If there ever was a reason for me to write about the future of marketing, it was in 2009. The theme though is as alive today as it was then. Some argue little has changed, others state the new era has already arrived. And there is Nilofer Merchant (@Nilofer) who suggests Marketing is Dead and then comes up with 5 ways to replace it. All in itself these five ways are things I can relate to, but they don’t make it as replacements for Marketing, in my humble opinion.
I recommend you read Ron Shevlin’s (@Rshevlin) post, a response to Merchant’s post, titled: The Death of Marketing (Madness). The subtitle of his blog (A (Mostly) Humorous Look at Marketing in the Age of Social Media) says it all. A very welcome critical and lighthearted voice in this age of Marketing deadly replacements.
What Really Replaces Marketing (Madness)
Here’s my take on What Really Replaces Marketing (Madness). I will do so following the story line of my recent Guest Lecture for the Marketing faculty, headed by Peter Verhoef, of the University of Groningen (The Netherlands). The guest lecture was titled: Marketing Leadership in age of Service.
I largely agree with Nilofer Merchant that Marketing needs to change its act. I have had that feeling for a long time, before 2009, when working in Customer Services, seeing the debris of (direct) marketing campaigns, failed brand promises and what have you. Early 2009 I started reading into the works of Steve Vargo and Robert Lusch named A Service Dominant Logic and I was introduced to the “Customer-Jobs-to-be-Done” innovation framework. Both combined provided a thinking framework that just made all pieces I had in my mind come together. You can read about my thoughts on that here (part 1) and here (part 2).
Three Concepts Combined
The bottom line in my thinking is that, since Value is dominantly created in-use and is a result of co-creation between company and Customer, marketing strategies should shift their focus from creating momentum for value exchange (the sale) to creating momentum for interactions that support Customers in creating value for themselves. And since value is something that can only be defined by its beneficiary we need to understand what outcomes Customers desire when they hire a company’s resources to get their jobs done. The Customer’s journey towards that outcome is where opportunity for marketing lies to design service that support Customers, employees and partners to co-create more (or better?) value together.
That may sound a bit posh (or a little more than a bit), but the combination of the three concepts (Service Dominant Logic, Customer Jobs-to-be-Done, Service Design) has been a powerful one. Not only to explain the outside world, but also to drive innovation in Marketing in my current role.
Three Ways Marketing Needs to Change
Marketing needs to change in three fundamental ways. First marketeers need to understand that they need to let go of a (communication) campaign driven methodology. Marketeers need to turn into Service Designers that are capable of designing end-to-end experiences. And they need not only design, orchestrate and market the experience (or value proposition in Service Dominant Logic terminology), they also need to ensure the company’s capability to deliver on the promise. And this also means involving, and taking responsibility for, company partners in the value network.
Secondly, marketeers need to start understanding that it really matters who you drive through the sales funnel. Goods-logic Marketeers don’t care about the quality of the lead, Service-Logic marketeers do, because they truly care about how they make their Customers feel in the end, and because they know serving the right Customer is a lot easier and vastly more profitable than serving just any Customer.
Thirdly, the next generation of marketeers should understand that there’s more to value in a Customer than just their wallet. Obviously we understand these days that a Customer’s connections matter, if only because they can tell a whole lot more about the Customer, than she will tell you herself. When seeing Customers as co-creators a lot more opportunities open up, like having them do work for you, because the Customer ends up with a better outcome, or by valuing their feedback as opportunities to improve on the Service you provide.
7 Marketer Jobs in the Age of Service
To make it a little more concrete I wrote down 7 jobs Marketers need to get done, if they want to make it in the age of Service. Here they are:
- Marketing’s first job is to understand Customer’s jobs & outcomes (or value creation process) and where in that process they fail to meet their desired outcome. This will involve both analytical approaches and qualitative approaches (like Customer Journey Mapping) for understanding the voice of the Customer. And these programs need to be focused outside the building, not within the walls of the firm (e.g. internal process mapping).
- Secondly Marketers need to build relationships in communities of individuals with similar Jobs-to-be-done and desired Outcomes. Traditional ways of segmenting Customers by their age or other demographic qualities have become largely obsolete in the worlds individualistic melting pot of cultures, lifestyles and routines. People bond with people that think and act alike. People bond with different people for different outcomes. Think Nike Plus and you know what I’m talking about.
- Their third job is to start supporting Customers to create value, not doing stuff to create value to the company. Stop trying to design a service that helps solve your problem of liquidity. Solve your Customers problem and they will solve yours in return. Sounds like basics, but I stumble upon the self-centered version still several times a month.
- Marketing’s fourth job is to design for interactions that stimulate engagement in these networks or communities (=your Customer segment!). Whereas most businesses seem to be focused on reducing (costly) interactions with their Customers, smart companies focus on increasing value co-creating interactions with their Customers and between Customers. Think GiffGaff and Best Buy as good examples of companies doing just that. Result? Keeping costs low and making Customers happy.
- More and more I think that the fifth job is one of the most important ones: engaging employees and partners in supporting Customers to co-create value. You can name it internal branding or your HR-policy to motivate employees, it is of vital importance that they understand what you are doing with your Customers and why, and what their role is in this journey. I find it helps a great deal if you get the first job done right. This will provide you with tangible frameworks and memes that will make it easier to get people involved and move towards a pro-active state of mind, the one that Customers need :)
- Your 6th job is to extract actionable insights out of 360 degree feedback to foster innovations and design new value propositions that attract new Customers. If you don’t listen, you don’t win. If you don’t improve, you will loose. If you don’t innovate, you’ll die (oops.. I did it..)
