, according to Patrick Barwise, Emeritus Professor of Management and Marketing at London Business School. “The job of marketers is to help companies focus on what matters most to customers,” he says.
I recently spoke with Patrick for the latest episode of the Outside In podcast. He is an expert on brand marketing, advertising, and customer-focused organizational strategy, as well as an accomplished speaker and award-winning author.
For many years, I’ve admired Patrick’s thinking and have often sought out his advice. When I established my innovation consultancy, Promise (which was acquired in 2012 by C Space), it was his book, Simply Better: Winning and Keeping Customers by Delivering What Matters Most, winner of the American Marketing Association’s annual Berry-AMA Book Prize, that helped inspire my business. It still does to this day.
One of that book’s main themes is the need to shift the marketing mindset from brand differentiation to simply better. “Differentiation is something that’s much bigger in the minds of marketers than in the minds of consumers,” Patrick says. “What matters to consumers is delivering the basics really well and really reliably.”
When you think like a customer, that makes a lot of sense. Customers don’t really care – certainly not as much as marketers, anyway – about what distinguishes brand X from brand Y, so long as brand X gets the job done and fulfills their needs.
Patrick uses Toyota to illustrate the point. As automotive brands go, Toyota doesn’t have the sexiest ads, nor is it all that different from similar auto brands, like Honda (though I’m sure the marketing teams for both brands would disagree). From the customer’s point of view, what’s so attractive about Toyota is that it delivers what most people want from a car “simply better than the competition.”
The key for marketers is to understand, deeply and in detail, what customers’ needs are. But if companies only need to understand their customers then why is this so difficult?
Because it all hinges on having empathy for the customer. That’s a complex, long-term process, and the value is harder to prove than more short-term, quantifiable measures. As Patrick puts it: “Empathy doesn’t give you data.”
Yet, CMOs are relying more and more on data and metrics to prove their own value. They’re under pressure to perform against strict financial goals and demonstrate executional efficiency. That means that building customer empathy can fall by the wayside, and the gap between leadership and customers themselves widens. It’s a slippery slope that has direct brand consequences; marketers often relinquish long-term, strategic insights and brand-building initiatives for the sake of short-term, demonstrable gains.
The effects of the empathy gap are real – just look at the recent tone-deaf fiascos at United Airlines and PepsiCo. With technology, mobile, and social media, consumers now have greater access to – and interest in – companies and brands, and they are holding companies, and their leadership, accountable.
“There’s always been the need to bridge the empathy gap, to understand how things feel from the viewpoint of real people away from the C-suite. The trouble is, it’s got even worse now because you get punished even bigger and faster than before because of social media,” Patrick says.
The solution is not to double down on advertising and focus on combating negative reactions. Rather, it’s to build organic empathy for customers with leaders, and across the entire organization so they hear customers, feel for them, and ultimately help guide them in the right direction.
“A valid, actionable customer insight achieves absolutely nothing unless it reaches the decision makers and is acted on,” Patrick says. As the company’s customer cognoscenti, marketers are in the unique position to lead the charge. They can ensure the truth travels upward to senior leadership, as well as across the company more broadly.
By closing the empathy gap, marketers can really begin to persuade customers – in a genuine, authentic way – to gravitate towards brands. In the end, that is the ultimate differentiator.