The philosophy behind marketing has been evolving over time, adapting to the surrounding economic and technological structure. Of course, some industries will remain laggards, while others will be more advanced in their progression. This is a general guide as to how marketing has changed.
First Era: Product Focused
“Build it and they shall come.”
In the early days of commerce, businesses primarily focused on creating superior products. During this era, consumers had limited choices and often faced resource constraints. As a result, they were keen to get the best value for their money. Companies that could offer higher quality at competitive prices thrived, as demand was high and supply was relatively low.
This era saw a simple equation: make the best product, and customers will naturally gravitate toward it. The competition revolved around who could build something better, faster, or cheaper. Advertising was minimal, and the product’s inherent value was expected to speak for itself.
However, as markets became saturated and more companies entered the fray, simply having a great product was no longer enough.
Second Era: Salesmen Focused
“We will sell it to everyone and their mother, if they are buying.”
As markets matured, the balance of power shifted from the product to the salesman. This period was characterised by aggressive selling tactics, with a heavy emphasis on closing deals. Information asymmetry—the gap between what sellers knew and what buyers knew—became a tool for the sales force to wield.
Salespeople worked on commission, giving them a strong incentive to embellish their offerings or even oversell the benefits of products to meet their targets. This led to the rise of the “hard sell” and gave birth to many of the negative stereotypes associated with salesmanship—slick talkers more interested in pushing products than serving the customer’s real needs.
The focus was no longer on what the product could do but on how well it could be sold. Customers were often left with products that didn’t live up to their expectations, leading to a growing mistrust of salespeople. This era laid the groundwork for a deeper awareness of the importance of honesty and transparency in business dealings.
Third Era: Customer Focused
“The customer is always right.”
As consumer awareness grew and the internet democratised information, the balance of power shifted once again—this time to the customer. In this era, businesses had to put the customer at the centre of their operations. The rise of service-based industries, e-commerce, and social media meant that consumers could easily compare products and share their experiences with others.
Customer-centricity became the new mantra, with businesses emphasising customer service, experience, and satisfaction. Companies like Amazon and Zappos revolutionised industries by prioritising customer feedback and tailoring their offerings to meet consumer demands. The emphasis was on creating positive, long-term relationships with customers rather than short-term sales wins.
Businesses learned that happy customers could be their greatest advocates. Word-of-mouth, reviews, and social media endorsements began to play a pivotal role in a company’s success, and the idea of customer loyalty took root.
Fourth Era: Lifetime Value Focused
“Think beyond the transaction.”
In today’s business landscape, the focus has shifted again, this time toward maximising customer lifetime value (CLV). Companies have realised that a single transaction is just the beginning of a potential long-term relationship with the customer. The goal is no longer just to make a sale or satisfy the customer, but to ensure that the customer remains engaged and loyal over time.
With the rise of subscription models, loyalty programs, and personalised marketing, businesses are now focused on building long-lasting relationships that are mutually beneficial. They invest in understanding customer preferences, behaviour, and needs in order to offer tailored products, services, and experiences. Companies track metrics like retention rates, repeat purchase frequency, and average order value to gauge the long-term health of their customer relationships.
In this era, businesses are not just aiming to acquire new customers; they’re also working to maximise the value of their existing ones. By focusing on customer lifetime value, companies can ensure sustained growth and profitability in an increasingly competitive marketplace.
Implications
Customer lifetime value is now the key to a successful business. You want to ensure that customers are not just happy with one transaction but will stick with your brand. My thesis is that as consumer attention is increasingly fragmented amidst a constant bombardment of content, distribution will get much harder. As such, to save on customer acquisition, you want to reduce the amount of churn from those who have already used your product. At the same time, word of mouth – especially from long-time users – is ultimately more trustworthy than paid advertising and embedded sponsorships.
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