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NSM Focus | Stakeholder marketing: the customer isn’t the only one who’s right

Bas Hillebrand has been working at the Nijmegen School of Management for almost twenty years. At the beginning of this year, he was appointed Professor of Marketing Management and Innovation. FM Focus spoke with him about the current situation in his field and was given a mini-lecture about stakeholder marketing, the strategy for which Hillebrand and his colleague Paul Driessen laid the basis.

Bas HillebrandLet’s start with an example. If you are going to travel, you can use Airbnb to book a stay ‘in someone’s home’. Airbnb has been enthusiastically used since it was founded in 2008, but it has also recently been the subject of quite a bit of negative media attention. The media have been writing about excessive tourism, complaining neighbours, dishonest competition, a shortage on the housing market and how it is impossible for municipalities and safety services to keep an eye on the properties being rented.

Airbnb has been receiving criticism because it didn’t consider all its stakeholders, explained Professor Bas Hillebrand. “The company failed to take a number of parties into account and is now under fire for that.” Together with his colleague Paul Driessen, Hillebrand wrote a scientific article in 2015 in which they argued for exactly this point: don’t think just about your customers when you market an innovative product or a new service, but consider all your stakeholders. You actually need all of them to be successful. Hillebrand and Driessen’s article gave an important impulse to this new-wave marketing that is gaining an increasingly larger following worldwide.

Broaden your perspective

Hillebrand quickly sketched the history of his field. “Starting in the 1950s, marketing focused for three decades on the classic four Ps: product, price, promotion and place. To put it simply, you have a product, you put a price tag on it, you advertise it and you wait until buyers appear. Then in the late 1980s and early 1990s, we saw attention being given to the longer-term relationship between supplier and customer. And ten years after this, the strategy was directed at creating value together, the customers were more than just passive consumers.” As usually happens in science, people are expanding this last perspective, as are Hillebrand and Driessen, for example, whose article put them at the birth of the stakeholder-marketing strategy.

Think carefully

“We expand the focus by looking at the whole ecosystem in which an organisation operates. That’s much more realistic – and a lot more complex. By weighing the interests of all your stakeholders, you have to ask yourself a lot of questions. How much authority do you want to give them? What information do you want to share? What are the consequences of this?” An example of how things can go wrong: in an online poll, an American manufacturer of soft drinks asked consumers to suggest a new name, which people could vote on. One of the suggestions was Hitler did nothing wrong. “Of course, that’s not a name that a manufacturer would seriously consider, but it illustrates that you have to think carefully in advance about how much room you give your stakeholders.”

Accept your responsibilities

The stakeholder-marketing strategy is in line with two contemporary developments. “First, the impact of IT and social media. We are in contact with one another more frequently and more easily. We can easily share information with one another, which makes the world smaller. Organisations are thus forced to enlarge their perspective. They just as much have to listen to the less powerful voices because they too make themselves heard on Twitter and Facebook.”

The second development regards the concept of responsibility in the broadest sense of the word. “Society increasingly demands that companies behave responsibly. Consumers, governments and interest groups want to know who has made a product, under what conditions and at the expense of what resources. You have to take these questions into account in your marketing decisions.” And you also have to make sure that you are flexible. “Your network or ecosystem of stakeholders isn’t a static entity; they themselves all have stakeholders, and everyone and everything reacts to one another. So you can’t completely plan your marketing strategy in advance. You have to be flexible, dare to make mistakes because you can learn from them; you go through an adaptive process. That requires a very different way of thinking than what many organisations and companies are used to.”

Keep up with developments

The new perspective also necessitates new material for the curriculum. “My colleagues and I and our PhD candidates are working on various research projects on the opportunities and pitfalls in stakeholder-marketing strategy. We will use all the knowledge we gain and the articles that we write in our teaching material. This means our lectures are very up-to-date. We see that students really appreciate this.” Hillebrand hopes that alumni will also want to remain informed on the latest marketing developments. “If there’s enough interest, we could think about follow-up days, for example, or postdoc courses.”

Stakeholder awareness, responsibility, assuming your responsibility on all fronts – this is fully in keeping with what Business Administration at Radboud University stands for, Hillebrand concluded. “As we teach our students, you’re not here on earth only for your stakeholders. There are more parties to be taken into account, even interested parties whom you aren’t even yet aware of, such as future generations. It’s precisely that social aspect that I so value in Nijmegen and at this university.”JvdB