Co-creating customer relationships by Wim Rampen

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An E-book with a collection of the best posts on my blog from the past 3 years.

Please check out wimrampen.com for more.

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Co-creating customer relationships by Wim Rampen

  1. 1. CO-CREATINGCUSTOMERRELATIONSHIPSThoughts, Explorations & Concepts for CustomerDriven Marketing & Service Innovationby Wim Rampen 1
  2. 2. IntroductionBy Wim RampenI’ve been thinking about writing a book Chapter three is where the meat is. This isseveral times. And this time I thought I’d about Social CRM and how I think aboutdo something about it. As it seemed Customer Relationship-building in the age ofsensible I started reading through the past Service and Co-Creation. If you’re looking forthree years of blog-posts that I’ve written. my persepective on technologicalHaving done so I decided I might as well developments you will be dissappointed as Ishare the ones I like best with you in a discuss Social CRM on a conceptual anddigital booklet. company strategy level.This booklet has four ‘Chapters’. The last chapter (four) contains two posts in which I bring together my thinking from the pastThe first chapter discusses Value. You can two years. The first one is on Service, theread all about adding value, offering value, value second one on Marketing. Both are quite longchains, value netwroks and even creating value. and have received lots of compliments,It can well be one of the most used words in retweets, referrals and comments. They toobusiness publications, but only very few seem have been the basis for several presentationsto be worried about what it means, and how and key-notes that I have conducted over thevalue can be a used on a conceptual level as to past year or so.make it framework one can use in a businessenvironnment. Since ‘Value’ is also used a lot in I consider this booklet my personal resource, amy blogposts, I thought I’d share with you how well of inspiration for writing my book and anI think about the concept in the first Chapter. important way to to collect feedback from you as to whether the idea of writing a book makesChapter two, a short one, contains two posts any sense ;)on The Net Promoter Score (NPS). Two lightreads to express my love/hate affair with Enjoy reading & please let me know what youmetrics in general and NPS in specific. think at http://wimrampen.com 2
  3. 3. Chapter I. Value Defined...or not actually...By Wim RampenPeople who know me through my writing, One of the most important notions about value,know that I’m very interested in to me, is that it can only be determined by itsunderstanding ‘value’. Make no mistake: beneficiary. I once used the example ofI’m not talking ‘valueS’. That’s the field of watching a football game with friends in a bar.thinkers like Umair Haque and many Although, from an external perspectiveothers following his footsteps. Even everyone had exactly the same experience, weMichael Porter, the value chain guru, has all know that everyone will tell a different storycome entered the debate with a plea for the following morning.Shared Value(s). And that is the case with all products andNo, I’m talking about the value Customers services we consume (or better: experience):derive from the products and services we, the we all experience in a different way. Hence,companies, provide. And if you know me really value is a very personal state of mind, awell, you know I don’t think in terms of perception of what is expected or has been‘extracting, getting or deriving value from’. I created.think in terms of value as being co-createdbetween Customers, firms and potentially many This Chapter contains three posts, amongst theother participants. More about that later in this most popular of my blog over the past years.booklet. Thank in advance for reading. “Value can only be determined by its beneficiary” Steve Vargo and Robert Lusch - A Service Dominant Logic 3
  4. 4. To Be A Value (Call) Center is Not Your ChoiceBy Wim RampenOver the past years most companies have "Deployment of a Value Center strategy will onlyrecognized the contact center or customer have a chance to meet the desired result if oneservices center as an important touch- can leave behind Cost Center methodologiespoint between the company and its and metrics"Customers. Becoming a Value Center is not about choosing[...] I very much welcome the interest of to upsell or cross-sell when you want it.Marketing (and Sales) for the call center Becoming a Value Center is also not somethingenvironment as much as I do the attention for one can decide to be by itself. Let theimprovement of the Customer Experience. Customer be the judge of how much value is created through the Customer ServicesThe main strategy of call centers has been to Experience, let the customer decide if your Calldevelop itself from a cost to a value center. Center is a Value Center!From a terminology perspective this works forme, but the practice, in my opinion, is mostly Call Centers are an important touch-point in thefocused on single value creation or value Customer Experience. It is also not the onlyextraction. Let me explain my thoughts: point a Customer will touch in its lifetime. The design , delivery and decision making aspectsThe main elements of the cost to value-center within the Call Center change if a companystrategy have been focusing around generating thinks and manages the contacts as part of aadditional sales, through up- and/or cross- lifetime of Customer interactions. [...]selling. [...] Some pro-active companies areaiming to improve the customer experience Thus, to conclude, I believe the best way to gowith things like welcome calls or any other form is not with a cost-centered, not with a profit-of courtesy calls (generating another sales- centered and not with a flawed value-centeredopportunity). approach. The best approach to Customer Services Call Centers is the Customer-centeredIm a firm believer in the great opportunities for approach.value creation there are on the customerservices touch-point. I also see that, in lots ofcases, after a promising first starting year, Deployment of a Valuecompanies forget that value-creation is not onlyabout extracting as much value possible out of Center strategy will onlythe Customer into the company. Hence have a chance to meet thecompanies start increasing the sales-targetsand more importantly, they start increasing the desired result if one can"sales-per-hour" target, which is just anotherproductivity metric not aimed at customer value leave behind Cost Centercreation. Which leads me to the following methodologies and metricsstatement: 4
  5. 5. "A brand doesnt know what it is unless it knows what its customer is. Thats why smart organizations focus on strengthening relationships with actual customers, and not on the independent creation of content and attention." Tom Asacker - A Clear EyeValue is Always Co-CreatedBy Wim RampenOne of the fundamental flaws in thinking can’t do that job without themselves.. Indeed,about value is based on the persistent themselves:logic that value is something you add, orprovide. I’ll try to explain why and how you Customers can only create value forshould think about value creation instead. themselves WITH themselves..Value is not derived from your product, but If it weren’t for yourself, how would you be ablecreated with your product to make a phone call? How would you be ableIt’s persistence is shown e.g. in the way we to make dinner? How would you be able tothink about value chains. It is vested thoroughly enjoy it with your friends? How would you bein our minds that each step in the production able to use your satellite TV? How would you,and delivery of goods or services is about well …. basically get anything done? I think youadding value, whilst at best it is about adding get my drift here. And although it soundsknowledge, features or capabilities. None of incredibly logical, this is not the logic mostthese elements are creating value for the companies use when designing experiences orCustomer though before they are consumed or targeting new Customers.used. Ignoring the Customer’s roleAs a consequence today’s marketers continue Most companies (their marketing departmentsto focus on explaining to (potential) Customers in particular) are stuck in telling Customers whatwhat value they are providing or adding. Firms value for their money they get, based on theseem not to understand that the other side of flawed thinking that the Customer derives valuethe table is not deriving value FROM the from the product itself. Yet, they are completelyproduct. The other side is trying to get a job ignoring the Customer’s role in the process ofdone and your product or service is a means to value creation.that end, thus they are creating value WITH theproduct. And – this is really important – they 5
