The Customer Learning Curve: Creating Profits from Marketing Chaos

Citation

Rich, M.K. (2003), "The Customer Learning Curve: Creating Profits from Marketing Chaos", Journal of Business & Industrial Marketing, Vol. 18 No. 2, pp. 196-199. https://doi.org/10.1108/jbim.2003.18.2.196.1

Overview

The rapid emergence of marketing as a discipline during the last 30 years has resulted in many of the core theories that drive the decision‐making process in marketing being “borrowed” from other fields. The simultaneous explosion of technology and complexities associated with the evolvement of today’s products and services has further complicated the ability to gain a clear understanding as to which marketing tools should be applied to specific situational analysis. During this past decade, the context for planning and implementing marketing activities has changed in ways that impede clear choices. This is manifested most profoundly in the business‐to‐business (B2B) arena where a major upheaval has occurred with a supply‐chain revolution, on‐line channels and Web exchanges. These issues have significantly altered the planning process related to the internal analytical and organizational requirements for effective marketing. Today, too many choices and not enough time are driving issues confronting the creation of effective marketing approaches for any given organization.

The Customer Learning Curve is a work that systematically sorts through the myriad of theories, tools and approaches for analyzing B2B marketing situations. Today’s market is typified with multiple tiers of distribution, the need to align applications and offerings with multiple customers and the resulting spectrum of pre‐ and post‐purchase activities that determine ongoing customer partnerships and ultimately strategic alliances. This work addresses the multitude of tools from the unifying perspective of the customer’s learning process and purchase dynamics.

One of the difficulties in today’s B2B environment is that because of complex technologies and the inherent complexity of the marketing tasks, too many companies fragment their learning about customers across different functions and departments even as market developments increase their coordination requirements. By providing a comprehensive, customer‐centric perspective across the purchase process, the book provides a managerial tool for aligning internal operations with external opportunities. This enables companies to learn from their customers and initiate continuous improvement in their own marketing and management activities. The Customer Learning Curve cuts across the eclectic mix of skills and wisdom that exists in B2B marketing, offering insight for not only the beginning marketing practitioner, but for the seasoned veteran of multiple battles for market share and customer recognition. This is not just a reading exercise but provides a framework of tools in a logical pattern for implementing more meaningful marketing efforts.

About the authors

Karl Hellman is co‐founder of Resultrek, an international management consulting firm specializing in strategic marketing, marketing skills development, and customer relationship management. Since graduating from Northwestern University, he has worked with over 1,000 strategic marketers to help them improve their results.

Ardis Burst has worked as a marketing manager, consultant and teacher since graduating from Harvard Business School in 1976. She has written two other books, The Management Game and The Three Families of H.L. Hunt. She lives in Santa Fe, New Mexico.

Content

There are several benefits that occur to a marketer implementing the process outlined in this work. First, it will help everyone in the firm develop a marketing perspective. In many companies, not everyone who has marketing responsibilities has a well‐defined set of marketing skills. Often, an organization is founded and developed around a specific technical skill or innovation. As the organization grows, attempting to meet pent‐up demand, not much focus is given to marketing and its related requirement for specific skills. The Customer Learning Curve will furnish an organization with a pattern for analysis that will work them more successfully through the product evolution.

Second, the book will let your company cope with too many choices. Historical studies and secondary data possessed by a firm might offer what appears to be an endless stream of alternatives. The Customer Learning Curve enables a firm to logically weigh each alternative and evaluate it against its relative importance in the overall process of effectively developing the market. This process will turn an endless stream of choices into knowing what is important and where to take action.

Third, the book will enable a firm to deal effectively with disruption. The old truism that the only constant is change was never truer than in today’s B2B marketplace. In the communications and computer fields, entire industries emerge or vanish in a matter of months. During these transitions, marketers are confronted with too much information in an unorganized array. The Customer Learning Curve provides a framework for sorting through and making sense out of the overwhelming amount of information available today. Getting information is not the problem. It is understanding it and taking correct action in these disruptive situations that is the challenge according to Garry Betty, president of Earthlink.

Fourth, The Customer Learning Curve will permit midcourse corrections necessitated by unpredictable behaviors of various uncontrollable factions in the macroenvironment. If a competitor suddenly decides that they want to increase market share so massive advertising suddenly appears against your established promotional budget, the book will permit analysis of various scenarios to determine projected outcomes. This “best case” or “worse case” analysis helps make sound marketing decisions in the thick of battle and its ensuing changing environment.

Fifth, the book will let you update your initial scenario with current information to analyze the impact of recent events. Some organizations have competing truths espoused by various management factions within the firm. The Customer Learning Curve helps avoid the battle of opinions that often stalemate forward progress in an organization. This process helps management make good choices, free of the political baggage that often hampers sound marketing decisions.

The Customer Learning Curve is a unique tool with two components:

1. 1.

   (1) a technique for developing deep insight into customers’ decision making; and

2. 2.

   (2) a practical financial model to use in determining marketing leverage points and the returns on alternative marketing expenditures.

The learning curve develops over the natural steps necessary to secure partnerships with B2B customers over an extended time frame. As the term implies, each step is a learning process that facilitates sound decisions for the next step. The associated software facilitates the calculative process necessary to quantify the process into tangible projections needed for sound marketing decisions. The steps involved are logical and intuitive, beginning with determining a need for your product. The number of prospects making it through the first step are then confronted with the question, are they aware of your product? Subsequent steps involve asking whether they have access to the product, are they motivated to buy, do they actually purchase, are they able to learn to use the product, do they experience value and are they retained as a customer for future involvement? It is interesting to note that the authors move beyond the sale and attempt to measure the customer’s perception of value.

Each chapter covers information and material that is typically not new nor innovative from a marketing perspective. What makes this work ground‐breaking and interesting is the linkage that has been achieved by the authors in weaving these tools and concepts together into a structure that is comprehensive, adding logic and sanity to a process that is fractured with competing theories and approaches that should not be exercised as isolated processes. The work helps the experienced marketer to mentally position various tools within a framework that might not have been considered otherwise. For the novice in marketing, this contribution will better position marketing as a function throughout the product’s life cycle with its associated changes and improvements necessary for its ascension to immortality – the ultimate achievement for any product or service in this competitive landscape.

The chapters are structured around each step in the process beginning with who needs what your company sells? The authors address the constant and fluctuating ebb and flow of conflicting market conditions under the metaphor of the Chinese philosophy of Yin and Yang. What appears to be a logic stretch initially actually makes sense as we approach Yin as achieving balance by creating expansive ideas of who might need and want a product or service. The Yang is to take these ideas and organize, classify and harness them into a focused strategy directed at a clearly identified, defined and discreet group of potential users.

Each chapter offers specific marketing tools to use in conjunction with the software to give added support to the resulting decision process. The eight chapters are easy to read and are structured in such a way as to facilitate using the work as a reference source. The one significant value that I saw in The Customer Learning Curve was the opportunity afforded an organization to embrace a common language that would be easily understood by all factions within the firm. This common language has as its root, marketing – the key element to master in this otherwise chaotic environment we find ourselves working in.