EXECUTIVE SUMMARY: UNDERSTANDING CUSTOMER EXPERIENCEAnyone who has signed up for cell phone service, attempted to claim a rebate, or navigated a call center has probably suffered from a companys apparent indifference to what should be its first concern: the customer experiences that culminate in either satisfaction or disappointment and defection.Customer experience is the subjective response customers have to direct or indirect contact with a company. It encompasses every aspect of an offering: customer care, advertising, packaging, features, ease of use, reliability. Customer experience is shaped by customers expectations, which largely reflect previous experiences. Few CEOs would argue against the significance of customer experience or against measuring and analyzing it. But many dont appreciate how those activities differ from CRM or just how illuminating the data can be. For instance, the majority of the companies in a recent survey believed they have been providing superior experiences to customers, but most customers disagreed.The authors describe a customer experience management (CEM) process that involves three kinds of monitoring: past patterns (evaluating completed transactions), present patterns (tracking current relationships), and potential patterns (conducting inquiries in the hope of unveiling future opportunities). Data are collected at or about touch points through such methods as surveys, interviews, focus groups, and online forums. Companies need to involve every function in the effort, not just a single customer-facing group.The authors go on to illustrate how a cross-functional CEM system is created. With such a system, companies can discover which customers are prospects for growth and which require immediate intervention.CEMCRM

WhatCaptures and distributes what a customer thinks about a companyCaptures and distributes what a company knows about a customer

WhenAt points of customer interaction: touch pointsAfter there is a record of a customer interaction

How MonitoredSurveys, targeted studies, observational studies, voice of customer researchPoint-of-sales data, market research, web site click-through, automated tracking of sales

Who Uses the InformationBusiness or functional leaders, in order to create fulfillable expectations and better experiences with products and servicesCustomer-facing groups such as sales, marketing, field service, and customer service, in order to drive more efficient and effective execution

Relevance to Future PerformanceLeading: Locates places to add offerings in the gap between expectations and experienceLagging: Drives cross selling by bundling products in demand with ones that arent

The idea at the center of CRM can be stated in the following way:Every time a company and a customer interact, the company learns something about the customer. By capturing, sharing, analyzing and acting upon this information, companies can better manage individual customer profitability.CEM's premise is almost the mirror-image. It says thatevery time a company and a customer interact, the customer learns something about the company. Depending upon what is learned from each experience, customers may alter their behavior in ways that affect their individual profitability. Thus, by managing these experiences, companies can orchestrate more profitable relationships with their customers.CRM comes after the experience, and CEM works hard on anticipating it. The two approaches are highly complementary and work together to improve an organizations understanding of its customers.Where does the problem lie? The authors have identified three factors: Overspending on CRM data that captures what a company already knows about their customers. In contrast, CE data looks at capturing a customers immediate response to an interaction. Lack of top-management empathy towards customers needs. Executives rising from finance or technology backgrounds still regard customer experience management as the responsibility of sales, marketing, and customer service departments. Fear of qualitative customer experience insights. Organizations are still driven by quantitative data. By combining CRM and CE insights, organizations can not only identify new trends taking place (the what), but understand how internal forces and subjective factors are driving these changes (the why and how).

CUSTOMER PROFITABILITY AND LTVExample: Customer Acquisition CostThe cost of sending a catalog (which includes production and mailing) is $0.5. The response rate is estimated to be 1%. By analyzing the buying behavior and demographics of current customers, the retailer estimates that it can rent names selectively from the broker to achieve a response rate of 4%. The list broker has a price of $0.2 per name.A response rate of 1% means that if the retailer sends out 100 catalogues, only 1 person is expected to respond. Similarly, a response rate of 4% means that out of 25 catalogues, 1 person is expected to respond. A.C = (# of catalogues needed to get 1 customer) * (cost of sending a catalogue) = Thus, the A.C of sending one catalogue using the random mailing approach is .5/.1 = $50 v.s using the broker (.5 + .2) / .1 = $17.5

Response Rate = CLV = - AcCustomer Experience and Brand Touch-PointsCustomers experience a business (or brand) in many different ways, both directly and indirectly. Some organisations gain a reputation as being "hard to do business with". Others constantly delight their customers (or at least build strong loyalty). Sometimes this is based on the performance of the product or service that a customer has bought. Usually it is a result of the many other ways in which a customer comes into contact with the business - its "touchpoints" with customers.

