MARKETING MATERIAL

9041 – Marketing Practice 6 Customer

Chapter 6

THE CUSTOMER

We now know something about ourselves, or at least about our organisation and its products or services. The next step then is to find out about the customer; for he or she is, as I have already stressed a number of times, the focus of marketing practice.

There is one relatively easy way of finding out about the customer - and that is to ask him or her to tell us about themselves. That is what both marketing research and selling are largely about. But before we can even do that we need to know what questions to ask, for the process is very much like one of those games where you have to discover what is the mystery object with the least number of questions. This is not because the customers are secretive. It is simply that, much as you do not yet understand them, they do not understand you - and, helpful as they want to be, they cannot answer questions which you do not ask!

To know literally everything about your customers would require such vast volumes of information that you would never be able to make practical use of it - or even find the few facts relevant to any specific situation. In the more traditional forms of marketing the search is therefore narrowed down to those facts which are of most direct use, by using models (theories) which map just the purchase process. This approach focuses on the aspect of the customer's life which is of particular interest to the marketer. There are a range of alternative models, but of these I believe that of AIUAPR, which most directly links to the steps in the marketing/promotional process is the most generally useful;

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AWARENESS - before anything else can happen the potential customers must become aware that the product or service exists. Thus, the first task must be to gain the attention of the target audience. All the different models are, predictably, agreed on this first step. If the audience never hears the message they will not act on it, no matter how powerful it is.

INTEREST - but it is not sufficient to grab their attention. The message must interest them and persuade them that the product or service is relevant to their needs. The content of the message(s) must therefore be meaningful and clearly relevant to that target audience's needs, and this is where marketing research can come into its own.

UNDERSTANDING - once an interest is established, the prospective customer must be able to appreciate how well the offering may meet his or her needs, again as revealed by the marketing research. This may be no mean achievement where the copywriter has just fifty words, or ten seconds, to convey everything there is to say about it.

ATTITUDES - but the message must go even further; to persuade the reader to adopt a sufficiently positive attitude towards the product or service that he or she will purchase it, albeit as a trial. There is no adequate way of describing how this may be achieved. It is simply down to the magic of the copywriters art; based on the strength of the product or service itself.

PURCHASE - all the above stages might happen in a few minutes while the reader is considering the advertisement; in the comfort of his or her favourite armchair. The final buying decision, on the other hand, may take place some time later; perhaps weeks later, when the prospective buyer actually tries to find a shop which stocks the product.

REPEAT PURCHASE - but in most cases this first purchase is best viewed as just a trial purchase. Only if the experience is a success for the customer will it be turned into repeat purchases. These repeats, not the single purchase which is the focus of most models, are where the vendors focus should be, for these are where the profits are generated. The earlier stages are merely a very necessary prerequisite for this!

This is a very simple model, and as such does apply quite generally. Its lessons are that you cannot obtain repeat purchasing without going through the stages of building awareness and then obtaining trial use; which has to be successful. It is a pattern which applies to all repeat purchase products and services; industrial goods just as much as baked beans.

This simple theory is rarely taken any further - to look at the series of transactions which such repeat purchasing implies. The consumer's growing experience over a number of such transactions is often the determining factor in the later - and future - purchases. All the succeeding transactions are, thus, interdependent - and the overall decision-making process may accordingly be much more complex than most models allow for.

Accordingly I will, for once, appear to complicate matters! But, fortunately, the additional complexity has a logic to it. In the single dimension which the original model inhabits from top to bottom there is a growing involvement of the customer with the product or service. The 'Enhanced AIUAPR Model' takes this and adds a further dimension which specifically reflects on one side the attempts by the vendor to influence this process - which were implicit in the original model. It shows, however, the way in which the vendor's involvement changes from the most impactful advertising at the start of the process to the highest quality support at the end - a progression which is not fully described in less complex models.

On the other side, though, it also shows the involvement of the customer with his or her peer group; whose influence is not even hinted at in the original version;

The starting point is, in this case, earlier than in the original model;

SUSCEPTIBILITY - even before you can build awareness, the consumer's mind has to have been opened up to the concept behind the product or service. In line with the theories we will look at later, this acceptance of a new need may have emerged from the workings of the opinion leaders in the consumer's peer group. On the other hand, this is also the stage where the supplier has to accept some form of market (or segment) building role; often making use of public relations as much as advertising.

