Co-creating customer relationships by Wim Rampen

1. CO-CREATING CUSTOMER RELATIONSHIPS Thoughts, Explorations & Concepts for Customer Driven Marketing & Service Innovation by Wim Rampen 1

2. Introduction By Wim Rampen I’ve been thinking about writing a book Chapter three is where the meat is. This is several times. And this time I thought I’d about Social CRM and how I think about do something about it. As it seemed Customer Relationship-building in the age of sensible I started reading through the past Service and Co-Creation. If you’re looking for three years of blog-posts that I’ve written. my persepective on technological Having done so I decided I might as well developments you will be dissappointed as I share the ones I like best with you in a discuss Social CRM on a conceptual and digital 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 past The first chapter discusses Value. You can two years. The first one is on Service, the read all about adding value, offering value, value second one on Marketing. Both are quite long chains, 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 too business publications, but only very few seem have been the basis for several presentations to be worried about what it means, and how and key-notes that I have conducted over the value can be a used on a conceptual level as to past year or so. make it framework one can use in a business environnment. Since ‘Value’ is also used a lot in I consider this booklet my personal resource, a my blogposts, I thought I’d share with you how well of inspiration for writing my book and an I 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 makes Chapter two, a short one, contains two posts any sense ;) on The Net Promoter Score (NPS). Two light reads to express my love/hate affair with Enjoy reading & please let me know what you metrics in general and NPS in specific. think at http://wimrampen.com 2

3. Chapter I. Value Defined... or not actually... By Wim Rampen People 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 its understanding ‘value’. Make no mistake: beneficiary. I once used the example of I’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 perspective others following his footsteps. Even everyone had exactly the same experience, we Michael Porter, the value chain guru, has all know that everyone will tell a different story come entered the debate with a plea for the following morning. Shared Value(s). And that is the case with all products and No, 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, a well, 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-created between Customers, firms and potentially many This Chapter contains three posts, amongst the other 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. To Be A Value (Call) Center is Not Your Choice By Wim Rampen Over the past years most companies have "Deployment of a Value Center strategy will only recognized the contact center or customer have a chance to meet the desired result if one services center as an important touch- can leave behind Cost Center methodologies point 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 something environment as much as I do the attention for one can decide to be by itself. Let the improvement of the Customer Experience. Customer be the judge of how much value is created through the Customer Services The main strategy of call centers has been to Experience, let the customer decide if your Call develop itself from a cost to a value center. Center is a Value Center! From a terminology perspective this works for me, but the practice, in my opinion, is mostly Call Centers are an important touch-point in the focused on single value creation or value Customer Experience. It is also not the only extraction. Let me explain my thoughts: point a Customer will touch in its lifetime. The design , delivery and decision making aspects The main elements of the cost to value-center within the Call Center change if a company strategy have been focusing around generating thinks and manages the contacts as part of a additional sales, through up- and/or cross- lifetime of Customer interactions. [...] selling. [...] Some pro-active companies are aiming to improve the customer experience Thus, to conclude, I believe the best way to go with 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-centered opportunity). approach. The best approach to Customer Services Call Centers is the Customer-centered I'm a firm believer in the great opportunities for approach. value creation there are on the customer services touch-point. I also see that, in lots of cases, after a promising first starting year, Deployment of a Value companies forget that value-creation is not only about extracting as much value possible out of Center strategy will only the Customer into the company. Hence have a chance to meet the companies start increasing the sales-targets and more importantly, they start increasing the desired result if one can "sales-per-hour" target, which is just another productivity metric not aimed at customer value leave behind Cost Center creation. Which leads me to the following methodologies and metrics statement: 4

5. "A brand doesn't know what it is unless it knows what its customer is. That's why smart organizations focus on strengthening relationships with actual customers, and not on the independent creation of content and attention." Tom Asacker - A Clear Eye Value is Always Co-Created By Wim Rampen One 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, or provide. I’ll try to explain why and how you Customers can only create value for should 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 able created with your product to make a phone call? How would you be able It’s persistence is shown e.g. in the way we to make dinner? How would you be able to think about value chains. It is vested thoroughly enjoy it with your friends? How would you be in 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 you adding value, whilst at best it is about adding get my drift here. And although it sounds knowledge, features or capabilities. None of incredibly logical, this is not the logic most these elements are creating value for the companies use when designing experiences or Customer though before they are consumed or targeting new Customers. used. Ignoring the Customer’s role As a consequence today’s marketers continue Most companies (their marketing departments to focus on explaining to (potential) Customers in particular) are stuck in telling Customers what what value they are providing or adding. Firms value for their money they get, based on the seem not to understand that the other side of ﬂawed thinking that the Customer derives value the table is not deriving value FROM the from the product itself. Yet, they are completely product. The other side is trying to get a job ignoring the Customer’s role in the process of done and your product or service is a means to value creation. that end, thus they are creating value WITH the product. And – this is really important – they 5

