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THE CUSTOMER STRATEGY

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The most profitable capital for today’s company is not money…it’s the customer. Gathering information about them has become big business, yet NO ONE has a finite answer to the question “Who is she/he”?

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  • Thank you so much as always for your commentary Michele!! You are absolutely correct!
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  • We need to approach customers as B2B companies would do: gathering data at every interaction fro every touch point. We need to share the information and make people accountable for this activity. Although I'm not enthusiastic about the idea, we may eventually reward our employees for gathering and sharing relevant information about customers with the rest of the company. Most of all, though, we need to change the sales culture that tells us that customers' info are a personal asset of sale people. This needs to belong to history. Finally, we must accept that some information about our customers are going to remain concealed to our eyes: it all depends on what the sales person decides to share with the rest of the company. And that's fine.
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THE CUSTOMER STRATEGY

  1. 1. “The Customer”…who is she/he? Andre’ Harrell CEO/President AH2 & Beyond Consulting Whitepaper 2015 1
  2. 2. Contents I. INTRODUCTION....................................................................................................................4 II. EVALUATING “BIG DATA”.....................................................................................................4 Big Data “Bankruptcy” .........................................................................................................5 III. WHY DID YOU BUY THAT?....................................................................................................6 Do We Really Need That?.....................................................................................................7 IV. HOW DO YOU KNOW YOUR CUSTOMERS ARE LOYAL?.........................................................8 V. “INSPIRING CUSTOMERS”….a business incompetency........................................................10 “Customer Voice” ..............................................................................................................11 VI. CUSTOMER BEHAVIOR IS KEY.............................................................................................12 The “Decision-Making” Process..........................................................................................13 VII. CUSTOMER “COMMITMENT DRIVERS” ..............................................................................15 VIII. “THE CUSTOMER”…who is she/he?....................................................................................16 REFERENCES..............................................................................................................................18 FIGURES....................................................................................................................................18 2
  3. 3. “IT IS NOT THE EMPLOYER WHO PAYS THE WAGES. EMPLOYERS ONLY HANDLE THE MONEY. IT IS THE CUSTOMER WHO PAYS THE WAGES.” Henry Ford 3
  4. 4. I. INTRODUCTION The most profitable capital for today’s company is not money…it’s the customer. Gathering information about them has become big business, yet NO ONE has a finite answer to the question “Who is she/he”? The current business landscape tells us that “Big Data” is key and that these golden analytics will map out the “emotional” and “rational” drivers that influence customers’ perceptions and usage of a particular product. The challenge with big data is that it’s big data. Understanding what’s in the mind of a customer is comparable to a “Tarot Card Reader” telling you what your future holds…both have validity issues. This is not to say that big data is pointless or invalid but there is a “paralysis by analysis” consequence if the information gained by such research is interpreted incorrectly. In this age of “Digital”, “SEO”, “Lead Generation”, “Customer Centricity” and all the other catchy business nomenclatures out there, I don’t know how anybody can truly decipher what metric or process truly gets at the crux of understanding what’s in the mind of a customer. I’ve longed believe that all that “STUFF” misses the mark and that it really boils down to “Customer Behaviors”, which I’ll further discuss a little later. One of the things to remember is that we’re all “consumers” in some sort of way so it stands to reason that you are currently standing in the shoes of your customers. Why is understanding them any different than understanding yourself? II. EVALUATING “BIG DATA” To reiterate, there’s absolutely nothing wrong with “Big Data” and its utility, however, it’s how the utility of “Big Data” is being applied. Company’s fork out staggering amounts of money to gather data they think is going to either get them access to customers or identify what is in their head. Further examination on what big data can tell us and “HOW” we use such information needs to be explored. Kimberly Whitler contributor to Forbes Magazine interviewed Tim Suther (Chief Marketing Officer for Acxiom) in 2013 on “What Marketers can do to manage and leverage Big Data”, below captures some of the commentary: Question: Marketers understand the importance so there must be barriers that make it exceptionally difficult to invest in generating, understanding, and using data. What are the big barriers? (Tim Suther) “There are several barriers that marketers are faced with that seem to be hindering their ability to fully leverage the value of data. Some of these are within marketers’ control and some are not”. 