It should be noted, however, that the seemingly distinct steps often, indeed usually, overlap. Thus, some sections of the population - the opinion leaders say - could be well into the repeat purchasing stage while other sections are only just beginning to perceive the need. Accordingly, promotion and advertising often will have to meet the requirements of a number of stages at the same time - a complex demand which is one reason why very successful advertising campaigns are so rare!

AWARENESS - you have already seen how this works in the original model; though the role of high impact advertising (or prospecting in industrial markets) was there implicit rather than being a formal part of the model as here. The main difference, though, is that research shows that the stimulus is as likely to come from an opinion leader in the peer group. These offer a hidden, and potentially very powerful, 'sales force' on behalf of the product or service; albeit that they in turn have necessarily been recruited by advertising (or by public relations activities - often a neglected medium, which is especially important in reaching this group).

INTEREST/UNDERSTANDING - these two are coupled together, since it is difficult to conceive of one happening without the other being at least in part also involved; though they may offer very different challenges to the advertiser. Again, however, it is members of the peer group, already users, who may be most likely to be able to proffer the 'demonstration' of the product (or the results of the service) to the prospective consumer.

ATTITUDE/LEGITIMACY - although one further stage is added, that of 'legitimacy' (persuading the prospective purchaser that, backed by his or her favourable attitudes, a purchase may be justified), this is merged with the attitude building process; and both may be dependent on the 'reference' support from members of the peer group who are already loyal users as much as traditional advertising.

PURCHASE DECISION - this should be, by this stage of the process, almost automatic; and, for once, the consumer is probably alone in making this particular decision. A key element, also featured in the original model but often (wrongly) taken for granted, is that the product or service must be easily available for the consumer to achieve that purchase.

EXPERIENCE - one stage ignored by the original model is that which happens when the consumer tries the product or service for the first time. This may, or may not, be a favourable experience; but whichever end of the spectrum it lies it still represents a major discontinuity in the model. At this point the nature of the accompanying processes changes. In the case of the vendor's promotional activities the emphasis switches abruptly from recruitment to support (perhaps still involving advertising, but mainly by conventional support services). This is perhaps best illustrated by the switch from new account selling before to account management afterwards, in face to face selling. At the same time the consumer switches from being a recipient of advice to one who can, from experience, give it to his or her peer group. This is hopefully of a positive nature, since a bad experience is typically reported to many more peers than a good one!

REPEAT PURCHASE - in this development of the original model this becomes almost a technicality.

LOYALTY - more important is the final step, that of creating a loyal user; based upon successive positive experiences (backed by sound customer support). These loyal users become, in turn, the 'references' for new users (or even the 'opinion leaders' which feature so strongly in this enhanced model).

Having made the model necessarily complex - to explain the underlying processes -  I will now offer a much more practical, condensed version of this;

This embodies, in much simpler form, most of the essentials of the process. Thus, the central pillar (the consumer's progress)  highlights the tentative nature of the first stages as the consumer moves from 'susceptibility' to the actual 'purchase'; and then the no less important subsequent stages as confidence builds into loyalty.

The break point, at the time of the first (trial) purchase, is reflected in the vendor's pillar by the switch from promotion to support (though this aspect is rarely emphasised in theory). It is even more obvious in the 'peer' pillar in the switch from 'taker' (of advice) before first purchase to 'giver' (as a loyal referee) after purchase.

Whilst this model is especially useful in providing a framework which most effectively handles the new consumers progress over time, it does not really do full justice to the richness of the interaction of the individual consumer with the whole community, not just the direct peer group, and the 'inertia' which this may lead to. Added to this is the wealth of (personal and community) experience built up over time, which multiplies the problems of access by the marketer - and often slows down the rate of structural change so that it occurs over the decades measured by the sociologist rather than the months in the marketer's plan; though though our research shows that even the great majority (more than 80%) of marketers also recognise the importance of long-term relationships with customers. The model which best demonstrates this complementary aspect is that of the 'Peer Pyramid'; 

The pyramid deliberately represents the customer as being at the apex of a layered set of influences. Not least amongst these are the consumers; the family for consumer goods and services, and the users in an organisation. Their views are frequently decisive - perhaps, over the longer term, even more so than those of the direct customer. But beyond them, and beyond the peer group which was so influential in the 'Pillars' model, are the whole range of 'establishment' forces; which regulate what may happen, as do a range of government bodies, or which control the processes of communication, as do the various media. It is these longer-term 'structures' in society which marketers fail to see (though, as already suggested, sociologists do track the slow movements of these over the decades).

