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Spotlight On The New Marketing Organization

5758 words - 24 pages

HBR.ORG

For the exclusive use of Y. Chen, 2014.
JULY–AUGUST 2014
REPRINT R1407E

SPOTLIGHT ON THE NEW MARKETING ORGANIZATION

Unlock the Mysteries
of Your Customer
Relationships
Are you connecting with consumers the way they
want you to? by Jill Avery, Susan Fournier, and
John Wittenbraker

This document is authorized for use only by Yin-Hao Chen in MARK-570_CONSUMER BEHAVIOR.SPRING.2015 taught by Rebecca Hamilton, at University of Maryland from December 2014
to June 2015.

For the exclusive use of Y. Chen, 2014.
SPOTLIGHT ON THE NEW MARKETING ORGANIZATION

Spotlight

ARTWORK Markus Linnenbrink
SAMMYDAVISJRKEEJOO ANDPETERLAWFORD
2010, c-print, epoxy resin on wood, ...view middle of the document...

ORG

July–August 2014 Harvard Business Review 3

This document is authorized for use only by Yin-Hao Chen in MARK-570_CONSUMER BEHAVIOR.SPRING.2015 taught by Rebecca Hamilton, at University of Maryland from December 2014
to June 2015.

For the exclusive use of Y. Chen, 2014.
SPOTLIGHT ON THE NEW MARKETING ORGANIZATION

relational intelligence—that is, they aren’t aware of
the variety of relationships customers can have with
a firm and don’t know how to reinforce or change
those connections. They may be very good at capturing simple demographic data—gender, age, income,
and education—and matching them with purchasing information to segment customers into profitability tiers. But this is an industrial view of customer
relationships, a sign that many firms still think of
customers as resources to be harvested for the next
up-sell or cross-sell opportunity rather than as individuals looking for certain kinds of interactions.
As a consequence, consumer companies often
manage relationships haphazardly and unprofitably,
committing blunders that undermine their connections with customers. A person wanting to be treated
like a friend is more likely to be treated as a mere
party to an exchange—or, even worse, as an adversary. It goes the other way, too: A customer looking
for a mere exchange may get an off-putting attempt
at building a friendship. In study after study, we find
that consumers are frequently frustrated by companies’ inability to meet their relationship expectations.
Through our two decades of research on brand relationships in a wide variety of industries across the

VALUING “FRIENDS”
AND “ACQUAINTANCES”
Determining which
customer-relationship types
offer the most value involves
weighing several factors.
Here we show the degree
to which various kinds of
relationships can help a
company build market share
or charge a price premium.
For instance, customers
looking for a one-night
stand with the brand are
generally willing to pay a
higher premium than those
who see themselves as
colleagues of the brand.

globe, we’ve learned how companies can glean information about the kinds of connections their customers are looking for. We’ve also identified a number of
relationship types, complete with the rules each type
implies. Some of the types are what you’d expect;
others veer into surprising territory. Do your customers want to have a fling with the brand? Do they assume a master–slave relationship, with the customer
playing master to a servile company? We’ll explain
these and show why they matter for profitability.
Drawing on our analysis of firms that have made
progress in managing relationships, we’ll show how
companies can unlock the mysteries contained in
their portfolios of relationships and deliver on customers’ expectations.

A New Approach to Relating

Why are relationships important? Consider these examples from our research.
A customer of a grocery delivery start-up is very
...

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