1. There is so much data and so many options regarding what to collect and how to analyze it that marketers don’t know where to start. 2. Some CMOs / marketers simply don’t have numerical literacy and aren’t comfortable with math, stats, or sophisticated analysis. 3. This is related to the last point. Some CMOs simply favor the artistic side of marketing. This can be based on skill or preference, but for these CMOs, it’s more of a choice. 4
  5. 5. 4. The most systemic challenge is the fact that there is such an emphasis on short-term results that it can prevent organizations from making the necessary investments today to lay the foundation for superior results that may take a year or more to come to fruition.1 Conversely, Mr. Suther speaks to the reason why Marketers should care about “Big Data: “Data is the missing link between marketing actions and results. For two decades, writers have been talking about the need for marketers to “prove” themselves. Data enables this to occur. There is a half- trillion marketing dollars spent around the world and a significant amount of it is wasted: nearly 40% according to Rex Briggs’ research. A substantial reason is due to a lack of data or disconnected data that inhibits insight and measurement. Not only does data enable marketers to be more effective and efficient, but it provides the platform to be able to prove it.”2 As Mr. Suther points out while there’s sufficient reason to have enough adequate data, it’s important that the data doesn’t inhibit insight or measurement. Right from the outset I’m hoping we can agree that with any data whether it’s big or small, it comes down to how it’s interpreted. When we examine “The Customer” there are certainly many particles one can look at through a microscope, and with the massive amounts of data we have to sift through to understand each particle it begs the question is “Big Data” paralyzing? My answer emphatically is possibly however again this is not to promote its non- use….just better intelligent use. Studying the data can be insightful, but if the analysis doesn’t yield actionable strategies in real-time – customer behaviors/interactions – the analysis can easily become just another report that weighs 10 pounds and collects dust on a shelf. Big Data “Bankruptcy” It is incumbent of today’s marketer to practice a little inertia when it comes to deciding on whether to purchase and operate big data. Prudent questions would be “Why are we providing financial resources in it”? “What are we expecting to receive”? “What are we going to do with the information”? Critical question “How can we leverage such information across the entire organization, and do we have the internal infrastructure (e.g. technology, personnel, leadership support) to accommodate the data”? As explained by Richard H. Level (“How to Avoid Big Data Analysis Paralysis”-Chief Marketer 2012): 1 Kimberly Whitler (contributor Forbes Magazine) “What Marketers can do to manage and leverage Big Data” 2013 2 Kimberly Whitler (contributor Forbes Magazine) “What Marketers can do to manage and leverage Big Data” 2013 5
  6. 6. “Purchasing massive amounts of data also contains hazards. Marketers rarely use all the data they acquire when they get it, and the information begins to decay the moment it arrives. Furthermore, most organizations lack the latest marketing technologies needed to synthesize the data and optimize it for real-time customer interactions — whether on the phone, online or at the point-of-sale. Companies also often purchase unrelated data elements that address specific segmentation attributes or one-off campaign needs, but don’t have a way of meaningfully linking these data pieces for future use.”3 Speaking for myself and I’m sure many of you will agree that as human beings we are not the most competent at managing the ridiculous amounts of data that is produced today. Little later in this paper I’ll be discussing more efficient ways to look at “VOC” data and the use of “Customer Commitment Drivers” to avoid “information meltdown”. III. WHY DID YOU BUY THAT? Have you ever said to yourself “Why did I buy that”? Well, you’re not alone and probably at this very second somebody has just purchased something mumbling to them self that same quote. Yes, we’re all inspired by different things and for different reasons but the commonality with you and I is our behavior toward what inspires us…is that single behavior. Determining that “single behavior” is the puzzle. The overall goal is to try to uncover the powerful yet hidden forces that shape customers’ attitudes, beliefs, motivations and behaviors. Examining the cultural drivers that mold how customers think and navigate choices, including understanding their belief systems particularly as it pertains to their behaviors are fundamental to uncovering the question “The Customer”….who is she/he? 3 Richard H. Level (“How to Avoid Big Data Analysis Paralysis”-Chief Marketer 2012) Figure 1 (Tom Fishburne @marketoonist.com) 6
