Customer Experience: Not Your Father's Kind of Marketing

Why is the marketing discipline so different today? Why haven’t marketers been talking about the “customer experience” all along?

In the latter half of the 20th Century, virtually all marketing activities revolved around the “Four Ps”—product, price, place, promotion—as originally proposed by marketing expert E. Jerome McCarthy in 1958, and popularized by the very prolific Philip Kotler over the next several decades, during which he published more than 50 marketing books.

However, the Four Ps meant that during the 20th Century nearly the entire marketing discipline was centered on the single task of getting more customers, as opposed to the equally important tasks of keeping them longer and growing them bigger.

Perhaps keeping and growing customers should always have been a part of the marketing department’s domain, but before the advent of computer technology and ubiquitous interactivity it was simply not cost-efficient. It would have been cost-prohibitive for, say, Campbell Soup or Unilever to communicate with individual consumers in order to keep them longer or grow them into bigger customers. Instead, all marketing strategies consisted of targeting broadly defined market segments through advertising and promotion, with every company’s goal being to get more customers for the products it had to sell. Keeping them longer and growing them bigger were not considered to be “marketing” tasks at all, and depending on the business category, these tasks were usually consigned to the sales or customer service departments.

In essence, the mass media and mass production technologies available in the 20th Century pushed companies into a supply-driven, mass marketing strategy. A firm could use the Four Ps to discipline its approach to the overall, aggregate market, while ignoring individual customers. This aggregate market could be a large mass market or a smaller niche market, but the Four Ps defined how to behave, uniformly, toward ALL the customers within whatever market was being addressed:

1. Product was defined in terms of the average customer—what most members of the aggregate market wanted or needed, including standard variations in size, color, style, and units of sale, as well as customer service and aftermarket service capabilities.
2. Price referred not only to the ultimate retail price a product brought but also to intermediate prices, beginning with wholesale, taking account of the availability of credit. The price was set at a level designed to “clear the market,” assuming that everyone would pay the same price—which was only fair because everyone got exactly the same product.
3. Place was the distribution system or sales channel. How and where was the product sold? In stores? By dealers? Through franchisees? At a single location or through widely dispersed outlets, such as fast-food stores or ATMs? Could it be delivered directly to the purchaser?
4. Promotion also worked in a fundamentally nonaddressable, noninteractive way, because the customers in an aggregate market were considered to be passive recipients of the promotional message, whether delivered through mass media or through salespeople. Ultimately, the way a product was promoted was designed to differentiate it from all the other, competitive products. Except for different messages aimed at different segments of the market, promotion never changed by customer, but only by product.

Fast forward to today, and technology has made it truly cost-efficient to interact with individual customers and change how different customers are treated, one customer at a time, even if a company has millions of them. So the simple capability to

“treat different customers differently”

has rendered a hundred years of sophisticated marketing discipline obsolete. Which is why marketing has been in such a state of flux for the last twenty-five years.

Because technology now makes it possible, the new marketing discipline is based on managing and improving each individual customer’s entire experience with the product or service being sold. As marketers today, our task is to put ourselves in each of our customer’s shoes, in an effort to see what that customer is seeing and experience what that customer is experiencing. And we try to visualize our company from the “outside in” perspective of the customer, rather than limiting ourselves to the “inside out” perspective of our product, and all the effort that we put into producing it. 

So marketing’s objective is no longer defined solely in terms of getting more customers. That was so... 20th Century! Rather, today’s marketing is about visualizing and understanding the customer experience, in order not just to get more customers, but to keep them longer, and to grow them bigger.