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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
The notion of customer orientation is becoming a necessity rather than a choice for many companies. It is a lasting response to competitive pressure and supports the company in a renewed definition of its mission, beyond direct economic gain. Within B2B services, the manager, through proximity to their team, their market and their client, is the essential actor in the deployment of this orientation. A Customer-oriented Manager for B2B Services provides managers with the knowledge and tools necessary to implement customer orientation themselves, with the involvement of their extended team. To this end, this book presents a four-step approach: understand the fundamentals of customer orientation in B2B services, know the customer, make the most of the offer and deliver the service.
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Veröffentlichungsjahr: 2022
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Table of Contents
Cover
Title Page
Copyright
Foreword
Preface
PART 1: Understanding the Fundamentals of Customer Orientation in B2B Services
Introduction to Part 1
1 Customer Orientation
1.1. Outlines and challenges of customer orientation
1.2. Marketing as the source of customer orientation
1.3. The manager’s customer orientation in response to marketing issues
2 Reality and Challenges of Service
2.1. Economy and service: from data to discourse
2.2. Defining the service
2.3. Characteristics of the service
3 Markers of B2B
3.1. Reality of the market
3.2. The relational issue
PART 2: Knowing the Customer
Introduction to Part 2
4 Modeling the Industrial Sector
4.1. Direct market
4.2. Indirect actors
5 Understanding the Purchase
5.1. Buying center concept
5.2. Buying process
6 Identifying Service Targets
6.1. Different types of targets
6.2. Target satisfaction challenge
PART 3: Making the Most of the Offer
Introduction to Part 3
7 Acting Against the Risk of Commoditization
7.1. Understanding the phenomenon of the offer commoditization
7.2. Countering the commoditization of the offer
8 Formalizing Your Offer
8.1. Positioning the offer
8.2. Design of the service offer
8.3. Plasticity of the service offer
9 Taking Care of One Commercial Action
9.1. Commercial proposal
9.2. Commercial negotiation
PART 4: Delivering the Service
Delivering the Service Part 4
10 Unlocking Human Potential
10.1. Associating the client
10.2. Mobilizing the team
11 Managing Service Operations
11.1. Operational efficiency
11.2. Manager’s responsibility for customer-oriented operations
12 Marketing the Tangibles
12.1. Tangible elements of the service
12.2. Challenges of tangibles
Conclusion
References
Index
End User License Agreement
List of Tables
Chapter 1
Table 1.1. Over-quality and customer delight
Chapter 4
Table 4.1. Defining one’s market
Table 4.2. Dual segmentation for B2B services
Chapter 7
Table 7.1. Total cost of ownership in business tourism
List of Illustrations
Chapter 2
Figure 2.1. Servuction (Eiglier 2004, p. 15). For a color version of this figure...
Chapter 3
Figure 3.1. The new aircraft painting service industry. For a color version of t...
Chapter 4
Figure 4.1. Supply chain of a home goods manufacturer. For a color version of th...
Figure 4.2. Supply opportunities for the water supply chain. For a color version...
Chapter 6
Figure 6.1. The gap model (Parasuraman et al. 1985). For a color version of this...
Guide
Cover
Table of Contents
Title Page
Copyright
Foreword
Preface
Begin Reading
Conclusion
References
Index
End User License Agreement
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Series Editor Régine Teulier
A Customer-oriented Manager for B2B Services
Principles and Implementation
Valérie Mathieu
First published 2022 in Great Britain and the United States by ISTE Ltd and John Wiley & Sons, Inc.
Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licenses issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned address:
ISTE Ltd27-37 St George’s RoadLondon SW19 4EUUK
www.iste.co.uk
John Wiley & Sons, Inc111 River StreetHoboken, NJ 07030USA
www.wiley.com
© ISTE Ltd 2022
The rights of Valérie Mathieu to be identified as the author of this work have been asserted by her in accordance with the Copyright, Designs and Patents Act 1988
Library of Congress Control Number: 2021949549
British Library Cataloguing-in-Publication Data
A CIP record for this book is available from the British Library
ISBN 978-1-78630-757-6
Foreword
I am very honored that Valérie Mathieu has asked me to write the Foreword to her book. I am even more honored because the CMA CGM Group, with its customer-oriented approach, is a perfect example of how the dynamic relationship between a company and its markets can create value for both the customers and the service provider. The organization of our group, a world leader in maritime shipping and logistics, shows how a company in the B2B sector can create value by giving an important role to its managers. It is, therefore, a great source of pride to contribute to this book, which will be read by students and professionals alike, as our group works, as part of its employer brand strategy, to showcase the variety of jobs in the transport and logistics sector, an emblematic B2B sector.