- Your last job is to redesign metrics that capture the engagement value to firm and to ensure that there is a high correlation to these metrics and Customer’s value created. If you can’t measure, you can’t manage. Old metrics focused on transactions and/or interactions are there to stay. The new way is to combine them with Customer value metrics and not evaluate them in isolation, but as a system (balanced scorecard still works for me..).
That’s it. Marketing’s new madness, according to me. Nothing really complex, but also easier said than done. And not the only ones either. You still need to sell you know, so go on and make nice commercials and create advertising. Just think different about what you are advertising for..
And I know it works and that this is a change I can “sell” to the C-level. Jobs 1 to 7, I’m doing them a little better every day.
Please check out my slides. They should fit the story you’ve read above. And please let me know what you think in the comments.
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hi: great content. thankyou for articulating the forces you see as critical.
There 2 other forces that keep coming up for. these are in addition to your tabled points. I wondered had you reconciled these 2 forces away? if so could you please share.
2 forces
1: mindset of visitors to your site (traffic) leads to revenue. so from a human care perspective, sets up treating visitor as a widget to convert rather than a human being to get to know. so from business model perspective, sets up thinking sales process is linear, top of funnel, and eventually conversion of sale. but we’ve always know purchase path is not linear. we’ve forced it to be linear as the systems of time lend themselves to linear design eg transactional flow, process flow rather than organic / network eg interaction
so this force has always been at play, since we adopted the highly efficient industrialization thinking as the basis of our business models, and thus into our process optimization (six sigma go crazy) and thus into our apps (ERP and CRM). all linear. assumption repeatable. assumption predictable.
the assumption that trust is the (or a) key driver (or influence determinant) is still not showing up as the no 1 factor.
eg up to a certain point in a relationship:
trust in institutions is down
trust in individuals / content (anything but the org really) is up
2: assumption “sales is a numbers game”. more in the funnel at top, more out the bottom.
>is this old saying now irrelevant – is the traditional opportunity pipeline DEAD?
>web reduced space between consumer to business to zero. so does this make the middle man irrelevant ? (eg recruitment agencies as if you know your industry you can just follow the players on linked in and you will see whose moving where, where positions are available etc)
>do we still “shop” or is shopping now dead and we go to store to “buy” (eg correct today for some categories, is this a category specific trend or a timing difference and will be soon for majority of categories with mobile use at shelf being purely for last minute sanity check v investigate)
because if these 2 forces are impactful and relevant to your category, then wouldn’t it be more like
– traditional service expanded to include pre and post sales, all coming from enablement, to serve mindset (rather than to sell)
– sales becomes the handover reps, making sure dots and t crossed at contract or order time, handling when user / buyer wants customized solution configuration. so basically they are service like in that their mandate is don’t stuff it up. they do post sale checkins, all cool, customer happy, feedback etc..
– marketing still accountable for brand awareness and depending on category whether they accept user generates brand message of they still fighting to hold onto this. this could be a maturity of market aspect
so I think I must missing something huge
as the big boys have gone the alternate route
of focus on marketing and drop service
eg
1: google — how easy is it to give them feedback on one of their products compared to one of your apps on your iphone — NOT easy at all! google is a marketing machine.
2: apple — does it feel like big black hole when you give them feedback on the apple apps on the iphone, and how easy is it to that? not as easy as the single developer makes it. though they are improving and they do refund when app does not meet your expectations
3: salesforce.com — does it feel like a big black hole their ideas exchange. they are suppose to role models or community generated ideas / involvement. their ideasExchamge is so poor they have senior sf employees creating ideas like “get back to the core”, aka get back to basics rather than all this social – keep-up-with market who-haa
4: sugarCrm has all the suggested new service channels – blog – developer forum – online feedback — but do you think any of them are working fully. I tried to get into their developer forum for 2 weeks. problem acknowledged and no feedback on when rectified.
the only big boy that seems to be tracking well is amazon. and these dudes don’t appear to have sales or hard hitting marketing. they use data to drive content. they embrace “try before you buy with their first chapter free DL”, they embrace device agnostic eg kindle app for iphone, iPad or Mac. they have fast service turnaround. they don’t have online community so no transparency to what other people like to see improved
so what am I missing?
> google, apple, salesforce.com, sugarCRM all demonstrated not embracing customer first, customer centricity (sugar is worse as their PR is open-source but fail to behave as open-source company – stealing brand kudos and undermining it is so uncool!)
> amazon is embracing customer first and no sales opportunity pipeline
Is there a tool that helps me truelly to map the voice of customer out. puts 80% energy into mapping and gaining insight from voc + 10.x sources ZMOT references. I mean true voc rather than so-called voc via buying personas.
cause I think amazon must have this capability because we have a profile with them.
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Value in Use is also GDL….and according to Vargo and Chandler (2011) we need Value In Context…so which one is now:
Value in Exchange, in Use, in Experience, in (Social) Practice(s) or Context?!!!?
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Great Post and wonderful dialogue. I will try to be short with my thoughts.
Marketing/Advertising has a very important role. They set the consumer’s expectations. However, Service Designers are becoming the go-to people to then deliver on that expectation. Often Marketers overpromise and then the brand under-delivers. This is one reason it’s getting harder and harder for marketers to reach consumers. They don’t believe it. It’s the boy who cried wolf situation. Airlines are notorious for this.
