Summary
“Rethinking Marketing” by Rust, Moorman, and Bhalla (2010) discusses how in spite of the technological innovations that are available in the world of marketing today, businesses are either failing to take advantage of these technologies or they are failing to utilize these technologies to the fullest extent possible. Companies have the availability to mine for data in ways that were never before possible, and use this information not only to cultivate their customers, but to reinvent the very process of marketing, allowing businesses to be more targeted in their marketing of products than ever before (Rust, Moorman, & Bhalla, 2010). Instead of embracing these technologies, companies are continuing to function in the same manner that they have done since the 1960s, providing little to no forward movement, though with an application of the data presented in this article, they will be able to exponentially move their business forward.
Mittal, Sarkees, and Mushed (2008) discuss the process of customer divestment, or terminating the service of a customer due one reason or another; reasons for divestment may include being continuously late on a bill, non-payment, a high volume of calls regarding issues that have already been resolved, or an increased level of difficulty on the part of the customer themselves. This goes off of the concept that “a customer who…calls every day is less profitable than one who pays on time and never calls you” (Mittal, Sarkees, & Mushed, 2008). While many companies view the process of customer divestment as something that must be done in order to ensure the health and continuity of the business, there is a simple three step process that is suggested, to renegotiate, migrate, and finally terminate (Mittal, Sarkees, & Mushed, 2008), that will allow the business to work to benefit from these customers for a bit longer and work with them more effectively.
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Reflection
The main thing that struck my attention in Rust, Moorman, and Bhalla’s article was the pushing for companies to move towards more and more data mining. In this day and age, and especially in light of the new information that has been made available to the public regarding PRISM, while this may have seemed like a good way to push businesses in 2010, this no longer seems like an article that a person would want their name on, period. Data mining has always been done in one form or another by companies, often in the form of surveys; however, recent information has brought home the reality of data mining to many individuals, something that was always plausible, but never seemed possible to most. Now that individuals are aware of exactly how much of their personal information is being mined, this is not the best way to go about rethinking the marketing process.
Mittal, Sarkees, & Mushed (2008) have presented a very interesting perspective on the process of customer divestment, however. The idea of first working to renegotiate the benefits received from the interactions between the company and the consumer, offering an alternative solution, and then terminating the customer if they fail to comply with the alternative they have been provided (Mittal, Sarkees, & Mushed, 2008), is vastly different from the previous methods of simply allowing the unruly individuals to either go to too much of an extreme and then be removed or have a three strikes and then gone policies that are currently in place. Many businesses would be able to more effectively and efficiently deal with their troublesome customers by reading this article and applying the information given to them by Mittal, Sarkees, & Mushed.
Managerial Implications
Of the many different managerial implications that stands out when looking at these two articles, perhaps the best application of the combination of these two principles would be the use of both in customer divestment. A manager would first take the principle of renegotiate, migrate, terminate, and take a look at the pre-existing customer base in order to see which individuals would need to be addressed. The issues that all these customers had would be determined, whether they were abusive, late in payments, or insisted that something was not fixed when it was, and an alternative would be provided to them, followed by termination if they failed to comply with that alternative measure. In order to incorporate more data mining into this process, for these troublesome customers, the company would send out surveys or questionnaires for each step of the process in order to better obtain information that could be used in their marketing strategies, for those who are often the most difficult are the ones who have set ideas about the product or service, allowing the company to benefit in multiple ways from these customers that otherwise would be terminated without being given additional chances.
Through a practical application of Rust, Moorman, Bhalla (2010), Mittal, Sarkees, & Mushed’s (2008) articles, a manager will not only be able to improve the fiscal profits of the business, work to remove bad debt from the company itself, and work to obtain more information that will better serve the company while going forward in their product or service’s life cycle. These tools will be invaluable for any manager, new or old, and will serve to only benefit the business itself.
- Mittal, V., Sarkees, M. and Murshed, F. 2008. The Right Way to Manage Unprofitable Customers. Harvard Business Review, pp.94-102. [Accessed: 10 June 2013].
- Rust, R., Moorman, C. and Bhalla, G. 2010. Rethinking Marketing. Harvard Business Review, pp.94-101. [Accessed: 10 June 2013].
