Marketing Done WRONG: Marketing Strategy Designed for Failure

Verizon as a case study in marketing done wrong

OK, so Verizon isn’t the only firm that exemplifies marketing done wrong, but they’ve certainly mastered the art of doing marketing wrong.

Verizon has good company; however, including Microsoft, AOL, Comcast, and WalMart.  Lest you think all big companies have lots of unhappy customers just because they have lots of customers, look at exemplary companies like the Virgin Group, BandAid, Disney, Pepsi and Publix Supermarkets.

Marketing Done Wrong

What characteristics do these firms share that makes them so widely hated.  Certainly, various factors contribute, but the element they all share is a disregard for customers — their single-minded pursuit of their own self-interest. Successful firms are not selfless, they just do a better job of balancing the needs of stakeholders — stockholders, employees, customers, and society.

Examples of Marketing Done Wrong at Verizon

• Pricing – there’s a saying normally associated with stocks that goes like this: “bulls get theirs, bears get theirs, but pigs get nothing”.  Firms like Verizon never learned this lesson.  They charge as much as possible until customers cancel service, then offer a lower rate.  This marketing strategy is backwards.  Firms should create strategies to keep existing customers since these customers are 5 times cheaper than attracting new customers to replace them.  Overcoming inertia is the biggest roadblock to switching.  Once a customer has surpassed inertia, you’re much less likely to keep the customers.  In fact, that’s a big part of how AOL ended on the list of 5 most hated companies — their market strategy is to make it impossible to leave AOL.
• Deceptive communications – lie to customers, even tacitly, and it’s marketing done wrong.  Introducing Verizon’s version of the iPhone saw Verizon promoting their flat rate data plan as an advantage over AT&T’s metered plan.  A blogger uncovered, and Verizon later admitted, they were slowing down data streams for heavy data users of its smartphones as a penalty for their use.  OK, so technically they weren’t charging you more, but the slowdown was a hidden charge that wasn’t disclosed.
  
• Poor customer service – is a consistent problem for firms that end up at the bottom of the barrel.  Again, firms figure customers will stay regardless of how they’re treated.  Some continue to think that as their businesses fail. Verizon has nearly 4500 fans on the Verizon Sucks Facebook page.And, unfortunately, getting customer service right is the hardest of the 3 marketing done wrong tactics listed.

Overcoming Marketing Done Wrong

Unfortunately, overcoming marketing done wrong is hard — it’s in the DNA of the firm.  Doing marketing right requires a change in the philosophy underscoring the business.  It requires less reliance on financial metrics, which even Jack Welsh, the former Chair of GE who started this wave, now says is a “dumb idea”.  Instead, firms need to focus on creating customer value.

If you think about this, it makes perfect sense.

Where does the money come from to pay wages, suppliers, and stockholders? From customers (not stockholders)

What happens when customer don’t buy your stuff? your business looses money and the long-term effect is bankruptcy.

Just look at the US auto industry.  In the 70’s the Japanese came in offering better prices and more fuel-efficient cars.  Customers defected and the auto industry has never been what it was prior to then.  In fact, several US automobile manufacturers would be bankrupt without  expensive federal bailouts.

Avoid the same fate by keeping your eye on creating customer value by understanding customers, establishing customer-centric standards, develop metrics related to these standards, and train (and motivate) employees to provide superior customer service.