When your friend gushes, “Oh my gosh, I love my new iPhone more than I love my family,” you laugh. The absurdity of the statement is what makes it powerful. But it might be more meaningful than we imagine at first glance. The notion of loving a company is widespread, but some new best practices suggest that this love can go both ways. Maybe your iPhone (or the company that makes it) can love you back.
To introduce this idea, four companies serve as excellent examples: Google, Apple, Facebook, and Amazon, or the GAFA. In all these cases, the companies seek to meet customers everywhere they might appear. Rather than focusing solely, or even primarily, on making a sale, these firms attempt to be a little bit of everything to everyone. Their version of customer relationship management (CRM) therefore is different from traditional versions, because what they are attempting to do is develop a truly loving relationship. In this context, love implies that the company wants what is best for the customer, and vice versa.
Thus, Amazon might encourage sales, but it also supports message boards that enable people to interact and ask questions that have little to do with the items for sale. It also creates markets for smaller firms and sellers, providing the sense of a local interaction, though still with all the benefits of its global scale. The very essence of Facebook seems dedicated to the proposition of enabling people to connect. Accordingly, users check it nearly everyday and get a feeling as if Facebook knows them, their emotions, their nostalgia, and their wants. Google provides information, but it also provides the Chrome browser and the Android operating system as open source offerings.
In contrast with the GAFA, most firms remain mostly, if not totally, focused on the bottom line, which is how much revenue they can earn from customers. Even if a firm establishes a presence on social media or engages in some basic CRM, the goal is often to accrue more “Likes” or page views, with the ultimate goal of making more sales. Rather than devoting attention to customers’ varied needs—not just consumption but also social, emotional, and moral needs—these firms continue to adopt a transactional approach to marketing and CRM.
A traditional, transactional approach cannot lead to love though, and ultimately, that might be the difference between firms that maintain their success and growth and those that limp along until they disappear. If consumers are faced with a choice between an online retailer that just wants to make a sale and Amazon for example, they are more likely to turn to “their” Amazon, which seemingly knows them, treats them with respect, and helpfully makes recommendations out of consideration of what they might like. That is, they appear not even to think about the choice, because they are completely and unthinkingly loyal to their Amazon, which loves them back.
To achieve loving relationships with their customers, companies might consider a five-factor framework they can use to assess their current status, then PIVOT (see the first letter of each factor in the following list) toward best practices:
- Pinpoint where the firm is now, by gauging its knowledge of its customers and their views of the firm.
- Identify where and how customers already contribute to the firm, who they are, and what they are like.
- Visualize a new business model that encourages and allows customers to participate in creating and sharing all value.
- Operate by moving resources to support the new business model, while protecting it from the inertia or resistance that might come from the existing, traditional model and operations.
- Track new metrics to assess the new business model, rather than relying solely on sales or revenue measures, such as the number of interactions with customers or the total value created.
- What companies are best at CRM?
- In general, what do they have in common that makes them so good?
- Specifically, what makes these “best” companies so good at CRM?
- Using the steps provided, choose a retailer and develop a plan to make their customers “blindly loyal.”
Source: Barry Libert, Jerry Wind, and Megan Beck Fenley, “Why Companies Need Their Consumers to ‘Love’ Them,” Knowledge@Wharton, August 4, 2015