Managing Customer Experience and Relationships: A Strategic Framework 4th Edition by Martha Rogers T
- “Learning Relationships” with customers can best be described as ___________________________________.
- “Relationships that get smarter and smarter about an individual customer’s needs, as the customer continues to use and interact with the brand.” Not to be confused with database marketing or “target” marketing.
1. Describe the difference between market share and share of customer.
*The amazon.com/Barnes & Noble story serves to illustrate the fundamental difference between a very well-run product-oriented company (Barnes & Noble, which has stores to populate with products and tries to find customers for those products) and a fairly well-run customer-oriented company (Amazon.com, which got us all as customers to buy books and DVDs, and now wants to sell each of us everything).
In Exhibit 1.3, the horizontal bar can be thought of as an enterprise’s market share—the proportion of total customers who have their needs satisfied by a particular enterprise, or the percentage of total products in an industry sold by this particular firm. But the customer-value enterprise focuses on share of customer— the percentage of this customer’s business that a particular firm gets—represented by the height of the vertical bar.
A correct answer could be a drawing of the horizontal/vertical bar chart (that is, Exhibit 1.3) or just the narrative description.
2. Name at least three ways a customer-focused business model is different from mass marketing.
1.__________________________________
2.__________________________________
3.__________________________________
* The principles of a customer-focused business model differ in many ways from mass marketing. Specifically:
- The aggregate-market enterprise competes by differentiating products, whereas the customer-driven enterprise competes by differentiating customers.
- The traditional, aggregate-market enterprise attempts to establish an actual product differentiation (by launching new products or modifying or extending established product lines) or a perceived one (with advertising and public relations). The customer-driven enterprise caters to one customer at a time and relies on differentiating each customer from all the others.
- The traditional marketing company, no matter how friendly, ultimately sees customers as adversaries, and vice versa. The company and the customer play a zero-sum game: If the customer gets a discount, the company loses profit margin. Their interests have traditionally been at odds; the customer wants to buy as much product as possible for the lowest price, while the company wants to sell the least product possible for the highest price. If an enterprise and a customer have no relationship prior to a purchase, and they have no relationship following it, then their entire interaction is centered on a single, solitary transaction and the profitability of that transaction. Thus, in a transaction-based, product-centric business model, buyer and seller are adversaries, no matter how much the seller may try not to act the part. In this business model, practically the only assurance a customer has that he can trust the product and service being sold to him is the general reputation of the brand itself.
The central purpose of managing customer relationships and experiences is for the enterprise to focus on increasing the overall value of its customer base—and customer retention is critical to its success. Increasing the value of the customer base, whether through cross-selling (getting customers to buy other products and services), upselling (getting customers to buy more expensive offerings), or customer referrals, will lead to a more profitable enterprise. The enterprise can also reduce the cost of serving its best customers by making it more convenient for them to buy from the enterprise (e.g., by using Amazon’s one-click ordering process or online banking rather than a bank teller).
And although technology accelerates customer relationships, it is not the same as building customer value. While one-to-one customer relationships are enabled by technology, executives at firms with strong customer relationships and burgeoning customer equity (CE) believe that the enabling technology should be viewed as the means to an end, not the end itself. Managing customer experiences and relationships is an ongoing business process, not merely a technology.