The vertical/diagonal split in the diagram is normally even more important. That, large part, to the left represents the great body of past experience that the customer, along with all those involved in the various layers of the pyramid, has already built up by the time they come to the current decision. This current portion may indeed be at the forefront of the customer's mind - but need not necessarily outweigh that body of previous experience (despite the fervent hopes of the vendor - and the lack of reference to such past experience by most marketing theory).

The simple message is that vendors should recognise that: 

This complexity of interaction, with many participants and stretching over time, is most evident in the complex sale. This is typically a sale to an organisation rather than an individual - though some of the lessons it holds may also be profitably applied to the seemingly simpler demands of FMCG markets.

Here, in the period of the 'disputed decision' when the supplier is changing, there are three main groups involved:

CUSTOMERS - these are the people who actually use the product or service ```and who, for most of the time, are the main contact with the supplier.

DECISION-MAKERS - those in authority who have the formal responsibility for decision, and who may be quite separate from the customers.

POLICE - the various departments (such as purchasing and quality control) who can veto the decision if certain standards (such as price limits or quality levels) are not met. 

This diagram over-stresses the time devoted to such decision-making. For most of the time, probably more than 90% of the total, the winner of the disputed purchase decision becomes the 'favoured supplier'. It then proceeds to deal only with the 'customers' in the diagram above, usually the direct customers or end users who make use of the product or service; and, most importantly, with no serious challengers in sight over long periods of time. Perhaps the best way of looking at this simple on-going relationship is through the picture provided by the 'Competitive Saw' - which also provides the necessary incentive to keep that relationship fresh. That is, until something undermines the customer's confidence in the arrangement (most usually as a result of a significant failure on the part of the supplier). Then, as shown above, the more complex - decision-making - phase is entered upon. In that phase the other two sets of actors enter the scene;

DECISION-MAKERS AND INFLUENCERS

There is much theory, and even more opinion, expressed about how the various 'decision-makers' and `influencers' (those who can only influence, not decide, the final decision) interact. Decisions are frequently taken by groups, rather than individuals. Often the official `buyer' does not have authority to take the decision.

Robert B Miller and Stephen E Heiman[1], for example, offer a more complex view of industrial buying decisions (particularly in the area of `complex sales' of capital equipment). They see three levels of decision making;

Economic Buying Influence - the decision-maker who can authorise the necessary funds for purchase.

User Buying Influences - the people in the buying company who will use the product and will specify what they want to purchase.

Technical Buying Influence - the 'experts' (including, typically, the buying department) who can veto the purchase on technical grounds.

An important aspect of the organisational buying process, in particular, is therefore the balance of influence between these various actors;

The customers, in this context usually the users of the product or service, typically are the real decision-makers; the formal decision-maker typically has no option but to support their decision. Indeed, it is very unusual for permission to be refused - unless it is controversial, or especially important, or cannot be resourced. But always waiting to pounce are the 'police'. These are the individuals (or departments) with veto power which, if brought into play, may outweigh even substantial amounts of customer protest (hence their considerable leverage on the balance shown above, which may go far beyond their apparent power in the organisation). They may accordingly sometimes become an unexpected stumbling block; even a  minor resource decision is likely to be policed by the finance department not the formal decision-maker. You should be aware, though, that there are many other forms of police waiting to see if you overstep the mark (sometimes 'secret police' whose involvement you do not even know about until they veto your pet project). These may range from the experts checking the technical specifications to those charged with guarding labour practices. The rule is, accordingly, that the widest possible range of customer contacts should be made. They may turn out to be the secret police themselves (or they may be able to warn you who these are). If you recognise who they are it is often easy to defuse potential problems with them in advance, but rarely so easy after the event.

This introduces a simple principle which holds generally, but is especially applicable to complex sales. It is simply that there is: 

It is a basic fact of marketing life, as we will see elsewhere, the amount of business which can be generated is proportional to the number of prospects which can be recruited ('the numbers game'). 'Safety In Numbers' is a rather more specific principle.  It simply says that the more of these who are recruited to your side in advance of the decision the safer are your chances of winning. This is true in the consumer goods situation where there a number of consumers of a product or service who make their wishes known to the purchaser - the more of these consumers who vote for your product the greater the chance of it being bought. It is especially true of the complex sale where, by definition, there are a number of powerful inputs to the decision-making process.

