Marketing with purpose: finding, keeping customers

Opinion

Hey there, time traveller!
This article was published 07/10/2023 (725 days ago), so information in it may no longer be current.

Peter Drucker, the dean of modern management, stated that “the purpose of every business is to find and keep a customer.” In one of my first-year business courses, Environment and Functions of Business, we were taught that “the purpose of a business is to stay in business.” Combining these two points means that businesses must strive to provide value to their customers, so they can remain in business.

Businesses can complicate this simple equation by trying to do too much. Marketing efforts should be in the interest of acquiring and retaining a customer. However, mixed, or unclear messages may result in a focus on the wrong customer priorities and the loss of customer support in the future. A recent example is the decision by Bud Light in March to push away from their “frat boy” beer image. When your product has served enough cold ones to become the top selling beer brand in the United States for the past two decades, it is odd that a company would run a marketing campaign that completely ignores its loyal beer-drinking customers.

Unsurprisingly, beer sales dropped substantially and Bud Light today is only the fourth highest selling beer brand in the U.S. Cumulative loss of revenue is over US$400 million since that marketing decision, which has had a negative impact on the share price of parent company InBev. And no new messaging or advertising can help them recover because they have alienated their primary customer base. They would have to double the number of new customers to replace those they lost because younger beer drinkers are drinking less than the older counterparts and opting for higher quality imports.

On the flip side, Modelo has become the highest selling beer in the U.S. since the Bud Light decision. Their focus has always been to craft a beer that celebrates the hard work, struggles and dedication of real people who have achieved success in their lives. This is not aspirational advertising; it is real life stories.

So, in one case, the company tried to replace their core customer, and in the other, they celebrate their core customer. As a customer, which brand would you be more loyal to? The vice-president marketing for Bud Light forgot that it is not what you think, it is what your customer thinks.

Every company should have a winning game plan that is customer-centric like Modelo. The customer’s patronage allows the company to succeed. Successful companies can also be good corporate citizens when they have the financial capacity to support community activities. This is the best form of customer loyalty because it comes after the company takes care of their customer.

When you know your customer well, you can determine the type of community support that strengthens the alignment with your company, and you become even more appreciated by your customers. If you try and force certain messaging, you run the risk of misalignment and a negative impact on how your current customers view your position.

In Bud Light’s case, their reduced sales demand resulted in a need for fewer containers and this caused a bottling plant to be closed to help manage profitability. Consequently, the ripple effect was that one of their bottle suppliers also closed because there were fewer bottles needed. The closure of these two plants resulted in hundreds of jobs being lost. A winning game plan would have accounted for these ripple effects of the initial decision and adjustments would have been made to stem the losses.

Finally, if you commit to something, stay committed. In Bud Light’s case, when the company tried to walk back their original campaign message (to retain their existing customers) they alienated the very community they were trying to reach because they showed a lack of genuine support and commitment.

There are plenty of examples of other companies that focus their marketing efforts on acquiring new customers, while ignoring their loyal customer base. Think of the New Coke debacle where the recipe was changed and angered their enormous loyal customer base. The customer response was so overwhelming Coke had to reintroduce Coke Classic and eventually phased out New Coke. Forgetting or ignoring the customers who made and make you successful, in your quest to acquire new ones, is a recipe for failure. A successful brand understands its customer base, has staying power, and makes positive impacts in the communities they serve.

And in a very ironic twist, InBev owns both Grupo Modelo (who brews Modelo) and Bud Light. InBev actually wins in total because they own both of these top brands. But only one brand successfully markets with purpose.

Tim’s bits: Marketing with a purpose begins with delivering a product or service that does what you say it will do and is delivered when you say it will be delivered. A trusting relationship is created as long as this equation is maintained. And your brand will have staying power and a positive image with the customers you serve and want to serve.

Tim Kist is a Certified Management Consultant, authorized by law, and a Fellow of the Institute of Certified Management Consultants of Manitoba.

tim@tk3consulting.ca