Relationship with the customer at the heart of value creation
CMA CGM has always placed the customer at the center of its concerns and priorities. This may sound like a banal statement for a company, but in reality, we have to know how to organize ourselves to listen to their needs, and even try to anticipate them, in order to design and deploy efficient services, and establish processes around customer satisfaction.
The core service we have historically offered – transporting goods in maritime containers – can very easily be done by one of our competitors. Hence, for several years, we have witnessed a “commoditization” of our industry. Faced with a plethora of choices, our customers chose their shipping line based on price alone. The industry engaged in an intense price war, which each of the players hoped to compensate with volumes. This logic led to overcapacity and serious difficulties for the sector in 2009 after the subprime crisis. It was at this point that the group completely rethought its approach, seeking to answer the question of how we could get a client to choose our services, even if we were more expensive than the competition.
This was a long-term process that required constant dialogue with our customers and partners. We had to understand what their problems were, what their challenges were and what they expected from their shipping company.
And contrary to what we thought, price was not necessarily the determining factor in their choice. One example of this is the premium service we have implemented on the Transpacific, which has been a huge success. This service makes it possible for an exporter or importer to have guaranteed space on a vessel and offers faster availability thanks to a Fast Lane upon arrival in Los Angeles.
Paradoxically, we know today that the peripheral services related to maritime transport are our best assets to develop customer loyalty and relationships.
An evolving relationship
And we are evolving with them: with the acquisition of CEVA Logistics, the CMA CGM group has changed its nature and is now able to offer end-to-end services, anywhere in the world. We can support our customers throughout their supply chain, with air transport solutions for shipments that do not suffer any delay, or warehousing and storage solutions to delay the pace of imports according to their specific needs.
The group has also started a major digitalization movement, in order to give our customers more autonomy in managing their supply chain.
Finally, we have taken the relationship to the extreme, since, thanks to our global presence and the customer portfolio we have developed over the past 40 years, we have become a true “business provider” for our customers who would like to expand internationally and are looking for reliable suppliers or partners.
We are now seeing that the future of our competitiveness is being played out in areas that were still weak signals in our industry 10 years ago. For example, our group launched studies on the use of liquefied natural gas as a fuel for our container ships, and today, ships capable of carrying 23,000 containers are operating service using this cleaner source of propulsion. In the meantime, environmental issues have become absolutely crucial for our largest customers, who now require their carriers to have a committed environmental approach.
The manager: essential interface for a win–win customer–supplier relationship
In maritime transport, it is absolutely crucial to know how to foresee. This is true for the crews on our ships. It is also true for our employees who are in the field every day, in contact with our customers. At CMA CGM, we have developed a very decentralized organization, where the managers of the agencies in the countries where the group is present (160 worldwide) occupy a central position. They are the ones who can inform the lines about changes in their region, about development projects, about companies that are setting up internationally or that, on the contrary, have growing import needs. Hence, we pay particular attention to their training. We have a training program specially dedicated to them, so that they have all the necessary assets to listen to our customers. It is on the initiative of these field managers that we develop new lines, new offers and new services. It is thanks to them and the special relationship they have with their customers in the field that we can set up pilots that can then be extended to our range of services. This requires them to be in a constant position of observing and actively listening to their clients and to maintain an ongoing dialogue with managers and department heads at headquarters so that they can study, design and deploy tailored and adapted solutions. This requires true teamwork, with each party working hand in hand to create value.
The experience and organization of our group resonate with the book we are holding in our hands. It offers an excellent opportunity to question, learn and progress for B2B companies like the CMA CGM Group that I represent.
Thierry BILLION
General Secretary
CMA CGM Group
November 2021
Preface
On August 19, 2019, 181 presidents of the largest companies in the United States, from Apple’s Tim Cook to Amazon’s Jeffrey P. Bezos to Dennis A. Muilenburg of Boeing, gathered at the influential Business Roundtable and signed a manifesto that redefines the mission of business1. Believing that maximizing shareholder value should no longer be the company’s primary focus and sole priority, the signatories put stakeholders, first and foremost the customer, at the heart of corporate responsibility: “delivering value to the customer”, “investing in employees”, “dealing fairly and ethically with suppliers”, “supporting the communities in which the company works”, “protecting the environment” and “generating long-term shareholder value”.