There is one very important caveat to this simple philosophy, and that is the need to recognise the decision is not dependent upon a majority vote among equals. For one thing the voters will have different weights attached to their votes. The direct users (consumers) will often have more influence than the supposed senior decision-maker.

Most important, however, is the existence of veto power in general (not just in the special case of the 'police' which we examined earlier). Even the most junior member of the decision-making group may, if he or she feels strongly enough about the issue, outweigh all the votes of the others (and in effect have a veto). Unless the rest of the group feel almost as strongly about your offering they will be tempted to switch to a less controversial decision - and there will usually be a number of other offerings almost as good (in their eyes) as yours. It is rare indeed that a supplier has a virtual monopoly which will overcome such resistance.

It is an onerous chore, which often demands very sensitive detective work, but once more all the bases must be covered;

The most important aspect of handling the complex sale is understanding how a partnership may be built. We will return to this later in the book, but at this stage the important aspect is finding out how the customer's organisation can, in effect, be fused with your own. Shared elements of identity or values, or shared group membership, or simply shared business interests are often what makes such partnership work; and the emphasis is on shared. It is important to recognise these synergistic components, which often revolve around intangible elements (such as the organisational cultures or even - with more volatility - personal relationshipr between the key participants).

It is also important to adopt the right perspective, the right frame of mind. 'Partnership' best describes this approach, which should be adopted from the very start of any business relationship. It is best illustrated by the Partnership Triangle:

This diagram usefully emphasises several of the key elements in such a partnership:

THREE WAY INVOLVEMENT - the customer is formally involved with the organisation as a whole, and the relationship with that corporate body - typically enshrined in the formal relationship with the sales professional who is the formal contact - is clearly important, especially in terms of the mutual trust. But the customer's contacts overall are mainly informal ones, with that sales professional but also with a range of staff throughout the vendor's organisation. It is often these 'staff' relationships which are most important to, and have the most impact upon, that customer. This is an aspect of the relationship which is often forgotten.

INTERNAL STRESS - in turn, the tension between these formal (organisational) and informal (staff) relationships often leads to tension within the vendor organisation - which may be communicated to the customer, with distinctly unwanted results.

POWER LIES AT THE BASE - it is no accident that in the diagram the most direct relationships, and the heaviest weighted ones, are at the bottom of the pyramid (triangle); between the equals who interact on various issues from both sides. It is they, and not the senior management, who will ultimately make the partnership work or fail.

In selling theory, such as it is, one of the most powerful concepts was developed by Miller, Heiman and Tuleja who encapsulated this in the concept of "Win-Win";

 'Those of us who have prospered by using Strategic Selling [the name of their technique and their book] know that good selling is never an adversarial game in which Buyers' Losses are our Wins, but are in which Buyers' Losses are our Losses too, and their Wins always serve our self-interest as well as theirs'. We understand that only by enlisting our buyers as partners in mutually supportive joint ventures can we hope to achieve mutual satisfaction over time.'

They conceptualise this philosophy in terms of the 'Win-Win Matrix';

In practice, this is something of a gimmick since their comments show that all of the remaining quadrants tend to be unstable; and degenerate into the Lose-Lose situation. Even the I Lose- You Win situation degenerates, since it sets up unrealistic expectations for the future. They stress;

'..let the buyer know it...the most serious mistake you can make in playing Lose-Win is failing to tell your Buyers that they're getting a special deal.'

On the other hand, the concept of Win-Win is a very powerful concept; and the only real alternative of Lose-Lose serves to highlight this. Partnership, or Win-Win, is what must always be looked for.

If you substitute a triangle for a matrix, however, the message is conveyed even more forcefully - since it demonstrates how unstable the relationship may become if you adopt the wrong approach: 

The main lesson of this triangle is the stress it places on sharing the 'Win'. If either side loses in the short term then the triangle immediately becomes unstable and topples over - so that, as a result, neither side wins in the long run. As we saw above, 'win-lose' and 'lose-win' are ultimately unstable and degenerate into 'lose-lose'. The 'Win-Win Triangle' simply shows this more directly.

This is as far as I intend to go with these graphical developments. No doubt someone will go on to superimpose the partnership triangle on the win-win triangle to get a Star of David which is doubly blessed, but I do not see that this will add anything. Beware ornamentation for the sake of ornamentation!

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