6. Value is Always Co-Created Continued... By Wim Rampen When they should be thinking how to further answer similar questions, yes. But dominantly in enable the Customer’s value creating the context of selling goods or services (how capabilities, they are thinking of how to capture can we make buying easier?). Too few ask value from the Customer. Which in essence themselves these questions in relation to the they ask in return prior to the value being Customer’s experience when consuming the created. (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 you Once you understand that the Customer has an provide? How powerful would that important, even decisive, role in the process of understanding be? What if you would value creation, and that value is only created in understand that better than your Customer’s use, it is not a quantum leap to the next stage: alternative suppliers? What would happen if you asking yourself what Customers need to do, in could support your Customers creating value in order to be able to create the value they are a more easy, better or quicker way, not just after. Asking yourself: What do they need to make them buy in a more easy, better or know, understand, be able to? (and I’m not quicker way? even touching upon the contextual and emotional side of value creation here). Or taken Would that not provide you with the competitive from the opposite angle: what is hindering advantage you want? Would that not create the them? what don’t they have? what don’t they advocates you want? Would that not allow you understand? what can’t they do? and how to capture higher margins over a longer come? 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. Value Co-Creation Canvas By Wim Rampen I'm a big fan of Business Model Generation journey to result in a Customer's experience and the Business Model Canvas. I find it that creates value for both companies and rather useful in many situations to explain Customers.. co-creates as one should say. the essence of CRM Strategy, Customer Experience and the importance of the I played around with the canvas and came up other building blocks to the blocks in the with my own Value Co-Creation Canvas.. It's far upper-right part of the Business Model from finished or perfect, but I believe it's good Canvas. enough to present to you and ask you for feedback. I think it should be a self-explanatory I also find it not to provide the depth sometimes canvas in the end, but am sure it isn't yet. So needed to explain how Company's resources please ask all questions you might have. It will and capabilities need to be aligned with help me improve it. Customer's resources and the Customer's 7

8. Chapter II. Metrics, metrics, metrics.. and how I love/hate NPS By Wim Rampen When I started with my blog, over 3 years But that never stopped me from writing and ago now, I was mostly concerned with thinking about it, resulting in the best read post metrics and measurement frameworks. I on my blog to-date. And it continues to be read even tried to rally up an international very well almost every week. It never community of highly experienced people in dissappears from the top 5 best read post. the ﬁeld of Customer Experience Management and measurement to co- On the next pages you will ﬁnd two posts on create a new measurement framework to NPS. Both resulted in heavy pro/con NPS capture value co-creation. debates. To-date I have mixed feelings about the concept. One thing is for sure: I’ll never buy What I didn’t know then is a) building a into NPS being the one number you need to community is tough work because hardly grow, like Reichheld c.s. suggested. anyone acts by himself completely b) it is impossible if the concept of value co-creation is But please, judge for yourself, if you haven’t not 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. NPS & The Customer Experience By Wim Rampen Net Promoter Score, like Customer customer service and sustainable growth. Satisfaction, is not a killer metric. Zappos.com is maybe The Brand Icon of how it NPS has been presented as ‘The One Number should be done. This video (featuring You Need to Grow’. [...] There has been, and Zappos.com CEO Tony Hsieh) provides some still is, a fierce discussion on the validity of NPS insight in how they do it. with regard to its [...] predictive capabilities. One of the better publications, from my point of It is not measuring NPS that relates to the view, is this one from MIT Sloan (PDF). For a success, it is the other way around good overview of pro's and con's also take a The success of a clearly defined, and well look here. executed strategy aimed at increasing positive Word of Mouth through "wowing" Customer Personally 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 of businesses. The Customer Experience is not companies resources, culture and true something one can take lightly nor are understanding of the Customer Experiences Customers. They are both way more complex that matter, which result in high NPS scores. than can be captured through measurement of one question (and an open feedback-question) Let me try and explain through a quote from that aims only to capture how many Customers Graham Hill: There is absolutely NO POINT in would be willing to promote your company or measuring something if doing so doesn't allow product. you to change the system through management action. These are often different Maybe provoked by the fierce way NPS measures to those typically measured by advocates approach the discussion and defend management. their positions, I developed an aversion to the metric. I still believe that a more profound As the video shows, Zappos.com understands measurement framework that focuses on their Customers and the Outcomes they desire. measuring Customer (desired) Outcomes and Zappos.com knows how to leverage this Value Co-creation, and not Customer knowledge and understanding. They are semantics, is a more powerful toolbox. measuring far more elements of the Customer Experience than NPS. Net Promoter Score for Zappos.com and a Customer Experience Zappos.com is an outcome of management that makes the difference action. I even think they are able to predict their Nevertheless I also have to acknowledge that next months Net Promoter Score because they there are some great examples of companies know what Experiences their Customers had. that are successful and that have great Net Promoter Scores.[...] One example of the Did NPS do that for them? I doubt it. It is their application of NPS I found has caught my focused and well executed strategy in attention: Zappos. Zappos is known for its combination with a balanced measurement great customer centric culture, wowing framework. 9

10. Sorry NPS, I’m not buying it By Wim Rampen I know a lot has been said about Net Promoter Score (NPS), and I'm not in this A comment by Rags Srinivasan to this world to judge anyone who's working with post provides some good additional it, or developing it into a Net Promoter insights: System. You make very valid points based only on I do like to share my experiences with it experience but also looking at it from though, hoping to attract other people who'd broader context. like to share theirs, so we can all get a better understanding of what drives Customer loyalty Since you already made some of the key and how to manage for it. Unfortunately the points on customer satisfaction metric and Net Promoter Score is not working for me right how NPS is all over the place, I will try to now. And here's 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 for Aa, who is working in my team as Program any business you are highly likely to find manager of the Customer Experience Program negative value. Take a case where we've launched this year. Zanna recently respondents all answer randomly and received her PhD based on her research on avoid rating 0 or 10. The NPS score for the role of the customer contact center in this business is going to be -55 relationship marketing. In short: she pretty (whether it is uniformly or normally much knows her stuff and she's as curious as distributed may change this, but still a I am to really understand what drives low negative number). On the other Customer Loyalty ;) hand a simple average of the rating (like customer sat) will show it is 5. A How we measure negative number creates a sense of As part of the program we are measuring really bad situation and helps to sell Customer Satisfaction, Net Promoter Score add-on services to improve this score. and Customer Effort Score. The first two we are 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 11 and the level of our annual Customer point scale? Why 0 to 6 are detractors Satisfaction survey on a large proportion of our when 5 is labeled on NPS survey Customer base (including those not in question as neither likely nor unlikely. interaction/transaction with us over the past year). Customer Effort Score we are only 3. If we treat 7 and 8 as Passives, what measuring on the level of interactions. Apart about those who did not even bother to from these standard questions, we are asking respond to the survey? By its own logic more questions in different forms, including an this scale should treat all non- open answer box to obtain qualitative 10