The solution—as I have experienced it—is cross silo teams within corporations that are responsible for the total experience, with Service Design taking the role as guide and integrator. From awareness and expectation setting to Service delivery and deployment the team needs to cut through the organizational silos that stifle any innovation.
See it’s simple. (said with much sarcasm)
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Hi Craig,
I would beg to differ that Service Design is the go-to for delivery. I would argue they are the go-to people for both assessing current delivery against Customer expectations, developing value propositions that do and service systems that are capable of getting it done.. Of course not all by themselves, but they are well equipped to serve all parts of the organization and bring them together to serve the Customer and user.
Very simple indeed :D
Thx for the read and taking time to comment!
Wim
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Marketing concepts that work always depend on culture and market maturity. Service design & Value-in-use are logical next steps in highly developed and mostly saturated markets along with evolving customer expectations. In those markets, marketers need to find new ways to make the difference to their competitors (which has always been their challenge) and thus compete on the overall experience they provide to customers (which includes JTBD efficiency along with mental models and emotional needs). Innovation must be in the DNA of organizations that want to survive over time. And innovation comes in many different shapes: Process, Management, Organizational, Technology, Product-Service systems, Business Model…and Marketing.
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I’d like to share my two cents on this excellent post.
“The combination of the three concepts (Service Dominant Logic, Customer Jobs-to-be-Done, Service Design) has been a powerful one.”
I never understand how the 3 concepts help marketers get anything done in the real world.
Or should I say, how unique is each of this concept really?
SDL…
Is product not service?
Is service not product?
How about output?
What’s outcome?
What’s the relationship between product, service, output, outcome, job…?
Would it help improve user’s satisfaction with never-ending new terminology?
Does user really care at all?
Please just get the job done.
JTBD…
That’s more interesting…
What’s the difference between JTBD and true need?
Aren’t they exactly the same thing?
True need can actually be identified by asking 5 whys.
How new is JTBD?
How many Fortune 500 companies use this JTBD to become what they are now?
SD…
Oh yes…
Another “new” idea to impress user…
Why SD really?
It’s simply to deliver an unforgettable experience along the journey…
So user will keep coming back?
However…
Now there is SD…
In the past… is it PD (product design)?
And now PD is no longer important?
Then how about a few years later?
ED, or experiene design?
In China, nobody really cares about SDL, JTBD, and SD.
But a lot of enterprises are making billions in profits.
So why should companies care about theories and concepts?
Re marketer jobs…
IMHO…
Just get the job done!
Please…
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@Daryl – good to challenge the whole notion here. I’m a fan of the job-to-be-done mentality in particular. Why talk about it?
In America, and across the globe, there are many companies making billions in profits. Yet, many companies fail to think in terms of their own customers’ needs. Which results in stumbles, unnecessary efforts that distract from a primary mission.
Two examples. First: New Coke. Remember that? Coca Cola decided to try out a new formula. Now, what was the customer job-to-be-done there? More likely, it someone’s job-to-be-done for Coca-Cola market share (vs. Pepsi).
Next example: Google+. What’s the customer job-to-be-done there? With Facebook and Twitter growing strongly, what are the unfulfilled jobs-to-be-done there? Pinterest shows that there are indeed unfulfilled jobs-to-be-done in the social networking world. Google+ doesn’t really help on any unfulfilled ones. It’s the same thing as Facebook and Twitter.
Customers don’t care that companies have their own jobs-to-be-done (revenues, profits, market share, etc.). Yet these companies seem to be taking a company-first attitude about what to introduce in the market.
And that is why the jobs-to-be-done approach matters. It formalizes a philosophy of thinking about customer needs, something that seems too easy to forget.
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Hutch
I hope I have the ability and capability to challenge…
But regrettably I am in a complete mess…
And am still figuring a way out.
I don’t want to confuse anyone in the practical world with my immature thoughts…
Re jtbd…
Honestly…
I am not saying that it’s not important…
jtbd is true need.
Or the root cause of why user needs and wants anything.
How could jtbd be not important?
The message I am trying to bring out is…
jtbd is just jtbd.
It’s nothing new.
It’s been here for probably several thousand years!
I am just surprised to see that we are excited about this idea…
And think it’s the holy grail of all times.
I was the Marketing Manager of Coca-Cola in China 10+ years ago.
And every decision I made back then was based on the so-called jtbd.
But I prefer to call it “true need.”
How complicated is jtbd though?
Every user wants to avoid pain and seek pleasure.
So just max pleasure and min pain in terms of rational and emotional needs and wants.
The only question is…
Pleasure and pain are dynamic…
And they mean different things to different people.
That’s the one question every firm needs to solve in order to achieve profitable sustainability.
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Hi Daryl,
Great challenge indeed. Hutch already replied on JTBD, which I fully agree with. Allow me to take on Service Design now.
Service Design (and Service Dominant Logic for that matter) is about the notion that, from a Customers’ perspective, there is no difference: products and services both service the Customer.
An outcome, to me, is a desired and-state (a finished job, happines, joy, excitement etc)..
Experience design comes close to service design, but is mostly aimed at designing the intangible part of an experience (interactions and services, not products).
Service Design takes an holistic and integrative approach in which both products, services and interactions are designed with the Customer (or Civilian or User, or Stakeholder etc) end-goal in mind.