  6. 6. Value is Always Co-CreatedContinued...By Wim RampenWhen they should be thinking how to further answer similar questions, yes. But dominantly inenable the Customer’s value creating the context of selling goods or services (howcapabilities, they are thinking of how to capture can we make buying easier?). Too few askvalue from the Customer. Which in essence themselves these questions in relation to thethey ask in return prior to the value being Customer’s experience when consuming thecreated. (yes, most purchases are actually pre- goods or services.payments). Why? What could be, if you would truly Because value only comes to life when understand? Customers are using the product or Imagine if you would understand what service. “resources” Customers bring to the table to create value, beyond the product or service youOnce you understand that the Customer has an provide? How powerful would thatimportant, even decisive, role in the process of understanding be? What if you wouldvalue creation, and that value is only created in understand that better than your Customer’suse, it is not a quantum leap to the next stage: alternative suppliers? What would happen if youasking yourself what Customers need to do, in could support your Customers creating value inorder to be able to create the value they are a more easy, better or quicker way, not justafter. Asking yourself: What do they need to make them buy in a more easy, better orknow, understand, be able to? (and I’m not quicker way?even touching upon the contextual andemotional side of value creation here). Or taken Would that not provide you with the competitivefrom the opposite angle: what is hindering advantage you want? Would that not create thethem? what don’t they have? what don’t they advocates you want? Would that not allow youunderstand? what can’t they do? and how to capture higher margins over a longercome? Customer lifetime?Many in the area of marketing, Customer I think so..experience or even Service design, try to Most companies (their marketing departments in particular) are stuck in telling Customers what value for their money they get, based on the flawed thinking that the Customer derives value from the product itself. Yet, they are ignoring the Customer’s role in the process of value creation. 6
  7. 7. Value Co-Creation CanvasBy Wim RampenIm a big fan of Business Model Generation journey to result in a Customers experienceand the Business Model Canvas. I find it that creates value for both companies andrather useful in many situations to explain Customers.. co-creates as one should say.the essence of CRM Strategy, CustomerExperience and the importance of the I played around with the canvas and came upother building blocks to the blocks in the with my own Value Co-Creation Canvas.. Its farupper-right part of the Business Model from finished or perfect, but I believe its goodCanvas. enough to present to you and ask you for feedback. I think it should be a self-explanatoryI also find it not to provide the depth sometimes canvas in the end, but am sure it isnt yet. Soneeded to explain how Companys resources please ask all questions you might have. It willand capabilities need to be aligned with help me improve it.Customers resources and the Customers 7
  8. 8. Chapter II. Metrics, metrics, metrics..and how I love/hate NPSBy Wim RampenWhen I started with my blog, over 3 years But that never stopped me from writing andago now, I was mostly concerned with thinking about it, resulting in the best read postmetrics and measurement frameworks. I on my blog to-date. And it continues to be readeven tried to rally up an international very well almost every week. It nevercommunity of highly experienced people in dissappears from the top 5 best read post.the field of Customer ExperienceManagement and measurement to co- On the next pages you will find two posts oncreate a new measurement framework to NPS. Both resulted in heavy pro/con NPScapture value co-creation. debates. To-date I have mixed feelings about the concept. One thing is for sure: I’ll never buyWhat I didn’t know then is a) building a into NPS being the one number you need tocommunity is tough work because hardly grow, like Reichheld c.s. suggested.anyone acts by himself completely b) it isimpossible if the concept of value co-creation is But please, judge for yourself, if you haven’tnot widely understood. And thus the initiative already.died. THE QUESTION How likely is it that you would recommend [your company] to a friend or colleague? HOW IT’S MEASURED 8
  9. 9. NPS & The Customer ExperienceBy Wim RampenNet Promoter Score, like Customer customer service and sustainable growth.Satisfaction, is not a killer metric. Zappos.com is maybe The Brand Icon of how itNPS has been presented as ‘The One Number should be done. This video (featuringYou Need to Grow’. [...] There has been, and Zappos.com CEO Tony Hsieh) provides somestill is, a fierce discussion on the validity of NPS insight in how they do it.with regard to its [...] predictive capabilities. Oneof the better publications, from my point of It is not measuring NPS that relates to theview, is this one from MIT Sloan (PDF). For a success, it is the other way aroundgood overview of pros and cons also take a The success of a clearly defined, and welllook here. executed strategy aimed at increasing positive Word of Mouth through "wowing" CustomerPersonally I do not take for granted any metric, Experiences, can be measured through NPS.let alone a metric like NPS that has been The Key-differentiator is not the measurement,marketed like it is the silver bullet for it is the strategy and the alignment ofbusinesses. The Customer Experience is not companies resources, culture and truesomething one can take lightly nor are understanding of the Customer ExperiencesCustomers. They are both way more complex that matter, which result in high NPS scores.than can be captured through measurement ofone question (and an open feedback-question) Let me try and explain through a quote fromthat aims only to capture how many Customers Graham Hill: There is absolutely NO POINT inwould be willing to promote your company or measuring something if doing so doesnt allowproduct. you to change the system through management action. These are often differentMaybe provoked by the fierce way NPS measures to those typically measured byadvocates approach the discussion and defend management.their positions, I developed an aversion to themetric. I still believe that a more profound As the video shows, Zappos.com understandsmeasurement framework that focuses on their Customers and the Outcomes they desire.measuring Customer (desired) Outcomes and Zappos.com knows how to leverage thisValue Co-creation, and not Customer knowledge and understanding. They aresemantics, is a more powerful toolbox. measuring far more elements of the Customer Experience than NPS. Net Promoter Score forZappos.com and a Customer Experience Zappos.com is an outcome of managementthat makes the difference action. I even think they are able to predict theirNevertheless I also have to acknowledge that next months Net Promoter Score because theythere are some great examples of companies know what Experiences their Customers had.that are successful and that have great NetPromoter Scores.[...] One example of the Did NPS do that for them? I doubt it. It is theirapplication of NPS I found has caught my focused and well executed strategy inattention: Zappos. Zappos is known for its combination with a balanced measurementgreat customer centric culture, wowing framework. 9
  10. 10. Sorry NPS, I’m not buying itBy Wim RampenI know a lot has been said about NetPromoter Score (NPS), and Im not in this A comment by Rags Srinivasan to thisworld to judge anyone whos working with post provides some good additionalit, or developing it into a Net Promoter insights:System. You make very valid points based only onI do like to share my experiences with it experience but also looking at it fromthough, hoping to attract other people whod broader context.like to share theirs, so we can all get a betterunderstanding of what drives Customer loyalty Since you already made some of the keyand how to manage for it. Unfortunately the points on customer satisfaction metric andNet Promoter Score is not working for me right how NPS is all over the place, I will try tonow. And heres why make other points.In my role at Delta Lloyd Groep I have the 1. By the very definition of the metric,pleasure to work together with Zanna van der when you measure it for the first time forAa, who is working in my team as Program any business you are highly likely to findmanager of the Customer Experience Program negative value. Take a case whereweve launched this year. Zanna recently respondents all answer randomly andreceived her PhD based on her research on avoid rating 0 or 10. The NPS score forthe role of the customer contact center in this business is going to be -55relationship marketing. In short: she pretty (whether it is uniformly or normallymuch knows her stuff and shes as curious as distributed may change this, but still aI am to really understand what drives low negative number). On the otherCustomer Loyalty ;) hand a simple average of the rating (like customer sat) will show it is 5. AHow we measure negative number creates a sense ofAs part of the program we are measuring really bad situation and helps to sellCustomer Satisfaction, Net Promoter Score add-on services to improve this score.and Customer Effort Score. The first two weare both measuring on the level of interactions 2. What is materially different between a 10(e.g. after a service call, or claiming damages) point scale used by ACSI and this 11and the level of our annual Customer point scale? Why 0 to 6 are detractorsSatisfaction survey on a large proportion of our when 5 is labeled on NPS surveyCustomer base (including those not in question as neither likely nor unlikely.interaction/transaction with us over the pastyear). Customer Effort Score we are only 3. If we treat 7 and 8 as Passives, whatmeasuring on the level of interactions. Apart about those who did not even bother tofrom these standard questions, we are asking respond to the survey? By its own logicmore questions in different forms, including an this scale should treat all non-open answer box to obtain qualitative 10