  7. 7. Do We Really Need That? One of the challenges is the uncertainty of “Why” customers make particular decisions, which moves us into the realm of “Needs”, does the customer need a 90-inch flat screen TV or will a 70-inch suffice? So, the work comes in determining which bucket of “Needs” does the customers’ behavior derive from? Dr. Maslow states the complexity in his research “Human needs are relatively fluid—with many needs being present in a person simultaneously”4. This poses a particular conundrum for marketers because depending on the situation you may have specific needs intermingling at one time…and addressing that will take precision. From a marketing perspective your ability to effectively appeal to one of these I call “inspirational” drivers is a key determinant of your brand success. For example if we look at non- essential services such as – personal training or custom tailoring these may be campaigned successfully towards the levels of “Self Esteem” and “Self Actualization” of Maslow's hierarchy because that clientele are driven by personal fulfillment. That very same campaign may not inspire those who are driven by basic needs: food, water and other elements of survival. If we look at this practically let’s say a company like Volvo who over the years has consistently “driven” (pardon the pun) the message of “Safety First”, customers who fall into Maslow’s 1st & 2nd level (Safety/Psychological) will be attracted to Volvo’s message. Customers inspired by things that will uplift their “Self-Esteem” may feel the Volvo brand is corny. It’s very simple, “Identify”, “Connect”, and “Provide Solution”, the tricky part….getting those customers to come to YOU. 4 Maslow, A. H. (1943). "A theory of human motivation". Psychological Review 50 (4): 370–396. Figure 2 (Maslow’s Hierarchy of Needs) 7
  8. 8. IV. HOW DO YOU KNOW YOUR CUSTOMERS ARE LOYAL? Is there such a thing as a “Loyal Customer”? After spending hours trying to research the definition of a “Loyal Customer” this is what I found: “Loyal customers make repeat purchases. Loyalty often refers to a customers’ commitment to repurchase or otherwise continue using a particularly brand by repeatedly buying a product or service. This is one of the easiest traits to pick up from your loyal customers”.5 In context I think the above definition is correct in that it does capture the consistent “Behavior” of someone you’d consider a “Loyal Customer”, however I’m not sure that is complete. Determining one’s loyalty to a particular brand I feel is a bit deeper. When it comes to loyalty it’s much more than repeating the same behavior because an individual can actually stop buying APPLE’s “IPhone” replace it with Samsung’s “Galaxy”…..only to later go back to the “IPhone” without having any problems with the “Galaxy”. Loyalty which derives from a strong feeling of support and allegiance to someone/something has more of a connection to INSPIRATION…than repeated behavior in my humble opinion. We’ve seen many examples where inspiration was the primary source for loyalty and for a variety of reasons just fizzled out. One well known American company is experiencing you might call an “inspirational deficit”: J.C. Penney is a retail chain of American mid-range department stores which its home base is located in Plano Texas. There are approximately 1,107 outlets in the 50 U.S. States and Puerto Rico. You can find most of the J.C. Penney outlets located in shopping malls located usually outside the city. The gentleman “J.C. Penney” was a very successful retail businessman in Missouri who in 1902 founded the legendary retail chain that sells a wide variety of products. Mr. Penney strongly believed back then that stores should be run with honesty and a deep respect for the customer, at that time that was an inspirational message to the consumer. Now with over a century of providing quality products with honesty and deep respect for the consumer as its vision…everyone is asking where has the “loyal” J.C. Penney customer 5 Client Heartbeat- “5 Traits Of A Loyal Customer You Can’t Afford To Miss” ( July 18, 2013) Figure 2 (JCPenney Logo) 8
  9. 9. gone? Has the inspiration left? Ashley Lutz from Business Insider (April 22, 2012) compiles some facts that explains the retailer’s decline: “10 Mind-Blowing Facts About J.C. Penney’s Epic Decline”6 • 19,000 employees have lost their jobs when Ron Johnson was CEO, the result has left J.C. Penney understaffed and unable to assist customers well. • J.C. Penney lost $985 million in 2012. Heavy investing and declining sales the culprit. • J.C.Penney lost customers under previous CEO Ron Johnson because his strategy entailed getting rid of the sales and promotions that long-time customers loved. J.C. Penney hasn’t recovered from those decisions. • J.C. Penney continues to run through cash to stay afloat, having difficulty maintaining a consistent balance sheet. • Comparable stores have experienced losses, which doesn’t bode well for the market J.C. Penney competes