Innovation and marketing. All else is cost!

PvT: In your opinion, what operational changes can organizations make to get a better picture of that customer? You’ve addressed several big topics. However, many organizations have very siloed systems, making it difficult to access needed data. For example, a retail customer may be quite different from an online customer, and rather than integrating that data they keep that data separate, in separate databases. What are some of the things that you think organizations can do, or should do, to address the issue?

MM: Well, let me go back to what I call the axiomatic assumption of the commercial enterprise, and then from that examine some of the propositions or key premise of commercial activity.

Peter Drucker, God bless him, said, ‘The firm has no other purpose than to find and serve customers. Only 2 things add value: innovation and marketing. All else is cost.’

So there you have a quintessential operating principle. There is no other purpose than to find and serve customers. That’s what I call a customer-making process.

So you can put Band-Aids on cancer but if, fundamentally, you do not have a mindset of customer-making, which is, ‘I am building systems, processes, and accountabilities for managing the process of attracting, serving, and keeping customers life, then everything kinds gets muddled, confusing, and a big hairball of politics and turf.

Customer benefit

First, we like to put it into more simple terms: “How does the customer benefit?

Whatever operational or tactical changes that a firm wants to consider, we recommend that that they ‘solve backward’ from customer-making as an integrated analysis-driven process.

Now, there are many companies that aspire to that, but for lack of leadership and the inertia of their business, they encounter a lot of difficulty. We believe that they simply need a better, more fun way of innovating new operational capabilities—yep, from the bottom up with those folks that actually know first-hand what’s going on.

Second, if you accept that innovation and marketing represent the two primary drivers of wealth creation and value, it then follows that customers 30 years or younger will no longer experience the world as online and offline, it’s just the world.

There’s no first life and second life, it’s just life. And as a function of that they start to interact with customers with what I call a digital third hand.

Digital third hands

Now a digital third hand is quite literally how they have developed the cognitive ability and the muscle-memory reflex of interacting in a purely digital world.

In our digital world, we experience an appetite for interacting with brand and communities of brand users that have fundamentally altered marketing and innovation—new business requirements that marketing and innovation must now satisfy.

One, consumers that are 30 years and younger today, for the most part are no longer represent singular economic actors, rather, they represent a clique, a crew, or a pod of 4 or 8 people – their best friends with whom the text message each other 50 times a day!

These younger adults tend to select their best friends not just on shared values and sense of humor; rather on the basis of cognitive specialties—what John Garner talks about as multiple intelligences and cognitive-skill specialties—that offset and complement others in the crew or pod.

This means that somebody in the group will be really good with data, arithmetic, and logic. Somebody else will have aesthetic or design sense—fashion, design, and color. Another person will be really good with interpersonal dynamics, empathy, and support.

This means that marketers must give up the conceit of marketing to an individual demo-psychographic profile.

Rather, we must learn how to market to a pod or crew with collective IQ many times greater than any one individual consumer.

This means that the collective unit will detect any hint of bullshit, manipulation, coercion, or underhandedness, and heap immediate retribution on offenders: the highest form of which is willful apathy and deliberate dis-engagement. Wow. Try marketing in that!

Some marketer will also suffer a public reprimand in front of millions of consumers on YouTube and the mainstream pick-up of outrageous videos.

So, as a function of digital third-handed customers, who then through instant messaging and SMS, and other kinds of presencing thing, be it Twitter or whatever, not only must you market to the pod, but you must market to the cognitive diversity that defines that pod.

Requirement for multimodal content

So that means that you need multimodal content things like Podcasts, and webinars, and newsletters, and interactive calculators if there’s a return on investment.

You need to do customer interviews so people can associate into the narrative, into the journey of customer-making.

So marketing, on one hand, becomes much more integrated, it becomes much more multi-channel and multi-modal in terms of the cognitive styles it must satisfy.

The third thing that happens is that these pods start to form larger networks – federal networks, and out of this they start to organize themselves in terms of movements or de facto unions.

And oftentimes a c-captain – a community captain – will appoint him or herself as the leader of this loosely gathered federal nation of interested people. So they will start – how can I say – exerting far greater influence than quote-unquote “a single loud-mouth” had in the past.