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 stable 4. 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 I'm '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. And In 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 latter from Rags on his blog at we don't know the exact way the questions are http://iterativepath.wordpress.com asked and in what order, we could not really be bothered. But with current 'evidence' that's exactly what we are.. Oh.. and the judge is still out on Customer Effort Score (CES), but so far we don't see the higher relationship with Customer loyalty, as promised.. So, what do you think? Back to Customer Satisfaction as the primary metric? 11

12. Chapter III. Social CRM Definitions, Concepts, Strategy & More By Wim Rampen Ever 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 need I’ve had some amazing talks, discussions his help, his point of view or his support. Thank and blog-exchanges and with many smart you Paul! and leading people in the world of CRM and Social Media, trying to figure out what And, that also goes for the bunch of people we Social CRM could be(come). If you select refer to as the “Social CRM Accidental the category Social CRM on my blog you Community”: Brian Vellmure, Mark Tamis, will find many articles about the concept Mitch Lieberman, Prem Kumar, Esteban and its development over time. Kolsky, Mike Boysen, Michael Krigsman, Paul Sweeney and Laurence Buchanan. All My musings on Social CRM are, volumewise, must follows. probably worthy of a book, but I’m pretty sure Paul Greenberg is beating me to it ;) And I can’t If you’re interested in Social CRM please read even begin to walk in his shadow. some of my posts on the next pages. Before you do, it does make sense to read Paul Paul Greenberg is one of the very few people I Greenberg’s seminal post: “It’s time to put a know that are really open minded and truly stake in the ground”. enjoy helping and connecting people. I’m not only glad I can count Paul Greemberg as a Enjoy, and son’t hesitate to contact me through friend, I’m really grateful he introduced me to my blog, if you have any questions or views to his world by inviting me to the world’s first share. Social CRM Strategy for Business Seminar in Washington DC, early 2010. Yeah, though Po the Kung Fu Panda became the Dragon Warrior by understanding that theres no secret ingredient in his father's 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. What a Social CRM Strategy is All About By Wim Rampen It has been a while since Paul Greenberg framework-statement I propose. First of all we put the stake in the ground by writing need to understand how Social CRM changes down the definition of Social CRM. For the way we answer those 3 questions? further reading purposes I will repeat it here: 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 run On top of the definition I think there is a more itself effectively too.” specified set of elements needed to define a Social CRM strategic framework statement. A But there is a change! Another quote from Paul statement that can provide some direction how Greenberg: to design processes, services and experiences in line with the SCRM philosophy and the latest “The lesson for business, in terms of Social thinking on Customer Centricity and CRM. CRM is that we are now at a point that the customers’ expectations are so great and their Three Strategic questions: Who? - What? - demands so empowered that our SCRM How? business strategy needs to be built around I think of strategy in three simple questions: collaboration and customer engagement, not Who 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 been a rough strategic statement that enables you to discussed and is still being discussed all over communicate both internally and externally on the (virtual) globe. what your Company is all about. At the end of this post I will provide you with my view on the On top of this Graham Hill said the following in Strategic Framework Statement for Social a comment to Paul Greenberg’s post: CRM. “Social CRM [...] extends CRM from being Before I do I will take you through some steps I something predominantly inside-out, to think are important for understanding the something that extends out into the 13

