The idea of ‘Purpose Marketing ‘ seems to me like yet another of those mystical inventions of some marketing professionals who claim that only they have the privileged professional insight to see the magical and profound marketing reason for which something is done or created or for which the business exists.
Sagely these marketing types propose that Marketing ‘Is all about the higher purpose of your brand’…..
Even esteemed marketing Prof. Ritso is having a pop at Purpose Marketing. In this article in in Marketing Week he cautions Om-nicient marketeers to remember the fundamental rather than the transcendental purpose of Marketing.
‘Heineken should remember marketing is about profit, not purpose. Heineken’s new purpose-driven ad might express all the right values, but marketers must remember if you don’t use your budget to create sales, you’ve failed.’
No wonder some marketing professionals struggle for reputation and credibility in organisations. Imagine this sketch:
Boss: so what you going to do to increase profits and market share?
CMO: we need to communicate our purpose – thinking ‘save the banana’ or ‘protect the navel gazers in Antarctica’
CMO: well Boss these days its all about connecting with the ends-means, aspirational purpose drivers of Generation Z in a digitally connected hyper-real post truth society
Boss: we already have a purpose – we solve customer problems, make their lives easier,satisfy customer needs and give them great value (just read about it in Value-ology btw) and sell them products and services at a price they want to pay.
CMO: Om…it’s alot deeper than that though Boss…from a marketing perspective we need to creatively communicate our values in the most arcane abstract way possible to show how smart and insightful we are and that we aren’t selling anything even though we are selling something…if you get what I mean.
Boss: how much are we paying you?
For me Alex nails it when he says:
‘It’s also the purpose of the word “purpose”. If a brand figures out what it’s for, and strives to deliver it to the best of its ability, then it can maximise the value it gives to the world, and thus maximise the value it receives. In this situation everyone wins – the brand is focused on value creation and innovation, which is good for the customer, and the customer rewards them handsomely, which is good for the brand.’
This line of thinking connects directly with the principles and methods of our book
Attaching some abstract ‘purpose’ to your business in the hope that customers will associate your brand with deep and meaningful values like ‘save the porpoise’ makes a big mistake in confusing Values with Value. Okay I get that Values (deeply held beliefs about what matters in life) can be valued, and they are not necessarily the same thing as the problems I want your product or service to solve for me. Also Purpose Marketing overlooks the idea of Value Appropriation (the point Ritso is making) whereby organisations also have to get value out of the supplier customer exchange. It’s not all about the customer (Marketing Fallacy #1) For more on this see:
Ellegaard C., Medlin C.J., Geersbro J. (2014) Value appropriation in business exchange –literature review and future research opportunities. Journal of Business & Industrial Marketing 29/3 185–198
Does this mean that Purpose Marketing is just another ‘fad’? Another way of some professional marketers searching for their professional purpose?
I predict that this form of Marketing will soon be superseded by Cetacean Marketing which will all be about Killer marketing campaigns that ensure you don’t give your customers the hump by creating the wright value proposition.
The HBR post explains that many call centers focus on increasing the number of calls their operatives can handle by decreasing the time they talk with individual customers whereas the customer, spookily enough, wants helpfulness which might take the call operative to provide.
So what we have here is the commercial conundrum of providing customer value versus value appropriation for the firm. An optimum needs to be found. Get it wrong and either way your business suffers. Too much customer care and it costs you revenue too little customer care and it still costs you revenue because customers stop using the service.
Is there a formula for success? Probably not. There will be data that allows the firm to try out different approaches (much like a business game – if I increase my ad spend whats the impact on sales and profit). This will refine the overall approach for sure.
The point of the article however is use a metric to measure what you want to measure and don’t use a metric as a proxy for something else. Call length is call length and helpful for profitability measurement use an attitudinal measure to track the quality of your service experience.
Okay! So sou might know what your customer’s need but do you know what they value?
Watch this YouTube introduction to see what I’m talking about Value-ology
Meeting a need is solving a problem delivering value is being relevant.
Academics Vargo and Lusch describe value as idiosyncratic, subjective and meaning laden. This means that value is a moving target that is only ever determined by the customer. A supplier can never tell a customer what value is.