  11. 11. Sorry NPS, I’m not buying it Continued... By Wim Rampen feedback as well. Response rates are quite high on the transactional surveys, and very respondents as Passives. It cannot satisfactory on the annual one. switch scales for its own convenience. What we see Customer Satisfaction ratings are quite stable4. When you ask respondents a rating and have been increasing steadily over the past question, regardless of whether it it years. The scores are also very similar throughout about satisfaction or both methods. We seem to have a good recommendation, the answers are understanding on what needle we need to move not going to be that different. It is an to get improvement on Customer Satisfaction. interval scale with continuous data. How different is this with Net Promoter Score. But in order to brand and monetize it The score itself is all over the place. It seems to they invented this complex Net math change from quarter to quarter going up and that converts customer level data into down without any reason (and we have been a useless company level net metric. looking for them).5. Segmentation? The method and Im bothered metric absolutely fail to ask any A recent event really makes me doubt the Net question about segmentation and do Promoter Score question/methodology: Our own not care how this metric differs measurement showed a score, whilst a survey across segment. What is the use of held by the same research firm on exactly the aggregate metric that ignores same sample, as part of an industry benchmark segmentation? as little as two months later, produced a difference of 20 points in the score. AndIn essence we have an arbitrary irrelevant Customer Satisfaction scores in both surveys metric that has captured the minds of showed the exact same result. On top of this some there are even bigger differences between the score in our own measurements and other so-You can find some excellent insights called industry benchmarks. Since for the latterfrom Rags on his blog at we dont know the exact way the questions arehttp://iterativepath.wordpress.com asked and in what order, we could not really be bothered. But with current evidence thats exactly what we are.. Oh.. and the judge is still out on Customer Effort Score (CES), but so far we dont see the higher relationship with Customer loyalty, as promised.. So, what do you think? Back to Customer Satisfaction as the primary metric? 11
  12. 12. Chapter III. Social CRMDefinitions, Concepts, Strategy & MoreBy Wim RampenEver since I ‘set foot’ on Twitter I was Ever since we have been in contact irregularly,introduced to the concept of Social CRM. but I know I can reach out to him when I needI’ve had some amazing talks, discussions his help, his point of view or his support. Thankand blog-exchanges and with many smart you Paul!and leading people in the world of CRMand Social Media, trying to figure out what And, that also goes for the bunch of people weSocial CRM could be(come). If you select refer to as the “Social CRM Accidentalthe category Social CRM on my blog you Community”: Brian Vellmure, Mark Tamis,will find many articles about the concept Mitch Lieberman, Prem Kumar, Estebanand its development over time. Kolsky, Mike Boysen, Michael Krigsman, Paul Sweeney and Laurence Buchanan. AllMy musings on Social CRM are, volumewise, must follows.probably worthy of a book, but I’m pretty surePaul Greenberg is beating me to it ;) And I can’t If you’re interested in Social CRM please readeven begin to walk in his shadow. some of my posts on the next pages. Before you do, it does make sense to read PaulPaul Greenberg is one of the very few people I Greenberg’s seminal post: “It’s time to put aknow that are really open minded and truly stake in the ground”.enjoy helping and connecting people. I’m notonly glad I can count Paul Greemberg as a Enjoy, and son’t hesitate to contact me throughfriend, I’m really grateful he introduced me to my blog, if you have any questions or views tohis world by inviting me to the world’s first share.Social CRM Strategy for Business Seminar inWashington DC, early 2010. Yeah, though Po the Kung Fu Panda became the Dragon Warrior by understanding that theres no secret ingredient in his fathers secret ingredient soup as also theres no secret in the dragon scroll, he did have a great training in making soup as well as kung fu. ;) Methods, tools, techniques are necessary but insufficient condition for success Prem Kumar - Social CRM Evangalist 12
  13. 13. What a Social CRM Strategy is All AboutBy Wim RampenIt has been a while since Paul Greenberg framework-statement I propose. First of all weput the stake in the ground by writing need to understand how Social CRM changesdown the definition of Social CRM. For the way we answer those 3 questions?further reading purposes I will repeat ithere: What has changed through Social CRM that is significantly different from the pre- “SCRM is a philosophy & a business scrm era? strategy, supported by a technology Paul Greenberg makes a statement in his platform, business rules, workflow, “staking”-post that relates to this last question, processes & social characteristics, which I totally agree with: designed to engage the customer in a collaborative conversation in order to “What this means is that SCRM is an extension provide mutually beneficial value in a of CRM, not a replacement for CRM. Its a trusted & transparent business dramatic change in what it adds to the features, environment. It’s the company’s response functions and characteristics of CRM but it is to the customer’s ownership of the still based on the time honored principle that a conversation.” business needs its customers and prefers them profitable and that same business needs to runOn top of the definition I think there is a more itself effectively too.”specified set of elements needed to define aSocial CRM strategic framework statement. A But there is a change! Another quote from Paulstatement that can provide some direction how Greenberg:to design processes, services and experiencesin line with the SCRM philosophy and the latest “The lesson for business, in terms of Socialthinking on Customer Centricity and CRM. CRM is that we are now at a point that the customers’ expectations are so great and theirThree Strategic questions: Who? - What? - demands so empowered that our SCRMHow? business strategy needs to be built aroundI think of strategy in three simple questions: collaboration and customer engagement, notWho are your Customers? What are their traditional operational customer management.”needs? How will those needs be met?Answering these questions will provide you with This is the fundamental change, that has beena rough strategic statement that enables you to discussed and is still being discussed all overcommunicate both internally and externally on the (virtual) globe.what your Company is all about. At the end ofthis post I will provide you with my view on the On top of this Graham Hill said the following inStrategic Framework Statement for Social a comment to Paul Greenberg’s post:CRM. “Social CRM [...] extends CRM from beingBefore I do I will take you through some steps I something predominantly inside-out, tothink are important for understanding the something that extends out into the 13
  14. 14. What a Social CRM Strategy is All AboutContinued..By Wim Rampenconversations that customers are having to better understanding the concept of valuebetween themselves. If we want to engage co-creation and the way it differs from differentcustomers we need to really understand [...] the shades of “co-production” or “mass-jobs customers are trying to do and the customization” (the differentiating element isoutcomes they are trying to achieve by doing `personalization of experiences - in use`).them. This i s best practice in understandingcustomer needs today [...] Once we understand A Social CRM Strategic Frameworkwhat customers need, we can innovate around Statementdelivering exactly that [...]. And we can use If I now take the definition of Social CRM fromservice-dominant logic to provide experience Paul Greenberg, the understanding of Serviceplatforms that allow customers to co-create Dominant Logic, Customer jobs and desiredvalue together with companies. Co-creating outcomes as explained by Graham Hill as wellvalue with customers is the modern definition of as the differentiating element from the value co-customer-centricity.” creation definition, and I put them all together in context by answering the who-what-howThis is not a light read and Graham Hill has questions, I get what I would like to define assince written several posts that shed some the Social CRM strategic framework-statementmore light on the value co-creation concept. I as shown below on this page.wrote a post on the definition of Value Co-creation myself based on (among other) Obviously I like it and I will discuss in futureGraham Hill’s views (you can find links to his posts what I think the implications of thispost there) because I had a need myself to statement are for a more detailed strategy.better grasp the concept of value co-creationand furthermore because I felt the need to be Of course I am not a guru and I’m definitely notable to explain it in as few words as possible to perfect in what I think and write. So it is now upanyone who is newly introduced to the to you all to blow it to bits or otherwise let meconcept. know what you like or not about the statement. And I would appreciate any views on theI advise you to read the whole post as well as implications of the SCRM strategy frameworkthe comments on it. This has been one of the statement when it comes to building a detailedmost valuable posts for myself when it comes strategy. Social CRM Strategy Framework Statement A Social CRM strategy is about understanding who the Customer is through listening to, engaging with and collaboration between Customers, employees and partners. It is aimed at developing innovations, interactions in networks of relationships that support customers in doing the jobs they need to do. The means are a personalized design of the service experience that empowers Customers, employees and partners to influence how well they can meet their desired outcomes 14