14. What a Social CRM Strategy is All About Continued.. By Wim Rampen conversations that customers are having to better understanding the concept of value between themselves. If we want to engage co-creation and the way it differs from different customers we need to really understand [...] the shades of “co-production” or “mass- jobs customers are trying to do and the customization” (the differentiating element is outcomes they are trying to achieve by doing `personalization of experiences - in use`). them. This i s best practice in understanding customer needs today [...] Once we understand A Social CRM Strategic Framework what customers need, we can innovate around Statement delivering exactly that [...]. And we can use If I now take the definition of Social CRM from service-dominant logic to provide experience Paul Greenberg, the understanding of Service platforms that allow customers to co-create Dominant Logic, Customer jobs and desired value together with companies. Co-creating outcomes as explained by Graham Hill as well value 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-how This is not a light read and Graham Hill has questions, I get what I would like to define as since written several posts that shed some the Social CRM strategic framework-statement more 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 future Graham Hill’s views (you can find links to his posts what I think the implications of this post there) because I had a need myself to statement are for a more detailed strategy. better grasp the concept of value co-creation and furthermore because I felt the need to be Of course I am not a guru and I’m definitely not able to explain it in as few words as possible to perfect in what I think and write. So it is now up anyone who is newly introduced to the to you all to blow it to bits or otherwise let me concept. know what you like or not about the statement. And I would appreciate any views on the I advise you to read the whole post as well as implications of the SCRM strategy framework the comments on it. This has been one of the statement when it comes to building a detailed most 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. Social CRM - What Relationships Should You Care For, And Why? By Wim Rampen I think most Social CRM definitions share a values the outcome generated from the company centered logic of building and/or experience of using your product or service, it leveraging a relationship between the should not be difficult to understand that Customer and the company. Customers value knowledge or information on how to improve that outcome, over I believe we need to let go of the company relationships (with the company). Even if the centered relationship logic and put Customers' company is involved in providing this relationships at the center of our thinking, when knowledge, it is not the interaction or we are designing our answer to the Social relationship, but the actual knowledge or Customer's ownership of the conversation. outcome of the interaction that is of value to your Customer. Most Customers don't want a relationship with you. We all understand and experience ourselves Your Customers value you mostly on the bases that the Customer does not depend on the of their experiences when using your product or company for knowledge or information. service. That's because they hired your product Customers turn to peers in their networks to or service to do a job for them, that they desire obtain this information, or to rating sites, to do. It's the outcome of the job your Customer support communities and what have Customers want, not the relationship. you. And all this information is valued higher than the information a company provides. Your Customer's relationships, not yours.. Also from a company's perspective, a Tap into the knowledge-flow relationship with your Customers is not what Hence, in the era of the Social Customer, you you need most. You need most to understand may want to better understand how your what job it is your Customers are trying to get Customers leverage ALL their relationships done. Company's can do that without any (strong and weak ties) and other ways of relationship with Customers at all. If the tapping into the knowledge-flows that matter to relationship with Customers was required no them, to obtain the information they need to start-up would be able to make it in this world. increase the value they create with the products Fortunately 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 maybe And here's why: part of this eco-system of your Customers' Because a Customer does not value a relationships. But please, don't put yourself at relationship with the company, but mostly the center of it.. 15

16. The S in SCRM is not about Social Media By Wim Rampen Today 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 these CRM. 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 the I 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 Customer's natural though on the meaning of the S. Here's way of segmenting. I believe it is not difficult to what I think the S in SCRM is about, and understand that capturing the understanding of why: the jobs your Customers are trying to do and the way they are trying to do it, is the Social 1. From 1-2-1 to M-2-M CRM way of Customer segmentation. I wrote a post almost two months ago on what relationships you should care for in Social CRM. Again, this doesn't mean that traditional ways In this post I argue that I believe we need to of segmenting have become obsolete. For me it completely let go of this company centered comes second though. Social CRM is not relationship 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-office understanding your Customers’ needs, you The third reason why the S in SCRM is more may want to better understand how your than adding a channel is the new entry to the Customers 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 and they need to increase the value they get from Services. With the S added to CRM innovation the 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 together between Customer and company are no longer with Customers (and partners) in close relevant. Nothing is less true, yet we need to collaboration. This can vary from inviting think of Customers as part of networks, of Customers to present new ideas to a full which we the company may be a part. And the process of co-development. It is clear to me company is not at the center of it: the though that product development and Customer is. innovation departments are having meaningful dialog with Customers, which, to me, allows 2. Segmentation the Customer's way them for a seat in the front-office row of a In traditional CRM companies segment Company. Customers along the lines of socio- and 16

17. The S in SCRM is not about Social Media Continued... By Wim Rampen 4. Breaking down silo's knows how to leverage his voice and Breaking down silo's 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 be consequence of the high focus on transactions treated as an opportunity for exchange at any and transaction efficiency (by example: much of convenient moment, from a Company's point of SFA is basically nothing more than monitoring view. But a Customer who wants to be treated transactions, from lead-generation numbers, to with respect and wants to have options to appointment numbers, to RFI's answered choose from. Moreover the Social Customer numbers etc etc..), this has not happened. wants to have influence on how he creates Specialization and task-oriented jobs have value from the products and services you become the norm in business (no need to provide. explain I think.. we can all relate, not?), whilst sharing knowledge and collaboration are The S in SCRM is about catering for these becoming increasingly important in the rapidly needs and adopting approaches that show changing and complex systems that we are all respect for the way the Customer wants to be part of these days. If we are ever going to turn treated (this last point in it's essence: no more CRM from the inside out to the outside in, we unsolicited direct mail, e-mail and outbound- need to break down the silo's. Before the S campaigns, in which unsolicited is very different was added to CRM, companies could still get from not opting out!). away with it. Increasing Customer empowerment is turning this ship around, To conclude: to me adding the S to CRM is through Customers complaining about the much more than just adding Social Media to Customer experience in open innovation the other channels available for communities, by marketing talking to Customer communications with Customers. Which is also service if they can help them turn service into why I disagree with any definition of Social CRM sales (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. I'm Much more water will flow through the Rhein, interested in learning yours. Please share them, before the Silo's 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 to CRM. Capturing the understanding 5. Answering to the Social Customer Last, but not least: According to Paul of the jobs your Customers Greenberg this is the essence of Social CRM, are trying to do is the Social and I agree. The Social Customer is not (only) a person that engages through Social Media. The CRM way of Customer Social Customer is any Customer these days. A segmentation. Customer that is not becoming more vocal and knowledgeable, but already is. A Customer who 17

