What's the Cure for Customer Fatigue?

Companies spent $22 billion on customer relationship management (CRM) software last year, according to the Gartner Group, but just what did it buy them? The snazzy technology was supposed to make one-to-one interactions with customers a reality, but experts say all it has done is enable companies to disappoint their customers faster and more efficiently—anytime and anywhere. Customer loyalty hasn't increased. Companies still can't target their most profitable customers, and their data-mining and sales processes are just as convoluted as ever.

There's widespread agreement that customers are sick and tired—of the barrage of irrelevant products and services, the glut of marketing messages, the coddling and the patronizing, and the broken promises.

So what's the elixir that will reinvigorate them? Trying to change your customers is the wrong approach, say the marketing experts HMU consulted—change your company instead. "When you really get down to what's driving customer fatigue," says Chris Goodman, CEO of Young & Rubicam 2.1 (the digital arm of the New York City-based advertising firm), "it's company fatigue—complacency about marketplace scenarios, the competitive frame, and the underlying wants and needs of the customer."

Sellers must reengage with customers, but not by "creating a communications campaign," cautions Jerry Michalski, president of the consulting firm Sociate (Mill Valley, California), "because that approach has pretty much lost its credibility." Get out of the advertising mentality, which focuses on the messages your company is trying to get across to customers, and spend more time trying to discern what customers are trying to say to you.

Getting closer to customers starts with new ways of thinking about the people who buy your products and services. After that comes organizational realignment: changing people's jobs so they can develop an appreciation for how customers' needs for products and services are intertwined with their desires for certain types of experiences. For example, sometimes the exclusivity of a product—"I've got something very few others have"—is its primary attraction. When this motivation is at work, you're more likely to make customers genuinely happy not by chasing after them and carpet-bombing them with pitches but by teasing them into chasing after you. But fine-tuning your offerings based on a deeper understanding of customers' motivation isn't enough: Trustworthiness matters more than ever, and the only lasting cure for customer fatigue is delivering on your promises of providing real value.

Getting past customers as data points
"Companies have forgotten how to talk to people," says Michalski. As supply chains developed during the Industrial Revolution, sellers lost direct contact with the end users of their products. "Then the media revolution suddenly separated everybody again," forcing them to interact through machines.

Today nearly everybody inside a company collects consumer data, but nobody has a complete understanding of the customer as a human being. Not surprisingly, companies' assessments of customers' needs and preferences often lack imagination and nuance.

"If there's one word we have to kill, it's 'consumer,'" Michalski continues. It diminishes the richness of the interaction by viewing people as automatons that reflexively acquire and use goods and services in response to a particular economic itch. The term "customer," however, helps companies understand the buyer-seller relationship in terms of a broader exchange of information, ideas, and feelings.

Most organizational structures aren't set up to alert employees to when they're not treating customers holistically—like human beings with a wide range of emotions and motivations that change over time, instead of as data points. As workforces have become more specialized, says Goodman, firms have tended to organize their marketing by brand, business unit, region, or sales channel, and not by relationship with the customer.

As a result, many marketing departments, and even entire firms, have an increasingly fragmented view of customers. The remedy, Goodman suggests, is a "customer segment-driven approach" in which companies identify the "four or five critical segments that are going to drive their business across product and service lines."

For example, a financial services company might segment its customer base into the following categories: boomers who are downscaling, shifting to lower-paying but more emotionally rewarding jobs; boomers who are financially responsible for the care for their aging parents; parents saving for their children's education; and single women looking to buy a home. By assigning one group of service reps to each segment and training those reps to sell the company's entire line of products and services to that segment—instead of having reps for each product or service make separate contacts with each customer—the company acquires a richer view of the customer's needs and desires, a subtler understanding of how its brands fit into the customer's lifestyle and changing life circumstances compared to competing brands.