Although the most skeptical commentators see it as an obligatory and principled response to the injunctions of investors2 and the most enthusiastic as a revolution, the manifesto nevertheless brings to light principles that are widely debated in management. Stakeholder theory and customer orientation, long discussed in the academic literature and applied to corporate practices, clearly resonate with this new definition of the company.
Since the 1990s, customer orientation has been recognized as a major alternative approach to positioning on price, product or business, in order to better face competitive challenges and keep the company focused on its markets. This customer orientation is seen as a strategic orientation of the company, validated by the general management, and put in priority in the hands of the senior executives of the C-suite such as CMO (Chief Marketing Officer), CCO (Chief Customer Officer) or CXO (Chief Customer Experience Officer). So how do we get this customer orientation down to the field? How can we find the intention of the leaders in the practices, behaviors and interactions, especially with customers, and more broadly with all the stakeholders of the company? How can we also free up energy at all levels of the company, so that customer orientation can be enriched on a daily basis? The key lies in the involvement of managers and field staff in the implementation of customer orientation and in their strong adherence to its principles and values. A customer-oriented manager becomes, on the one hand, the intermediary between an ambition and its realization, and on the other hand, the activator of a continuous renewal of this orientation as close as possible to the market.
B2B3 service is a legitimate, necessary and urgent field of application for customer orientation. First, it is legitimate to focus on it specifically because of its economic dynamism. In an economy dominated by services, business services account for nearly half of the value added of market services and concentrate exports4. While the field of services is widely covered by a large body of academic and managerial literature, it is essentially focused on B2C. It is, therefore, necessary to deepen our knowledge of B2B services, beyond a simple superposition of the specificities of the service offer on the one hand, and the B2B market on the other hand. As markets inevitably mature, the challenges of increased competition and commoditization of the offer will sooner or later make customer orientation particularly urgent for service providers. A technical or business orientation, in which customers are insufficiently understood in their complexity and taken into account in their needs and expectations, is still dominant. While managers in charge of developing and launching offers are in a strong and lasting relationship with customers, observation of practices too often leads us to the findings that, at best, the players are not aware of their role in this customer orientation, and that, at worst, they reproduce approaches and behaviors that are in conflict with the balance between customer satisfaction and the profitability of their company.
The aim of the book is to provide managers with the skills that will enable them to launch customer orientation in their area. More precisely, the objective is to provide managers with the knowledge and tools necessary to implement this customer orientation by themselves, while involving their extended team. With this in mind, the book develops a structuring approach in four steps: Understanding the fundamentals of customer orientation in B2B services (Part 1), Knowing the customer (Part 2), Making the most of the offer (Part 3) and Delivering the service (Part 4).
While this new managerial skill may seem burdensome at first, both in its acquisition and implementation, the resulting benefits should encourage the manager to go beyond this apparent difficulty of the task. Managers will benefit in three ways: as collaborators, they will be recognized for having implemented a strategic intention and vision; as leaders, by consolidating the performance of their perimeter, their legitimacy will be reinforced and as a person, the pleasure of building a relationship of trust with their clients and their extended team will give their actions the meaning so often sought after.
This book is not about management, but for managers, whether they are active or aspiring. Regardless of the size and stakes of their perimeter, whether they are accompanied by functional teams or in autonomy and whether they are employees or entrepreneurs, managers will be able to easily adapt the roadmap proposed here to their specific context. Engineering students, most of whom will sooner or later be called upon to take on managerial responsibilities, will be made aware of this customer orientation issue as soon as they start their studies. Finally, and more broadly, students in management schools will find in the book a complement to their courses in management and marketing of services, which are increasingly common in training, as well as to courses dedicated to B2B, which are rarer. In view of the numerous internships and work-study programs offered to these students by B2B service providers, this supplement should enable them to more quickly grasp the specificities of their missions.
November 2021
1
www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans
.
2
Laurence Fink, CEO of Blackrock, the world’s largest asset manager, in his January 2019 annual letter asked business leaders to think about their purpose and get involved in societal issues.
www.businessinsider.fr/us/larry-finks-annual-letter-2019-1-2019
.
3
B2B stands for business-to-business, that is, a service offered to a private or public company or to a professional, as opposed to B2C, business-to-customer, a service offered to consumers.