18. The Only Thing Your Social CRM Strategy Cannot Do Without By Wim Rampen There have been some interesting discussions around what elements your Implementing social tools, and doing absolutely Social CRM eﬀorts can or cannot do nothing differently than before, would not make without. It started with Bob Thompson it part of a Social CRM strategy. Just like asking whether one can do Social CRM adding e-mail or chat to the channel-mix wasn't without Social Media/Networks, or CRM truly game-changing. And increasing your Systems. 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 your Prem Kumar asks whether Apple is using Customers either. Social CRM. I recommend you read both posts and the discussions in the comments. From 18 to 2 Use Cases? Having said this, it is also clear to me what These discussions made me think though what popular "use cases" under discussion would would be the one thing your Social CRM not imply a Social CRM Strategy. This does not Strategy cannot do without. THE sine-qua-non mean, by the way, that there's no value in these of Social CRM. use cases. To me, they would be part of regular CRM or CEM programs, like we have been In my humble opinion the sine qua non of running them for quite some years now. They Social CRM is: Empowering the Customer in are either about using or adding the Social the process of creating value for the Customer. Media channel and tools or improving upon practices that should have been part of being This 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 and Social Media. It is not only missing.. it's the key your company by implementing these use element that is missing. cases. Social CRM's 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 company's relationship with him. [...] meeting the company's objectives on the one hand, but on the customer's terms on the other. - Paul Greenberg - 18

19. The Only Thing Your Social CRM Strategy Cannot Do Without Continued... By Wim Rampen not only to share, but shape their experiences I reviewed the 18 use cases of Social CRM with their peers (much like Nike + is doing), and as published by Altimeter early March of this cases that allow your Customers to sell, share year. I believe the following 2 use-cases or distribute their own ideas and products described 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 of creating value for the Customer (themselves or These use cases require a higher level of their peers, that is). They are about involving creativity and "guts" than just implementing and empowering the Customer in the design social media or social tools to existing and 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 of Peer Unpaid Armies or Customer Support your Customer in that process. Communities - Where smart organizations find ways to harness the collective expertise Transferring the power available within their networks of Customers Acknowledging that Customers own the (and providing the platform for Customers to conversation is not enough. Having meaningful exchange that expertise with their peers). conversations on online social networks with your Customers is not enough either. # 13: Social Innovation streamlines Complex Ideation - Crowdsourced R&D - Where You need to design experiences and companies find ways to harness the collective experience platforms that will allow the expertise available within their networks of Customer to influence their experiences or that Customers for ideation, product development will allow your Customer to support their etc.. networks and peers in creating personalized experiences. All other use cases are smart things to do, but mainly about doing smart things you (should) It is about actually transferring the power from have been doing before. Social tools or the company to the Customer, and that is much channels may help you to get these jobs done harder to do, than implementing social tools to better than before, but they do not significantly do a better job at the things you (should) have change 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 by the way. They are cases that involve the What do you think? Are you ready to transfer Customer to customize the products before power to your Customers? ordering or even build their own (Lego), cases that bring Customers together in communities of practice or social networks and allow them 19

20. 5 Things You Need To Know About (Social) CRM (Definitions) By Wim Rampen I think trying to define something is a very good • (Social) CRM as a (cap)ability exercise to understand what you are dealing • (Social) CRM as a technology with or what you are trying to do it for. It also • (Social) CRM as a practice (or as practices) helps to communicate internally. And regardless of what many say, I don't think there are OR, as a combination of all or some of the enough definitions of (Social) CRM, at least not above concepts, in a non-alphabetical order. good ones.. But that is a personal opinion, not relevant to today's post.</em> Most of the times you'll find that the writers point of view is highly related to the concept of If, for whatever reason, you have a need for a CRM he's trying to define. But it's not always definition of (Social) CRM, please take into the case. It will not take you a long time to find consideration the 5 things you need to know a CRM strategy definition from a PR/marcom about (Social) CRM for you to make your own specialist. Again, no pun intended. definition, described here: 3. In what context? 1. What's your point of view? (Social) CRM, regardless of your point of view The concept of (Social) CRM has been defined or the concept you defined, is not similarly and explained by many different people inside successful under all circumstances. E.g. it and outside "the industry". Be it marketeers, matters if your industry is one with high scholars, IT-consultants, vendors etc etc. they commoditized products versus industries with all have their own point of view, they all take low commoditisation. CRM is more successful with them their own backgrounds and biases. in highly commoditized industries, because there it provides a way to differentiate oneself Definitions only tells you so much about (Social) from competition.. yes.. CRM is what people CRM itself. Definitions will tell you a whole lot mean they need when they say that Customer more about the person who made the service must be a differentiator. They just don't definition. And I do not mean that in a bad way. always realize it.. I do think it is important that you are aware though, 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 CRM comment on your definition, better.. project within your company, or that you are just about to start your first. It thus is of vital 2. What's your concept of (Social) CRM? importance that you understand and articulate Regardless of the definition you'll 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. 5 Things You Need to Know About (Social) CRM (Definitions) Continued... (1) By Wim Rampen the "treating different customers differently" processes etc etc..). How else are you going to paradigm it so strongly supports. (Although we understand which Customer does and which still see many CRM system implementations doesn't value the relationship? How are you with 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 you every Customer.) going to differentiate your service offering based on such understanding? Cost-leadership is basically the first one to think of. Not so much in relation to higher And yes, the same seems to be valid for the efficiencies, but to improved effectiveness. It is Social species as well. Most Customers are just easy to understand that increasing a conversion connecting on-line with brands for the purpose rate from 5 % to 10 % can be achieved through of getting a perk or discount. They are not there creating the same total number of leads, but for the engagement. with higher quality, or through creating better targeting within a smaller number of leads. The Bottom line: never ever (!!) say you need to latter is more likely the case in most DM/Cross- do (Social) CRM because your Customers sell 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 the your Customers from being targeted (and trust above is valid for both Social CRM and CRM me, they don't mind). (tradizionale if you want ;) definitions. Does this mean that I'm ready to leave the Social part on What I'm trying to say: don't link your CRM the table and get back to using good old CRM definition to business performance directly, link (of which "social" is an integrated part..). I think it 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 CRM shows as much as two thirds of your Customers do not really want a relationship strategy is NOT about trying with you. The even do not expect the benefits to get a spot inside of such a relationship (or could have a low expectation of such benefits?).. And the Customer’s circles and at worrying part is that it's mostly the young and the same time letting them wealthy people who are not interested in these relationships. wait in the cold after knocking on your touch- But that doesn't mean you do not need to develop (Social) CRM (capabilities/strategy/ points door! 21

