Assumption 3: Becoming Customer-Centric

The third assumption, that companies can rapidly move from being product-focused to being customer-focused, is the weakest of all. After working with dozens of large American corporations, I can report that it is almost impossible for most companies to become customer-focused. Why is this so? Because of the way business is developed. You create a new camera, a new computer, a new automobile, or a new hotel. The company that develops the product wants to realize a return on its investment. It puts a product manager in charge of marketing the product and tells her to get busy.

The product manager does everything she can think of: mass marketing, point-of-purchase displays, retailer subsidies, direct marketing. Of course, if you have a list of prospects in your warehouse, she may try a promotion to that list to see if it works. But her goal is to sell hotel space in this new hotel, and only secondarily to increase overall customer lifetime value to the company.

Could you replace all the product managers with customer segment managers and have no product managers at all? Not likely. No company has ever done that, and none ever will. Once you have developed a product, you can’t leave the promotion of that product to chance. You simply won’t say, “We will be nice to our customers and hope that they notice our new hotel. We won’t specifically promote this new hotel, because one of our older hotels may suit some customers better.”