Product Design is too often done in isolation and is feature focused. How long did it take for computer manufacturers to understand that many people did not want more and more features on a laptop, but fewer instead. Much fewer to be exact once they looked at the jobs people really were getting done on their laptops (browse the internet, do e-mail and look at pictures), and then the netbook was born..
Think Greenwheels (greenwheels.com), a company that doesn’t sell cars, nor rents out cars, but sells a right to use a car when you need one. A car that’s within walking distance from your house (if you live in the City) and can be put back there when you’re done. With an 24/7 easy to access online reservation system, a ‘company’ credit card for paying the gaz you need, in the car etc etc.. A great example of a company that understands how to monetize value-in-use, and understands that ‘having access to’ is already of ‘use-value’ to the Customer. And has designed a service (system) that enables that.
Many companies make a lot of money, most fall into the commodity trap at some point. And then think commodities from a couple of decades ago, and how many of those companies are still around.. Companies that continue seek new perspectives and (creative) ways to solve Customer jobs, or that innovate around unfulfilled jobs, are the ones that survive and thrive.
In short: To me, these words are not new buzz-words for old ways of thinking and working, but new concepts and perspectives that help me do the job my boss hires me for better. Oh.. and I’m applying the principles and jobs described in this post, every day. Some a little more, other less, some better, others worse. But I learn every day, and get better at it, I think :)
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Wim
As said…
I really don’t have the quality to challenge anyone especially you and Graham. :)
“Experience design comes close to service design, but is mostly aimed at designing the intangible part of an experience (interactions and services, not products).”
Hm…
I’m not really sure about this Wim.
It depends on how you define experience.
Is product not experience?
Is service not experience?
IMHO…
Both product and service are just devices for experience creation.
If firm cares about user experience, it will come up with great product and service.
Just like what Steve Jobs has done for us.
All firm needs is to do again is…
Max pleasure and min pain in terms of rational and emotional needs and wants of user.
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Hi Daryl,
I think we are not far off. Let’s not debate terminology. We can agree to disagree on that and still have productive dialogue, no?
Wim
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Wim,
A lot to process and evaluate from your post in terms of practical application. I’m not going to propose to comment on the job of a marketer. Because I’m not one.
In terms of the way Marketing, or any othe function in the enterprise, defines, views and engages with the customer, well, that’s the part of the post that really resonated with me. So, the three ways you suggest marketing changes, in my view, can and should be applied to the entire enterprise, every function, back and front office, traditional customer-facing or not.
In order of degree of change, I think #1 will actually emerge as the easiest in the long run? Why? Because that change is goiing to be thrust onto the marketing function, like it or not.
In terms of #2 – being more particular about who a company does business with i.e. moves into and through the funnel I’m seeing is a big, tough pill to swallow. (although, I also believe that the traditional funnel has been demolished. McKinsey identified this in their Customer Decision Journey study of two years ago). Marketers and sales people I’ve worked with rarely have the fortitude to walk away from a prospect that has money to spend. I’ve witnessed this first hand in my business. As a BtoB service provider, the agreement to do business with a client based soley on the criteria of ability to pay typically results in a bad outcome. It is usually only a matter of time. Strategic fit, cultural fit, commonality of goals and objecives, call it what you will. But if there are not alignment between the two firms along these dimensions, the relationship has a greater chance of eventually unwinding.
As for #3 – this is actually part and parcel and connected to #2. As example, I am working with my clients on a mind shift. I run a customer service BPO. So, the easy thing to do is to look at the VOC asset as the data that is collected in the course of the interaction. That’s a very transactional view. Why not view the customer as the asset. As in a community, looking only at the posts offered by customers is missing the opportunity. The customer is the asset, from which on-going engagement can reap much greater insight and value over time. Engage them in the on-going dialog rather than transact with them
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Hi Barry,
Of course you are a marketer, everyone is (https://www.mckinseyquarterly.com/Were_all_marketers_now_2834)!
I like how you chose to comment on the three things that need to change. And I agree these changes are not only limited to the marketing function. Maybe even it is the way the rest of the organization perceives marketing that should change. I say this because I do see marketers with great ideas that just do not resonate with other stakeholders in the organization, because they don’t understand the new things marketing is proposing..
Thx for joining the conversation here Barry! I always highly value your perspectives.
Wim
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Hi Wim,
I’m really impressed by your post deeply resonating with many of my own thoughts on service design, outcome driven innovation and service dominant logic.
At a first level, one of the aspects I’ve appreciated the most is the shift in focus from innovation to marketing as, reading Strategyn’s papers, I kept constantly asking myself why limiting similar thoughts just to innovation or market positioning.
Graham’s comment nonetheless reinforced another gut feeling I had while looking at ODI: this is not a job for any single function. Even focusing on marketing won’t do the trick.
To fully reap the benefits of ODI you necessarily have to break down internal silos, evolve the organization and reorient (at least customer facing but that won’t be enough either) departments around a common customer centric axis given by jobs to be done and desired outcomes. As stated by Graham, to provide a satisfying end to end experience marketing, service, sales, innovation, customer insights have to be coordinated while the supply chain has to follow through (see for example Rethinking Marketing in HBR).
At the end it is operationally not very far from the experience continuum of Esteban or the thoughts of Rangay Gulati in Reorganizing for Resilience: a long-term outside-in shift from the product you have to push to improving your customer’s life and co-creating value in use.
