Book review: Honesty is best new customer policy
In business as in art, we live in a postmodern era. Old certainties are being demolished and relationships redefined. Leaders are told to think of themselves as servants, competitors are advised to co-operate, and strategists warned that strategy-making is no longer their sole preserve. Everything you thought you knew about business has been upended.
The relationship between companies and customers is no exception. The old notion that producers produce and consumers consume is regarded as passé by management theorists. These days, value is more often co-created by producer and consumer.
For example, innovations are as likely to come from customers as from pointy-headed PhDs in corporate labs. In extreme cases (think Open Source software) consumers are cutting producers out of the game altogether by collaborating to build their own products. How postmodern can you get?
In his latest book, Glen Urban offers his prescription for survival in this topsy-turvy world. His answer, as the title of the book implies, is that producers need to move far beyond cultivating relationships with consumers. The future, he argues, belongs to companies prepared to act in the best interests of their customers at all times, even if it means advising them to buy elsewhere.
But “customer advocacy” involves more than simply turning away unprofitable business. Urban, a faculty member at the Massachussetts Institute of Technology's Sloan School of -Business since the mid-1960s, urges companies to steer even valuable customers in the direction of competitors if they would be better off.
On first hearing this sounds not only idealistic but also unrealistic. Since when was anyone in business happy to act as a salesperson for a competitor? This is “coopetition”, the phrase coined by economists Adam Brandenburger and Barry Nalebuff to describe co-operation among competitors gone mad.
But Urban argues his case from a pragmatic starting point. Today's internet-
enabled customers have all the information they need to make informed choices and access a greater variety of alternatives.
Moreover, they are becoming harder to reach. As media outlets proliferate, primetime advertising no longer reaches a critical mass of consumers. The old “push-pull” approach to marketing