  15. 15. Social CRM - What Relationships ShouldYou Care For, And Why?By Wim RampenI think most Social CRM definitions share a values the outcome generated from thecompany centered logic of building and/or experience of using your product or service, itleveraging a relationship between the should not be difficult to understand thatCustomer and the company. Customers value knowledge or information on how to improve that outcome, overI believe we need to let go of the company relationships (with the company). Even if thecentered relationship logic and put Customers company is involved in providing thisrelationships at the center of our thinking, when knowledge, it is not the interaction orwe are designing our answer to the Social relationship, but the actual knowledge orCustomers ownership of the conversation. outcome of the interaction that is of value to your Customer.Most Customers dont want a relationshipwith you. We all understand and experience ourselvesYour Customers value you mostly on the bases that the Customer does not depend on theof their experiences when using your product or company for knowledge or information.service. Thats because they hired your product Customers turn to peers in their networks toor service to do a job for them, that they desire obtain this information, or to rating sites,to do. Its the outcome of the job your Customer support communities and what haveCustomers want, not the relationship. you. And all this information is valued higher than the information a company provides.Your Customers relationships, not yours..Also from a companys perspective, a Tap into the knowledge-flowrelationship with your Customers is not what Hence, in the era of the Social Customer, youyou need most. You need most to understand may want to better understand how yourwhat job it is your Customers are trying to get Customers leverage ALL their relationshipsdone. Companys can do that without any (strong and weak ties) and other ways ofrelationship with Customers at all. If the tapping into the knowledge-flows that matter torelationship with Customers was required no them, to obtain the information they need tostart-up would be able to make it in this world. increase the value they create with the productsFortunately they do. and services they use. Where CRM focused on the Customer - Social CRM is not about managing the company relationship, a Social CRM strategy relationships with your Customers, it is will only succeed if it centers around ALL of (increasingly) about managing the knowledge- your Customers relationships. flows through the relationships of your Customers. And yes, you as a company maybeAnd heres why: part of this eco-system of your CustomersBecause a Customer does not value a relationships. But please, dont put yourself atrelationship with the company, but mostly the center of it.. 15
  16. 16. The S in SCRM is not about Social MediaBy Wim RampenToday I read a tweet by Ray Wang where demographics and/or lines of profitability,he states that he lifetime value and share of wallet. If there is one thing we (should) learn from emergent on-line "doubts Social CRM (SCRM) will replace communities it is that people join theseCRM. They augment each other. S is just a communities to perform a certain job (to-be- new but powerful channel. What do you done). This can be a social job, functional job or think?" emotional jobs, mostly formed around a shared interest. It is these jobs & interest that bond theI fully agree that Social CRM will not people in a community. On-line (and off-line)replace CRM. I have a different view communities are in fact the Customers naturalthough on the meaning of the S. Heres way of segmenting. I believe it is not difficult towhat I think the S in SCRM is about, and understand that capturing the understanding ofwhy: the jobs your Customers are trying to do and the way they are trying to do it, is the Social1. From 1-2-1 to M-2-M CRM way of Customer segmentation.I wrote a post almost two months ago on whatrelationships you should care for in Social CRM. Again, this doesnt mean that traditional waysIn this post I argue that I believe we need to of segmenting have become obsolete. For me itcompletely let go of this company centered comes second though. Social CRM is notrelationship logic and put Customers’ replacing CRM, it is extending, or improving, it.relationships at the center of our thinking.Hence, in the era of the Social Customer, after3. A new entry in the front-officeunderstanding your Customers’ needs, you The third reason why the S in SCRM is moremay want to better understand how your than adding a channel is the new entry to theCustomers leverage ALL their relationships front-office. CRM has a clear focus on the(strong and weak ties) to obtain the information traditional front-office: Sales, Marketing andthey need to increase the value they get from Services. With the S added to CRM innovationthe products and services they use. made it into the front-office, in my humble opinion. More and more we see companies co-This does not mean that 1-to-1 conversations develop new products and services togetherbetween Customer and company are no longer with Customers (and partners) in closerelevant. Nothing is less true, yet we need to collaboration. This can vary from invitingthink of Customers as part of networks, of Customers to present new ideas to a fullwhich we the company may be a part. And the process of co-development. It is clear to mecompany is not at the center of it: the though that product development andCustomer is. innovation departments are having meaningful dialog with Customers, which, to me, allows2. Segmentation the Customers way them for a seat in the front-office row of aIn traditional CRM companies segment Company.Customers along the lines of socio- and 16
  17. 17. The S in SCRM is not about Social MediaContinued...By Wim Rampen4. Breaking down silos knows how to leverage his voice andBreaking down silos has been on the agenda knowledge to his (and his peers) advantage.for quite some time. Unfortunately, as a Also a Customer that does not want to beconsequence of the high focus on transactions treated as an opportunity for exchange at anyand transaction efficiency (by example: much of convenient moment, from a Companys point ofSFA is basically nothing more than monitoring view. But a Customer who wants to be treatedtransactions, from lead-generation numbers, to with respect and wants to have options toappointment numbers, to RFIs answered choose from. Moreover the Social Customernumbers etc etc..), this has not happened. wants to have influence on how he createsSpecialization and task-oriented jobs have value from the products and services youbecome the norm in business (no need to provide.explain I think.. we can all relate, not?), whilstsharing knowledge and collaboration are The S in SCRM is about catering for thesebecoming increasingly important in the rapidly needs and adopting approaches that showchanging and complex systems that we are all respect for the way the Customer wants to bepart of these days. If we are ever going to turn treated (this last point in its essence: no moreCRM from the inside out to the outside in, we unsolicited direct mail, e-mail and outbound-need to break down the silos. Before the S campaigns, in which unsolicited is very differentwas added to CRM, companies could still get from not opting out!).away with it. Increasing Customerempowerment is turning this ship around, To conclude: to me adding the S to CRM isthrough Customers complaining about the much more than just adding Social Media toCustomer experience in open innovation the other channels available forcommunities, by marketing talking to Customer communications with Customers. Which is alsoservice if they can help them turn service into why I disagree with any definition of Social CRMsales (as a consequence of the lack of that puts the channel at the center of it.outbound sales) etc etc.. This is my interpretation of the S in SCRM. ImMuch more water will flow through the Rhein, interested in learning yours. Please share them,before the Silos will be broken down. For me, it and your comments to mine, below.is a "sine-qua-non" if you want to add the S toCRM. Capturing the understanding5. Answering to the Social CustomerLast, but not least: According to Paul of the jobs your CustomersGreenberg this is the essence of Social CRM, are trying to do is the Socialand I agree. The Social Customer is not (only) aperson that engages through Social Media. The CRM way of CustomerSocial Customer is any Customer these days. A segmentation.Customer that is not becoming more vocal andknowledgeable, but already is. A Customer who 17
