A new approach in tune with the world’s complexity
Today’s marketing has been built to reach one group of people: customers. As the main stakeholder who buys a business’ goods or services, they have long been the subject of marketing research—what they need, how they think, how to reach them.
In reality, businesses are supported by a complex web of communities and stakeholder groups, including ones that fall outside their assumed “target audience,” (we can talk in a different post about the use of the term target audience but for now, let’s stay focused). Different stakeholder groups have different relationships to a brand and to each other, and should not be considered in a vacuum. To the extent that a business markets to its customers without considering their context, it loses its ability to connect with that audience authentically.
Welcome to the brave new world of stakeholder marketing. It can be a corrective method to customer-focused marketing, a new approach designed for an environment in which brands no longer centrally control the message and transactions aren’t a simple two-party exchange.
Translation: a customer’s relationship with a business is influenced and mediated by other stakeholders groups. A brand’s relationship with the world is part of a system —multiple systems, in fact. An ecosystem.
So say goodbye to imagined “customer personas,” each with fixed attributes, and consider stakeholder marketing instead. This approach is for understanding and engaging with all the communities that support a business, including ones that fall outside the assumed “target audience.” Why is this so important? Doing the work of uncovering various stakeholder groups, listening to what they express, assessing their respective needs and understanding their relationship to the brand (and each other) allows a company to recognize their values while also minimizing collective harm. And that, in turn, strengthens relationships with communities and sustains relationships and ultimately success.
Stakeholder Marketing: A Definition
Stakeholder marketing is the practice of engaging communities and recognizing the needs, values and interests within, with the purpose of producing and maintaining mutually beneficial relationships across the ecosystem while also minimizing harm.
Make no mistake, engaging stakeholder marketing requires a level of thought and then action that may be intimidating to those who haven’t already done the work of mapping stakeholders, codifying community values, and establishing a valued role within their communities. According to the most comprehensive study of stakeholder marketing to date — “Stakeholder marketing: theoretical foundations and required capabilities,” published in the Journal of the Academy of Marketing Science in 2015—there are three important transitions that have occurred involving the interrelatedness of stakeholders.
- The transition from centralized to dispersed control of brand messaging
- The transition from implicit to explicit stakeholder tensions: conflicting interests can no longer be ignored, as stakeholders can now more easily organize and make themselves heard
- The transition from two-person exchanges to complex exchanges
All three of these encompass one central idea: marketing relationships do not occur between a brand and a homogeneous “persona” group or an imaged one to one relationship. Instead, they occur within emergent systems of conversation. I know what you’re thinking, Rai-mon, I see the link but seriously, what the hell is an emergent system of conversation? And I’m glad you asked because the answer is actually really important.
Emergent systems are what happens in a system that cannot happen with all the individual’s people parts of that system by themselves. It’s what greater means in the statement, greater than the sum of their parts.
Old hierarchical institutions of information and power are currently being replaced with more horizontal or flat forms of knowledge production and communication. Imagine a flock of birds changing direction en masse—or millions of people interacting on social network platforms.
“Stakeholder marketing recognizes that customer relationships may be influenced by relationships with other stakeholders and that a diverse network of stakeholders creates value,” Bas Hillebrand, Paul H. Driessen and Oliver Koll wrote in their Journal article.
Beyond the One-to-One Paradigm
Since the rise of modern marketing, the focus has been on customers and building relationships with them. In recent years, thinking in terms of “customer personas” or “user stories” has become the norm, so that businesses can segment a customer base and target marketing efforts accordingly. But the focus is still on identity, as though each customer and segment exists as homogeneous groups and are unattached to others with discrete needs and identities. This practice keeps the one to one relationships and value exchanges, between a seller and a buyer, the way most companies like it.
Stakeholder marketing moves past this old way of thinking. Hillebrand writes that stakeholder marketing “focuses on co-creation in network relationships rather than just one to one relationships and acknowledges the potential of indirect creation of value. … Stakeholder marketing recognizes that customer relationships may be influenced by relationships with other stakeholders and that a diverse network of stakeholders creates value.”
See the conversations and then actions taken in response to Colin Kaepernick by people, political parties, leagues, colleagues, brands and government as well as the social, political and financial capital created as an outflow. Very few of which were intended by the original communications between Mr. Kaepernick and the league.
None of this is to say simple one-to-one exchanges no longer exist—they do. The point is that today, in more and more stakeholder networks, exchange relationships have become complex, meaning they involve more than two parties. More and more businesses now operate in this complex world, but many (most?) still cling to the old —one-to-one—paradigm. They do so to the detriment of more powerful and meaningful relationships because the old paradigm cannot allow an accurate understanding of how the treatment of one stakeholder group or single stakeholder impacts relationships with others.
To thrive in a world full of complex exchanges, organizations must develop a new capability: community or systems thinking— which (in a marketing context) is basically an ability to understand the business’s value stream as well as its ecosystem. Marketers must gain insights into who influences whom and how, and who depends on whom and how. Only then can a business deploy meaningful strategies.
A Drastic Shift in Marketing Is Overdue
Like ecosystems in the natural world that sustain life on earth, social systems are complex. Our communities overlap, interact, expand and contract in ways that are never easy to define or measure. What may be true when observing one group in one environment may be untrue when observing another—even if certain individuals are in both groups! This may paint a picture of an extremely complex environment, but the goal is to at least make the attempt to understand it.
A company that wants to achieve sustainable success today must anticipate the needs of the ecosystem that supports its existence. To do that, brands need to understand the ecosystems they operate within by truly seeing each group of stakeholders as well as their needs, values and interests. Once seen, a map of how these individual communities overlap, interact and engage with the world around them can be visualized. Once this groundwork is laid a brand can begin to converse with their communities authentically, in an improvisational manner, helping them connect their value to the company’s values.
Does conducting stakeholder group mapping increase expectations of marketers and generally make our jobs harder? Without a doubt. But, awareness of the fact that your messages and actions have an effect on the world as a whole is the first step toward participating as a member of a global community, not to mention correcting the wrongs of the many marketers who have come before.
Brands capable of making this shift in perspective have found themselves supported by their communities (Ben & Jerrys, Patigonia, Clif Bar). Brands that don’t will make it hard on themselves in the short term and even harder on their reputations, communications efforts and bottom line in the long term.
To learn more about applying these learnings in your organization, check out our workshops or drop us a line at firstname.lastname@example.org.