4
www.insee.fr/fr/statistiques/4255850?sommaire=4256020
.
PART 1Understanding the Fundamentals of Customer Orientation in B2B Services
Introduction to Part 1
This first part presents the three fields at the intersection of which this book is positioned: customer orientation, service and B2B.
Customer orientation is debated in a dense literature that focuses on defining and justifying its benefits and also questions how it can be implemented in the company. This customer orientation is a direct result of the marketing culture. Translated into a managerial skill, customer orientation allows for the diffusion of a marketing culture within the organization as a whole.
The interest in the service sector in particular is justified by its economic weight and also indicates the need for a specific approach in order to implement customer orientation in a relevant and effective way. It is, thus, necessary to understand the reality, the stakes and the specificities of the service sector in order to introduce an adapted customer orientation.
As for the focus on B2B, it implies a significant distinction between B2B and B2C in terms of customer orientation. One often resorts to endless lists to justify what distinguishes B2B from B2C. Two specificities are in fact essential to understand, the first one is related to the market and the second one to the relationship. While the first one, involving the notions of channel and derived demand, is specific and exclusive to B2B markets, the second one, which defends the importance of the relationship between customers and their providers, is also at the heart of B2C. Nevertheless, the B2B relationship, because of its strength, depth and duration, is becoming a major managerial challenge.
1Customer Orientation
1.1. Outlines and challenges of customer orientation
Customer orientation is an old hand in the young management literature. The concept appeared a little more than 30 years ago1 and has been attracting the attention of researchers, consultants and managers ever since.
1.1.1. Customer orientation framework
1.1.1.1. Customer and market orientation
The notion of market orientation was first proposed in the academic literature, whereas a more managerial literature would later more easily refer to the term customer orientation. Market orientation has historically been defined on the basis of three pillars: customer focus, broad involvement of different departments in the company and profitability (Kohli and Jaworski 1990, p. 3).
Here the preferred term “customer orientation” seems to be more anchored in reality and pragmatic. While the invisible hand of the market does not need to be tightened, on the other hand, many customers will judge one by one’s handshake! Nevertheless, a full and true customer orientation must also integrate competitive issues and more broadly a set of stakeholders that will be presented throughout the book.
1.1.1.2. Customer orientation between cultural and behavioral approaches
The literature on customer orientation has been built around two approaches that are more complementary than truly opposed: the cultural approach and the behavioral approach. The cultural approach speaks of a state of mind, values, beliefs and attitudes, rituals and even a philosophy, centered on the customer in order to create maximum satisfaction and achieve the ultimate goal of long-term profitability2. The behavioral approach is more operational and focuses on understanding the conditions for implementing this orientation. It questions the organizational behaviors to be implemented, the organizational and managerial structure to be put in place and the actions to be taken to make this orientation effective3. More specifically, we are looking at the conditions that will enable the organization to understand the market, to anticipate its changes and to respond favorably. Information is at the heart of this behavioral approach: the collection of information, its dissemination and its translation into strategies, decisions and actions.
Today, we find these two questions in the company: how to spread an actual customer culture within the organization and also how to implement strategies, actions and behaviors that are truly customer oriented.
1.1.2. Benefits of customer orientation
Customer orientation is an investment for the company. Specific resources will be mobilized to implement this new orientation. Disseminating a strong culture within the company, listening to the customer, collecting and analyzing information, relaying it and building offers that take this information into account are all direct or indirect investments for the company. The question of return on investment is legitimate. Does customer orientation have a positive impact on the company’s performance? Will this investment in customer orientation really be profitable? Will it allow the company to really build a sustainable competitive advantage? Will it be a means of differentiation from the competition? These are all questions that can be asked at the overall level of the company to validate a customer orientation, as well as for managers who wish to implement this orientation in their area.
1.1.2.1. Customer orientation and company performance
The impact of customer orientation on factors such as return on investment (ROI), sales volume, market share and sales growth was quickly identified. Studies based on different methodologies have validated the link between customer orientation and performance, including:
–
a meta-analysis of 114 empirical studies
(Kirka
et al.
2005): the results of 114 empirical studies on the effects of market and customer orientation on performance were analyzed. The results show that market and customer orientation have an impact of 20% on a company’s ability to innovate, 10% on its market share and 7% on its profits and sales;
–
a longitudinal study over three periods
(Kumar
et al
. 2011): the observation of the same sample of companies, in 1997, 2001 and 2005, showed that the first companies to have adopted a market orientation benefited from an impact that was twice as strong on their sales and profits, compared to companies that adopted this orientation later;
–
an analysis based on a sample of 7,500 French companies
(Pekovic and Rolland 2012): the relationship between customer orientation and EBITDA per employee was highlighted. The relationship appears to be stronger the more the company operates in a competitive, growing and uncertain market.