in. • J.C. Penney’s inability to cash in on the E-commerce platform which is growing is a bit disconcerting. • Most regional stores and categories at the company are producing negative sales. • The company has been losing cash since 2008. • The company's share price has tumbled 60% in the last couple of years • Sales per square foot at J.C. Penney continue to decrease which is taxing overall profits. Somewhere along the transition from Mr. Penney’s dream of running an honest business that places the customer’s needs first got lost. Now, to be fair every company in order to be successful has to evolve so it’s unrealistic to expect the J.C. Penney of today to have the “mom & pop” feel of yesteryear. However, it appears J.C. Penney lost that most important ingredient that made them the #1 retail chain for many years…yep, inspiration. J.C. Penney’s has fallen into the familiar trap most gargantuan companies find themselves in and that’s focusing just on profits and not the customer. Certainly having shareholders & Wall Street at the corporate office doors with pitchforks doesn’t help, however corporate leaders cannot lose site that their ultimate “boss” is the customer. An inspired customer is a loyal customer 6 Ashley Lutz Business Insider (April 22, 2012): “10 Mind-Blowing Facts About J.C. Penney’s Epic Decline” 9
  10. 10. V. “INSPIRING CUSTOMERS”….a business incompetency “Customer Segmentation”, “Customer Engagement”, and “Lead Generation”, is the business industry’s customer nomenclature rage. There’s absolutely nothing wrong or that I’m implying these business “verbs” are invalid, on the contrary they’ve shown to be very useful in collecting data on the customer. My question, are we spending more time thinking up colorful business phrases and collecting data versus “inspiring” customers? Thanks to a 5 year-old company based in Atlanta Georgia by the name of “Performance Inspired” who claims to have a process that identifies which companies truly inspire customers, below is the top 10 2014 ranking: 1) Tesla 2) Trader Joes 3) Target 4) Toms Shoes 5) Costco 6) Ford 7) Chick-Fil-A 8) Google 9) Microsoft 10) Amazon Interestingly missing from the top 10 list is APPLE which is currently #14, a significant drop from #1 which they enjoyed in 2012. Performance Inspired the company that conducted the research implemented an online survey that asked respondents which companies they find most inspirational, and why. It also asked them to describe their most recent encounter with each company. The overall objective was to find a correlation between successful companies and those that inspire their consumers. Performance Inspired CEO Terry Barber “We now see there is a validated set of drivers to inspiration and when these drivers are activated, it elevates employee engagement that shows up in the customer experience.”7 As we discussed earlier we know from Maslow’s Hierarchy of Needs customers buy from people they know, trust, and like not far different from how we choose our close friends. “Customer Service”, “Value”, and “Cost” head up the list as being the top 3 most critical parameters, but, I believe there’s one more missing that’s becoming more important…the company’s “VISION”. In our classic J.C. Penney example above somewhere along the way the company lost its vision, which it turn lost the inspiration of its customers. Companies like Tesla that have come on like gangbusters are inspiring customers based on innovation and its creative vision, which APPLE has demonstrated for the past decade. Today’s marketing lingo of “Disruption” is becoming much more than innovation and even creativity, customers are now inspired by a company’s vision and oddly enough how they can be a part of that vision. There’s a reason why the BEST companies spend a great deal of money on “VOC” (Voice of the Customer), getting it from the horse’s mouth sort of speak. Surveys, Focus Groups, Key Opinion Leadership, all strategic ways to get customers involved in the process and the vision. People want to be a part of something that’s going to be great, it’s empowering and inspiring, and the most successful companies like Starbucks/APPLE understand this. 7 Forbes Magazine 2012 (25 America’s Most Inspiring Companies) 10
  11. 11. “Customer Voice” There 3 pieces of information most companies would pay their entire budget/profits on finding ways to influence the customer, those are their expectations, needs, and yes “dreams”. Hitting the trifecta jackpot in uncovering ways to leverage those 3 parameters can make any company competitive. As I’ve mentioned, nothing beats going directly to the customer and asking them what they want, and developing communication channels that stay in consistent touch with customers will help them feel they are a part of the process (e.g. inspired & empowered). Voice of Customer Process: The term Voice of the Customer (VOC) is used to describe customers’ needs and their perceptions of your product or service. VOC data helps an organization to decide what products and services to offer, identify critical features and specifications for those products and services. In addition, decide where to focus improvement efforts, get a baseline measure of customer satisfaction to measure improvement against, and identify key drivers of customer