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e other important risk relates to competitors. e risk pro le related to existing competitors is 98%. is means that its second objective (market share) by targeting customers of existing com- petitors (strategy) has almost no chance of being achieved.
Step 4: Measure the financial impacts of Market non-alignment?
Financial risks are high in businesses that are not closely aligned with their markets. e nan- cial impact of these risks can be measured by the changes in the lifetime value of customers that re ects customer retention and customer churn. Pro t is also impacted by the cost of acquisition of new customers. e nancial risks become greater if alignment weakens over time to the point where substantial non-alignment between the business and its customers’ needs occurs.
Marketers can help their organizations align with their markets by measuring their current customer culture, pointing to speci c elements at risk and indicating the potential pro t impacts of improvements through measurement of the value of customer retention. Di erent scenarios accord- ing to di erent market and industry dynamics can be used as a context for assessing the risks and pro t impacts of di erent levels of market alignment.
Marketing’s critical Pro t role: reducing Market alignment risks
A company’s growth and pro t potential from adopting the seven cultural disciplines and imple- menting cultural re-alignment with its markets is huge if successful. But the nancial risks are sub- stantial if its strategy is not supported by a culture that is aligned with customer needs – current and future. If the company does not embed the rst ve cultural disciplines properly, its market align- ment risk will be high. If the progress of cultural re-alignment on these disciplines is not measured the nancial risks and pro t potential of its actual culture will remain hidden. Any delayed corrective action may come at a large cost to the business.
Senior management need to be made fully aware of these risks and have personal input into any need for risk mitigation and prevention. Marketing,
that is founded on a customer-centric culture, has the natural role to identify, measure and report
on market alignment risks. If marketing uses this framework and measurement approach it will enable a company to manage market alignment risk where it counts – to increase revenue and pro t. ■
Dr. Linden Brown is co-author, with Chris Brown, of the award- winning book “The Customer Culture Imperative.” He is the Chairman and co-founder of MarketCulture Strategies, a Silicon Valley company focused on analyzing the customer-centric cultures of organizations.
John Stanhope is the Chairman of Australia Post and Chancellor of Deakin University, Australia. He was formerly Chief Financial O cer and Group Managing Director, Finance and Administration with Telstra Corp. Ltd.
RefeRences
Brown, L., & Brown, C. (2014). e Customer Culture Imperative: A Leader’s Guide to Driving Superior Performance. McGraw-Hill Education.
Brown, L., & Brown, C. e Customer Culture Imperative: Marketing Destined to Lead a Better World. Journal of World Marketing Summit, 1(1), 123-131.
Picoult, J. WaterRemarks: e O cial Blog of Watermark Consulting. (June 2, 2015). e 2015 Customer Experience ROI Study. Retrieved from http://www. watermarkconsult.net/blog/2015/06/02/the-2015- customer-experience-roi-study/
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