To me, marketing or innovation are just two of the many pieces that should go together
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Hi Wim
I have read through your post at least three or four times in the past couple of days. It is full of challenges to marketing as we know it.
Although – as I wrote in my earlier comment – I believe the post underplays the continuing importance of the current goods-dominant logic approach to marketing, it also lays out an interesting pathway for the evolution to a service-dominant logic approach to marketing.
I like the seven jobs for marketers that you set out. They all make a great deal of sense if marketing is to evolve to a service-dominant logic approach. But I wonder how feasible the seven jobs are. Let’s have a look at them in a little more detail and see whether they really are.
Job No 1 – Understand What Customers Value
Understanding what customers value is the logical starting point for everything. As Ulwick & Bettencourt have described in detail, you can do this by mapping the many different customer jobs at different stages in the customer journey. I wouldn’t bother with customer outcomes at this stage though, unless you are going to focus on just one small part of the journey. Having said that, I am beginning to wonder whether capturing customer jobs is enough. As Ng et al point out in a recent working paper on ‘An Integrative Framework for Value’, customer jobs only captures a small part of the bigger contextual picture of what customers value. We need the contextual part just as much if we are to create better products, services and experiences.
So for me, feasibility = 75%, as some of the tools to understand what customers value are still being refined.
Job No 2 – Build Relationships in Customer Communities
Research by Christakis & Fowler suggest most of us belong to a relatively small number of communities of interest. These affiliations are typically driven by things like religion, school, work or hobbies. But they typically don’t revolve around customer jobs. Not the sort you are talking abut. If we want to get to know segments of customers with similar jobs better, we will have to build the communities ourselves so that they support customers in the way they want and thus elicit the information we want to gather. That may be relatively easy if you are a customer co-created company like UK mobile telco Giff Gaff, but it will be damned hard if you are United Airlines with its serial service problems. Unless you want a community of irate customer terrorists that is!
Feasibility = 50%, as most customers are not going to be interested in joining any communities that companies care to create. They are too busy having a life!
Job No 3 – Support Customers Creating Value
Here’s a job that is easy to support. As Tuli et al show in an article on ‘Rethinking Customer Solutions: From Product Bundles to Relational Processes’, customer really do want support getting value from the products they have bought, and they want it throughout the entire customer journey, not just before and after the point of sale. Vargo & Lusch’s seminal work on service-dominant logic provides a mental model to think about how customers co-create value from products, one interaction at a time. But there is a problem too. A huge one. Marketing currently only ‘manages’ a small proportion of the interactions in the customer journey. And as Bain & Co research on ‘Closing the Delivery Gap’ shows, they don’t manage those particularly well. Only by orchestrating a cross-functional team with responsibility for the entire customer journey can you hope to support customers when they really need it; typically some weeks, months or years into using the product.
Feasibility = 25%, as either other functions are currently responsible for the interactions with customers (and who wants to hand over organisational power to Marketing?), or more often, no-one is!
Job No 4 – Design Interactions for Engagement
Here is where the real problems for me start. As David Brennan in a timely article in Brand Republic magazine on ‘Attention! This is Not Engagement’ points out, the meaning of engagement has been dumbed-down to the point where it often means little more than ‘engaging with’ customers. In contrast, research by Brodie et al has shown that true engagement is a higher-order relational construct that goes beyond mere participation (closest to the dumbed-down definition) or even involvement, to encompass the co-creation of value together with customers. As the Bain & Co study mentioned before points out, if the gap between that which companies promise and that which is actually received by customers is so huge, what chance is there of a deeper relationship developing based on engagement? Answer: very little. Liljander & Roos’ research on ‘Customer Relationship Levels – From Spurious to True Relationships’ supports this, finding that only around 5% of customers had a true relationship with their automotive dealership, usually with a person in the dealership. And this in a high involvement product.
Whilst I agree with the sentiment entirely, feasibility = 50%, as most companies demonstrably fail to deliver what they promise, so there is little chance of achieving true engagement.
Job No 5 – Engage Employees & Partners
In contrast to the previous four jobs, I think this job is entirely feasible with the right service strategy and matching implementation. Just as employees are key to enabling value co-creation with customers during many interactions, so are partners in many others. The key to engaging employees and partners is designing business operations so that they receive whatever they value as well as enabling what customers value. Co-creation isn’t just for customers. As Parasuraman et al’s pioneering work in the 1980s on the Gaps Model shows, one of the biggest obstacles to this is conflicts faced by customer-facing staff between what management say they want and the service standards (management creates) that they are expected to follow. These boundary spanning conflicts often prevent employees from delivering what they know customers want.
Feasibility = 100%, providing boundary spanning conflicts in customer-facing staff are tackled as part of the design process.
Job No 6 – Extract Insights to Drive Innovation
Here’s another job that it is easy to agree with, but that is fiendishly difficult to do. Companies should listen to their customers (and to non and ex-customers too) to find out what they value. Modern approaches to innovation, such as Strategyn’s ‘Outcome-driven Innovation’ provide a structured framework to innovate around unmet customer needs. Importantly, its framework can be used to drive the market as well as be driven by it. As Apple has shown, driving the market can be much more profitable than being driven by it. The big challenge is that most companies don’t have the insights they need to do this. As I wrote in a post about ‘It’s Time for a Balanced Scorecard for Customer Data’ companies need to gather much more contextually rich data than they do currently. The glut of unstructured (social) data that many companies now routinely collect makes things worse rather than better.