22. Observations Why Social CRM Isn’t By Wim Rampen No, I won't claim Social CRM is dead, to creation with Customers, not just supportive the contrary. It just isn’t growing up fast of transactions. enough to really have a business impact. Mono-channel focus This is more likely due to the slow pace at The current logic of many companies is that which companies are responding to changing investments should flow to mobile and social market environments than it is due to the channels, because this is where, and how, the advancement of technology... Customer “hangs out”.. They seem to be forgetting that way too many Customers There are a few observations I would like to continue to fail doing what they need to do at share with you. Observations I see as hindering the “traditional“ touch-points like the Call us in the advancement of service being Center or the company’s web-site. practiced as the dominant logic, Social CRM as the supporting strategy and Customer Adopting a Social CRM strategy is NOT about engagement as it’s underlying tactic. trying to get a spot inside the Customer’s circles and at the same time letting them wait in It's company centric the cold after knocking on your touch-points Companies continue to think mainly how social door! technology in general and on-line social Lack of accountability networks 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. All network for that matter) seems to be focused on how companies can use it to engage energy is directed to getting social working, without a clear view on what types of value it Customers, mine their conversations and to become part of their circles (to sell them stuff). should generate for companies. Most are on Companies continue to ignore that CRM the train, or almost ready to jump on it, few should shift it’s focus from the Company - know where it’s heading. If we are not tying Customer relationship to the Customer - Customer engagement tactics to Customer Customer relationship. engagement value, your social initiatives will not outlive the next crisis. Influence, not value Social Network analysis is targeted to Analyst paralysis On top of all of the above, analyst firms, like understand 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 so Customers. We would make a lot more progress if we would direct all these resources confusing companies even more. (You should read Paul Greenberg's post on this topic! to understand how Customer’s value is created in, and flows through, social He's spot on.) networks. Because this will help us design and align touch-points that facilitate value co- 22

23. Observations Why Social CRM Isn’t Continued... By Wim Rampen Catching the wave The 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 navigate catch long enough to jump the next one.. To those, you should not expect to get out of there me 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. Chapter IV. Marketing With a Service Logic And Service With a Marketing Mindset By Wim Rampen What I’ve tried most, over the past years of I therefor would like to conclude this booklet blogging, is bringing together (Social) CRM, with two posts: The ﬁrst is about Customer Customer Experience Management, Customer Service and how Managers of Customer Service, Marketing and as of late also Service Departments should break free from the Innovation & Service Design. From my silo’d after sales support role. The second one prespective all these disciplines are trying to is about how Marketing with a Service mindset solve the same challenges, but are either requires new approaches and most of all 7 new limiting themselves to a speciﬁc discipline, “jobs” for marketers to perform. technology or methodology, or are trying to compete with the others. Thank you in advance for taking the time to read this far. I hope you enjoy the last two And that’s too bad, because either of the articles, and look forward to your feedback on disciplines has a lot to offer. I even think they all my blog at http://wimrampen.com need each other. There are two books I always recommend when I’m talking about Customer Service. You should read them too. 24

25. Because It Is Time You Take Customer Service Seriously By Wim Rampen Despite 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 effort Social Media, I sometimes get the feeling as well as implementing self-service capabilities that managers in Customer Services put in for high value contacts to Customers OR a lot more effort to ensure the company company. Last, but not least, investing in those does not get bad press, or negative "buzz" contacts regarded valuable to both Customers in stead of providing a better then AND company. expected Customer service experience. The methodology basically prescribes you to: We know companies do not always take Customer service seriously. I think though many • Listen to "What (y)Our Customers Are managers of Customer Services should start Saying" (WOCAS) taking their discipline a lot more serious than • Improve your products and processes so that they are doing today.. you do not get repeat contacts and many complaints Apart from the fact that it is useful to improve • Implement self-service with the utmost rigor waiting & ticket-processing times, Customer's possible self-service capabilities, complaints handling, • Use the remainder of contacts to do smart first contact resolution, quality monitoring up- & cross-selling scores and what have you.. I believe there is a • Segment your service (e.g. better service for necessity for a more fundamental change in high value Customers) both the mental model and governance systems guiding current design and execution And if you do this well, you'll see that your of 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 and service needs a (mental) makeover for it to transaction volume can multiply with a factor really become one. five (Amazon case). The best service is no service Five perspectives To date, the best proxy for good and effective Whilst I believe there is a lot of greatness to be Customer Services (operations), has been set found in this methodology and/or approaches by Bill Price, with his book (and proven like Lean/SixSigma, which have similar claims methodology) "The Best Service is no Service". and approaches, I believe we need a more You can see a good summary in this fundamental change in perspective to get out of slideshare presentation. the "call center is the end of the line or the organization's drain"-paradigm. And, of course, Key to the methodology is that it very closely to finally start having a real and sustainable looks at what contacts are of value to the impact on business results, not just sitting on Customer and to the company, continuously the cost-side of the equation. 25