satisfaction. The purpose of VOC activities is to identify the key business drivers of customer satisfaction. There are 2 basic VOC Systems: Typical Reactive Systems  Problem or service hotlines  Customer Service Calls  Sales/Market Share Changes  Webpage Activities  Customer Complaints or Compliments (phone or written) Typical Proactive Systems  Customer Interviews  Focus Groups  Surveys  Comment Cards  Market Research  Benchmarking 1 Identify customers and determine what you need to know 2 Collect and analyze reactive system data then fill gaps with proactive approaches 3 Analyze VOC data to generate a key list of customer needs in their language 4 Translate the customer language into CTQ's 5 Set specifications for CTQ’s Critical-to-Quality (CTQ) requirements 2. Reactive Systems • Information comes to you whether you take action or not • Secondary Data 1. Proactive Systems • You need to put effort into gathering the information • Primary Data 11
  12. 12. Businesses that have consistent contact with their best customers can gather feedback/opinions from those customers on what’s important to them, which is a “Reactive System” process. It’s critical however those companies have a mechanism in place that addresses all feedback in an efficient/organized way, and importantly can optically show the customer their feedback has been addressed. The “Proactive System” is the process that allows for initial contact with customers, for example face-to-face interviews or customer visits. Face-to-face interaction with customers can provide a wealth of data and knowledge that is unobtainable by other means and it’s also effective in observing customer behavior, personality, and energy in real time. If you’re designing an initial targeted customer contact platform to gather information, you should look for ways to integrate your effort with ongoing customer contacts in your organization. For example, request that customer service or the marketing group ask additional questions during regular contact with customers, or see if customers will allow you to observe their workplace during a scheduled visit. This will provide a better understanding of customer, and importantly strengthen the relationship. VI. CUSTOMER BEHAVIOR IS KEY Customer Behavior/Decision Making is the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.8 It’s universally agreed that customer behaviors follow the prescribed tenements of psychological, environmental, cultural, social, and personal influences. Philip Kotler an American marketing author, consultant, and professor at Kellogg School of Management at Northwestern University has put together a thoroughly examined often criticized customer behavior model called “black box”. 8 Kuester, Sabine (2012): MKT 301: Strategic Marketing & Marketing in Specific Industry Contexts, University of Mannheim, p. 110. Figure 3 (Kotler’s buyer behavior model or the “black box” model-Kotler 2009) 12
  13. 13. His architecture of the black box looks at what drives customer behavior when specific stimuli are present to bring about various consumer behaviors, decision making and consumer responses. The challenge I have with Mr. Kotler’s research is that it only looks at customer behaviors after a specific stimulus has been inserted. For example, if a company drastically lowers the price on a particular brand that action alone may cause a specific behavior in this case purchasing it because it’s at a reduced cost. However, that stimulus alone doesn’t guarantee you’ll have a loyal customer, and if you consistently lower the cost of your product you may put yourself out of business. So, there’s still this guessing game on which stimulus is going to catch hold and relying on such things as demographics, psychological, and personal can vary widely depending on the situation. I’ve always believed that companies and marketers need to be extremely flexible in their approach when it comes to a customer, and compartmentalizing their behaviors/characteristics/demographics in a box can be misguided. Hence, the reason for criticism of Mr. Kotler’s “bIack box” customer behavior theory is that it’s too contained and lacks depth. Research has shown that consumer behavior is difficult to predict, even for experts in the field. 9 The “Decision-Making” Process In one of my favorite books (“The Six Sigma Leader” by Peter S. Pande) it talks about “The Law Of The Ignorant Customer” here’s the passage: “I related a story from a workshop with a group of commercial insurance salespeople at GE. In the session, when we got to talking about customer focus and knowing customer requirements, this group immediately started grumbling. The problem: Most of their customers bought insurance based on one factor alone, price. When I suggested that the salespeople would do well to talk about adding value and winning through services, all I got was a lot of glazed expressions. Finally, one member of the group blurted out, “There are a lot of ignorant customers; and almost all of us are ignorant customers.”10 Removing the crude and possibly out of line emotion attached to the comment…there’s a morsel of truth there. Indeed there are challenges and obstacles when it comes to the customer, however on the other side of that is a Pandora Box of opportunities. Every business