  18. 18. The Only Thing Your Social CRM StrategyCannot Do WithoutBy Wim RampenThere have been some interestingdiscussions around what elements your Implementing social tools, and doing absolutelySocial CRM efforts can or cannot do nothing differently than before, would not makewithout. It started with Bob Thompson it part of a Social CRM strategy. Just likeasking whether one can do Social CRM adding e-mail or chat to the channel-mix wasntwithout Social Media/Networks, or CRM truly game-changing. And increasing yourSystems. listening capabilities by adding Social Media Monitoring, however important, is not game-Another interesting thread can be found where changing the value creation capabilities of yourPrem Kumar asks whether Apple is using Customers either.Social CRM. I recommend you read bothposts and the discussions in the comments. From 18 to 2 Use Cases? Having said this, it is also clear to me whatThese discussions made me think though what popular "use cases" under discussion wouldwould be the one thing your Social CRM not imply a Social CRM Strategy. This does notStrategy cannot do without. THE sine-qua-non mean, by the way, that theres no value in theseof Social CRM. use cases. To me, they would be part of regular CRM or CEM programs, like we have beenIn my humble opinion the sine qua non of running them for quite some years now. TheySocial CRM is: Empowering the Customer in are either about using or adding the Socialthe process of creating value for the Customer. Media channel and tools or improving upon practices that should have been part of beingThis actually is also the missing element of my Customer Centric long before Social Media.previous post: The “S” in SCRM is not about Again: still lots of value to capture for you andSocial Media. It is not only missing.. its the key your company by implementing these useelement that is missing. cases. Social CRMs value is that it opens up communications between the company and the customer in a way that allows the customer to sculpt his own experience with the company - thus enhancing the value of the companys relationship with him. [...] meeting the companys objectives on the one hand, but on the customers terms on the other. - Paul Greenberg - 18
  19. 19. The Only Thing Your Social CRM StrategyCannot Do Without Continued...By Wim Rampen not only to share, but shape their experiencesI reviewed the 18 use cases of Social CRM with their peers (much like Nike + is doing), andas published by Altimeter early March of this cases that allow your Customers to sell, shareyear. I believe the following 2 use-cases or distribute their own ideas and productsdescribed there, would fit as use cases for a through your platform (E-bay, Amazon,Social CRM Strategy sincy they are about P&G Connect & Develop etc).empowering the Customer in the process ofcreating value for the Customer (themselves or These use cases require a higher level oftheir peers, that is). They are about involving creativity and "guts" than just implementingand empowering the Customer in the design social media or social tools to existingand delivery of experiences: processes. They require you to re-invent the process and, more importantly, to change the# 11: Social Support and Service - Peer-2- way you perceive your own role and that ofPeer Unpaid Armies or Customer Support your Customer in that process.Communities - Where smart organizations findways to harness the collective expertise Transferring the poweravailable within their networks of Customers Acknowledging that Customers own the(and providing the platform for Customers to conversation is not enough. Having meaningfulexchange that expertise with their peers). conversations on online social networks with your Customers is not enough either.# 13: Social Innovation streamlines ComplexIdeation - Crowdsourced R&D - Where You need to design experiences andcompanies find ways to harness the collective experience platforms that will allow theexpertise available within their networks of Customer to influence their experiences or thatCustomers for ideation, product development will allow your Customer to support theiretc.. networks and peers in creating personalized experiences.All other use cases are smart things to do, butmainly about doing smart things you (should) It is about actually transferring the power fromhave been doing before. Social tools or the company to the Customer, and that is muchchannels may help you to get these jobs done harder to do, than implementing social tools tobetter than before, but they do not significantly do a better job at the things you (should) havechange the game of providing value for your been doing before. And, in my humble opinion,Customers. it is the most appropriate answer to the Social Customers ownership of the conversation.Use cases as such can be found all around bythe way. They are cases that involve the What do you think? Are you ready to transferCustomer to customize the products before power to your Customers?ordering or even build their own (Lego), casesthat bring Customers together in communitiesof practice or social networks and allow them 19
  20. 20. 5 Things You Need To Know About (Social)CRM (Definitions)By Wim RampenI think trying to define something is a very good • (Social) CRM as a (cap)abilityexercise to understand what you are dealing • (Social) CRM as a technologywith or what you are trying to do it for. It also • (Social) CRM as a practice (or as practices)helps to communicate internally. And regardlessof what many say, I dont think there are OR, as a combination of all or some of theenough definitions of (Social) CRM, at least not above concepts, in a non-alphabetical order.good ones.. But that is a personal opinion, notrelevant to todays post.</em> Most of the times youll find that the writers point of view is highly related to the concept ofIf, for whatever reason, you have a need for a CRM hes trying to define. But its not alwaysdefinition of (Social) CRM, please take into the case. It will not take you a long time to findconsideration the 5 things you need to know a CRM strategy definition from a PR/marcomabout (Social) CRM for you to make your own specialist. Again, no pun intended.definition, described here: 3. In what context?1. Whats your point of view? (Social) CRM, regardless of your point of viewThe concept of (Social) CRM has been defined or the concept you defined, is not similarlyand explained by many different people inside successful under all circumstances. E.g. itand outside "the industry". Be it marketeers, matters if your industry is one with highscholars, IT-consultants, vendors etc etc. they commoditized products versus industries withall have their own point of view, they all take low commoditisation. CRM is more successfulwith them their own backgrounds and biases. in highly commoditized industries, because there it provides a way to differentiate oneselfDefinitions only tells you so much about (Social) from competition.. yes.. CRM is what peopleCRM itself. Definitions will tell you a whole lot mean they need when they say that Customermore about the person who made the service must be a differentiator. They just dontdefinition. And I do not mean that in a bad way. always realize it..I do think it is important that you are awarethough, because it will help you understand the It also matters if you want to define (Social)response from other stakeholders that read and CRM in the context of a recently failed CRMcomment on your definition, better.. project within your company, or that you are just about to start your first. It thus is of vital2. Whats your concept of (Social) CRM? importance that you understand and articulateRegardless of the definition youll read or try to the context in which your definition is (to be)tweak, it will be one that fits into the following 6 used.(valid and viable!) concepts of CRM: 4. How does it effect performance?• (Social) CRM as a process (or function) CRM is at its best when it is supportive of a• (Social) CRM as a strategy business strategy of differentiation and/or cost-• (Social) CRM as a philosophy (or mindset or leadership. Most people understand the logic) differentiation part, because it highly relates to 20
