One of the books that fueled my passion for loyalty marketing was Peppers and Rogers’ The One to One Future. The One to One Future was written in 1993, before anyone was talking about CRM or Customer Centricity It was a remarkably prescient book. Some of the chapter titles are; “Collaborate with Your Customers” “Take Products to Customers not Customers to Products” “Differentiate Customers not Products”, “Make Money Protecting Privacy not Threatening It”.
The One to One Future flipped the paradigm of marketing. From Mass Marketing to Personalized Marketing. Marketers should play the long game and think not just in terms of customer acquisition be also in terms of maximizing customer value. One to One Future was a great success, popularizing ideas like Lifetime Value, Share of Customer, and Personalized Marketing.
I re-read One to One Future recently, because it is also a great read in terms of Human Centered Marketing. Peppers and Rogers also put forward the idea that marketing should be less centered on company and more centered on the needs of the customer.
At Sprocket we talk a lot about Human Centered Marketing. Human Centered Marketing applies the fundamental design principal of starting from the standpoint of satisfying customer needs. In short, we believe that maximizing customer value is achieved by maximizing customer utility. Human Centered Marketing starts from the perspective of figuring out what the customer wants.
Human Centered Marketing isn’t a particularly new idea. Clayton Christensen in The Innovators Dilemma introduced elaborated the idea of starting from a point of customer empathy with his “Jobs to Be Done” paradigm.
And as Christensen noted, this wasn’t a brand-new insight. His Harvard colleague Theodore Levitt in the 1960’s classic “Marketing Myopia” advised marketers to be “physically close to buyers, penetrate their domain to learn about their needs, desires, and fears and then design and supply the product with those considerations in mind”.
I have been a loyalty marketer for over 25 years. When I look at the broad loyalty landscape as well as the clients and the programs I have been involved with and I ask myself …“Is our loyalty strategy really in service of the customer?” My honest answer is…no.
Many loyalty managers still see customers are “segments” defined by economic value. E.g. Silver, Gold, Platinum”. It’s all the rage lately to talk about customer engagement. But when you peel back that onion, Customer Engagement usually plays out as pumping out more multi-channel marketing communications. Loyalty managers routinely employ data to better target their members. Does anyone join a loyalty program so they can be targeted?
Relatively few companies use their loyalty program to identify customer needs and motivations and then tagging each member with a persona as well as value score. Few programs see customer engagement first as a mechanism for building an emotional connection. Rather, customer engagement is a means to drive transactions by pumping out offers more effectively. Most programs leverage customer insight to target their members, but few programs employ customer insight to drive innovation.
As loyalty marketers we need to think of our mandate to Maximize Customer Value less myopically. At Sprocket we believe loyalty strategies (and loyalty programs) need to be less transaction-oriented and more about understanding customers and figuring out how to satisfy their needs. As loyalty marketers we need to take a Human Centered Approach and think in terms of maximizing customer value through first maximizing customer utility.
To quote Levitt again:
“The entire corporation must be viewed as a customer-creating and customer-satisfying organism. Management must think of itself not as producing products but as providing customer-creating value satisfactions. It must push this idea (and everything it means and requires) into every nook and cranny of the organization”
We believe that the future of marketing is one of true collaboration with your customer. If any marketing discipline should be leading the charge for Human Centered Marketing it should be loyalty. We have permission, transactional and profile data that we can leverage in the service of understanding and satisfying the customer.
Human Centered Marketing is a paradigm shift from the transactional thinking that has dominated loyalty marketing for the last 30 years. We launched Sprocket to be a catalyst and an instigator of that paradigm shift. If you’d like to ride this paradigm shift wave with us, please give us a shout.