on this planet while having different experiences of the same problem as the salespeople in the above example had; you will inevitably have ignorant customers, as all of us are ignorant customers. Yes, the customer has access to information pretty much at their fingerprints so it wouldn’t be difficult for them to learn on their own about your products & services. However, I’m sure you’ll agree there are aspects of your product that cannot be explained by a stroke of a computer key. Therefore the “Education” that you provide over and above what’s located on your website becomes the engagement factor to your customer. This education is achieved in a number of ways: 9 J. Scott Armstrong (1991). "Prediction of Consumer Behavior by Experts and Novices". Journal of Consumer Research (Journal of Consumer Research Inc.) 18: 251–256. doi:10.1086/209257. 10 Peter S. Pande (2007) The Six Sigma Leader “How Top Executives Will Prevail in the 21st Century 13
  14. 14. • The “Customer Experience” in which the customer has never purchased your product or service before and is determining what’s important so he or she can make a good choice. • “Grassroots Referral”, customers have access to information on your products and services however providing those testimonials, feedback grading scales from others fitting your interests are another education point. • Bringing in “Product Champions”/”Key Opinion Leaders”, those who have had great experiences with your products & services and can provide objective feedback based on usage experience. • Develop an engaging “Sales Team” who are knowledgeable, supportive, and customer service savvy that can provide “interaction value” to the customer. The decision making process of a customer is probably single-handily the most challenging but critically important behavior companies need to understand. Some experts on the subject will argue that the decision making process of customers is started from a “Pain Point”. In other words a problem exists and the behavior from the customer is to relieve that pain problem. This is illustrated below: A basic model of consumer decision making by Belch et al (2012) The graphic suggests there are 5 stages customers go through when purchasing a product or service. Each of the stages coincides with corresponding psychological dimensions that address each decision in that particular stage. As mentioned the stages in the customer decision making process starts from a “Pain Point”, when a customer sees a need and becomes motivated to solve the problem. Once again like Kotler’s Black Box model, the Consumer Decision-Making model compartmentalizes the decision making process when consumer behavior is much more fluid. Not every decision we make is based on a problem or pain point…it could be from indifference or satisfaction. For example we see this in commodity markets where there’s not much differentiation from product to product in terms of features & benefits. How do you address markets that aren’t dissatisfied or have pain points to leverage from? The decision making process that we all go through on a day to day basis is not that cut and dry where there’s always a problem, markets are flooded everyday with what’s called “me too products” that can fulfill a problem but aren’t necessarily chosen based on their problem solving attributes. Figure 4 Belch et al. (2012) Consumer Decision-Making Model 14
  15. 15. VII. CUSTOMER “COMMITMENT DRIVERS” Because “value” is subjective, the words we as marketers use and the actions we take to describe our products & services can have a tremendous impact on how they are perceived by the customer. Marketers should always ask themselves the following questions: • How can we describe what we’re sharing right now to maximize its perceived value? • What value do I want the customer to focus on during the interaction with our product? • How can we inspire the customer to become long time users of our product(s) and if possible advocates? The unfortunate yet fortunate opportunity for today’s marketer is that most people cannot handle the virtual flood of information coming at them and unconsciously screen information. Social science research indicates that when people don’t have enough time or data to make decisions in their usual fashion, they take predictable “shortcuts”. Customers use these shortcuts in their decision-making process in order to maintain their hectic schedules. “Commitment Drivers” are ways marketers can take advantage of these shortcuts and delve into the customers’ natural thought process. There are six Commitment Drivers: 1. Scarcity— 2. Deadline— 3. Authority— 4. Conformity—5. Bargain—6. Competition 15