  21. 21. 5 Things You Need to Know About (Social)CRM (Definitions) Continued... (1)By Wim Rampenthe "treating different customers differently" processes etc etc..). How else are you going toparadigm it so strongly supports. (Although we understand which Customer does and whichstill see many CRM system implementations doesnt value the relationship? How are youwith companies strongly holding onto going to understand what is of value to them,standardized business processes for each and and let all your people know? How else are youevery Customer.) going to differentiate your service offering based on such understanding?Cost-leadership is basically the first one to thinkof. Not so much in relation to higher And yes, the same seems to be valid for theefficiencies, but to improved effectiveness. It is Social species as well. Most Customers are justeasy to understand that increasing a conversion connecting on-line with brands for the purposerate from 5 % to 10 % can be achieved through of getting a perk or discount. They are not therecreating the same total number of leads, but for the engagement.with higher quality, or through creating bettertargeting within a smaller number of leads. The Bottom line: never ever (!!) say you need tolatter is more likely the case in most DM/Cross- do (Social) CRM because your Customerssell programs. Which is fine, because it saves want a relationship with you..you from costs to reach out to these targets.And, most important these days: it also saves Last, but not least, I just realized all of theyour Customers from being targeted (and trust above is valid for both Social CRM and CRMme, they dont mind). (tradizionale if you want ;) definitions. Does this mean that Im ready to leave the Social part onWhat Im trying to say: dont link your CRM the table and get back to using good old CRMdefinition to business performance directly, link (of which "social" is an integrated part..). I thinkit to the high end strategies everyone supports it does.and show it supports those strategies. You? Let me know what you think!5. How about your Customers goals?This is an important reality check.. Research Adopting a Social CRMshows as much as two thirds of yourCustomers do not really want a relationship strategy is NOT about tryingwith you. The even do not expect the benefits to get a spot insideof such a relationship (or could have a lowexpectation of such benefits?).. And the Customer’s circles and atworrying part is that its mostly the young and the same time letting themwealthy people who are not  interested in theserelationships. wait in the cold after knocking on your touch-But that doesnt mean you do not need todevelop (Social) CRM (capabilities/strategy/ points door! 21
  22. 22. Observations Why Social CRM Isn’tBy Wim RampenNo, I wont claim Social CRM is dead, to creation with Customers, not just supportivethe contrary. It just isn’t growing up fast of transactions.enough to really have a business impact. Mono-channel focusThis is more likely due to the slow pace at The current logic of many companies is thatwhich companies are responding to changing investments should flow to mobile and socialmarket environments than it is due to the channels, because this is where, and how, theadvancement of technology... Customer “hangs out”.. They seem to be forgetting that way too many CustomersThere are a few observations I would like to continue to fail doing what they need to do atshare with you. Observations I see as hindering the “traditional“ touch-points like the Callus in the advancement of service being Center or the company’s web-site.practiced as the dominant logic, Social CRM asthe supporting strategy and Customer Adopting a Social CRM strategy is NOT aboutengagement as it’s underlying tactic. trying to get a spot inside the Customer’s circles and at the same time letting them wait inIts company centric the cold after knocking on your touch-pointsCompanies continue to think mainly how social door!technology in general and on-line social Lack of accountabilitynetworks can help them, not their Customers.All talk on Google+ (and any other on-line social Social CRM or engagement initiatives are currently supported by good-will mostly. Allnetwork for that matter) seems to be focusedon how companies can use it to engage energy is directed to getting social working, without a clear view on what types of value itCustomers, mine their conversations and tobecome part of their circles (to sell them stuff). should generate for companies. Most are onCompanies continue to ignore that CRM the train, or almost ready to jump on it, fewshould shift it’s focus from the Company - know where it’s heading. If we are not tyingCustomer relationship to the Customer - Customer engagement tactics to CustomerCustomer relationship. engagement value, your social initiatives will not outlive the next crisis.Influence, not valueSocial Network analysis is targeted to Analyst paralysis On top of all of the above, analyst firms, likeunderstand how influence flows through them.But it’s not influence that creates value for Gartner, continue to publish quadrants and posts that make no sense and by doing soCustomers. We would make a lot moreprogress if we would direct all these resources confusing companies even more. (You should read Paul Greenbergs post on this topic!to understand how Customer’s value iscreated in, and flows through, social Hes spot on.)networks. Because this will help us design andalign touch-points that facilitate value co- 22
  23. 23. Observations Why Social CRM Isn’tContinued...By Wim RampenCatching the waveThe root cause, if you ask me, is that many just the doldrums, if it hasn’t arrived there already.consider this to be a wave that they need to And if you do not have a strategy to navigatecatch long enough to jump the next one.. To those, you should not expect to get out of thereme it looks like this wave is heading towards anytime soon! If there is one person who influenced my thinking it is Graham Hill. I highly recommend following him on Twitter and reading his posts over at Customer Think. Below are the 15 trends Graham described in 2009 that are driving Social Business. That post is as valid as it was three years ago. A must read. A Manifesto for Social Business No1. From Individual Customers… to Networks of Customers No2. From Customer Needs, Wants & Expectations… to Customer Jobs-to-be- Done No3. From Company Value-in-Exchange… to Customer Value-in-Use No4. From Delivering Value to Customers... to Co-Creating Value with Customers In No5. From Marketing, Sales & Service Touchpoints… to the End-to-End Customer Experience No6. From One-Size-Fits-All Products… to a Long-Tail of Mass-Customised Solutions No7. From Competing on Products, Price or Service… to Competing over Multi- sided Platforms No8. From Company Push… to Sensing and Responding in Real-Time to Customers No9. From Technology, Processes & Culture… to Complementary Capabilities and Micro-Foundations No10. From Made by Companies for Customers... to Made By Customers for Each Other No11. From On-premise Applications… to On-demand Solutions from the Cloud No12. From Stand-alone Companies… to an Ecosystem of Networked Partners No13. From Hierarchical Command & Control… to Collaborative Hybrid Organisations No14. From Customer Strategy… to a Portfolio of Emergent Customer Options No15. From Customer Lifetime Value… to Customer Network Value 23
  24. 24. Chapter IV. Marketing With a Service LogicAnd Service With a Marketing MindsetBy Wim RampenWhat I’ve tried most, over the past years of I therefor would like to conclude this bookletblogging, is bringing together (Social) CRM, with two posts: The first is about CustomerCustomer Experience Management, Customer Service and how Managers of CustomerService, Marketing and as of late also Service Departments should break free from theInnovation & Service Design. From my silo’d after sales support role. The second oneprespective all these disciplines are trying to is about how Marketing with a Service mindsetsolve the same challenges, but are either requires new approaches and most of all 7 newlimiting themselves to a specific discipline, “jobs” for marketers to perform.technology or methodology, or are trying tocompete with the others. Thank you in advance for taking the time to read this far. I hope you enjoy the last twoAnd that’s too bad, because either of the articles, and look forward to your feedback ondisciplines has a lot to offer. I even think they all my blog at http://wimrampen.comneed each other.There are two books I always recommend when I’m talking about CustomerService. You should read them too. 24
  25. 25. Because It Is Time You Take CustomerService SeriouslyBy Wim RampenDespite the economic crisis, the rise of the eliminating contacts that are of no value to"Social Customer" and the popularity of both, by means of improved processes etc.Customer engagement strategies through Furthermore reducing time and Customer effortSocial Media, I sometimes get the feeling as well as implementing self-service capabilitiesthat managers in Customer Services put in for high value contacts to Customers ORa lot more effort to ensure the company company. Last, but not least, investing in thosedoes not get bad press, or negative "buzz" contacts regarded valuable to both Customersin stead of providing a better then AND company.expected Customer service experience. The methodology basically prescribes you to:We know companies do not always takeCustomer service seriously. I think though many • Listen to "What (y)Our Customers Aremanagers of Customer Services should start Saying" (WOCAS)taking their discipline a lot more serious than • Improve your products and processes so thatthey are doing today.. you do not get repeat contacts and many complaintsApart from the fact that it is useful to improve • Implement self-service with the utmost rigorwaiting & ticket-processing times, Customers possibleself-service capabilities, complaints handling, • Use the remainder of contacts to do smartfirst contact resolution, quality monitoring up- & cross-sellingscores and what have you.. I believe there is a • Segment your service (e.g. better service fornecessity for a more fundamental change in high value Customers)both the mental model and governancesystems guiding current design and execution And if you do this well, youll see that yourof Customer Services operations. Not only Customer services unit does not have to grow,because great Customer service can be a or can even shrink in headcount (significantly!),differentiator, but mostly because Customer whilst company revenue can double andservice needs a (mental) makeover for it to transaction volume can multiply with a factorreally become one. five (Amazon case).The best service is no service Five perspectivesTo date, the best proxy for good and effective Whilst I believe there is a lot of greatness to beCustomer Services (operations), has been set found in this methodology and/or approachesby Bill Price, with his book (and proven like Lean/SixSigma, which have similar claimsmethodology) "The Best Service is no Service". and approaches, I believe we need a moreYou can see a good summary in this fundamental change in perspective to get out ofslideshare presentation. the "call center is the end of the line or the organizations drain"-paradigm. And, of course,Key to the methodology is that it very closely to finally start having a real and sustainablelooks at what contacts are of value to the impact on business results, not just sitting onCustomer and to the company, continuously the cost-side of the equation. 25
