What is happening to the cellular companies?
The crisis facing the cellular companies in Israel marks another point on the journey towards their tragic, but apparently inevitable, demise. Twenty-five years ago, I happily paid $250 a month for the miracle of the technology of the mobile phone. Motorola was the sole supplier of the device. Today, I lose interest and change my supplier within an hour.
Today, phones are mass-produced, and I have no particular attachment to them. The technology has advanced almost infinitely and the market is more competitive, yet the approach to the customers hasn’t changed. Why should I have to choose a single local cellular package, or one of three generic packages when I go abroad, when none of them are suited to my particular needs? I’d be happy to pay three times the current price, and even more, for a package that would include more than a “chat” with a bot-representative – I want to receive human attention from a personal representative who can help me with technical difficulties, is available when I need him, and will put together a value proposition that meets my particular needs.
My cell phone goes almost everywhere I go, and I use it for countless tasks. Contact with me is a strategic asset for my cellular provider, and a company that is not smart enough to build a partnership with me will quickly lose my trust and loyalty. Since I currently have no other choice, I will continue to pay market prices until an alternative technology is invented that will allow me to free myself from all of the cellular providers.
Creating Value so the Customer Will Remain Loyal
The wave threatening the cellular companies, which have based their models on commodity mass production, is quickly threatening to engulf banks, insurance companies, and financial services. Managers are discovering that they can’t prevent a crisis by using the same tools and attitudes that caused that crisis in the first place. The writing has been on the wall for nearly a decade, as waves of cutbacks in expenses and “optimization layoffs” erode workers’ and customers’ trust and make the problem worse. Marketing strategies based on aggressive advertising have turned out to be little more than an expensive way to exacerbate the problem.
To escape this vicious circle of destruction, we must take a sharp turn towards a different paradigm, involving a redefinition of the value proposition for the customer and a significant change in our point of view and marketing processes. We must transition from mass push of merchandize to the pull of a value package for the customer. But how can the activities of the customer (for whom the value is designed) advance the sales of a product, service or idea?
The Customer is at the Centre of the Story
Steve Jobs, one of the greatest marketers, made brilliant use of the paradigm of pull marketing. He succeeded because he understood the importance of a story and developed an ability to make that story available to his audience of customers. For nearly a dozen years (from 1985-1997), when Jobs was exiled from Apple, he underwent a personal transformation.
The idea of a story as constituting consciousness guides Joseph Campbell’s research about “The Hero With A Thousand Faces.” The storied structure includes the protagonist who undergoes a dramatic change of identity as he progresses along a journey filled with obstacles, opportunities and conflicts created by the antagonist and other characters that join him on that journey.
Joseph Campbell’s insights and messages were adopted by George Lucas as the narrative frame for the design of the Star Wars saga, produced by Lucasfilm. The studio was purchased by Pixar, which was founded by Steve Jobs in 1986. While at Pixar, Jobs learned just how powerful a story is as the ideological basic for design and development of a product. Every product should tell a story, and the hero of that story is neither the producer not the product, but rather the customer; in Jobs’ case, that refers to the customer who uses technology to create his identity and his life style.
What is that journey that the customer takes, which the producer must understand (and sometimes invent) in order to enable him to overcome the obstacles along the way?
In his book, “This is Marketing” (2018), Seth Godin defines the purpose of marketing as setting in motion a deliberate change that will improve the customer’s status. Based on the work of Campbell, Godin adopts a storied framework when he defines the customer as a hero engaged in a process of changing the design of his personal identity. According to Godin, a product or service is chosen-pulled by the hero because it is a component in the design of his updated identity, status and life-style, and thus it creates value for him.
From Selling Merchandize to Creating Value
We return to the story of the journey to save the cellular (mass-production) companies, whose managers apparently thought that the technology and the product were the protagonists, and that the customers were merely a target that had to be recaptured from the competitors (the villains). Managers were evaluated according to their ability to turn a brand into a prison for captive customers. Customers who wanted to escape had to do battle with the units established for “customer retention.” But when the market was opened to competition, the customers took revenge. If the cellular companies don’t learn to reinvent the story of their customer’s change, their demise will be inevitable.
At the brink of the abyss, they will have to reframe their story. Treating the customer as a hero who has embarked on a journey of change will force them to create a value proposition based on empathy, curiosity and extending their hand so that they can become part of this journey. Gaining the trust of the customers is the first step in the transition from selling commodities to creating a value proposition that is individually tailored to each customer.
Value-creating marketing is evaluated according to its ability to responds to the customer’s needs. If the managers of the cellular companies want to reverse direction, they should remember that in an environment filled with noise and possibilities, the customers’ interest in their value proposition is dependent upon trust in which the provider and the customer work together.
Boaz Tamir, ILE.