I happened to stumble upon an article (Salomann, Dous, Kolbe & Brenner 2007) about one of my favorite topics: new kinds of customer relationships, usually enabled by the internet. These guys, Salomann et al., talk about self-service.
First I got excited because contemporary self-service thinking would fit well with my IDBM project (more about that later). I believe that in certain forms self-service could offer plenty of opportunities. But, as usual, the discussion in the article went very much along the old paradigm where customers are treated merely as targets. Salomann et al. are referring to earlier studies: “As a matter of fact, banks are losing money on their ATMs (Florian, Burke & Mero, 2004).” This might be if you only look at the situation from the bean counter perspective. Personally, as a customer, I would change my bank immediately if I would always have to go to a teller – ATMs are actually helpful to me for withdrawing money! So are the banks losing money or just trying to provide at least the same level of service than their competitors?
I would call for strategic customer thinking as opposed to thinking about your customers only when it suits you. Authors often flirt with true customer oriented thinking (like Salomann et al: “start with your customers’ processes, not with yours”) but in the end they just mean something like “try not to get your customers angry when streamlining your processes”. I argue that enabling and facilitating customer value (co-)creation is the way to long-term profits and competitive advantage. If this is what you seek.
I was presenting my research to my colleagues and got feedback on the historical perspective on marketing thought. Personally I think the paper by Vargo and Lusch (2004) on evolving marketing paradigms is excellent and very much needed. It has a profound message underneath the somewhat complex web of arguments. In my reading the message goes something like this: in all market phenomena value is co-created in use and in exchange, and thus firms cannot perform their tasks well while being isolated from other actors in the market – the firms have to engage in all kinds of meaningful relationships.
Many of the senior researchers seem to be highly critical of the newness of Vargo and Lusch’s ideas. As V&L have said, the ideas themselves aren’t new but they have pulled all the different strings together. Starting a high profile debate, they have also legitimized this discussion for younger researchers.
I agree that most of the ideas have been presented before, some even by Kotler already in the 60’s. What some critics seem to be missing is that the world of business practice is obviously still predominantly product-oriented or following the “old” goods-dominant logic. Measured by growth and profits to shareholders, the firms have done well. But what about the (near) future? Can the firms still continue with their tried and true isolated style? I don’t think so. In this knowledge-intensive, globally networked world, firms cannot survive on their own.
If the senior researchers have known the stuff by V&L all along, and at the same time they have been analyzing the real business world in their research and communicating the result to managers, how is it possible that the managers are still in the old mindset? Two possibilities come to mind: first, the senior researchers still base their thoughts and theories on the old economics-oriented view, or second, the existing theories and real world practice don’t meet.
Together with four young doctoral students in marketing, we were discussing about writing an article about joining some basic ideas of consumer culture theory to the discussion of market orientation. Naturally, an article with a “complete” description would be a huge task so we probably have to choose a more narrow focus. Without going into details on this occasion, I would like to raise one central point: can old firms truly adopt structures and processes that allow honest dialogue with customers?
First, what is honest dialogue and what does it require from firms? Honest dialogue is something where there is a decent amount of trust and transparency between the parties. Both sides are being heard, understood and taken seriously. Starting from the fundamentals, the dialogue would require getting rid of the strict separation of the firm and the customer. Firms would no longer market to customers, they would market with them. Instead of asking what kind of products customers might want, firms would invite them to design and create products and services for best mutual benefit. Going a bit further, firms would understand where customers are coming from – their culture(s).
Cultural understanding is not possible if people inside firms are just minding their own business. With the old mindset, the organization chart tells workers where they belong, they have their routines, they have their NDAs. If someone sees a customer, it’s the salesperson. Even if the salesperson would have the incentive and the passion to understand customers, (s)he would probably not be able to transmit this understanding to engineers and designers, let alone the management.
You might have started to anticipate that my answer to the question, can the old catch up, would be no. I’m not sure. At least my job as a researcher would be to find out ways the old firms could catch up. Our article might give you the answer.
Do you, dear reader, have any older firms in mind that are engaging in honest dialogue with their customers?