Selling an experience
The better equipped your company is to view and treat your customers as whole human beings, the wider the range of opportunities it can envision for engaging in relationships with them. "Two hundred years ago, 97% of people lived or worked on farms," says James H. Gilmore, coauthor of The Experience Economy. "They made their own clothes, their own meals, their own tools." But eventually it became advantageous for them to pay others to do those things for them, either because they could make more money doing something else or because they wanted to spend the time satisfying some other human need. And therein lies a key to discovering new ways of making customers happy.

"The customer is whoever sends you a check," Gilmore continues. "Everybody else could become a customer if you can envision offerings that they would pay you for" (see "Thinking Beyond Products and Services"). For example: creating opportunities for "direct contact, whether it's a physical or a virtual place, to spend time together." Such experiences can offer value by "restoring some of the relationships" destroyed by technological innovation.

Gilmore believes that "more of life should become a paid-for experience. Charge explicitly for the time people spend with you" at this place you've created, he recommends, and then "talk with them or observe their behavior during that time." This is exactly what American Girl Place in Chicago does: It charges admission to a live, in-store theater production and to a fancy dining experience. It's more than a retail store, encouraging customers to spend time in a place themed around the company's line of dolls from different eras of American history. The interaction is not about the customer's desire for a toy, says Gilmore. "It's about an experience that promotes child development and helps parents instill values in their children."

But a customer's desires aren't always so noble, notes Stephen Brown, professor of marketing research at the University of Ulster in Northern Ireland. "Customers aren't the paragons they're made out to be. Marketers should stop pandering to them. Treat 'em mean, keep 'em keen."

Companies need to understand that today's jaded customers see right through their manipulative ad campaigns. "We're dealing with very, very sophisticated customers," says Brown. His analysis of people's interpretations of advertisements reveals that even straightforward pitches get viewed with suspicion. Marketing must become equally sophisticated, he concludes; proceeding from "a deeper understanding of what people want than would ever emerge from the bowels of a data mine." Marketers must realize when customers want to be romanced, teased, even "tormented by deliciously insatiable desire" ["Torment Your Customers (They'll Love It)," Harvard Business Review, October 2001]. Play to such emotions, advises Gilmore. "Do the stratification and intentionally design offerings that will not appeal to everyone because not everyone will want or be able to afford them."

Or, if having their imaginations stirred is what customers really want, tantalize and torment them by creating offerings that change regularly or have an aura of mystery or unpredictability. The point here is that interpersonal relationships require a variety of experiences to sustain their vitality, and customer relationships are no exception. So if your customers are showing signs of fatigue, try spicing things up. After all, desire often increases with unattainability.

From experience to relationship: the role of trust
Crafting an array of experiences that deliver what they promise and satisfy customers' various desires isn't sufficient to create a real relationship. When a flaw developed in one of Intel's chips and the company did a poor job of acknowledging it and making it up to customers, the message behind its "Intel Inside" ad campaign—trust only those computers that have the Intel logo—started to sound hollow, and the company lost respect in its customers' eyes.

In a genuine relationship, customers see your company as trustworthy, which means that your marketing is backed up by authentic organizational behavior. "You can't just say, 'I'm trustworthy,'" says Michalski. "You can only behave that way" every day. And "if you screw up, then admit it." That's the only way you'll be able to maintain your trustworthiness. Such admissions are rarely easy to make, but in an increasingly transparent business climate, people will know when you slip up, and so the consequences of not admitting your mistakes grow ever more painful.

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Reprinted with permission from "What's the Cure for Customer Fatigue?" Harvard Management Update, July 2002.

See the latest issue of Harvard Management Update.

Kirsten Sandberg is the executive editor at Harvard Business School Publishing.

Related articles in HBS Working Knowledge:
It's Time to Reinstall the 'R' in Your Customer Relationship Management Programs

Not All Customers Are Created Equal

Is Your Organization Built for the Consumer?

Let Customers Call the Shots

Building 'Brandtopias'—How Top Brands Tap in To Society

Tease Your Customers

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