In the new customer department, customer and segment managers identify customers’ product needs. Brand managers, under the customer managers’ direction, then supply the products that fulfill those needs. This requires shifting resources—principally people and budgets—and authority from product managers to customer managers. (See the sidebar “What Makes a Customer Manager?”) This structure is common in the B2B world. In its B2B activities, Procter & Gamble, for instance, has key account managers for major retailers like Wal-Mart. They are less interested in selling, say, Swiffers than in maximizing the value of the customer relationship over the long term. Some B2C companies use this structure as well, foremost among them retail financial institutions that put managers in charge of segments—wealthy customers, college kids, retirees, and so forth—rather than products.
What Makes a Customer Manager?
IN A SENSE, THE
ROLE of customer manager is the ultimate
expression of marketing (find out what the customer wants and fulfill the need)
while the product manager is more aligned with the traditional selling mind-set
(have product, find customer).
Jim
Spohrer, the director of Global University Programs at IBM, hires what UCal
Berkeley professor Morten Hansen calls “T-shaped” people, who have broad
expertise with depth in some areas. Customer managers will be most effective
when they’re T-shaped, combining deep knowledge of particular customers or
segments with broad knowledge of the firm and its products. These managers must
also be sophisticated data interpreters, able to extract insights from the
increasing amount of information about customers’ attitudes and activities
acquired by mining blogs and other customer forums, monitoring online
purchasing behavior, tracking retail sales, and using other types of analytics.
While brand managers may be satisfied with examining the media usage statistics
associated with their product, brand usage behavior, and brand chat in
communities, customer managers will take a broader and more integrative view of
the customer. For instance, when P&G managers responsible for the Max
Factor and Cover Girl brands spent a week living on the budget of a low-end
consumer, they were acting like customer managers. The experience gave these
managers important insights into what P&G, not just the specific brands,
could do to improve the lives of these customers.
We’d expect
the most effective customer managers to have broad training in the social
sciences—psychology, anthropology, sociology, and economics—in addition to an
understanding of marketing. They’d approach the customer as behavioral
scientists rather than as marketing specialists, observing and collecting
information about them, interacting with and learning from them, and
synthesizing and disseminating what they learned. For business schools to stay
relevant in training customer managers, the curriculum needs to shift its
emphasis from marketing products to cultivating customers.
In a
customer-cultivating company, a consumer-goods segment manager might offer
customers incentives to switch from less-profitable Brand A to more-profitable
Brand B. This wouldn’t happen in the conventional system, where brand and
product managers call the shots. Brand A’s manager isn’t going to encourage
customers to defect—even if that would benefit the company—because he’s
rewarded for brand performance, not for improving CLV or some other long-term
customer metric. This is no small change: It means that product managers must
stop focusing on maximizing their products’ or brands’ profits and become
responsible for helping customer and segment managers maximize theirs.