Suppliers can only ever propose value. That’s why of all the marketing tasks a CMO has to do the creation of a value proposition can be the difference between success and failure. Your offer has to address some matter at hand in the world of the customer.
Your products and services will of course be designed to solve a problem that is generally understood. Zoning in on value means improving your customisation.
Value-ology is packed full of thought provoking ideas and practical tools that can transform your marketing and improve your ROI
I bet one of the first things you would say is ‘well it depends’ and by saying that you are acknowledging something crucial and fundamental about this thing we call ‘customer value’. Saying ‘it depends’ means we recognise that value is unique to the person who decides the value and the circumstances in which they are making the decision.
So in the case of the rusty old Volkswagen Beetle like this one the scrapyard dealer might be thinking of the monetary value of the scrap metal, the VW owner who needs a scarce part might be thinking how their break down problem has been solved now that s/he has found a rare engine part, the car renovator might be thinking about how perfect the car shell is for their next custom car project, the grandson tracing his family history might over the moon that he has finally found his grandfather’s car that he drove around Europe in the early sixties and met the woman who was to become his wife. What we ‘get’ for our money is so much more than just the thing itself.
2.Put value at the heart of every marketing conversation you have
As a cornerstone of business activity in general and marketing management in particular understanding value is the primary commercial concern. Marketing shorthand for value is typically ‘the benefit’ or ‘the solution’. It is so fundamental that almost everybody in a firm from the tea boy to the CEO has a view about what the customer values. If you don’t deeply understand value as a concept and what value in particular means to your customers your chances of success are greatly impaired.
3.Make value the touchstone of every marketing decision and action
Understanding value seems so obvious it hardly warrants further comment and so marketers often give more time and attention to marketing implementation rather than making sure actions are aligned to fundamental value drivers. Marketers can easily end up focussing on the interesting rather than the important. To paraphrase Peter Senge when they do this marketers run the risk of chasing the latest fads thinking they are being proactive when all they are doing is reacting and overlooking fundamentals.
4. Cover all the value bases
Over the years it’s become clear that the idea of value is a multi-dimensional constantly moving target. It is unique to each and every customer, it is relative to the competition and it is a weird mix of the monetary, functional and meaningful. For that reason it’s probably one of the most challenging topics in marketing.
Key thought leaders who have produced value definitions and frameworks include:
Park, Jawarski, and MacInnis (1986) from function to experience
Valerie Zeithaml (1988) from give to get
Robert Woodruff (1997) from product attributes to satisfaction
Sheth Newman and Gross (1991) from function to social
Morris Holbrook (1998) from efficiency to spirituality
Ulaga (2003) from attentiveness to expertise
Khalifa(2004) from trade off to means ends
Brock and Colgate (2007) from money to symbols
Value is a complex combination of different things.
Some are more important in b2c and others more relevant to b2b. The important thing to note is that it is a blend of these things, unique to each customer and each market situation. This means value is never fixed and constant.
Key value elements include:
Economic value – what is the asking price or utility of something
Perceived value – what you think something is worth
Relationship value – how much a long term and close trading worth
Experiential value – how interacting with your brand feels
Symbolic value – what something means
Knowledgable value – how helpful something is in improving life and business in general
These different facets of value engage the purchaser in both rational and emotional decision making simultaneously. The big debate in b2b is just how much purchases depend on objective financial factors and how much on subjective factors such as relational warmth. Is clarifying what value actually is on your marketing agenda.
5. Don’t confuse Values with Value
There is a lot of contemporary talk in professional marketing circles about moving from attribute to values based marketing. The idea here is that if you tap into the psyche of customer by understanding their deeply held beliefs and life goals this is more relevant persuasive and influential than addressing economic, functional and perceived value. We claim that choosing either attributes or values presents a false dichotomy. In practice it’s not really the case of choosing either attribute or values based marketing. Also in a b2b context there might be a very clear need for specific technical expertise, or financial attributes that are deemed of immediate value rather than a more values based value view of purchase drivers such as loyalty or trust.
Value and values are of course closely related. The distinction needs to be made clear nevertheless. Frequently people hear the word value being mentioned and proceed to talk about their company values. Value is what is the customer gets (which might include resonating with personal values). Values on the other hand are the profound beliefs that people hold which guide how they act in the world. Value and values are not the same thing. Is distinguishing value and values on your marketing agenda?
