Reading: Why Customers Matter
Who Are Customers, and Why Do They Matter?
Marketing exists to help organizations understand, reach, and deliver value to their customers. For this reason, the customer is considered the cornerstone of marketing.
With this in mind, what is likely to happen when an organization doesn’t understand or pay attention to what its customers want? What if an organization doesn’t even really understand who its customers are?
One of the world’s best-known brands, Coca-Cola, provides a high-profile example of misunderstanding customer “wants.” In the following video, Roberto Goizueta—in his only on-camera interview on this topic—recounts the disastrous launch of New Coke in 1985 and describes the lessons the company learned. Goizueta was chairman, director, and chief executive officer of the Coca-Cola Company from August 1980 until his death in October 1997.
You can view the transcript for “All About New Coke” (opens in new window)
Can you think of other examples or brands that have pivoted based on consumer feedback?
A recent example is Netflix’s shift in policy on password sharing. For years, Netflix tolerated the practice, but in 2023, the company began restricting account sharing to increase subscriber revenue. This move initially triggered backlash from longtime users. However, rather than reversing the decision entirely, Netflix responded by introducing a new paid feature that allowed users to officially share their account with individuals outside their household for a small fee. This strategic pivot demonstrated Netflix’s responsiveness to customer preferences and changing usage patterns in an increasingly competitive streaming market.
Source: O’Flaherty, K. (2023, June 12). Netflix password sharing crackdown—New data reveals surprising truth. Forbes. https://www.forbes.com/sites/kateoflahertyuk/2023/06/12/netflix-password-sharing-crackdown-new-data-reveals-surprising-truth/
The Problem of Misplaced Focus
As introduced in Chapter 1, not all businesses adopt a marketing orientation. Some still prioritize internal efficiencies or aggressive selling over customer insight. Historically, companies like Texas Instruments and Otis Elevator followed a production orientation, focusing primarily on technology, cost-efficiency, and streamlined distribution. These firms operated under the assumption that a technically superior or lower-cost product would naturally generate demand. While this strategy may yield short-term advantages, it leaves companies vulnerable in the long term to competitors who better understand evolving customer expectations or adapt faster to market shifts.
Similarly, organizations that adopt a sales orientation, such as Amway, a multi-level marketing company, tend to equate marketing with selling. This mindset assumes that demand can be created through persuasion alone, often placing more emphasis on closing a sale than understanding customer needs. When the sales process overshadows customer value, companies risk alienating consumers and missing out on opportunities to build lasting relationships. In today’s marketplace, companies that fail to center the customer in their strategy risk falling behind those that do.
Staying Close to the Customer
Insightful businesses acknowledge the importance of production and sales but realize that the following three-step process is most effective:
- Continuously collect information about customers’ needs and competitors’ capabilities
- Share the information across departments, including production and sales
- Use the information to create a competitive advantage by increasing value for customers
Thanks to the Internet and other technological advances, today’s consumers have access to far more and far better information than ever before. They also have many more choices. To succeed in this environment, businesses must provide comparable levels of information to competitors, and they must deal with new competitors that are quicker, smarter, and open 24-7-365.
Organizations that employ marketing correctly know that keeping customers informed is easier if they maintain constant contact with the customer. This does not necessarily mean that they write or call regularly, although it could. Rather, it means a marketing organization knows a great deal about the characteristics, values, interests, and behaviours of its customers. It monitors how these factors change over time. It provides channels of information and communication to meet customers where they are and be accessible at any moment. Although the customer-oriented marketing process is not an exact science, there is sufficient evidence that marketers who do this well tend to succeed.
A prime guideline for marketing success is to establish customer satisfaction as a company’s number-one priority. This forces an organization to measure and pay attention to customers’ experiences purchasing and using its products. The drive to improve customer satisfaction typically results in improvements to products, processes, and relationship building. This approach helps organizations develop a marketing mentality that facilitates information gathering and maintains effective communication with the customers who are critical to growth, profitability, and success.
Creation notes: Chat GPT was used to update and shorten text to include current examples.
