Relationship Marketing a Consumer Experience Approach - Essay Example

? FLIP THE FUNNEL (A Marketing Essay) of (affiliation) Introduction The marketing function of any business entity is perhaps its most critical aspect, as any inability to execute this function spells the difference between success or failure in a markeplace. It is the so-called “last mile” between a company product or service to its eventual consumers or customers, to use today's more relevant word in the world of marketing. This function decidedly is also part science and part art; and a fast-changing world is making this task more difficult. The majority of companies are hard pressed to find new ways of bringing their products or services to a highly-competitive marketplace that is also becoming global. Technology has made the world “flatter” as barriers to entry are lowered and competition could be just around the corner or it can be halfway around the world. Technology has bridged both distance and time much shorter. Ironically, technology has also made the world more impersonal, because people want to deal with technology instead of dealing with each other directly and personally. It has become a convenient shield to hide behind actual human interactions, although technology has its merits. The rise of computer technology, and especially the Internet, has made the world much smaller. A good number of people put too much reliance on technology, forgetting that it is only a tool to an end, and not an end in itself. This subtly askew mentality pervades the world today. This paper discusses the merits of a new mentality in the world of marketing, a game-changer of sorts, or what management and business experts term as the new paradigm. This shift has been long in coming, because most so-called marketing experts are themselves so enamored with their own ideas, views, and perspectives it made it hard for them to see the light of the day, so to speak. The entire marketing process has been likened by the author of the book to a funnel which focused on acquisition instead of retention; this is the basis for “flipping” the funnel. Discussion The marketing function has been taken for granted for so long that people have a hard time trying to think up new things, or whether what they are doing is actually right or not. It is a primary aim of the author, Mr. Joseph Jaffe, to demonstrate how many time-honored traditions in the art of marketing had been wrong in the first place, by destroying most of the assumptions or accepted wisdom in this vital part of a business entity. People had always assumed marketing is a frenetic effort to always attract new customers, that this always-new incoming horde of buyers, consumers, or customers will save a company in the long run. The assumption can only be partly right, because at some point, the point of saturation will reached and no new buyers will come in. The economic recession certainly brought to the fore the many defects of previous thinking. It is a good idea to always challenge the reasoning, assumptions, or justifications in any practice, whether in business or not. This is particularly true in the area of marketing, because so much time, money, and effort are expended on the acquisition of new customers, but as the good author had pointed out, many of these newly-acquired customers get neglected once they made a purchase and taken for granted by the company. These disgruntled customers will soon leave if ever there is another offer by the competition, displaying their lack of loyalty because they were not treated right by the previous firm. It is only right that they leave, because no one should be in the bad position of being a good customer and not given enough importance by a firm. In a good example or metaphor, the recession is like a low tide, in which rocks previously unseen are now exposed for everyone to see. During high tide (or in good economic conditions), mistakes, errors, or wrong practices are not very material but a recession forces firms to re-examine everything. The author certainly did a good job of pointing out the many mistakes in marketing as it is currently practiced. Sad to say, many customers get the poor end of the bargain, once they had committed themselves to a purchase, because they are disappointed by bad customer service. The viewpoint of most firms selling a product or service ends during a sale, when it should just have been the beginning of a long-term, even a lifetime, relationship. Going back to the earlier part of this discussion, the aim should be retention of customers who were acquired at a great cost. The majority of firms neglect their customers, and then focus again on acquiring new customers. This is clearly a bad business practice, since the acquisition process will not be sustainable. The metaphor of the funnel in the marketing efforts is certainly appropriate, because it is focused on acquiring many consumers, and then funnels or narrows them down to a few good or paying customers. However, the author advocates “flipping the funnel” in a reverse process. It begins with a few satisfied consumers who become the best advertising agents of any company if they are treated right and convince other potential buyers to also avail of the same products. The key word in the whole book is continuity, how companies should communicate with their clients all the time, in good and bad times, whether in recessionary periods or not. People appreciate it. In other words, people like a firm to have consistency all throughout in the relationship. A new paradigm of focusing on retention of clients rather than acquisition of new ones is a very obvious or glaring truth, and yet very few people acknowledge it as such. Instead, many experts in marketing are so focused on the technicalities they fail to see the forest for the trees, in a way. Treating existing customers right is the whole point of flipping the funnel, a reverse process of a future growth from present growth; from the few come the many (Jaffe, 2010, p. 16). On another vital point, the author likewise showed how the flip side of the funnel will in time force an existing firm to re-focus on uncontested space, because so many competitors have not yet seen the wisdom of this reverse engineering mentality, from acquisition to retention. It