Not-So-Semantic Differences

Tom Peters

L-I-S-T-E-N. Educate customers vs. listen to them. Marketing-driven vs. market-driven vs. customer-driven companies. To me, debates about these terms do not amount to semantic nitpicking. Rather, they reflect one’s fundamental, strategic posture toward the marketplace.

Business winners—from chicken to kiwis to two-by-fours—tend to be especially responsive to customers. That is, they listen, adjust, listen some more, and adjust some more. Losers develop products in a vacuum; they then try to educate their customers about the products’ ostensible benefits, without having listened extensively to raw impressions from the marketplace.

Many science- and technology-based companies have awakened to the need to be more customer- or market-focused. Their response, however, is often to call in some marketing professors to provide new analytic tools. Or to centralize the marketing staff around a newly appointed senior vice president of marketing.

Analysis is generated. Plans are formulated. But little of substance ensues. Why? Because creating a market- or customer-responsive company is 5 percent technique and 95 percent attitude.

Consider that hated word—educate. The marketers tell us we should be more thorough and systematic when educating our customers about our products’ attributes. The problem with that approach is that we are probably in a pickle in the first place because we ignored the fundamental first step—constant contact with our customers.

My former McKinsey-Tokyo colleague, Ken Ohmae, reports that the average Japanese consumer electronics product design engineer spends one-half of each year out in the market visiting customers and dealers, attending trade shows, and holding regional product conferences with salesmen and dealers to get direct feedback. It is a rare American counterpart company that manages to send (or to force) a design engineer into the field five days a year to attend two trade shows and make one department store visit.

To educate is to tell, to talk. Educating presumes we know of what we speak. Few of us do. Surely we know why we think the product or service is great; how we think it will help our potential customer. But are we sure our “facts” match with the customer’s perception? They seldom do. The customer’s perception of our product is based on a complex of history, word-of-mouth information, an inadvertent bad experience five years ago (long forgotten by us) and perhaps a competitor’s recent small act of courtesy.

“Listen,” “naive” and “frequent” are three words I prefer to use in combination. We all listen—but how recently and continuously? Remember the six of every 12 months that the Japanese designer is in the field. That’s continuity of the first order! And do we really listen naively—do we keep our mouths shut and our ears open? It’s so tempting to rebut the customer’s “soft” argument with a technical rejoinder.

Closely related to the dichotomy between listening and educating is the difference among marketing, market-driven, or customer-driven companies. I much prefer market-driven over marketing-driven. Marketing-driven, in practice, connotes technique-driven. Market-driven means driven by the real circumstances out there (by constant contact with customers again). But the best option, to my mind, is a customer-driven company. Customers—not markets—buy products or services.

The debate about marketing focus vs. customer focus is even seeping into the traditional marketing bastions such as the world of the consumer packaged goods companies. The giants in the industry are being challenged by new and smaller competitors, who rapidly sense new market opportunities, who are abandoning mainly spurious economies of scale, and who launch assault after assault on previously hallowed principles.

Mrs. Fields Cookies and Dreyer’s Grand Ice Cream are typical of the new, small, effective players. Campbell Soup is a traditional packaged goods company that is fighting back, by systematically keeping in direct touch with leading-edge restaurants and gourmet stores in order to ferret out new trends and tastes before the rest of the pack discovers them.

Affluence, technology, advances in flexible manufacturing, new and flexible communications media, a new concern with quality and service—all are leading consumers (both businesses and individuals) to demand more variety and quality from producers of goods and services. Traditional marketing techniques and educating processes are no longer sufficient.

Customer responsiveness means listening, tailoring the offering, listening again, and tailoring again. Are your product designers spending 50 percent of their time in the field?