Feasibility = 75%, as companies often find that what is easy to measure is not always all that useful, and that which is useful is not always easy to measure.
Job No 7 – Redesign Metrics to Capture Engagement Value
As Kumar et al set out in their article on ‘Undervalued or Overvalued Customers: Capturing Total Customer Engagement Value’, there is much more to measuring the value of a customer than just the value of their transactions over time. There are a whole host of other elements of value that can be incorporated into a total customer engagement value model. But how many companies are even calculating the value of customers’ transactions? I would estimate that only around 20% of companies are even doing this basic level of customer valuation. Without first reaching this basic level it is hard to see companies leaping to a more encompassing measure of customer value. Let alone getting the insights generated where they can be used to make s difference during value co-creation.
Feasibility = 50%, as most companies have hardly got started measuring customer lifetime value, let alone any of the more difficult elements of Total Customer Engagement Value.
I really do like the seven jobs for marketers that you set out. I think they provide a great starting point for rethinking how marketing might look in a service-dominant logic world. But I am not sure that most organisations are ready to do many of the jobs. As the old English proverb famously goes, ‘there’s many a slip ‘twixt the cup and the lip’. But that doesn’t mean that they shouldn’t try.
Graham Hill
Customer-centric Entrepreneur
@grahamhill
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Hi Graham,
Those are two excellent comments you make to this post. As you know I like to see my writing as conversation starters, even though I know only few will engage in thorough conversations. Glad you (and the other commeters so far) did.
I truly like your feasibility assessment of the 7 jobs. Which poses another follow-up question: How would you rate the relative importance of each job in the total? And how would you prioritize the 7?
The one assessment that I feel you are truly off is Job #3. I think its feasibility is a lot higher if you consider Marketing does not need to orchestrate ALL interactions with Customers. Marketing needs to orchestrate all interactions that truly matter to Customers’ (job to be done) – and contribute to Company’s value creation as well.. And since the current level of orchestration is low, it’s not too difficult to make tangible and noticable difference for Customers, specifically in comparison to their Customers’ alternatives.
I would argue it’s a 75% rate of feasibility as well, increasing the overall assessment significantly, no?
More to come (after you answer my questions above ;)
Wim
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Hi Wim
Your post has triggered some interesting comments.
You ask an interesting question, namely, how would I prioritise the seven jobs. That’s a good question. To answer it I took the seven jobs through the orthogonal contrasts inspired approach you know I use for prioritising factors generally. I first compared each of the jobs with each other job and for each comparison asked which one was most important for business success. The most important job got a +1 the least a -1. I then totalled all the scores for each job, added a number to transform them all to a +ve number and then calculated a percent weighting. You know the general approach.
The job scores, in order of their importance were as follows:
Job No 3 – Support Customers Creating Value – 23%
Job No 5 – Engage Employees & Partners – 20%
Job No 4 – Design Interactions for Engagement – 17%
Job No 1 – Understand What Customers Value – 14%
Job No 6 – Extract Insights to Drive Innovation – 11%
Job No 2 – Build Relationships in Customer Communities – 9%
Job No 7 – Redesign Metrics to Capture Engagement Value – 6%
The prioritisation reveals a number of themes. The first theme is the importance of supporting customers during the co-creation of value. Irrespective of who notionally ‘owns’ different interactions with customers, if you don’t support the customer while they co-create value for themselves they will create less of it and you will have less opportunities to create value for yourself in the future. I agree with you that Marketing doesn’t need to own all of the key interactions, but someone does need to orchestrate them if they are to work together as a coherent whole. I am not convinced that this should be Marketing. Maybe I should raise my feasibility score for Job No 3 to 50%, but only in exceptional circumstances. Look to your own organisation as an example!
The second theme is recognising that as your employees and partners handle many of the interactions with customers, supporting them to support customers and designing the interactions so they are easy to use to co-create value are critical. We recognise the importance of reducing the Customer Effort Score. As Evans et al describe in their insightful (and free) book on ‘Invisible Markets: How Software Platforms Drive Innovation and Transform Industries’, companies need to create ‘platforms’ that enable each party – customers, partners and the company – to co-create whatever value they want from interacting with each other. That doesn’t mean that value needs to be co-created in equal amounts for each. But it does mean that each needs to co-create enough to be satisfied with the individual interaction and with the service as a whole.
There is also a hidden theme too. One that is implied but has not been picked up so far. The hidden theme is that the customer should be seen as a part-time employee. As Grönroos points out in an article on ‘Adopting a Service Logic for Marketing’. customers bring their own resources, skills and knowledge to each interaction. Smart companies treat customers as an extension to their own workforce, providing them with tools, training and so on so that they can co-create more value out of each interaction. Just think of the staff airlines placed beside the newly introduced self-service check-in at airports. They were there to train customers how to use the technology. Customers won because they gained control over one of the most fraught parts of the flying experience. Employees won because they were released from dull check-in duties. And the airline won because it resulted in higher customer satisfaction and lower costs over the longer-term.
The final them is recognising that you really need to know your customers in a different way if you are to design winning platforms that co-create more value at key interactions in the customer journey. Transactional data is table stakes for companies today, but it is never enough by itself to suceed. Companies also need to understand what customers value, the context in which they co-create that value and who guides them as they seek to co-create it. And as Helfat & Raubitscheck describe in their paper on ‘Product Sequencing: Co-evolution of Knowledge, Capabilities and Products’, this theme also implies that as customers gain experience using a platform, their own perceptions of what they value changes. So uncovering insights into what customers value and applying them is a continuous job.