is certainly true that marketing efforts should be shifted from acquisition to retention instead; what is termed as the new uncontested space in marketing parlance, because very few firms do it at all. Most of the views on marketing practices, as expressed by the author, are valid and meritorious. It just needed someone brave enough to say things are not always correct, and challenge ideas. However, the idea of competing in uncontested space is not an entirely new thought, as it had been discussed previously, and quite extensively at that, by two eminent professors. In the best-selling book by W. Chan Kim and Renee Mauborgne, Blue Ocean Strategy, the professors had also upended most existing ideas of what constitutes a good corporate strategy, much like in the same way that Jafee had discussed about flipping the funnel, in the marketing arena. The two professors found out excellent companies create their own competitive space and leave their own competition behind, because they are bold and venture into a future of their own making. It is a testament to how thinking out-of-the-box can greatly help in securing long-term success. This paradigm shift has been amply demonstrated by the success of companies which in many ways acted differently from their competition, such as Dell Computers and Apple, Inc. The ideas by Jaffe in his book are in many ways similar to these bold moves taken by the said firms, to reject conventional wisdom and traditional thinking in favor of new ways of doing business. A key idea of Jaffe to use people who can influence other people (“influencers”) is not entirely new either, as it had been discussed previously in another book, The Tipping Point, by M. Gladwell. However, although not entirely new in themselves, the ideas by Jaffe can be applied in a new creative way by combining these ideas with the power of technology, specifically the use of the Internet through social media marketing. The “blue ocean” strategy requires the creation of a new ocean by reaching beyond existing demand and reconstructing new market boundaries that competitors cannot hope to enter (Kim & Mauborgne, 2005, p. 47) in the same manner how the funnel that has been flipped creates new uncontested space in terms of strong client retention. It rejects the old and worn-out ideas of advertising and marketing, such as “command and control” or “spray and pray” or even the accepted adage of “churn and burn” which are all reflective of a wrong strategy of continuous client acquisition which can eventually dry up (Jaffe, 2010, p. 27). This new approach has significant implications if applied to business-to-business or in the B2B sphere of marketing. In other words, the ideas of flipping the funnel, that of the blue ocean strategy, and then of the tipping point, can be combined and utilized to be successful in the B2B world. The basis of the tipping point is the use of “influencers” which author Gladwell had called as “mavens” who help shape public opinion and sway or influence other people with their ideas about a product, service, or anything that can result in a trend (Gladwell, 2006, p. 8). Ideas are easily disseminated through this process of a tipping point, like a virus, that spreads quickly. In cyberspace, it is called as “viral marketing” that utilizes the concepts of social media networks. This retention-centric approach utilizes the advantages inherent in how a firm stays engaged with its customer base, using the ideas used in usual customer relationship management (CRM) and loyalty marketing (Jaffe, 2010, p. 29), which promote repeat purchases and rewards those clients who can refer new customers through appropriate incentives. In the B2B context, marketing strategies and tactics should still follow the same ideas or principles as selling to people individually, except that now the firm is selling to companies and organizations in which decision-making processes such as buying, are a bit different because it is now made usually by a committee or a group of people (people in the purchasing department). A key strategy is to use the same ideas on how to influence people, this time on the members of that purchasing committee. In short, their buying behavior is a bit different (Lilien & Grewal, 2012, p. 95); examples of these differences include the level of expertise with regards to product or service they will purchase, unlike individual buyers, and also the number of people involved. Conclusion Marketing is never an easy undertaking, and many firms try to find ways to stay within the vicinity of their market in terms of consumer proximity. However, many of these firms make the mistake of taking their customers for granted, giving lousy service and risking losing them to their competition. For these companies, they need to flip the funnel so they can re-focus efforts on retention and not on acquisition. It is very expensive to acquire a new customer compared to just retaining an existing customer. It is good business practice to do so, as retention builds up to long-term success and sustainability, because existing customers make larger repeat purchases. It had been demonstrated in the case of Zappos, using customer buying metrics and analytics. Best customer service result in customer satisfaction that in today's world has a big exponential effect, because of the presence of so many contact points, primarily the social media propelled by Internet technology. The best advertising agent is a satisfied customer, so they say. This applies in the B2B sphere as well, where relationship marketing is paramount (Baron et al., 2010, p. 35). References Baron, S., Conway, T., & Warnaby, G. (2010). Relationship marketing: A consumer experience approach. Thousand Oaks, CA: Sage Publications Limited. Gladwell, M. (2006). The tipping point: How little things can make a big difference. Boston, MA: Little, Brown, & Company. Jaffe, J. (2010). Flip the funnel: How to use existing customers to gain new ones. Hoboken, NJ: John Wiley & Sons, Incorporated Kim, W. C. & Mauborgne, R. (2005). Blue ocean strategy: How to create uncontested market space and make the competition irrelevant. Boston, MA: Harvard Business School Press. Lilien, G. L. & Grewal, R. (2012). Handbook on business to business marketing. Northampton, MA: Edward Elgar Publishing. Read More