  16. 16. When you understand decision-making shortcuts used by a customer, you can use them to shape value around a product or service. The 6 different commitment drivers when used consistently can increase the frequency of product/service messaging that tie into the various behaviors/decision-making of customers. As we discussed earlier it is very difficult to place customer behaviors and their decision- making in a box, both parameters are fluid and require flexibility in determining how and why they may choose a product or service over the next. An evaluation of which commitment driver to use in a given campaign, a marketer may use an application check list to help their decision on which of the 6 commitment drivers to implement. That check list could include the following questions:  Based on what I know about the customer, which of the commitment drivers might work best?  How can I use “Framing” to create a sense of competition, scarcity or bargain around my value- add?  What ways might I create a sense of urgency in the mind of this customer?  How might I appeal to a respected authority or create a sense that “everyone is doing it” to motivate commitment?  How might I combine two or more commitment drivers to create even more motivation for a customer to take action? To be clear “Commitment Drivers” are only effective when used in the most non-manipulating way. Certainly many advertisers have used “Commitment Drivers” to coerce and manipulate customers in order to get their business; we’re all familiar with the “Going Out Of Business Sale”…only to see the business never actually going out of business. “Commitment Drivers” can expose a company’s nefarious use of them and that’s why when properly used with integrity can provide significant value to the customer. VIII. “THE CUSTOMER”…who is she/he? In determining who the customer is it can only be explained in one word… capricious. Capricious, a politically correct way of saying bipolar, schizophrenic, or unpredictable. The one constant is that there’s no constant when it comes to really knowing who the customer is, and perhaps it’s better to look at ourselves when evaluating who the customer is and what and why they want. As communicated throughout this brief we are all customers and having a sense of self of why we make the decisions we do in purchasing a product or service, can provide a tiny GPS look at why customers behave as they do. Even with that said we can agree that a flexible and buoyant strategy is a must whether it includes voice of customer research, segmentation that relies on behavior rather than attributes, or driving behaviors through the use of commitment drivers, the strategy has to address the fluidity of the customer. 16
  17. 17. Objective What do we want to know? Perhaps a skeleton process such as the one illustrated below can provide a roadmap to understanding what’s in the head of a customer: Gather Data (Use process most relevant to objective) Diagram Conclusions (Hypothesis about customer needs, expectations Requirements, trends, refine hypothesis based on additional data testing) Communicate Take Action Respond to updated knowledge about customers. Examples could include: • New or changed requirements • Revised pricing • Updated marketing messages • New product/service ideas • Improve or design projects, etc While the above diagram shows a systematic approach to gaining an understanding of the customer and what they want, it still provides room for a flexible strategy that validates assumptions based on real time data. Customers like yourselves can be very fickle and perhaps building a malleable plan that incorporates a more competent view of “Big Data” (e.g. “VOC”, Customer Behaviors-Real Time) can illicit great results in understanding the customer. Companies really miss out on opportunities to use every- day observation of customer behaviors that could offer significant insights. Test Initial Conclusions (Hypothesis) Response Assessment, Ongoing VOC 17
  18. 18. REFERENCES Ashley Lutz Business Insider (April 22, 2012): “10 Mind-Blowing Facts About J.C. Penney’s Epic Decline” Client Heartbeat- “5 Traits Of A Loyal Customer You Can’t Afford To Miss” ( July 18, 2013) Forbes Magazine 2012 (25 America’s Most Inspiring Companies) J. Scott Armstrong (1991). "Prediction of Consumer Behavior by Experts and Novices". Journal of Consumer Research (Journal of Consumer Research Inc.) 18: 251–256. doi:10.1086/209257. Kimberly Whitler (contributor Forbes Magazine) “What Marketers can do to manage and leverage Big Data” 2013 Kimberly Whitler (contributor Forbes Magazine) “What Marketers can do to manage and leverage Big Data” 2013 Kuester, Sabine (2012): MKT 301: Strategic Marketing & Marketing in Specific Industry Contexts, University of Mannheim, p. 110. Maslow, A. H. (1943). "A theory of human motivation". Psychological Review 50 (4): 370–396 Peter S. Pande (2007) The Six Sigma Leader “How Top Executives Will Prevail in the 21st Century Richard H. Level (“How to Avoid Big Data Analysis Paralysis”-Chief Marketer 2012) FIGURES Figure 1 (Tom Fishburne @marketoonist.com)........................................................................................6 Figure 2 (Maslow’s Hierarchy of Needs)...................................................... Error! Bookmark not defined. Figure 3 (JCPenney Logo).........................................................................................................................8 Figure 4 (Kotler’s buyer behavior model or the “black box” model-Kotler 2009) ....................................12 Figure 5 Belch et al. (2012) Consumer Decision-Making Model..............................................................14 18
  19. 19. Andre’ Harrell AH2 & Beyond Consulting http:www.ah2andbeyond.com aharrell2000@comcast.net andre.harrell@ah2andbeyond.com 267-221-8529 19

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