The leading subject of management books published in a given year is an indicator of the strategic focus of the top-performing organizations and their leaders.
For several years, the number-one topic was Total Quality Management. Then it was leadership. Then branding. While these topics remain significant, it's clear from the major new titles of 2004 that customer focus has taken center stage.
To be sure, 2004 was not the first year we saw important new books about customer focus. But, from the sheer quantity (15 major titles, by my count, in the past year), it's now apparent that the recognition of the customer as the key to profitability and growth has spread outside of the marketing silo—and into the ranks of executive management.
Just what this means for you and Marketing inside your organization depends on many factors. For starters, though, it's important to know about these books, because it's likely that your CEO and CFO will read one or two.
To give you an overview and some recommendations, in this article we briefly describe each of the 15 books. Next week, we'll publish a review of one of the best new books on the subject.
The customer focus literature in 2004 spanned six areas:
- Customer insight
- Customer relationships
- Customer loyalty
- Customer value
- customer experience
- Customer evangelists
The books in each category are discussed briefly below.
1. Consumer Insight: How to Use Data and Market Research to Get Closer to Your Customer.
Merlin Stone, Alison Bond, Bryan Foss (Kogan Page)
More than market research, consumer insight is about achieving a depth of understanding of consumers and a sensible use of this understanding to help the organization fulfill consumer needs. This guidebook focuses on what to do with data and marketing research to extract optimal intelligence. The authors align the analytic parameters of data and customer information and offer welcome relief to companies that are being asked to leverage critical information assets and investments. They present a framework that enables businesses to harness the torrents of data while supporting the delivery of enriched customer intelligence and insight across the organization.
2. Why People Buy Things They Don't Need: Understanding and Predicting Consumer Behavior.
Pamela Danziger (Dearborn Trade Publishing)
Focused on consumer products, Danziger explores the "whys" behind discretionary purchases. Synthesizing the findings of her 20 years of surveys, interviews and focus groups, she profiles customers in more than 30 categories and explores the motivations of their buyer behavior. Not surprisingly, as many academic consumer behavior researchers long before her, Danziger concludes that understanding the emotional satisfaction rather than the purely functional benefits of the purchase is of vital importance. She identifies 14 "justifiers" that make consumers feel good.
3. Mass Affluence: Seven New Rules of Marketing to Today's Consumer.
Paul Nunes, Brian Johnson (Harvard Business School Publishing)
The top 20% of US households now holds 60% of the nation's discretionary spending power. These 22 million US households have gained significant wealth, income and discretionary spending power over the past 30 years. Marketers, the authors argue, have tremendous opportunities to craft new products and services to serve the affluent mass market. The thesis of the book is based on an empirical study of shifting demographics. As a guidebook for new approaches to targeting this powerful consumer market, the "new rules" are organized into four sections: The New Rules of Positioning, The New Rules of Designing Offerings, The New Rules of Customer Reach, and a final section on What's Next.
4. CRM Unplugged: Releasing CRM's Strategic Value.
Doug Kurk, Philip Bligh (John Wiley & Sons)
Kurk and Bligh provide best practices for identifying why CRM often does not produce returns on the investment; creating strategies for successful implementation, and achieving a positive ROI in CRM. They first argue that most CRM investments do not produce a return because organizations do not consider how the parts of a business collaborate on customer activities. This is a "how-to" book to effectively implement customer relationship management by focusing on business processes rather than technology.
5. Managing Customer Relationships: A Strategic Framework.
Don Peppers, Martha Rogers (John Wiley & Sons)
Peppers and Rogers, leaders in the field and authors of five books about "one-to-one" CRM, compile a wealth of experience and knowledge (theirs and others') to provide a reference text and road map to help us make customer relationships the cornerstone of sound corporate strategy. The book includes contributions from experts—including Philip Kotler, Esther Dyson, Geoffrey Moore and Seth Godin—on such topics as guidelines for identifying customers and differentiating them by value and need; the importance of privacy and customer feedback; and advice for measuring the success of customer-based initiatives.
6. Think Like Your Customer: A Winning Strategy to Maximize Sales by Understanding and Influencing How and Why Your Customers Buy.
Bill Stinnet (McGraw-Hill)
Although written for sales executives by a sales training consultant, the book has insights that are valuable for marketers (especially B2B marketers) who strive to build enduring and profitable relationships with customers. Stinnet teaches us how to understand both why customers buy and how customer buy. And he teaches us how to act on that knowledge.
7. The Relationship Edge in Business: Connecting with Customers and Colleagues When It Counts.
Jerry Acuff (John Wiley & Sons)
Although this book is perhaps more about B2B sales than about marketing, Acuff, who had a long career in pharmaceutical sales, develops what he sees as the keys to "relationship edge"—success principles for building customer relationships. The book includes valuable suggestions for shifting away from selling product features and benefits and toward building long-term relationships with customers. For example, the author introduces the "Relationship Pyramid," with the largest group of relative strangers at the bottom and people who highly value your relationship at the top. The author offers a step-by-step approach to take a customer relationship to the next level, including examples that illustrate what can be accomplished by following the program.