26. Because It Is Time You Take Customer Service Seriously Continued... (1) By Wim Rampen I 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 you're out. Maybe, just maybe this improves Customer Satisfaction on the call, but 1. The Value-perspective if this also relates to improved value to the 2. The Customer-perspective company as a whole, or the Customer in 3. The Experience-perspective specific, is only assumed, if at all. Besides that: 4. The Relationship perspective satisfactory results are good enough, most 5. The Network-perspective certainly if it's possible to reduce costs further without reducing Customer Satisfaction. Combining these perspectives and projecting them onto Customer services operations shows This all may be a little better in the Best Service we are far away from integrating the logic, the is No Service approach, but even there it is the views and ideas that can be found in these contact and the transaction that is center to the perspectives. All the more reasons to take a approach and the upper right corner of the closer look. value to the Customer vs Value to the Firm matrix shows "sales campaigns" as one of the 1. The Value perspective activities to fit in there. I would argue there is no The most important shift in logic and customer value to the Customer in being sold to.. services governance we need to make is the shift in our value logic. The entire governance Goods versus Service Dominant Logic system is based on a value-logic that embraces To put it bluntly: the Customer Services value to the company and aims at maximizing management system is designed with a Customer value extraction. production-based logic from the pre-war decades of the previous century. The founding The 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 dominant uses 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 the The "transaction" or "interaction" (=the call) is basis for value creation between company and central to all we are doing. Contact Centers are Customer. And a mindset that values the role of managed by the day, the week at most. even 26

27. Because It Is Time You Take Customer Service Seriously Continued... (2) By Wim Rampen the employee, not just the value he/she is able any period, nor what the calls of the heavy to extract from the Customer in exchange. users are about, compared to the light users. To cut it short: any Customer Services And whilst the "Best Service is No Service" department that has not already should get approach is more than half way of this direction, started tomorrow on building a Customer most Customer Services (operations) needs to centered view of their operations, not a redefine 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 what's the issue" look on your face. More guidelines as to what this means can be found in the four remaining perspectives. 3. The Experience Perspective Furthermore it is of vast importance to stop 2. The Customer Perspective seeing service as something just offered after I did not only not put this one first to avoid the sales when something went wrong. From the obvious trap, but more so because I wanted Customer's perspective everything you do is you to understand first, from the previous service (or not, most of the time ;). The way paragraph, that from my point of view most service is perceived is through the experiences Customer Services operations are not about Customer have over all your touch-points. From Customers. They are about transactions. the fine-print to the mail-delivery company Throughout my career I have not seen one used, to the advertisements in a magazine (with Manager Customer Services reporting a coupon for new Customers with a nice Customers, not transactions. Not one of them discount..), to the invoice, the payment could say, on a weekly bases even, how many arrangement, the collections calls etc etc.. Customers dialed in, and how many have been helped to their satisfaction. And, more and more experiences from others are part of the Customer's perspective of the They can tell you how many calls they handled, service you provide, through ratings and and what the average satisfaction score was, reviews shared by others, whether shared but they cannot tell you how many Customers through (online) social networks or not. are considered at risk for retention, because they had a complaint. But this was not logged Understanding the Customer's journey as a complaint, because the Customer did not throughout her lifetime should go beyond listing use 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 and Hardly any Customer Services manager will be (actionable) insights to the organizations as to able to tell you how many unique Customers (incrementally) improve the Customer call into the call center or visit a service site in Experience. Customer Services should expand 27

28. Because It Is Time You Take Customer Service Seriously Continued... (3) By Wim Rampen their horizon by understanding the Customer's other legal actions, your Customer is already journey and how their key-capabilities to help doing what has been advised by her peers or Customers when things are not running "experts". smoothly, could be put to use to improve the Customer's experience when getting her job Where many companies are stars in describing done. what situations are NOT covered by Customer services, companies that see themselves as 4. The Relationship Perspective service providers to their Customers, arrange The fourth perspective is the Relationship for their Customers to have access to networks perspective. CRM traditionally consists of of Customers and/or experts, outside the Marketing, Sales and Service. In the name of company firewall, to increase the likelihood that CRM though, many companies have done their the best resolution is offered in the fastest very best to exploit their relationships with possible way, with the least possible Customer Customers at the lowest possible costs. And effort. Please take a look at this post by when the relationships comes to a divorce, Laurence Buchanan about GifGaf to see the companies even ask for alimony. CRM is not benefits of this Network perspective. there to improve the Customer's nor the employee experience, CRM is there to improve To conclude the company's control. Best practices in Customer Services are hard to come by, mostly because bad Customer In stead of conversion-rates, revenue per hour service stories have better reach and because or per contact, I believe the next generation there is more to gain for the story-teller. The Customer Services will need to make a serious best methodology so far comes from the heart effort to manage their Customer interactions and mind of Bill Price: The Best Service is No with respect for the (individual) Customer's Service. I do think though Customer services in lifetime value, network value AND referral value. general, and the Best Service is No Service, are These long-term relationship-indicators should in need of a thorough iteration, based upon the shed a different light on what is important to latest insights and developments. manage on a contact, and which contacts are of value to the company and/or the Customer. The five perspectives discussed above are not new in a stand alone way of discussing. I 5. The Network Perspective wanted to bring them together as guiding Last, but not least: in the name of CRM the 1 principles, with practical implications, for the on 1 relationship between Customer and future directions of Customer Services company is center. In the meantime, in management and governance. Directions that Customerland, the Customer, increasingly go beyond operational excellence, process armed with numerous social tools, cannot only efficiency and other tactics. solve issues better herself, she can do so faster than you can, and most of the time even better. Because it is time we take Customer Where your legal department is still fighting over services seriously.. wording issues, to avoid future compliance or 28

