The Seven Myths of Customer Management: How to be Customer-Driven Without Being Customer-Led

In this lively and readable book, the authors argue that in recent years far too much has been made of customer satisfaction, and that this has come at the expense of hard-edged consumerism. Whether or not "the customer is king," the first rule of business is to make money. Pragmatic and practical, the book destroys seven key myths about customer management that have gained almost folkloric status, and provides a step-by-step action plan for linking customer service with commercial goals.

John Abram began his career selling industrial textiles to major customers in industries as diverse as mining; water treatment and pollution control. He was promoted to head the firm's business development functions in the UK, where he was responsible for introducing one of the earliest examples of automated customer management systems used in the UK.

He was recruited by American Express in 1978 and appointed Marketing Manager, with responsibility for Cardmember recruitment and retention, as well as cross-sales of complementary products and services.

In 1981, backed by a leading publishing firm, he started his own business promoting a range of products and services to entrepreneurs and business managers. In 1984, he bought out his original backers and took the business on to become a significant innovator in the promotion of investment products by phone and post, being the first in the country to sell personal pension plans direct to consumers.

Paul Hawkes joined American Express Card Division in 1975 and subsequently became Marketing Manager for the merchant network in the UK and Ireland. In 1979, he moved to Time-Life Books and was promoted to become European Mark eting Vice President. In this role, he was responsible for mail order and retail marketing and sales, new product development and co-publishing relationships across 14 countries within Europe and Africa.

He was a director of the British Direct Marketing Association and a Council Member of both the Association of Mail Order Publishers and the Mail Order Publishers' Authority; and is a Fellow of the Chartered Institute of Marketing. He is now a director of the Virtual Partnership Ltd.

John and Paul co-founded Abram, Hawkes plc in January 1987. Over the next 13 years they built and managed the company to become the UK's foremost consultancy specialising in marketing and customer management; or, more simply, advising and assisting organisations on how to grow revenues and build customer profitability. They sold the company at the beginning of 2000 to Valoris, a major European consulting firm. Their clients included many of the country's largest and most successful organisations, such as Norwich Union, Centrica, Switch Card Services, Thomas Cook, Lloyds Bank, MBNA, Visa, Barclaycard, Axa Sun Life, GUS Catalogue Order, and many others.

Figures. Acknowledgements. Introduction. 1. The seven myths of customer management: Debunking some established wisdoms. The Dangers of Customer Leadership. What's Actually Happening? Myth 1: Customer Retention is the Key to Increased Profitability. Myth 2: Divesting Unprofitable Customers Will Increase Profitability Overall. Myth 3: Customer Satisfaction Leads to Customer Loyalty. Myth 4: Repeat Purchase is the Same as Customer Loyalty. Myth 5: Organisations Should Develop Relationships with their Customers. Myth 6: One-to-one Marketing is the Ultimate Goal. Myth 7: Technology is the Primary Enabler of Customer Focus. A Different Approach. 2. Testing the water: Understanding where you are today. Picking Up Customer Signals. Business-to-Business Customers. What Research Does Not Tell You. New Technology, New Danger. Substituting Benchmarking for Thought. Ten Ways to Gain Real Customer Insight. 3. Look before you leap: Developing a customer focused strategy. What is customer-focused strategy? Strategy in Context. Developing Customer Focused Strategy. Appraising the world outside. Seeking to be different. Leading on Cost. Focusing on markets or customers. The Customer Lifecycle. Deciding and Evaluating Alternatives. Action Planning. 4. Measuring your way to success: Allocating resources for maximum effect. The failure of Measurement. Customer attitude Measures. Customer Retention Measures. Customer Value Measures. The Failure of Management Information Systems. Towards Customer Value. Customer Value Analysis in Action. The Pitfalls and Problems. The Benefits of value-based Management. 5. Don't Keep it too Simple, Stupid: The need for a Segmented Approach. Segment or Die! Understanding Customers' Needs and Motivations. Collecting the Data. From Data to Intelligence. From Intelligence to Hypothesis. From Hypothesis to Appraisal. From Appraisal to Strategy. From Strategy to Results. Pitfalls and Problems. Segmentation: A Postscript. 6. Lining up the Ducks: Aligning the Company for Customer Focus. Aligning Finance. Aligning Product Strategy. Aligning the Proposition: From Product to Profit. Brand Alignment. Aligning Distribution. Aligning Customer Communications. Customer Loyalty Programmes. Alignment: A Postscript 7. Are You the Problem? The Role of Leadership in Creating Customer Focus. Data-less Decision-making. The Pitfalls of Project Teams. Best Practice is Sometimes Best Left Alone. Incentivising Inappropriate Behaviour. Technology Turmoil. Everybody Embraces Change Enthusiastically. Reorganising for Focus. Changing a Light Bulb. 8. Bringing the Focus Alive: A Practical Action Plan. An Action Plan for Customer Focus. Managing the Customer Focus Process. The Internal Review. Customer Dynamics and Needs. Segment Objectives and Propositions. Customer Management Objectives, Strategy and Tactics. Channel Strategies and Implementation. Testing and Performance Measurement. Customer and Market Knowledge Management. Change Planning. Technology Strategy. Index.