How would you define marketing?
Christian Grönroos, Professor of Service and Relationship Marketing at the Hanken School of Economics, has a thoughtful take. In his paper (Defining Marketing 2005) he states that marketing revolves around customer relations, where the objectives of the parties involved are met through various kinds of exchanges.
At first, it sounds unremarkable, but look more closely and it becomes clear that the emphasis on customer relations is rather different to the more mainstream, “meeting client needs in a profitable way”. This isn’t because Grönroos doesn’t value profit, but because he discovered that the longer an organisation’s relationship with a customer is, the more profitable that relationship is likely to be.
Straying deeper into the world of marketing academics, we see a phrase re-occurring in many papers and journals – “Customer Delight”.1
It seems to be well-established in certain areas of marketing scholarship that Customer Delight is an essential part of creating those long relationships.
Maybe that’s right, because it seems simply satisfying customer needs will not always forge the long-term relationships set out in Grönroos’ research.
This was revealed in a study carried out by Francis Buttle of Macquarie University in 2002 which showed that customers may switch some or all of their business to another supplier even when they are fully satisfied, 2 something many of us can testify to.
Isn’t satisfaction enough?
But just to make things a little more complicated, proponents of Lean and other similar methodologies argue that once you have eliminated dissatisfiers from your operation and added satisfiers, going further will cost you and may not prolong your client relationship either.3
The common illustration goes like this: Imagine the perfect car. If your car has all the functionality your customer would ever want, would you even think of dropping a second engine into your vehicle, just to go the extra mile? Going further than your customer wants, they argue, is wasteful, unproductive and maybe even damaging.
So what do we do?
If satisfaction does not guarantee loyalty and if going further than the customer wants doesn’t either, then we need to understand what does drives loyalty and longevity of our client relationships.
This study of 75,000 people looked at the links between customer service and loyalty, which was defined as “a customer’s intention to continue doing business with a company, increase their spending, or say good things about it (or refrain from saying bad things). The findings were as follows:
- Consumers tend to punish bad service much more than they reward ‘delightful’ service
- Loyalty is built by reducing the work a customer must do to get their problem solved
Aldlaigan and Buttle’s report on the banking sector; “Beyond Satisfaction: Customer attachment to retail banks” 2 offers us three more loyalty factors.
- Organisational credibility which leads the customer to express confidence. It covers aspects such as reliability, fairness, trust and respect.
- Relational values which describe the effectiveness of personal relations. Loyalty is increased when a customer knows, likes and has a good rapport with the team members with whom he interacts.
- Value congruency – the ethical relationship a client has with their bank. Loyalty is increased when a client shares the same values as the organisation with which they are dealing.
We have been offered a view of marketing by Grönroos which emphasises the establishment and prolongation of customer relationships as its key role. We have learned that that there will always be a better offer for clients that are simply satisfied, so client satisfaction is not the key to unlock loyalty and long relationships and it seems exceeding client expectations is even worse.
Instead we are presented with five specific areas to work on to build long-term relationships and thereby increase profitability:
- Create an organisation that is credible, trustworthy and reliable
- Build strong personal relationships with your clients – even in today’s locked-down, online economies
- Operate with strong values to which clients relate
- Reduce the effort that a client exerts to solve a problem
- Focus on avoiding bad service more than on over-delivering good service
We believe that loyal relationships – the essence of marketing – are not generated by offering unneeded and unwanted goodies but from the cultures, values and problem-solving abilities of the organisations we represent. That’s what our customers need and what they deserve. What do you think?
1 To name but a few: Popli, Sana “Ensuring Customer Delight” Quality in Higher Education
Rust, Roland, Oliver “Should we delight the customer?” Journal of the Academy of Marketing Science
Schneider, Benjamin, Bowen “Understanding Customer Delight and Outrage” Sloan Management Review
Torres, Edwin, Kline “From Satisfaction to Delight” International Journal of Contemporary Hospitality Management
Yang, Ching-Chow “Identification of Customer Delight for Quality Attributes…” Total Quality Management
2 Buttle’s finding from his 2002 study was cited in “Beyond Satisfaction: Customer attachment to retail banks” a study he co-authored with Abdullah Aldlaigan in 2005
3 A key theory of customer satisfaction was developed by Prof Noriaki Kano in 1984 whhc gave rise to the Kano model
4 Dixon, Freeman, Toman “Stop Trying to Delight Your Customers” Harvard Business Review, July/ August 2010