As
published in Marketing News, September 11, 2000
By
Michael Render
Despite 50 years of talk, the concept of businesses becoming customer or market-focused really is still in its infancy. This is about to change, however, as businesses begin to think in terms of managing the inflow marketing mix and using new technological tools.
Marketing can be described as all the ways an organization makes a connection to the world outside. This connection can be divided into two dimensions: outflow marketing, or all the ways we move our message and our product to the market, and inflow marketing, or moving information from the market into the organization. In simple terms, outflow marketing is talking and selling; inflow marketing is listening and learning.
The concept of marketing mix needs to be expanded to differentiate between these unique dimensions of marketing. Promotion, advertising, public relations, selling, distribution and so on really are all part of an outflow marketing mix. The inflow marketing mix, however, includes market analysis, formal marketing research, customer-initiated communication (contacts to call centers and e-mails, for example) and consolidating intelligence gathered informally through employees. Only by strategically considering the inflow marketing mix’s entire spectrum can we develop an integrated approach to becoming customer-focused.
Inflow marketing includes far more than just marketing research. Defining customer orientation in this way—such as, “What degree of tilt do you prefer for your steering wheel?”— has led to a misguided argument that customer focus may even be inappropriate because it can hold back real innovation. On the contrary, real inflow marketing involves listening to the consumer in all possible ways, via both formal and informal research, to garner both the consumers’ desire for minor improvements and desires for more basic improvements which could require more fundamental product changes. Revolutionary ideas seldom come from consumers in a packaged form, but creative sparks do.
Inflow marketing also should not be confused with relationship marketing. To date, relationship marketing primarily means outflow marketing activities directed at smaller and smaller market segments, such as using database technologies to tailor messages to individuals.
The importance of inflow marketing is obvious: It provides the specific knowledge to answer individual questions and solve individual concerns, and it gives us the knowledge to create a better and more attractive product and a more efficient outflow marketing connection. All this translates to increased customer retention and acquisition, sales and profitability. (Inflow marketing also can improve brand equity as a byproduct of the practice itself; consumers often report better feelings toward companies that seem to want and value their opinions.)
Unfortunately, nearly all organizations still spend far more time and money on outflow marketing activities because they are perceived as having more immediate payback and because many organizations have a built-in resistance to inflow marketing activities. Marketing research, as they understand it, sounds overly cold and statistical, and some believe it is intrusive.
On a more basic level, successful companies doing well often discount the importance of looking outside their own culture. Production is at capacity, they reason, so why worry about listening to the market? The problem is either a trainwreck or a fantastic opportunity may be lurking around the next bend, and dealing with either requires the lead time that inflow marketing can provide.
In order to further move toward the ideal of true customer focus and further cultivate its inflow marketing mix, companies need to do the following:
Better connect top management to the inflow marketing mix. Strategic decisions should be based on fresh information, not opinions framed from earlier frontline experience. Top management should dedicate a few days each year to getting closer to the customer—perhaps by working the call center or distribution sites, attending focus groups and actively participating in the planning and review of formal marketing research projects.
Top management also should review consolidated inflow marketing information regularly. Our peers in accounting and financial management have championed the use of a so-called balanced scorecard that consolidates not just, but also market information because what customers value about their relationship with us and the degree to which these expectations are met is just as important to the organization’s basic scorecard as profit-and-loss information. (Fortunately, recent technologies make it easier to present inflow marketing information in an interactive, decision-support style.)
Give more attention to information from customer-initiated contact. Customer-initiated contacts to the organization often are underappreciated and underused. When the organization contacts a customer or prospect, the process is expensive and sometimes intrusive. The customer must be convinced to communicate. On the other hand, a customer initiating a communication already is motivated.
Inbound customer communication certainly should get more attention. Call centers can be vastly improved at every level, and online communication offers numerous opportunities for cost-effectively gathering information since the customer inputs information directly. Capture the reason for all inbound contacts, and record and consolidate any suggestions. Finally, offer customers an opportunity to take selected surveys. Customer contact also provides a legitimate reason for the organization to follow up, which not only builds satisfaction but gives the company the chance to extend additional survey invitations.
Consolidate information gathered from employees. Employees are the eyes and ears of the organization but often have no systematic way of recording the information they gain. They should be encouraged to add observations about the marketplace to a central intranet or Internet site, which management can review in a systematic, unbiased way. Salespeople have a wealth of information that could be tampered with on its way to decision-makers. A confidential system through which employees communicate directly with them solves the problem.
Increase and improve market research activities. Finally, more effort and money should be allocated to marketing research for using the full range of both traditional and new methods. Marketing research should move from an ad hoc project approach to a well-planned, integrated program to gain information about all facets of the business.
Marketing will continue to move toward a more customer-focused approach as we move into the 21st century. More attention to the concept and execution of inflow marketing is one of the primary ways this will occur.