Looking at the jobs and the themes it reminds me that someone needs to develop a developmental roadmap for value co-creation setting out the capabilities companies need, what each step in the developmental roadmap looks like, and how to go about evolving from Level 1 Aware, through Level 3 Practicing, to Level 5 Leading. Now that would be an interesting blog post.
We are still at the experimental stage of implementing service-dominant logic and value co-creation in companies. These conversations help me to think through their ramifications for business. For that I am immensely grateful.
Graham Hill
Customer-centric Entrpreneur
@grahamhill
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Orthogonal contrasts. 1 question answered :)
Wim, this is a very thoughtful post and Graham, you have not only filled in gaps but taken the conversation to another level.
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Hi Graham,
Excellent comment again and full of insight that I need some time to absorb. I also like your themes. One more theme (in line with jobs #2 and #4) I see is the role of social networks in value co-creation. I recently learned that customer attrition is contagious, much like WOM is. Which leads me to wonder what is the role of other Customers in value co-creation by Customers with the firm?
Much to thin about, many blanks to fill, of whcih the capability maturity framework is a crucial one to bring it all together.
Thanks for your part of the deal in making this conversation work ;)
Wim
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Graham, Wim –
The idea that marketing has a hand in understanding what customers value (Job #1) is good. But in my experience, marketing folks don’t have the mentality to do this. By that, I mean that marketing folks are good at:
– Demand generation techniques
– Market messaging
– Brand management
– Tactics for getting marketing collateral online
I’ve yet to meet any that would have the domain expertise to really get deeply into the jobs-to-be-done or the co-creation of value. The folks that are geared to do that work are found elsewhere in organizations.
And that gap is one that challenges companies to fundamentally improve and gain advantage from the approaches outlined here.
Or am I missing something?
Hutch
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Hi Hutch,
You are probably right in the sense that most markteters do the jobs you describe based on a goods-dominant-logic, whereas I advocate they do those jobs (and the 7 I described above), based on a service dominant logic..
On top of that I agree with you it’s important to understand that getting the 7 jobs done, requires a lot of cross-functional collaboration & a lot more expertise than is currently available within many marketing departments..
Oh.. and I’m a marketer as well :)
Wim
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Wim,
is that only about cross-functional collaboration and expertise or also about a shared (top-down) long-term vision of how a company should work and co-create value?
My experience is much in line with what Hutch just wrote. That doesn’t mean all marketeers are that way but the majority probably is based on what is asked to them in most organizations.
Emanuele
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Hi Emanuele,
A shared vision and mindset is very important. Without it’ll be extremely difficult to make any progress, imo.
And my experience is no different, but it needs to change don’t you think?
Wim
p.s. thx for joining the conversation
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Hi Wim
A great post. Full of original thoughts. Ones that made me think… And ones that made me just a little worried.
Like Ron Shevlin in some of his Snarketing 2.0 posts, I have become tired of people like Nilofer Merchant peddling their preposterous notions that Marketing is Dead. From my vantage point working closely with CMOs, I can see that marketing faces a number of challenges; but that is hardly new and it certainly isn’t enough to warrant all the doom mongering.
Marketing’s role has traditionally been to let potential customers know what products the company has to offer. It uses a broad range of tools to do this, from brand communications, through marketing promotions, all the way to much maligned CRM. Once marketing has done its job closing the sale is sales’ responsibility. Dealing with customer enquiries is customer service’s responsibility. Providing and supporting the products in use is operations’ responsibility. This is classic goods-dominant logic. As we both know, it is the dominant logic in 99.99% of companies today. And as Drucker so succinctly put it, it is one of the two functions that create value for companies, along with innovation. All the other functions are costs.
But does marketing actually work? It sure as hell does! There is considerable evidence that marketing significantly influences business success: from the PIMS studies in the 70s, through the Marketing Science Institute’s market-orientation studies in the 80s, to more recent studies. Collectively, the studies point to the importance of George Day’s seminal 1994 classification of marketing’s three types of capabilities – outside-in, inside-out and spanning capabilities – in driving business success. And as Day wrote last year in a new article on ‘Closing the Marketing Capabilities Gap’ in the Journal of Marketing, marketers recognise that big data, hyper-competition and social business mean they need to update their capabilities.
Vargo & Lusch’s service-dominant logic provides a powerful new model for reorganising marketing, sales, service and operations. One that as Irene Ng has shown, is already starting to change the nature of how complex service industries like precision engineering pay for outcomes. And what works for Rolls Royce’s Aviation business today will no doubt be working for Vodafone’s pre-paid mobile telephony business tomorrow. In the interim, we must be very careful not to be in too much of a hurry to throw the working marketing baby out with the still unproven service bathwater.
Marketing is DEAD! Long live Marketing.
Graham Hill
Customer-centric Entrepreneur
@grahamhill
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This is a much-needed post. To, me one of the key problems with marketing is the degree to which agencies that set out to do marketing don’t really employ the core principles of the discipline themselves. Much of what you talk about in your article is what marketing SHOULD be about but so rarely is. Marketing has almost become another word for spamming.
My hope for the influence of Service Design on marketing is that it will help everyone to cut through the less customer-focused practices that have built up over the years and help us arrive at a much more mutually beneficial approach for marketing. I think both the tools and the theory of Service Design have a lot to offer.