  26. 26. Because It Is Time You Take CustomerService Seriously Continued... (1)By Wim RampenI would like to explain so by elaborating on the the quality management systems put in place"Five perspectives on Customer Services" we look at the transaction. 3 mistakes on a call,need today. and youre out. Maybe, just maybe this improves Customer Satisfaction on the call, but1. The Value-perspective if this also relates to improved value to the2. The Customer-perspective company as a whole, or the Customer in3. The Experience-perspective specific, is only assumed, if at all. Besides that:4. The Relationship perspective satisfactory results are good enough, most5. The Network-perspective certainly if its possible to reduce costs further without reducing Customer Satisfaction.Combining these perspectives and projectingthem onto Customer services operations shows This all may be a little better in the Best Servicewe are far away from integrating the logic, the is No Service approach, but even there it is theviews and ideas that can be found in these contact and the transaction that is center to theperspectives. All the more reasons to take a approach and the upper right corner of thecloser look. value to the Customer vs Value to the Firm matrix shows "sales campaigns" as one of the1. The Value perspective activities to fit in there. I would argue there is noThe most important shift in logic and customer value to the Customer in being sold to..services governance we need to make is theshift in our value logic. The entire governance Goods versus Service Dominant Logicsystem is based on a value-logic that embraces To put it bluntly: the Customer Servicesvalue to the company and aims at maximizing management system is designed with aCustomer value extraction. production-based logic from the pre-war decades of the previous century. The foundingThe current value logic has been perfected into fathers of Service Dominant Logic (Vargo &such detail that almost every KPI the industry Lusch) name this old logic a "goods dominantuses breathes value-to-the-company on each logic".contact. Some examples: It is time, contact center and customer services• A call cannot take longer than 5 minutes operations management switch to a Service• A call must be solved within the first contact Dominant mindset. A mindset that understands in 80 % of all cases that the Customer can bring more to the table• A service representative cannot have more than money alone, like knowledge, feedback than zero fatal errors or 2 non-fatal errors in from her experiences, on all touch-points, not her quality monitoring sheet. just the regular survey or after the "feedback"-• Customer satisfaction on the call must be at button. A mindset that does not see service as least a 6 (on a scale of 0 - 10) something offered after the sale, but as theThe "transaction" or "interaction" (=the call) is basis for value creation between company andcentral to all we are doing. Contact Centers are Customer. And a mindset that values the role ofmanaged by the day, the week at most. even 26
  27. 27. Because It Is Time You Take CustomerService Seriously Continued... (2)By Wim Rampenthe employee, not just the value he/she is able any period, nor what the calls of the heavyto extract from the Customer in exchange. users are about, compared to the light users. To cut it short: any Customer ServicesAnd whilst the "Best Service is No Service" department that has not already should getapproach is more than half way of this direction, started tomorrow on building a Customermost Customer Services (operations) needs to centered view of their operations, not aredefine what it means with "Value Center", for transaction based view.the current understanding and application has"goods-dominant-logic" written all over it. I guarantee you the "a-ha.. now I see whats the issue" look on your face.More guidelines as to what this means can befound in the four remaining perspectives. 3. The Experience Perspective Furthermore it is of vast importance to stop2. The Customer Perspective seeing service as something just offered afterI did not only not put this one first to avoid the sales when something went wrong. From theobvious trap, but more so because I wanted Customers perspective everything you do isyou to understand first, from the previous service (or not, most of the time ;). The wayparagraph, that from my point of view most service is perceived is through the experiencesCustomer Services operations are not about Customer have over all your touch-points. FromCustomers. They are about transactions. the fine-print to the mail-delivery companyThroughout my career I have not seen one used, to the advertisements in a magazine (withManager Customer Services reporting a coupon for new Customers with a niceCustomers, not transactions. Not one of them discount..), to the invoice, the paymentcould say, on a weekly bases even, how many arrangement, the collections calls etc etc..Customers dialed in, and how many have beenhelped to their satisfaction. And, more and more experiences from others are part of the Customers perspective of theThey can tell you how many calls they handled, service you provide, through ratings andand what the average satisfaction score was, reviews shared by others, whether sharedbut they cannot tell you how many Customers through (online) social networks or not.are considered at risk for retention, becausethey had a complaint. But this was not logged Understanding the Customers journeyas a complaint, because the Customer did not throughout her lifetime should go beyond listinguse the complaint procedure (usually sending in Customer Services as the after sales touch-a written letter.. ) point. The role of Customer Services should also go beyond providing feedback andHardly any Customer Services manager will be (actionable) insights to the organizations as toable to tell you how many unique Customers (incrementally) improve the Customercall into the call center or visit a service site in Experience. Customer Services should expand 27
  28. 28. Because It Is Time You Take CustomerService Seriously Continued... (3)By Wim Rampentheir horizon by understanding the Customers other legal actions, your Customer is alreadyjourney and how their key-capabilities to help doing what has been advised by her peers orCustomers when things are not running "experts".smoothly, could be put to use to improve theCustomers experience when getting her job Where many companies are stars in describingdone. what situations are NOT covered by Customer services, companies that see themselves as4. The Relationship Perspective service providers to their Customers, arrangeThe fourth perspective is the Relationship for their Customers to have access to networksperspective. CRM traditionally consists of of Customers and/or experts, outside theMarketing, Sales and Service. In the name of company firewall, to increase the likelihood thatCRM though, many companies have done their the best resolution is offered in the fastestvery best to exploit their relationships with possible way, with the least possible CustomerCustomers at the lowest possible costs. And effort. Please take a look at this post bywhen the relationships comes to a divorce, Laurence Buchanan about GifGaf to see thecompanies even ask for alimony. CRM is not benefits of this Network perspective.there to improve the Customers nor theemployee experience, CRM is there to improve To concludethe companys control. Best practices in Customer Services are hard to come by, mostly because bad CustomerIn stead of conversion-rates, revenue per hour service stories have better reach and becauseor per contact, I believe the next generation there is more to gain for the story-teller. TheCustomer Services will need to make a serious best methodology so far comes from the hearteffort to manage their Customer interactions and mind of Bill Price: The Best Service is Nowith respect for the (individual) Customers Service. I do think though Customer services inlifetime value, network value AND referral value. general, and the Best Service is No Service, areThese long-term relationship-indicators should in need of a thorough iteration, based upon theshed a different light on what is important to latest insights and developments.manage on a contact, and which contacts areof value to the company and/or the Customer. The five perspectives discussed above are not new in a stand alone way of discussing. I5. The Network Perspective wanted to bring them together as guidingLast, but not least: in the name of CRM the 1 principles, with practical implications, for theon 1 relationship between Customer and future directions of Customer Servicescompany is center. In the meantime, in management and governance. Directions thatCustomerland, the Customer, increasingly go beyond operational excellence, processarmed with numerous social tools, cannot only efficiency and other tactics.solve issues better herself, she can do so fasterthan you can, and most of the time even better. Because it is time we take CustomerWhere your legal department is still fighting over services seriously..wording issues, to avoid future compliance or 28
