Marketing at a Crossroads: The Importance of Customer Fairness

Marketing is currently at a crossroads. Customer trust in marketers & their marketing is at all all-time low. Customers don't believe what marketers say, but are still disappointed when their marketing's promises are not fulfilled. Engagement with brands and response rates are falling, at the same time as more money is spent on marketing. And the CMO now has one of the shortest tenures as a board member.

Marketing faces a number of choices for the future directions it can take. One direction is to do more of the same: more branded marketing, more cost, more broken promises, more disappointment, more rotation at the top. Unbelievably, a few companies will take this barren path.

Another direction is more precise targeted marketing. With ever larger databases, more powerful decision engines and careful targeting of messages to customers through virtual media. Some marketers are already doing this. For example, mobile telcos have long targeted customers for retention, save and winback depending upon the strength of their relationship and how near they are to the end of their contracts. Many companies are already taking this path. And it works very well. But it is not enough. It still treats the customer as a target rather than as a, dare I say it, a person.

Missing from both of these approaches is recognition that customers are people. With all the cognitive and emotional baggage that brings with it. A McKinsey Quarterly article Exploring Business's Social Contract: An Interview with Daniel Yankelovich highlights the problem; customer trust in companies is falling. It currently lies at 28%, lower even than in the immediate aftermath of the Enron scandal. And it is still falling. A big part of the problem lies in the unfair treatment that many customers receive at the hands of marketers: better offers for non-customers than for loyal ones, bundled products that force customers to buy stuff they don't want, rotten customer service after the sale, small print with sometimes illegal restrictions and a general unwillingness to treat the customer fairly.

But precisely because customers are people, they frequently react to being treated unfairly with immediate anger and a long-term desire to get even. A case in point: I was practically accused of fraud by a BMW dealership in Köln because they were too incompetent to account for the credit card payment I had made after having my car serviced. I had to prove to them that I had made the payment. They never apologised. It happened again when I had my next service. I complained in writing to the dealership, copied to BMW in München. I never heard from them. From this point on, the BMW brand meant arrogance, service incompetence and a total lack of humanity. It still does, more than 15 years later!

Yankelovich suggests that part of the answer to this falling level of trust is for companies to supplement the obvious question, "is this good for shareholders?", with the question, "is this good for society?". The equivalent for marketers is to supplement the question, "will this achieve a strong ROI?", with the question, "is this good for customers?". But marketers just asking the question of themselves is not enough. They also need to monitor the broader perceptions that customers have about their marketing and the impact it has the reputation of their company. They also need to develop measures that reflect the risk that inappropriate or badly executed marketing carries. I have talked about measures like Customer Value at Risk previously on the CustomerThink Think Tank.

Until we start to ask these questions and to measure the true health of customers' relationships with companies, we should not be surprised if marketing winds up going in the wrong direction.

What do you think? Should companies just smile and carry on regardless? Or should they start treating the customer as a person?

Post a response and get the conversation going.

Graham Hill