Page 147 - Marketing Management

124 PART 3 CONNECTING WITH CUSTOMERS

|Fig. 5.1| (a) Traditional Organization Chart (b) Modern Customer-Oriented Organization Chart

Traditional
Top
Organization versus manage- CUSTOMERS
Modern Customer- ment
Oriented Company
Organization Middle management Frontline people
CUSTOMERS

Frontline people Middle management

Top
manage-
CUSTOMERS
ment
CUSTOMERS

Managers who believe the customer is the company’s only true “profit center” consider the tra-
ditional organization chart in Figure 5.1(a)—a pyramid with the president at the top, man-
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agement in the middle, and frontline people and customers at the bottom—obsolete.
Successful marketing companies invert the chart as in Figure 5.1(b). At the top are customers;
next in importance are frontline people who meet, serve, and satisfy customers; under them are the
middle managers, whose job is to support the frontline people so they can serve customers well;
and at the base is top management, whose job is to hire and support good middle managers. We
have added customers along the sides of Figure 5.1(b) to indicate that managers at
every level must be personally involved in knowing, meeting, and serving customers.
Some companies have been founded with the customer-on-top business model,
and customer advocacy has been their strategy—and competitive advantage—all
along. With the rise of digital technologies such as the Internet, increasingly in-
formed consumers today expect companies to do more than connect with them,
more than satisfy them, and even more than delight them. They expect companies to
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listen and respond to them.
When Office Depot added customer reviews to its Web site in 2008, revenue and
sales conversion increased significantly. The company also incorporated review-
related terms to its paid search advertising campaign. As a result of these efforts, Web
site revenue and the number of new buyers visiting the site both increased by more
than 150 percent. 6

Customer Perceived Value

Consumers are better educated and informed than ever, and they have the tools to
verify companies’ claims and seek out superior alternatives. 7

Dell Dell rode to success by offering low-priced computers, logistical effi-
ciency, and after-sales service. The firm’s maniacal focus on low costs has been
a key ingredient in its success. When the company shifted its customer-service
call centers to India and the Philippines to cut costs, however, understaffing
frequently led to 30-minute waits for customers.Almost half the calls required at
least one transfer. To discourage customer calls, Dell even removed its toll-free service num-
When certain business decisions ber from its Web site.With customer satisfaction slipping, and competitors matching its prod-
led to a deterioration of customer uct quality and prices and offering improved service, Dell’s market share and stock price both declined
service, Dell’s founder Michael sharply. Dell ended up hiring more North American call center employees. “The team was managing cost in-
Dell took decisive action. stead of managing service and quality,” Michael Dell confesses. 8