Wednesday, May 2, 2012

Be Customer Focused or Perish

In today’s interactive, network-based marketplace, the marketing process changes from “marketer in control” to “customer in control” since marketers hit the wall of over-supply making products hard to differentiate. Thus, the marketing process should start with creating solutions for the problems customers have. Understanding customer problems, instead of developing products and trying to fit them to customer needs, should be the new marketing imperative for marketers in the hotel industry.  

Today, the customer buys a solution bundle or a solution experience, not a product or service. Instead of focusing obsessively on price, value is what customers want. That is, while many marketers believe that price and promotion are the primary tools for increasing sales and gaining market shares, value can motivate customers to pay more. With the right value package, customers are willing to pay more to satisfy a style preference. Thus, identifying significant customer purchase drivers and assigning value to each of them become a critical element.

For example, the Puli Hotel and Spa, a new luxury hotel in Shanghai, penetrated a highly competitive market to compete effectively with the Peninsula and the Four Seasons in Shanghai. Typically, hotels start marketing when a property is complete. However, the Puli chose to understand its customers first before developing its hotel concept and then designed the property and service around their needs. This guest-centric hotel successfully identified a niche customer segment (aesthetic connoisseurs) that demands artisan design, cultural authenticity and local traditions of craftsmanship. Instead of appealing to the majority of people, the hotel deliberately provided exclusivity that their customers would appreciate. The hotel was later recognized by the Warc Prize for Asian Strategy, Asia’s first award established to reward brilliant strategic thinking in marketing.  To find out more about the Puli Hotel and Spa, click here.

Here are the action items marketers can take to start making a difference.

1.     Start with customers - identify their needs and develop products accordingly. In other words, place strategy ahead of product development.
2.     Be data-driven - IMC depends on the data to uncover customers’ needs, motivations, attitudes and behaviors. IMC is a blend of “art” and “science.” That is, both creativity and rigorous analysis should be presented in the IMC process.
3.     Communicate better with customers - based on the data, marketers make improved decisions regarding how to communicate with customers.

Today's marketers have more information than ever about their customers' behaviors and preferences. Therefore, they should redefine marketing in terms of what customers expect rather than in terms of developing or selling products. As a result, this innovative approach will create new opportunities for marketers in how they relate to their customers.

Phoebe Lin is a master’s candidate in the Northwestern Medill IMC marketing program and is specializing in consulting with companies on communication and social marketing. Phoebe can be reached on twitter @PhoebeLin4

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