8. Scoring Points: How Tesco Is Winning Customer Loyalty.
Clive Humby, Terry Hunt, Tim Philips (Kogan Page)
This revealing investigation examines how Tesco's loyalty program succeeds while many others fail. Tesco, the largest grocer in the United Kingdom, is able to keep the program fresh and effective with ongoing efforts to segment the customer base, make relationship marketing part of the corporate culture, and stay sensitive to privacy issues. The book covers not just the high level strategic concepts but also the actual steps the company has taken to achieve results with customer relationship management.
9. Who Stole My Customer? Winning Strategies for Creating and Sustaining Customer Loyalty.
Harvey Thompson (Pearson Prentice Hall)
Thompson helps you, and others throughout your organization, to view your business through your customer's eyes to learn what you must do to increase loyalty. The book builds on his first book, The Customer-Centered Enterprise (2000), which Thompson wrote based on his experience helping IBM to change from an inside-out, product-and-sales focus to an outside-in, customer focus under the leadership of Lou Gerstner in the late 1990s. This is a more readable and hands-on work: the pointed questions, exercises and examples give you practical information that can be widely used throughout the organization, leading to improved customer retention and value.
10. Simply Better: Winning and Keeping Customers by Delivering What Matters Most.
Patrick Barwise, Sean Meehan (Harvard Business School Publishing)
Barwise and Meehan, professors of marketing in the UK, argue that marketers have been led astray by the widely espoused teaching of the importance of differentiation. They suggest that it's time to focus thinking "inside the box" instead of creative and fanciful thinking "outside the box." Efforts to be different from the competition have led marketers to miss the goal of giving customers more of what they want. The last chapter sums up the message by providing six rules for becoming "simply better": think category benefits, not unique brand benefits; think simplicity, not sophistication; think inside, not outside the box; think opportunities, not threats; for creative advertising, do think outside the box; think immersion (interaction with customers), not submersion (inside the walls of the organization).
11. The Dollarization Discipline: How Smart Companies Create Customer Value…and Profit from It.
Jeffrey J. Fox, Richard C. Gregory (John Wiley & Sons)
"Value" may be one of the most overused and foggy words in business. This book provides clarity by focusing on the only value that counts: value created for customers with positive financial consequences for the organization. The authors make a convincing case for the importance of "the translation of the benefits a product or service delivers to a customer into the dollars-and-cents financial impact to that customer." The book presents techniques to measure customer value in dollars and illustrates how to put the techniques into action in all types of companies. Marketers will find the concepts and tools particularly useful for new product pricing, market segmentation and communications.
12. The Future of Competition: Co-Creating Unique Value with Customers.
C.K. Prahalad, Venkat Ramaswamy (Harvard Business School Publishing)
The authors, professors of marketing at the University of Michigan Business School, give us more evidence to convince senior management that the key to survival in any industry today is to adopt a "customer is king" approach to the business. The message is powerful: financial value to the company comes from involving the customer in "co-designing" the product that will satisfy his needs and from regularly servicing the customer through ongoing online communications. Lots of examples help convey just how organizations are implementing customer-centric strategies based on these key concepts.
13. Customer Mania! It's Never Too Late to Build a Customer-Focused Company.
Ken Blanchard (Free Press)
The self-described "Chief Spiritual Officer" and author of many business bestsellers—including One Minute Manager, Whale Done and Raving Fans—turns to the subject of customer focus. Why? "Because whether you're selling pizzas or professional services, your business is not about you. It's about the people you serve," Blanchard writes. He studied Yum! Brands, formerly Tricon, the group of three businesses spun off from PepsiCo, including KFC, Taco Bell and Pizza Hut, forming the largest restaurant company in the world. The story is one of successful culture change to become a customer-focused organization, and, in the process, triple earnings per share, double return on investment capital and increase market capitalization from $3.7 billion to $10 billion.
14. Clued in: How to Keep Customers Coming Back Again and Again.
Lewis Carbone (FT Prentice Hall)
Customer experience, according to Carbone, may be the best way to have your customers feel connected to your company and ultimately differentiate your offerings from those of the competition. Clued In provides the tools to design a positive customer experience ("much of it unconscious and emotional"), regardless of what you market and to whom you market. Covering the entire process, Carbone provides a toolkit to audit ("take apart existing experiences and see them as your customers do to gain insight into critical needs and true preferences"), design, implement and re-evaluate any customer experience. Most importantly, he discusses how to make positive experiences sustainable and profitable.
15. Free Prize Inside: The Next Big Marketing Idea.
Seth Godin (Penguin USA Portfolio)
To grow, add something remarkable about your product (worthy of customer evangelists who will rave to others), advises marketing guru Godin in a follow up book to his popular Purple Cow. If your product "satisfies consumers and gets them to tell other people what you want them to tell other people, it's not a gimmick, it's a 'soft innovation,'" he writes. "A 'free prize' is the thing about your service, your product or your organization that's worth remarking on, something worth seeking out and buying…. It rarely delivers more of what we were buying in the first place." With Free Prize Inside, Godin provides the guidance to implement the "free prize" creation process and sell the idea inside your organization. But remember: even if you are successful, a product as "remarkable" as the Apple iPod still requires large expenditures on traditional advertising to keep sales healthy.
* * *
With customer focus receiving increased attention in the management literature in 2004, it's apparent that as we marketers deliver on our promise to bring the customer inside the enterprise, we will increasingly have the opportunity to participate in the business strategy discussion.
May you seize the opportunity in 2005!
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