29. What Really Replaces Marketing (Madness) By Wim Rampen If there ever was a reason for me to write about framework that just made all pieces I had in my the 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 Combined new era has already arrived. And there is Nilofer The bottom line in my thinking is that, since Merchant who suggests Marketing is Dead and Value is dominantly created in-use and is a then comes up with 5 ways to replace it. result of co-creation between company and Customer, marketing strategies should shift All in itself these five ways are things I can relate their focus from creating momentum for value to, but they don't make it as replacements for exchange (the sale) to creating momentum for Marketing, in my humble opinion. interactions that support Customers in creating value for themselves. I recommend you read Ron Shevlin's post, a response to Merchant's post, titled: The Death And since value is something that can only be of Marketing (Madness). The subtitle of his defined by its beneficiary we need to blog (A (Mostly) Humorous Look at Marketing in understand what outcomes Customers desire the Age of Social Media) says it all. A very when they hire a company's resources to get welcome critical and lighthearted voice in this their jobs done. age of Marketing deadly replacements. The Customer's journey towards that outcome What Really Replaces Marketing is where opportunity for marketing lies to design (Madness) service that support Customers, employees Here's 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 the Marketing faculty, headed by Peter Verhoef, of That may sound a bit posh (or a little more than the University of Groningen (The Netherlands). a bit), but the combination of the three The guest lecture was titled: Marketing concepts (Service Dominant Logic, Customer Leadership in age of Service. Jobs-to-be-Done, Service Design) has been a powerful one for me. Not only to explain the I largely agree with Nilofer Merchant that outside world, but also to drive innovation in Marketing needs to change its act. I have had Marketing in my current role. that feeling for a long time, before 2009, when working in Customer Services, seeing the Three Ways Marketing Needs to Change debris of (direct) marketing campaigns, failed Marketing needs to change in three brand promises and what have you. Early 2009 fundamental ways. First marketeers need to I started reading into the works of Steve Vargo understand that they need to let go of a and Robert Lusch named A Service (communication) campaign driven methodology. Dominant Logic and I was introduced to the Marketeers need to turn into Service Designers Customer-Jobs-to-be-Done innovation that are capable of designing end-to-end framework. Both combined provided a thinking experiences. And they need not only design, 29

30. What Really Replaces Marketing (Madness) Continued... (1) By Wim Rampen orchestrate and market the experience (or value proposition in Service Dominant Logic This will involve both analytical approaches and terminology), they also need to ensure the qualitative approaches (like Customer Journey company's capability to deliver on the promise. Mapping) for understanding the voice of the And this also means involving, and taking Customer. And these programs need to be responsibility for, company partners in the value focused outside the building, not within the network. walls of the firm (e.g. internal process mapping). Secondly, marketeers need to start For their second job Marketers need to build understanding that it really matters who you relationships in communities of individuals with drive through the sales funnel. Goods-logic similar Jobs-to-be-done and desired Marketeers don't care about the quality of the Outcomes. lead, Service-Logic marketeers do, because they truly care about how they make their Traditional ways of segmenting Customers by Customers feel in the end, and because they their age or other demographic qualities have know serving the right Customer is a lot easier become largely obsolete in the worlds and vastly more profitable than serving just any individualistic melting pot of cultures, lifestyles Customer. and routines. People bond with people that think and act alike. People bond with different Thirdly, the next generation of marketeers people for different outcomes. Think Nike Plus should understand that there's more to value in and you know what I'm talking about. a Customer than just their wallet. Obviously we understand these days that a Customer's Their third job is to start supporting Customers connections matter, if only because they can tell to create value, not doing stuff to create value a whole lot more about the Customer, than she to the company. will tell you herself. When seeing Customers as co-creators a lot more opportunities open up, Stop trying to design a service that helps solve like having them do work for you, because the your problem of liquidity. Solve your Customers Customer 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 Marketing's fourth job is to design for To make it a little more concrete I wrote down 7 interactions that stimulate engagement in these networks or communities (=your Customer jobs 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 Marketing's first job is to understand Customer's 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. What Really Replaces Marketing (Madness) Continued... (2) By Wim Rampen their Customers and between Customers. Think That's it. Marketing's new madness, according GiffGaff and Best Buy as good examples of to me. Nothing really complex, but also easier companies 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, I'm doing You can name it internal branding or your HR- them a little better every day. You? policy to motivate employees, it is of vital importance that they understand what you are There are numerous blogs, articles, papers doing with your Customers and why, and what etc. I’ver read over the past years. I was their role is in this journey. I find it helps a great about to summarize them here, until I deal if you get the first job done right. This will found this excellent resource-list from Service360. You can download it at their provide you with tangible frameworks and website. memes that will make it easier to get people involved and move towards a pro-active state of While you’re there, please also subscribe mind, 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 don't listen, you don't win. If you don't improve, you will loose. If you don't innovate, you'll 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 Customer's value created. If you can't measure, you can't manage. Old metrics focused on transactions and/or interactions are there to stay. The new way is to combine them with Customer value metrics and not evaluate them in isolation, but as a system (balanced scorecard still works for me..). 31

32. THAT’S IT . (FOR NOW) Please let me know what you think at http://wimrampen.com 32

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