6. Ensure everyone in the team has the same take on value
One of the most frequent problems we hear about when working with organisations is that there is a problem with communications. People don’t keep their colleagues informed, there is a lack of feedback or information is simply not shared.
These things obviously create communication challenges however there is something much more profound about how we communicate that is often overlooked. That thing is declaring your assumptions or explaining where you are coming from. We take our assumptions for granted and so we often don’t bother talking about them or revealing them to others. People tend to rush into selling and enthusing about their ideas and proposals without establishing a baseline of understanding. They assume they are talking about the same thing when often they are not. One person may be talking about economic value and the other about symbolic value; another may be referring to value and the other to values. Always be clear about ‘what’ you are talking about. Is understanding different internal value perspectives on your marketing agenda?
7. Avoid customer worship
The establishment of marketing philosophy and principles in the management psyche is probably one of the most successful selling jobs ever.
Marketing speak is everywhere, people who don’t even work in marketing talk of brands, positions, segments, targets, benefits, competition and differentiation. Where there is talk of customers instead of patients, where there is talk of customers rather than students, where there is talk of customers not citizens that’s marketing talking. Philip Kotler crystalised the idea that marketing touches every aspect of life from business, hospitals, schools and churches in his 1972 article The Generic Concept of Marketing. We can call this the marketisation of everything and the assumption that this is obviously a good thing, but is it? Customer centricity is a key marketing idea.
Customer centricity is epitomised by the idea that the ‘the customer is king’. If you are not careful this can lead to customer worship and the potential of going out of business. I worked many years in the gambling industry. When we researched players they always said they wanted ‘the jackpot’ every time they played a slot machine. Did we give the customer what they wanted? Of course not! Value has to be created for all parties for the deal to work. The players were given a win chance and a run for their money and the slot operator got a profit per game played. Esteemed marketing expert Evert Gummesson recently called the pursuit of customer centricity a wild goose chase. Getting the balance right between the value the customer wants and the value the supplier needs is called value appropriation.
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8. Deeply understand value in use and value co-creation.
How many people in your firm actually know what co-creation of value means?
Do they really understand the principles of The Service Dominant Logic of Marketing proposed by Robert Vargo and Stephen Lusch where the notion of co-creation was first presented?Many marketers use the term co-creation to mean working with the customer to develop new products and services. For sure an element of joint or co-creation takes place. Often this is called co-production too.
When talking co-creation of value Vargo and Lusch mean something else entirely. They challenge the very basis modern marketing management by claiming that the whole profession is built on focussing on just one, very particular, idea that philosopher and economist Adam Smith had about value. This idea was the exchange of value which he set out in his book Wealth of Nations. In this treatise Smith made the case that for nations to grow their wealth in the global economy they needed to add value by the production of products which is then exchanged for money by exporting to international markets. The idea of value exchange has been the basis of marketing ever since.
Adam Smith was making a specific economic case in relation to exporting; as a philosopher Smith also understood that value was only really co-created at the point of consumption. So we have value in use rather than value in exchange. Their point is subtle and important.
The claim that value can only ever be created in the moment of use means that value creation is reciprocal – in other words co-created for the supplier and the customer at the same time not passed from one to the other. Value therefore cannot be ‘added into’ anything and embedded by the supplier prior to purchase. Thinking about value in use ensures that firms don’t run away with a technological or product perspective and always focus on the value the customer will derive when the solution that is offered is used. Co-creation is not really about co-development.
9. Remember you are always aiming at moving target
Can we ever really know what the customer wants, needs or values at any point in time? Sure we can have broad idea of the sorts of problems and aspirations customers have and sure we can propose generic solutions to satisfy what the customer might be seeking. But can we actually know in advance what is driving a particular customer purchase? The context of every purchase is unique every time. Only the customer can decide what is relevant to their situation and so this means that businesses can only propose value. What this means is that being continuously tuned into what is relevant to your customers is vital. This is what makes face to face interactions in b2b marketing so important. Without relevance your marketing efforts run this risk of missing the target. Is solution and value proposition development for value in context on your marketing agenda?
10. Create, deliver and communicate differentiated customer value with Value-ology