If we consider the strategic dimension of company performance, it is widely accepted that market and customer orientation have an important impact on building a sustainable4 competitive advantage. It is by keeping abreast of what customers expect, how their preferences evolve and change, and by disseminating this information widely internally, that the company and its members can identify the resources needed to build the value expected by the markets, and thus maintain a sustainable competitive advantage. By going beyond the simple observation of current customer expectations, and by asking questions about the evolution of these expectations, the company puts itself in a position to capture latent market expectations more quickly than its competitors and thus to strengthen its competitive position over time (Narver et al. 2004).
1.1.2.2. Customer orientation and its impact on the customer
Customer orientation can be expected to trigger positive attitudes and behaviors from the customer. Customer satisfaction is of course the most important consequence of customer orientation. As a corollary to this satisfaction, the customer’s positive word of mouth is more active and thus has an impact on the company’s reputation. Customer loyalty is also easier to build from a stronger customer relationship (Mullins et al. 2014). Knowledge of markets, consideration of customer expectations and preferences makes it possible for the company to develop and perform better services (Hartline et al. 2000).
The employee, immersed in a customer-oriented culture, should more naturally engage in building strong and lasting relationships with the customer. It is the values, attitudes and behavior of the customer-oriented employee that will increase the customer’s trust and encourage the latter to behave cooperatively with the service provider (Poujol and Siadou-Martin 2012). It is, therefore, not surprising that customer orientation is an approach that is now in demand in the sales context (Julienne and Banikema 2017).
1.1.2.3. Customer orientation and its impact on the employee
From a more social perspective, a number of empirical studies have sought to establish a relationship between a company’s customer orientation and the work attitudes of its employees. These studies have focused on variables such as job satisfaction, organizational commitment and involvement. Strong links between customer orientation and these variables have been consistently shown. Customer orientation would build esprit de corps among employees, greater job satisfaction as well as greater commitment5.
1.1.3. Implementing customer orientation
While it is clear that customer orientation is a relevant strategic approach, the challenge is to implement it within the company. A gap may exist between what the company says about its customer orientation and what its customers say about it.
When it comes to customer orientation, it is not so much what the company says, but what the customer perceives. Cap Gemini Consulting, in a 2014 research report, highlighted this potential divergence: “56% of companies claim to be customer oriented. Only 12% of their customers approve!”6
1.1.3.1. Commitment of top management
Top managers must have a strong and clear message about their commitment to customer orientation. The discourse must transmit a vision centered on this orientation, be able to mobilize energies by carrying a deep meaning beyond the conventional and act on the cognitive and affective organizational systems7. The speech must be concrete, illustrated with real examples, stories and real-life experiences and animated by symbols in order to be as mobilizing as possible. The speech must be followed by strong and clear decisions about the organization, its structure and the chosen strategy. To be effective, customer orientation must be based on more fluid decision-making processes and more cross-functional collaboration between teams and departments. New organizational and management methods, like the agile method, which puts the customer at the heart of the process and encourages team autonomy and accountability, are likely to be effective in supporting the implementation of customer orientation.
Guillaume Faury, successively CEO of Airbus Helicopter, then of the civil aviation branch of Airbus and finally of the Airbus Group, has always put the customer first in his speeches:
We are starting the year under a new brand, Airbus Helicopters, which is for us much more than a new name, it touches the DNA of Airbus, it touches ambitions like customer satisfaction, quality, safety, industrial efficiency.8
The first challenge for Airbus is obvious. It’s about serving our customers and ramping up production.9
We need to prepare the Airbus of tomorrow in order to better serve our customers, increase our competitiveness and grow in a sustainable way.10
1.1.3.2. Manager’s adhesion
The quality of management, and especially middle management, is widely considered to be the essential foundation for implementing customer orientation (Hartline et al. 2000). This is all the more true in a service environment where proximity to the field, the market and the customer is strong. The managerial challenge is twofold: managers must be personally involved in a customer orientation and must also lead their team in the direction of a customer orientation. They must set an example, be a reference in terms of behavior and attitude for their team. Their decisions and arbitrations must clearly show the priority given to the customer. They will also have to be attentive to the way in which their team lives this customer orientation. Customer relations and customer satisfaction are not always easy realities for employees. They must also encourage collaboration between teams, functions and departments. It is up to managers to allow their teams to break out of their strictly defined perimeters. There cannot be customer orientation without autonomy and risk-taking. Expected managerial skills are, therefore, inevitably enriched. While traditional skills, like technical skills for an engineer, remain essential, they are no longer sufficient to effectively implement customer orientation. This customer orientation becomes particularly sensitive in the context of the implementation of entrepreneurial projects with high technical content.
