Creating Stakeholder Value

I read a book on the topic of relationship marketing that was written a decade or so ago, when the idea was still relatively fresh, with an eye toward whether much progress has been made in shift from a company-in-control transactional approach to a customer-in-control relationship one.   I am left without a clear conclusion: in some ways, significant progress does seem to have been made - but in others, vendors still seem to be stuck in an outdated mode.

There likely is no denying that the tenor of markets has changed significantly in the past few decades: firms are no longer in a position to dominate their customers, as there are many competing suppliers for any given product or service in the marketplace and the products on offer have become commoditized.   But there is also no denying that, given the behavior of a vast majority of firms, commerce continues to cling to the glory days of mass production and mass marketing when customers were compelled by lack of options to tolerate poorly designed products and abide the difficult behavior of indifferent producers concerned only with their own benefit and convenience.

My sense is it's likely a generational issue: the individuals who are in positions of authority in commercial enterprises came of age in the era when supply was insufficient to demand, such that any firm that was able to bring product to market was able to find success in spite of glaring inadequacies because consumers had a lack of alternatives - and as the silent and boomer generations make their final exit from the workplace and hand the reins to generations who are less accustomed to prostrating themselves in reverence to vendors, the last traces of that outdated attitude will also be retired.  There seems to be little hope of it happening sooner.

But at the same time, much of the philosophy learned by the next generation of leaders was written during the era of supplier-dominated markets, so it seems entirely likely that the change will be incremental, over a number of decades, as the new leadership will continue to the principles of their predecessors.  The notion that the change of regime will result in a change in perspective does not necessary hold true, because the new leaders will be selected by the old - and the old leaders demonstrate a preference for those members of the next generation who are compliant with, rather than opposed to, their own way of thinking.

That is to say that the "new" leaders can be expected to follow closely in the footsteps of their predecessors because anyone who had a significantly different idea was likely unacceptable as a candidate for management.  Thus, Generation X managers are not likely to make an overnight transformation, and the Millennial are likely to live up to their alternate moniker of "the echo generation" in following in the traditions of their Boomer parents.   So likely, even two decades from now, the topic of relationship marketing will still remain poorly understood and even more poorly applied.

There is, perhaps, potential for an accelerated evolution when the present financial crisis draws to a close and buyers have the flexibility in their budget to reward the firms that provide the best designed products and the highest quality of service  rather than settling for whatever is selling for the lowest price that meets their most basic functional needs, somewhat adequately and with a considerable amount of difficulty and disappointment.  But even that is likely to be a slow transition because consumers settle int habits as well: consider that those who lived through the great depression developed miserly habits that they carried through the rest of their lives, and it would seem to be a reasonable conclusion that there will be no great revival of the markets, and we may yet be a few more generations from departing from the transactional model.