  29. 29. What Really Replaces Marketing (Madness)By Wim RampenIf there ever was a reason for me to write about framework that just made all pieces I had in mythe future of marketing it was in 2009. The mind come together.theme though is as alive today as it was then.Some argue little has changed, others state the Three Concepts Combinednew era has already arrived. And there is Nilofer The bottom line in my thinking is that, sinceMerchant who suggests Marketing is Dead and Value is dominantly created in-use and is athen comes up with 5 ways to replace it. result of co-creation between company and Customer, marketing strategies should shiftAll in itself these five ways are things I can relate their focus from creating momentum for valueto, but they dont make it as replacements for exchange (the sale) to creating momentum forMarketing, in my humble opinion. interactions that support Customers in creating value for themselves.I recommend you read Ron Shevlins post, aresponse to Merchants post, titled: The Death And since value is something that can only beof Marketing (Madness). The subtitle of his defined by its beneficiary we need toblog (A (Mostly) Humorous Look at Marketing in understand what outcomes Customers desirethe Age of Social Media) says it all. A very when they hire a companys resources to getwelcome critical and lighthearted voice in this their jobs done.age of Marketing deadly replacements. The Customers journey towards that outcomeWhat Really Replaces Marketing is where opportunity for marketing lies to design(Madness) service that support Customers, employeesHeres my take on What Really Replaces and partners to co-create more (or better?)Marketing (Madness). I will do so following the value together.story line of my recent Guest Lecture for theMarketing faculty, headed by Peter Verhoef, of That may sound a bit posh (or a little more thanthe University of Groningen (The Netherlands). a bit), but the combination of the threeThe guest lecture was titled: Marketing concepts (Service Dominant Logic, CustomerLeadership in age of Service. Jobs-to-be-Done, Service Design) has been a powerful one for me. Not only to explain theI largely agree with Nilofer Merchant that outside world, but also to drive innovation inMarketing needs to change its act. I have had Marketing in my current role.that feeling for a long time, before 2009, whenworking in Customer Services, seeing the Three Ways Marketing Needs to Changedebris of (direct) marketing campaigns, failed Marketing needs to change in threebrand promises and what have you. Early 2009 fundamental ways. First marketeers need toI started reading into the works of Steve Vargo understand that they need to let go of aand Robert Lusch named A Service (communication) campaign driven methodology.Dominant Logic and I was introduced to the Marketeers need to turn into Service DesignersCustomer-Jobs-to-be-Done innovation that are capable of designing end-to-endframework. Both combined provided a thinking experiences. And they need not only design, 29
  30. 30. What Really Replaces Marketing (Madness)Continued... (1)By Wim Rampenorchestrate and market the experience (or valueproposition in Service Dominant Logic This will involve both analytical approaches andterminology), they also need to ensure the qualitative approaches (like Customer Journeycompanys capability to deliver on the promise. Mapping) for understanding the voice of theAnd this also means involving, and taking Customer. And these programs need to beresponsibility for, company partners in the value focused outside the building, not within thenetwork. walls of the firm (e.g. internal process mapping).Secondly, marketeers need to start For their second job Marketers need to buildunderstanding that it really matters who you relationships in communities of individuals withdrive through the sales funnel. Goods-logic similar Jobs-to-be-done and desiredMarketeers dont care about the quality of the Outcomes.lead, Service-Logic marketeers do, becausethey truly care about how they make their Traditional ways of segmenting Customers byCustomers feel in the end, and because they their age or other demographic qualities haveknow serving the right Customer is a lot easier become largely obsolete in the worldsand vastly more profitable than serving just any individualistic melting pot of cultures, lifestylesCustomer. and routines. People bond with people that think and act alike. People bond with differentThirdly, the next generation of marketeers people for different outcomes. Think Nike Plusshould understand that theres more to value in and you know what Im talking about.a Customer than just their wallet. Obviously weunderstand these days that a Customers Their third job is to start supporting Customersconnections matter, if only because they can tell to create value, not doing stuff to create valuea whole lot more about the Customer, than she to the company.will tell you herself. When seeing Customers asco-creators a lot more opportunities open up, Stop trying to design a service that helps solvelike having them do work for you, because the your problem of liquidity. Solve your CustomersCustomer ends up with a better outcome, or by problem and they will solve yours in return.valuing their feedback as opportunities to Sounds like basics, but I stumble upon the self-improve on the Service you provide. centered version still several times a month.7 Marketer Jobs in the Age of Service Marketings fourth job is to design forTo make it a little more concrete I wrote down 7 interactions that stimulate engagement in these networks or communities (=your Customerjobs Marketers need to get done, if they want segment!).to make it in the age of Service. Here they are: Whereas most businesses seem to be focused Marketings first job is to understand Customers jobs & outcomes (or value creation on reducing (costly) interactions with their process) and where in that process they fail to Customers, smart companies focus on meet their desired outcome. increasing value co-creating interactions with 30
  31. 31. What Really Replaces Marketing (Madness) Continued... (2) By Wim Rampentheir Customers and between Customers. Think Thats it. Marketings new madness, accordingGiffGaff and Best Buy as good examples of to me. Nothing really complex, but also easiercompanies doing just that. Result? Keeping said than done. And not the only ones either.costs low and making Customers happy. You still need to sell you know, so go on and make nice commercials and create advertising. More and more I think that the fifth job is one Just think different about what you are of the most important ones: engaging advertising for.. employees and partners in supporting Customers to co-create value. And I know it works and that this is a change I can "sell" to the C-level. Jobs 1 to 7, Im doingYou can name it internal branding or your HR- them a little better every day. You?policy to motivate employees, it is of vitalimportance that they understand what you are There are numerous blogs, articles, papersdoing with your Customers and why, and what etc. I’ver read over the past years. I wastheir role is in this journey. I find it helps a great about to summarize them here, until Ideal if you get the first job done right. This will found this excellent resource-list from Service360. You can download it at theirprovide you with tangible frameworks and website.memes that will make it easier to get peopleinvolved and move towards a pro-active state of While you’re there, please also subscribemind, the one that Customers need :) to their blog. It’s excellent! Your sixth job is to extract actionable insights out of 360 degree feedback to foster innovations and design new value propositions that attract new Customers.If you dont listen, you dont win. If you dontimprove, you will loose. If you dont innovate,youll die (oops.. I did it..) Your seventh job is to redesign metrics that capture the engagement value to firm and to ensure that there is a high correlation to these metrics and Customers value created.If you cant measure, you cant manage. Oldmetrics focused on transactions and/orinteractions are there to stay. The new way is tocombine them with Customer value metrics andnot evaluate them in isolation, but as a system(balanced scorecard still works for me..). 31
  32. 32. THAT’S IT . (FOR NOW)Please let me know what you think athttp://wimrampen.com 32

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