Alfred Sloan’s Customer-centric Winning Strategy

In 1909, Henry Ford wrote (some say he said it) a phrase that would stick to
him like glue for the next 107 years and beyond:

“Any customer can have a car painted any colour that he wants so long as it is black.”

There are a few reasons given for the thinking behind this statement but,
whichever you subscribe to, what is fairly clear is that Ford didn’t do a lot of
consulting with his customers. Ford was a product- and process-centric kind
of guy. Customer needs were not in the driving seat.

While Henry Ford and The Ford Motor Company went on to achieve
incredible success, it was his focus on product and process over
customer that would see General Motors (GM) knock The Ford Motor
Company from the top of the podium, a position that Ford has been
unable to regain since.

Contrast Henry Ford’s well-known quote with the lesser known one of
Alfred P. Sloan, who headed up GM from the 1920’s, “A Car for Every Purse
and Purpose”, it’s not difficult to see that Sloan was far more in tune
with the customer than Ford was.

If you were to accept that a definition of customer-centricity is:

“the alignment of a company’s development and delivery of its
products and services around the needs of a select set of customers in order to maximise their long-term financial value to the firm,”

then you’ll appreciate that Sloan was indeed the out-of-the-box marketing
and customer-centric strategist that he is hailed to have been.

It was Sloan who introduced the idea of planned obsolescence,
encouraging the customer to buy the latest model. He also introduced
‘Brand Architecture’ where one company could control multiple brands
of products. While Ford had everything riding on the Model T, GM
developed multiple brands still seen today by way of Chevrolet,
Buick and Cadillac. Of course, you and I see these concepts as perfectly
normal as if they’d been around for centuries.

Sloan Was Just The Beginning

There have been almost 100 years since Alfred P. Sloan first began to shake
up how an entire industry viewed its customers. Since then, we’ve seen
incredible advancements in how organisations have arranged themselves
around targeted customers; to the extent that some of the best customer-centric companies don’t even talk about the customer because they
recognise that there is no one average customer. There are so many variables at play that they’re working with subsets and ecosystems.

As Peter Fader, in an article on Wharton.edu, points out in his example of
Amazon and it’s introduction of the Kindle, the game has only just begun.

“For the original Kindle Reader, this ‘select set’ of focal customers was clearly defined. Back in 2010, Jeff Bezos went on record saying that the Kindle was for ‘serious readers.’ He elaborated by pointing out that ‘90% of households are not serious reading households.’ By focusing squarely on serious readers, the Kindle carved out a tremendously valuable market niche. Its simple interface and innovative screen technology provided a top-notch reading experience for those who still care to read books. It was a strategy focusing on creating delight for a particularly profitable customer segment. The many other ‘non-serious readers’ who also bought it were just icing on the cake.”

Business around the globe has realised that digital transformation represents a major opportunity to grow and improve, and whilst technology is a powerful enabler, the innovators, disruptors and market leaders all deploy it as a means to enable a comprehensive business strategy like customer-centricity.

One has to wonder what Alfred P. Sloan would have done with today’s
technology. Our ability to collect information about our customer, analyse
it and then apply it, is far beyond what he probably imagined and dreamed
of. You have to believe, however, that the equivalent of his out-of-the-box
thinking, applied today, would result in a game-changing customer-centric
strategy.

Sloan’s legacy is a lesson to business leaders and marketers alike. Build your business around the needs of your customer and you will reap the rewards.

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Contact us today to get started with our unique Customer Centricity ProActive consultation process, or delve deeper into how we can help your business become more Customer Centric at www.mint.co.za