Studies have looked at the leadership style that would be most conducive to the implementation of a customer orientation in the company. They highlight a specific leadership style called transformational leadership11. The transformational leader succeeds in getting colleagues and collaborators to go beyond their personal interests, to converge in the same direction and to win their support by explaining and bringing meaning (Barabel and Meier 2015, p. 614).
Box 1.1.Testimony of Matthieu Somekh (CEO and Co-Founder of ZEBOX, Former President of France is AI and Former Director of Entrepreneurship and Innovation at the École Polytechnique)
ZEBOX is an international incubator-accelerator of innovative start-ups, located in Marseille, specialized in the transport, logistics, mobility and Industry 4.0 sectors.
Entrepreneurs are strongly committed to the development of their innovation in order to confirm the existence of a market, to demonstrate the adequacy between the latter and their offer and to attract customers. Their ability to do so will be a determining factor in their entrepreneurial success.
Nevertheless, there are several types of entrepreneurs, including those who are more business-oriented and those who are more “techno”-oriented. The business-oriented profile launches itself into the creation of a company following different professional experiences, which led him to the observation of a non-optimal or even non-existent response to an observed problem. The projects carried by this type of profile are generally relatively well aligned with the satisfaction of a need. A second profile, which could be called “technologist”, develops a technological solution before specifying its potential on the market. The risk associated with such an approach is to see efforts pushed in a non-optimal direction because they do not address a real market problem.
A structure like ZEBOX, positioned on innovative projects, essentially dedicated to B2B, combines both types of profiles. In both cases, one of ZEBOX’s missions, supported by its corporate partners12, is to help entrepreneurs better understand the markets in which they are evolving (or will evolve) with regard to their specificities and their assets. The support on the strategic aspect of the project will make it possible for them to take the necessary distance to confront the market and exchange with multiple profiles of potential customers. This exercise will be an opportunity for them to refine their value proposition, thus maximize their chances of meeting their market and eventually make the decision to pivot as soon as possible.
The transition from the incubation stage to the acceleration one validates a certain maturity in the customer orientation of the entrepreneur and the start-up. Incubation enables the identification of a first strategic client or a key partner in order to better structure an initial business model. Acceleration builds on this first step to move towards a more ambitious implementation that will make it possible to develop a first portfolio of customers. The evolution of the project during the incubation phase, and then its transition to acceleration, will be all the better if the entrepreneur is able to capitalize on the network to which the incubator/accelerator gives him/her access.
Finally, it can be assumed that there are employees in an organization who have a sort of natural customer orientation at an individual level. These employees can then serve as role models and influence the level of customer orientation of their colleagues or their team (Lam et al. 2010). Empirical studies have confirmed that a leader’s level of customer orientation influences the level of customer orientation of his or her colleagues (Liao and Subramony 2008), and this is particularly true in the context of sales management (Lam et al. 2010).
1.2. Marketing as the source of customer orientation
By putting customers and their satisfaction at the heart of its ambitions, customer orientation is intimately associated with marketing. Customer orientation can also be considered as the implementation of the marketing concept13. To better understand the marketing concept and its implementation is then a natural step to better enter in the customer orientation.
1.2.1. Marketing as a corporate culture
The marketing concept and customer orientation are very similar in their cultural dimension, since they are both customer-centric business philosophies.
1.2.1.1. The customer at the heart of the marketing concept
Peter Drucker, the historical and essential author of management, was one of the first to approach the concept of marketing in the early 1950s. He emphasized that marketing is not a separate and specific function of the company, but a global approach of the company from the customer’s point of view. In this sense, the marketing concept is close to a specific corporate culture based on a set of shared values and beliefs that put the customer at the heart of the company (Deshpandé and Webster 1989). Today, it is easier to speak of a marketing perspective as opposed, for example, to a product or production perspective that focuses more on the company’s offer and its capabilities.
