The Manufacturer's World Has Changed Forever

July 12, 2010
Today's aggressive, techno-savvy customers are armed with purchasing firepower unavailable to any previous generation, and they use three lethal weapons to secure the benefits they seek and satisfy their intense need to win

To succeed in a global marketplace dominated by the new generation of internet-empowered, seller-agnostic customers, every manufacturer -- in every industry and segment -- must confront the radically changed purchasing behavior of these often-ruthless customers.

Today's aggressive, techno-savvy customers are armed with purchasing firepower unavailable to any previous generation, and they use three lethal weapons to secure the benefits they seek and satisfy their intense need to win:

  1. Instant, comprehensive information from the internet about all manufactured products as well as every manufacturer's service offerings
  2. Immense choice in every sector of manufactured goods -- a wide variety of options and prices from every corner in the world
  3. Real-time price comparison on smarter-and-smarter technology and newer-and-newer apps on their now-ubiquitous mobile devices

Moreover, social media informs and influences these determined customers -- it shares and compares their purchasing experience with every manufacturer -- favorable and unfavorable -- in real-time throughout the world.

Make no mistake -- this era of "new experts" is permanent. In fact, it will become an even more potent force because the generations of customers that follow it will have more effective and more agile technology and they will be more adept at using technology for their benefit -- not yours.

Can you afford not to change the way you deal with customers in this period of irreversible change in the manufacturer's world?

This startling statistic documents the necessity for change: in 2009, only one in five American car buyers were loyal the company that manufactured their brand, compared to the 1980s when four out of five bought the same car brand, according to CNW Marketing Research (Bill Vlasic, "For Car Buyers, the Brand Romance Is Gone," New York Times, October 20, 2009.)

In the absence of customer loyalty, Customer Preference is the Only Differentiator and the Surest Way to Be Your Customers' 1st Choice

Customer Preference, in the context of business, is deliberately making a choice to obtain a real or perceived benefit -- a benefit the customer values enough to influence the decision about where and from whom to purchase.

Think of Customer Preference in terms of the following advantages it offers manufacturers like you:

  • The buyer will go a little out of his way to buy from your firm.
  • The buyer will pay just a bit more for your firm's products or services.
  • The buyer will buy from you without forcing you to bid every time.
  • The buyer will buy from your firm more frequently.
  • The buyer will be slightly more tolerant when your firm fouls up.
  • The buyer will consider making you 1st Choice over your competitors.

Individually, these benefits may not make or break your business, but collectively they will be the fundamental difference between your growth and your decline.

Creating Customer Preference does not require a wholesale rethink of your business nor does it require investment in infrastructure or marketing. You can create Customer Preference for any size or type manufacturing company with big ideas and small ideas. Delivering Customer Preference customer-after-customer and day-after-day will make your company 1st Choice.

Manufacturers of every kind and size must realign their existing organization to create Customer Preference at the Four Decisive Moments in every purchasing progression:

  1. The Now-or-Never Moment -- first brief contact
  2. The Make-or-Break Moment -- lengthy transaction process
  3. The Keep-or Lose Moment -- customer's continued usage
  4. The Multiplier Moment -- highly profitable repeat purchase, advocacy, referral

To survive and thrive in this new hostile environment, manufacturers, like all companies, must:

Stop Thinking Like Yesterday's Seller! Start Thinking Like Today's Buyer!

The automobile manufacturing category offers a brilliant example of a manufacturer that succeeded by thinking like its customers and creating Customer Preference for its brand and products.

How Fiat Went from Loser to Winner By Thinking Like Its Buyers

In 2003, Italy's Fiat Auto, marketer of the legendary Fiat, Alfa Romeo, Lancia, Ferrari, and Maserati brands, reported a net loss of nearly €2 billion for 2002. There was wide spread speculation that the firm would not survive. Four years later, Fiat Auto announced trading profit of €691 million.

In late 2007, I went to Fiat's enormous headquarters in Turin, Italy, to learn how this company had converted red ink to black so quickly and how it had revitalized its reputation among customers, dealers, financial analysts, and journalists throughout its European and Latin American markets.

Earlier that same year, Fiat introduced the highly successful new Punto, Panda, Bravo models and the trendy new Fiat 500 model that sold over 100,000 cars and was named Europe's car of the year. What I found at Fiat was a company that had changed it way of thinking and acting and an organization that was totally aligned behind creating Customer Preference.

For more than five hours, I met with the senior team that Sergio Marchionne, Fiat's hard-driving, charismatic CEO, had put in charge of his mission to change the direction of the Company. The team, headed by the highly articulate 39-year old Luca De Meo answered all my questions with clarity and candor. I learned the intimate details of this manufacturer's miracle.

The Fiat turnaround began in 2005, when Sergio Marchionne assumed the role of CEO, Fiat Auto. Marchionne, who had no automobile experience, took the following actions:

  • Terminated a failing venture with GM to gain full decision making autonomy
  • Eliminated an entire floor of executives to reduce costs and bureaucracy
  • Cut Fiat's product development time in half to get products to market quickly
  • Re-organized and re-energized its dealer organization to assure sell-through
  • Re-designed every Fiat product to create enduring create Customer Preference for the Fiat brand and products

In 2008, Fiat Auto reported trading profit of €1,102 billion.

Ironically, in 2009 when Fiat was continuing to thrive and expand, another automotive manufacturer closed its doors. In 1983, GM announced to the world that it would introduce a "new kind of car company" called Saturn. Nineteen years after its introduction, in 2009, the Saturn operation ceased to exist because it failed to create enduring Customer Preference.

However, there was more irony in 2009: Fiat Group S.p.A became an owner of Chrysler and Marchionne became its CEO. He has already infused Fiat's new US operation with profound change and there is wide spread speculation that Fiat will bring its hot Fiat 500 small car and legendary Alfa Romeo brand to the U.S.

Learning From Contrasting Experiences of Two Car Manufacturers

In today's global buyer-dominant climate, manufacturers must:
  • Think like today's buyer, not like yesterday's seller
  • Get rid of the dead wood -- it will drag you to the bottom
  • Anticipate change -- it is inevitable and relentless
  • Act with determination
  • Move with a sense of urgency
  • Inspire your organization to meet your expectations and goals
  • Align your organization to consistently create Customer Preference at each of the four Decisive Customer Moments

Make Your Firm 1st Choice by Creating Customer Preference for Your Company

Robert H. Bloom is the author of THE NEW EXPERTS: Win Today's Newly Empowered Customers At Their 4 Decisive Moments (Greenleaf). For more information visit

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