Managing growth after business re-engineering

By Ken Nyadimo

An interesting point arises from last week’s article on managing challenges like the current global recession and still maintain business momentum.

A hit locally and a myriad more from The Standard readers abroad raise an interesting point: we have redesigned our corporate culture -and this is attested to by frequent business process audits- but we still do not seem to hit the rock.

Essentially, developing a profitable customer base is proving difficult because of the growing nature of marketing complexity and a major power shift to customers.

The company is no longer queen, what with the growing dilution of company-controlled programs by new forces like experiential fervour, word of mouth channels, and consumer-generated media (CGM).

Another question from the readers pertains to the demarcation of the listening forum: the what, where, how and when linkages of the listening scenario.

The weakness of most commonly employed probe techniques like surveys and focus groups is that data is attainable only through the active collaboration of the respondent resulting in up to 90 per cent of relevant data being missed out. As a result, problems such as skewed loyalty and unsuccessful product launches emerge at great cost.

Precisely so, what needs to be realised is the merging of market insight with action and strategy. This was a lesson learnt by Coca-Cola following the difficulty in developing the New Coke concept.

Strong consumer currents

With minimal data trapped out of conservative listening forums there is little wonder that the action and strategy components do not lead to adequate problem resolution. In response, I challenge a rethinking of market penetration strategies from product development, pricing, placement and promotion to consumer insight and interaction.

This shift in the conceptualisation of market growth strategy does not negate the importance of the former in any way other than reinforce the view that the very 4P methodology fails in certain instances to fully comprehend the implication of a weak firm in a sea of strong consumer currents.

A move to the seeking of consumer insights will invariably result into the active desire to pick up data at every point of interaction. Listening should therefore take place at every instance that the customer is exposed to either the company or its brand, or when negative mnemonic influencers come into play.

The challenge for organisations is therefore the establishment of adequate touch points for such interaction. Business outfits evoke specific psychological ties with core customers and the main task should be to discover at what point miscommunication occurs.

Fortunately, a plethora of analytic tools already exists to not only enable the determination of the efficacious communication forums but also to measure the weight of feedback, including opinions and complaints.

Market research

Meanwhile, a cursory look at websites like measuredup.com, consumerist.com, and planetfeedback.com shows how ineffective most global companies are with regard to proper communication with their customers despite the fact that they spend colossal sums in market research projects.

Interestingly, the "villain" companies are those who spare no effort in maintaining huge corporate social responsibility budgets. Their CSR efforts include billions in donations to charities and to causes like environmental sensitivity and civic education.

To mitigate against these situations, your firm should also assess itself in terms of brand equity and consumer decision-making- a process known as brand vitality assessment (BVA).

This metric is easily applied where the conceptual focus shifts from the company to the customer with the understanding that even financial statements are incomplete without a measurement of the likelihood of the company maintaining closer ties with its customers over time.

This BVA approach has been adopted by many, leading to numerous positive scores. For instance, US-based Lucent Technologies saw a sharp reduction in capital expenditures by the key telephone service bloc in the early 2000s because of major shifts in telephony.

Greater insight

However, by tapping back into its major customer segments, the company was able to establish greater insight and interaction enabling it to understand that, even though sales were down 30 per cent, it still had great brand equity, and consumption could be revived through simple innovation while employing automated consumer research tools.

As a result, attention turned on the creation of a new service platform named Lucent World Services. The idea was to target a diverse consumption base insulated from the business cycles of telecom infrastructure equipment. For the subsequent merger between Lucent and Alcatel, this new service line was one of the most compelling factors.

The need for greater insight into the customer beyond the mere picking and pasting of product promotion theory is also given weight by the International Association of Business Communicators (IABC) which notes that all too often companies assume they know what consumers want, "(…) a tweak of the logo here, and a couple of paper and TV ads thrown into the mix."

It follows that as firms seek to adopt to the new world dominated by a more informed customer who can easily shift to the competitor’s options, customer knowledge management becomes a key success factor.

The implication is that data is most important if it captured and processed in real time. The processed information should then be compartmentalised into logical knowledge segments and shared out by relevant strategic planning units that cut across marketing research, sales planning, finance, direct marketing, and human resource management.

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