By holding marketing accountable for the return on investment of its actions, the company and its shareholders have pushed it to focus on and value two major assets: the customer and the brand. Customer equity, defined as the sum of a customer’s lifetime values, and brand equity, are now recognized as key elements in the evaluation of a company. In B2B environments in general and service environments in particular, it is possible to hypothesize that customer equity plays a more important role than brand equity14.
1.2.1.2. The search for a balance between satisfaction and benefit
Marketing and customer orientation are not seen as an expense but as an investment that needs to be skillfully managed by finding the right long-term balance between customer satisfaction and profitability for the company. If it is quite simple to satisfy the customer as it is also quite simple to reach a given level of profitability, the difficulty lies in maintaining the balance between satisfaction and profit. Some people will want to allow the occasional and exceptional “sales opportunity” that offers the company a much higher profitability than customer satisfaction. But this imbalance cannot be maintained over time without running the risk of exposing oneself sooner or later to a competition that, either for the same level of profit, manages to offer the customer greater satisfaction, or for the same level of satisfaction, manages to lower the price with lower profitability. The opposite situation, where satisfaction is higher than profitability, is just as dangerous, since it is difficult to imagine the company maintaining its competitiveness over time with such an imbalance in its profitability.
When managers in B2B environments are asked about the percentage of business achieved at such a fine balance, they are often surprised by the proportion of those who acknowledge that they satisfy the customer more than the company. B2B seems to be much more characterized than B2C by an imbalance between satisfaction and profit in favor of the former. The duration of the relationship, the proximity with the customer, the passion for the job and the technical challenge can explain a lesser vigilance of managers on this balance. By wanting to please the customer, the employee often pleases himself/herself first. In this proximity to the customer, which is the basis of customer orientation, saying no to the customer is often difficult.
However, there are several reasons why a manager might say no to a client:
– financial and economic reasons: in order to achieve what the client requests, it would be necessary to commit resources (financial, technical, human, time, etc.) that would be too great in relation to the expected return;
– technical reasons: the provider is not sure to be able to bring the expected result to the customer;
– safety reasons: what the client asks for carries a risk both for his/her own employees and for the service provider;
– image reasons: what the customer asks for can damage the reputation of the provider.
However, we must distinguish between over-quality and customer delight, because while we must guard against the former, the latter is inherent to customer orientation. The notion of delight appears in the field of marketing through the notions of customer satisfaction and experience.
Customer delight, considered as a positive emotional reaction (Oliver et al. 1997), consists of surprising the customer, in going beyond his/her expectations (see Table 1.1 for illustrations of these differences between over-quality and enchantment).
Table 1.1.Over-quality and customer delight
Over-quality
Enchantment
– A superior performance that the provider brings compared to what is expected by the client or what was agreed upon.
– The customer does not always perceive this superior performance.
– This performance has no real value for the customer.
– The customer is not willing to pay for this performance.
– The extra performance does not lead to increased customer satisfaction.
– But it can mean an additional cost to the provider (direct or indirect, visible or hidden costs).
– Example: cleaning an additional space that was not foreseen in the contract.
– An additional value that the provider brings to its client that is not expected or asked for.
– The customer clearly perceives this additional value.
– This additional value brings the customer an additional benefit.
– The customer might be willing to pay to benefit from this value.
– Customer satisfaction is positively (and strongly) impacted.
– It may involve additional cost for the provider, but it is a profitable investment.
– Example: cleaning a site at the end of an intervention.
This issue of the balance between satisfaction and profit questions the relationship between the service provider and its client more broadly. In complex cases and relationships where the financial and technical stakes are high, the question of the commitment of the service provider and also of the client arises. The service provider is not the only one involved in maintaining the balance between satisfaction and profitability. This balance will also depend on the client’s commitment to participate, to get involved in the long-term, to aim towards a partnership relationship. This will in turn justify for the service provider the investment in a relationship which, if it can be unbalanced at the beginning, because it requires taking a real risk, turning out to be more balanced in the long-term.
1.2.2. Strategic marketing
Strategic marketing will determine the company’s long-term orientation by deciding on its positioning and its major strategic axes. Strategic marketing relies on a thorough analysis and knowledge of the market and the environment in order to align its structuring decisions.
