On the basis of the reading of the case scenario illustrated below, respond to the following questions:
Question 1. A surprising number of corporations place themselves in an adversarial relationship with consumers. Discuss.
Question 2. What do companies have to learn from old-fashioned service providers?
Question 3. How should companies create a valuable relationship with these customers?
Question 4. Analyze how three organizations that you are familiar with try to create a deeper relationship with their customers.
Case Scenario: LEAVING THE CUSTOMERS ALONE
Rejecting the anonymity that has characterized mass marketing for decades, corporations want to know everything about their customers so they can reward their most loyal buyers and devise new products for them. Following a trend set by airlines, companies in dozens of industries - including hotels, supermarkets and even car washes - have launched frequent-buyer clubs. Corporations flood their customers with special offerings, e-mails and news¬letters in a bid to inspire brand fidelity. Consumers might be expected to feel flattered by such attention. Instead, they feel smothered by unwanted advances, says Susan Fournier, a professor at HBS. Ms Fournier has documented hundreds of cases of consumer alienation. Consumers, it turns out, may want nothing more than to be left alone. Many feel besieged by too many choices, too many sales pitches, and too many questions about their lives and buying habits. They develop defensive habits to cope with the barrage, such as screening telephone calls and tossing away all junk mail.
'A surprising number of corporations place themselves in an adversarial relationship with consumers,' says Ms Fournier. She says the problem with relationship marketing is that too many corporations want a relationship that gives them the upper hand. One woman complained that AT&T would make her special offers only if it initiated the call. When she phoned the company’s customer relations office she was rebuffed. 'AT&T wanted to set the rules of the relationship on its own terms,' says Ms Fournier.
Companies that place themselves in the role of invisible servant may do better. The Internet bookseller “amazon.com” , for instance, wins loyalty through maintaining a certain degree of reserve. It contacts customers only to confirm orders, and to make purchase suggestions only when a buyer logs on to the site. 'They are like the good butler who brings slippers and pipe at just the right moment and doesn't ask questions,' says Ms Fournier. Indeed, old-fashioned service providers are the model for many relationship marketing advocates. Companies would like to inspire the kind of loyalty normally reserved for hairdressers who know just how to trim their clients' hair, and butchers who set aside the best cuts for loyal customers. Fournier doubts that companies can amass such subtle information on vast numbers of customers. As one woman pointed out: 'If a hotel did "remember" what drink I ordered the last time I stayed there. who's to say I'd want it again? I don't always order a diet soft drink.' Relationship marketers, moreover, seem obsessed with winning the devotion of their buyers. They would do better to content themselves with a more casual acquaintance, says Ms Fournier. A Kentucky woman she studied purchased one of five brands of laundry detergent, depending on which was on sale, a habit the relationship marketing movement would scorn. 'But if she's only buying five brands, that still adds up to a lot of sales over the years. A company should be pleased with that.'
Many of the strongest relationships that consumers have with products, says Fournier. are based on old-fashioned brand building, rather than constant two-way communication. Fournier interviewed consumers who felt passionate about hundreds of products, from Tabasco to Diet Coke, although they had never had any personal contact with the company making the product.
Companies that fail to see the importance of these anonymous relationships may be led astray, says Ms Fournier. She interviewed a Range Rover owner who was furious over Land-Rover's launch of the cheaper Discovery model on the US market a few years ago. 'For him, owning a Range Rover had always been a status symbol,' Ms Fournier explains. 'Exclusivity was an unwritten rule of his relationship with the company. When they made the down-market model, it was as if his wife had an affair. The company broke the implicit contract of the relationship.' Land-Rover's management may have simply failed to under¬stand that they had a relationship to uphold. 'A relationship is not getting a newsletter, responding to a questionnaire or holding a frequent-buyer card,' says Ms Fournier. 'It has to do with product quality, consistency, image, and what is going on in people's personal lives. It's not about giving power to the companies, but placing it in the hands of consumers. That is what the relationship marketing movement has failed to recognize.