By Mairead Brady, Warwick Business School (WBS)
WBS Core Insights: Future of Work
To adjust to the new post-pandemic normal it is vital that businesses move with their customers.
The pandemic saw rapid innovation across many sectors as B2B marketers quickly adapted to their customers new needs and the reality of their contacts working from home, with face-to-face meetings curtailed and new digital ways of working emerging.
For many businesses this sudden change because of COVID-19 involved adopting digital technologies in a hurry. Although this offers some advantages, there are also significant dangers in the digitalisation of customer relationships and internal and network-based operations. If these are not designed to be customer-centric they may offer internal efficiency at the price of external effectiveness.
So how should marketing managers create a new normal that leverages technology, while staying uncompromisingly customer-centric?
The temptation for many is to go back to marketing and B2B relationships as they were before the pandemic. But treating the last 18 months as a disruption means wasting the opportunity that the COVID crisis presented for innovation and transformation. While markets, supplier–customer relationships, supply chain, and business models remain in flux new and better ways of working with customers to identify and serve their needs can significantly improve B2B marketing as well as operational efficiency.
What B2B marketers need now is not a pre-pandemic – or even a pandemic – mindset, but a post-pandemic vision driven by the data that places the customer at the centre of organisational decision-making.
The big question is how do B2B marketers leverage the technological and online skills that are now available within their organisation and combine them with those developed among their customers, albeit not uniformly or with the same enthusiasm. Indeed, despite the acceleration to an online world during the pandemic, there will still be a significant section of customers desperate to return to human face-to-face interactions rather than having to use digital technology.
Faced with a split of some customers wanting to return to pre-pandemic face-to-face relations and those that have embraced the new digital world, it would be easy to assume that marketers have to choose between the two. This is only possible if the offline and online worlds are seen as being on the same dimension – where at either extreme there is a fully offline way of marketing or a total online version, and in the middle is some sort of hybrid that mixes the two.
What this understandable simplification obscures is the possibility of combining the two worlds rather than trading them off against each other. Instead, there is the possibility where both marketing worlds are offered and the customer can choose their preferred mode of interaction. This is known as the ‘cafeteria model’ and while it is likely to be more expensive to offer, initially it provides marketing managers with two benefits.
First, it frees managers of the limiting assumption that online and offline marketing are trade-offs because they can be integrated and offered in parallel.
Secondly, pursuing a cafeteria style strategy allows the question of what digital transformation decisions to make to be answered by the most valid and most important stakeholder – the customer – and ensures that your company is customer-centric.
Technological ability, while crucial, should not be the only driving force, but instead an important enabler to support transformation. In the race to embrace a socially-distanced model during the pandemic there was no time to ask do we understand the implications of what we are doing, externally and internally in our organisation?
And the most vital aspect of using technology to improve B2B marketing is not the actual capacity of the technology, but both the effectiveness of its integration into the customer proposition and the deployment through people to create customer value. This transformation process is as much about people and relationships as it is about processes and technology. This holistic perspective must remain at the heart of any customer-centric business model. Prioritise digital technology at the expense of relational effectiveness and customer closeness and your business will suffer.
Using the cafeteria strategy allows the customer to be at the heart of the decision-making as marketers can follow the data to see exactly which channels are producing the best results, whether they are offline or online.
The customer needs to be at the centre of the organisation and that is marketing’s role. As the legendary management thinker Peter Drucker said, there are only two important functions within an organisation and they are marketing and innovation – the rest are costs centres. Companies are in business to satisfy customers at a profit and do it better than their competitors.
This sounds like a fairly simple concept, but amidst the internal politics and departments battling for budgets, this laser-targeted focus on the customer can become blurred and even lost.
Many companies are production-focused, or sales-focused or dominated by finance, rather than being customer-focused, which is where marketing comes in. Is the customer in the boardroom when decisions are made?
Amazon founder and CEO Jeff Bezos famously has an empty chair in boardroom meetings representing the customer, but I would argue it should be at least a life-size cut-out of the target customer if not a real living and breathing one.
Marketing is often under-represented in the boardroom in the UK, and that means a lack of customer voice in the major decision-making. Instead, finance has the final say on decisions, putting budgetary restrictions on what the customer wants and needs.
For many companies the emergency situation of the pandemic saw the finance hegemony be checked by the unquestionable need to suddenly invest in digital solutions to overcome COVID-induced challenges. But how will that continue after the pandemic?
Research by consulting giant McKinsey found 80 per cent of B2B marketers have preferred the digital engagement and the advantages of it, so companies now need to build on this and invest in how to become more customer-centric through marrying the offline and online worlds in a cafeteria strategy.
Achieving the required customer-centric transformation with digital technology requires technological acumen deployed within a customer-centric business model. This mindset has to be the driving force of this transformation, and the marketing function in B2B markets is best placed to embody and drive this way of thinking. And more importantly B2B marketers have to be at the cutting edge of implementing these strategies.
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