1.2.2.1. Knowledge of the market and the environment
In accordance with a strategic methodology, the analysis of the environment is divided into micro- and macro-environments. The micro-environment is close to the notion of market and groups together actors with whom the company has regular interactions and who constitute its daily life: clients, customers, distributors and intermediaries, and influencers. On the other hand, the macro-environment has a less direct and more distant influence on the company, but it is just as real and can sometimes be very strong15.
Analyzing one’s environment means first of all locating and identifying each of the actors and then understanding their positions, their evolutions and their strategies in order to anticipate their impact on the company and also to think about collaborative perspectives or the ways in which the company can influence them. This will be the subject of the second part.
1.2.2.2. Positioning the offer
Positioning is the heart of strategic marketing by ensuring that the offer has a clear, distinct and privileged place in the customer’s mind so that it is preferred over competing offers. Positioning is the ultimate step in strategic marketing that begins with market segmentation and continues with segment targeting. These key marketing concepts are essential to the implementation of a customer focus16.
1.2.3. Operational marketing
Operational marketing refers to the implementation of the marketing strategy. The notion of marketing mix is very closely associated with operational marketing.
1.2.3.1. The marketing mix
The marketing mix is the set of tools available to marketing to act on the buyer’s behavior in order to achieve the defined marketing strategy and reach the company’s objectives. McCarthy’s 1960 classification is widely adopted. It groups these tools into four categories called the “4Ps”: product, price, place, promotion.
A good marketing mix must above all be coherent, coherent between actions and coherent with the positioning.
1.2.3.2. Expanding the marketing mix
While the “4Ps” model remains the reference model of operational marketing, the means of action of marketing have been progressively widened. In order to be in phase with the evolution of the markets, it is obviously necessary today to integrate the notions of experience, customer relationship, digitalization, social responsibility and sustainable development. Among the various extensions of the marketing mix concept and more specifically of the “4P” model, it is interesting to look at two of them: the “4Cs” model and the concept of the services marketing mix.
The “4Cs” model, proposed in the 1990s by Robert Lauternborn, is a sort of transposition of the “4Ps” model from the supplier’s point of view to the customer’s one (Lauternborn 1990). Each of the four elements of the 4Ps is translated into a customer benefit in the 4Cs model: customer needs, convenience of buying, cost to satisfy and communication. The “4Cs” model thus emphasizes the customer orientation of marketing even more explicitly.
The concept of the service marketing mix was developed in the early 1980s by service marketing specialists to better integrate the specificity of service17. Three other levers of action were added to the traditional “4Ps” model: people, physical evidence and processes. The people element takes into account the actors who play an essential role in the service relationship. These are the staff in contact, the customer and the other customers. The physical evidence reflects the importance of the physical environment in which the service takes place as well as the different tangible elements that are present during the relationship with the customer. The process refers to all the procedures, mechanisms, activities and flows necessary to provide the service. Each of these three service-specific levers is dealt with in the last part of this book.
1.3. The manager’s customer orientation in response to marketing issues
We must distinguish between function and culture. If marketing as a function is now facing certain challenges, its original culture, that is, the customer at the heart of the company, is more relevant than ever. The customer-oriented company can neither be the exclusive project of a department, even if it is a marketing department, nor the strategic vision of the management committee alone. Making customer orientation a managerial skill is, therefore, a response to the challenges of marketing and a powerful lever for achieving the promises of a customer culture in the company.
1.3.1. Restricted marketing
1.3.1.1. Credibility crisis
Marketing suffers from many prejudices and is often referred to in a pejorative way in order to discredit or denigrate people, approaches and actions. It is considered vulgar, manipulative and even dishonest. In some sectors, it is now clearly in conflict with aspirations for sustainable development and greater social justice. In industrial, technical and scientific environments, where it is well established within large companies and organizations, it is still little appreciated by the players because it is probably not well known. Is it then to counter these negative energies that the title of Chief Customer Officer is now more easily given to the old-fashioned Chief Marketing Officer? Or should we see it as a final questioning of marketing’s actual capacity to take an actual interest in the customer, so that it is necessary to integrate its raison d’être into its title?
1.3.1.2. Difficulty of implementation
It is not uncommon to hear marketers themselves complain about their difficulty in “getting their strategy down”, implementing their plans and actions, and to encourage managers to use the tools they develop. These complaints are particularly common in service and B2B environments, because in these environments, marketing has difficulty achieving its objectives without the collaboration of field managers. Marketing undeniably suffers from being confined to its own function and department, which gives it a bureaucratic image, far from the reality of the field and the