Ideally a marketing agency can act as a real broker for relationships. Of course that’s what it should be but the relationships have become much less collaborative than they should. If we imagine the marketing agency as a vehicle for bringing together customers, creatives, products, services and ideas to create value then we have an opportunity to create a much better offering.
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Hi Simon,
I agree with a lot you say obviously, I’m not sure though the marketing agency plays a central role in this. They are just a node in the value network, a tool hired by companies to get their job done. They could do a much better job then most of them currently do, but hey.. if the monkey is asking for peanuts..
Thx for the read & comment.
Wim
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Wim, there are many smart things about this post. One of my favorites is your job #1 for marketers: defining the outcome, or need to be solved for customers. I have sadly lost count of the number of leaders I have met that can describe very clearly what they sell, but cannot describe the need, desire, outcome or job-to-be-done that they solve for their customers.
Since customers will measure the success of any experience by if, and how well, the need is solved, this is a critical job – and marketers are precisely the right people to define this and then engage others in the organization to contribute to solving it.
In my experience, the “If/if not” outcome (was the need solved that triggered the customer to act in the first place?) is the “harder” measure Hutch may be looking for, while the “how they feel” or “how well” measures (satisfaction, willingness to advocate, etc) are usually emotional. Both measure value for the customer, and thus for organizations, too.
Thanks Wim. Great conversation here.
LCI
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Thx Linda!
Yes, sadly that’s true. There is a lot of knowledge inside the company on the product, its features, the size of its market and how that likely develops, but there hardly is knowledge on the problem the product is solving for Customers and how well that’s being done. In short: we hardly know if we are selling what Customers read on the tin..
Glad you liked the post and thank you for stopping by to comment as well.
Wim
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Hi Wim, Thanks for a great wrap-up & linking: SD-Logic, JTBD, Service Design. In other words, changing micro-economic value creation paradigm, behavioral analytics & strategic design methodology combined. And the way it is written also makes it a great tool for selling new marketing & service design. Please continue to add such useful insights to our discipline and community of practice !
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You’re welcome Sylvain :)
I would be interested also to understand what you define as ‘our discipline and community of practice’. Because frankly, the Service Design community, the marketing community and the innovation community show very little overlap in real life.
Fortunately I see more and more exceptions to the ‘silo rule’, most of them in thinking and writing, but far fewer of them can be seen as cross-silo practitioners. How do you see this development? Where do you see people, agencies, consultancies, companies, governments that are embracing what you describe as “changing micro-economic value creation paradigm, behavioral analytics & strategic design methodology combined”?
Would love to hear your thoughts and get some pointers.
Thank you for reading, sharing and taking the time to comment.
Wim
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Wim, Thanks for your reply. Your are completely right in asking these questions and the answer is not a straightforward one of course. Fact is that I approach these 3 disciplines always as one thing when talking to customers, in the public & private sector alike. So for me (I’m an economist by education) there is no difference between those 3 in contemporary management. This doesn’t mean that those clients embrace this automatically. But I always try to explain things in natural language and show by simple examples that these are linked, and even including intellectual capital management & knowledge management as 2 more very important pillars in new management. And as Peter Drucker said, there is only one reason for a company to exist, which is to create a client. Consequently the two most important functions in business are marketing and innovation, to which you may add intellectual capital management these days.
Often clients then understand and see the links and agree to work cross departmental on projects. Concerning the community of practice, I have been entering different communities (via conferences) over the years, from marketing, to user experience design, knowledge management (& IT), service design and innovation management, and I always found some people there that were also thinking and working on the linkage of those “silos”. And you probably know all of them ;).
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I very much understand where you come from. I also find it is not too difficult to have people join cross-silo projects. Usually these projects even generate a lot of positive energy.
It becomes a tad (understatement) more difficult when at the same time you’d also want to integrate the three (new) concepts. It is already difficult to let all silo’s embrace one and the same midset in my experience.
Glad to see that doesn’t hold you back though! Me neither :)
Thx again & look forward to seeing you back here soon.
Wim
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Love this post Wim. I’ve been reading up a bit on the differences between value-in-use vs. value-in-exchange (thanks Graham!). I like your usage here in teasing that out more fully in an operational sense.
One thought on your second way marketing needs to change. You relate this desired outcome: “because they truly care about how they make their Customers feel in the end”. I agree with the emotional objective, yet the hardened analytical side of me feels a bit unsatisfied with that. Perhaps something more concrete, like “because they truly care that the customer satisfactorily fulfills her job-to-be-done”.
Great integration of marketing and innovation here.
Hutch
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Thx Hutch :)
I’ve written this post in my head maybe a dozen times and probably a lot more refined than it turned out now. But I wrote it irl now, on a late Friday / early Saturday. I didn’t even bother to do a thorough spelling check. I was inspired by the two posts mentioned and the words just came out, like they ended up on the paper. Glad I finally did..
I can very much relate to your remark on job #2. I am also a utilitarian, very much focused on the functional side of jobs & outcomes. I’ve also come to believe that in the end, all desired outcomes are emotional, because that’s the only way humans are capable of evaluating the experience.. All in all: most Customer jobs are a combination of functional, emotional & social jobs, and your alternative sentence fits nicely with that. What do you think?
Thx for reading & taking the time to comment!
Wim
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Yes, I can see that. “Satisfaction” itself is an emotional state. Sometimes with a concrete measurable basis, sometimes with more of a “feels right” perception. Both work.
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