Every touch-point that is in any way associated in customers' minds with the brand identity of a business contributes to the customers' experience of that brand. This means every piece of marketing communications, sales contact, service delivery, customer service interaction, and business system that the customer comes into contact with can impact the brand image and customer franchise.Virtual Relationships and Customer RetentionVirtual relationships offer a powerful approach to generating positive customer experience while managing costs. When the full breadth of options are considered, many businesses will find that very few interactions with customers need to be face to face in order to deliver a valued, quality experience.This is particularly important in customer retention activity. Businesses need to ensure they do not erode the profitability of valuable customers in their efforts to retain them and strengthen customer franchise.From the customer's viewpoint, a business can generate positive experience and a feeling of membership or belonging through many channels. These include direct interactions the customer has with the business as well as the "halo effect" of encounters with the brand in their daily lives.

Understanding Brands Traditional Perspective Brands are intangible assets which provide value to the firm and its customers. Brands have an informational role, adding value to the branded product beyond its functional utility (i.e. people pay extra for Heinz ketchup because people know and trust the brand)Contemporary Perspective Products are made in the factory, but brands are created in the mind Walter Landor While traditional definitions of branding highlight the identification of marking function, they may underestimate the critical ways a brand infuses a choice situation with meaning. Brands color how consumers experience, understand and value the product. The web associations of brands is known as brand knowledge 2 types of brand associations Tangible: related to the products actual performance and functional purpose. Intangible: stress the intrinsic value of the product to the consumer and tend to be more imagery related and abstract.Brands as Identity MarkersBrands are used by consumers and identity markers, props to construct and maintain their identity.The identity meanings of brands arise from several different sources: First, identity meanings can flow from the identity of the group of people who most use the brand (Honda odyssey and soccer moms) Second, brand managers can craft the identity meanings of the brand though advertising and other marketing communications programs. Using a specific type of spokesperson imbues a brand with identity meanings (Nike and Michael Jordan) Brand carry 5 different personalities: Sincere brands (hallmark), exciting brands (axe), competent brands (Prudential Insurance), sophisticated brands (Grey Poupon) and rugged brands (Levis) Consumers choose brands that signify who they are or who they would like to be and avoid brands that are not me or which are used by undesirable others.Brand Communities (brands as social glue)We tend to form bonds with other people who share our brand preferences. Our consumption of brands help us achieve social integration when we purchase and use brands that are socially desirable in a group we want to join. Essentially brands help us fit in, and stand out.Brand Equity: Valuing the BrandON the micro level, brand equity arises from the differential responses consumers have to products when they are branded. One way to measure brand equity is to offer 2 identical products (one with a brand name, one without). Brand equity is calculated based on how much more the consumer is will to pay for the branded item On a macro level, brand equity is measured as the incremental profits that accrue from the sale of the product versus the level of profits that would of accrued from the sale of the same product unbranded. This recognizes that brand equity drives not only a revenue premium, but also cost savings. Products with strong brand gain efficiency in marketing costs because consumers are more receptive and responsive to a brands message

Branding as a competitive advantage

Product differentiation has become difficult to achieve especially in a crowded market place. Therefore, it is imperative to understand that branding is one of the most important aspects of business. Salience: having a brand with broad, deep brand awareness, so that consumers think of the brand in a purchase situation. Brands serve multiple purposes for consumers, some of which are informational and cognitive, and some of which are psychological, emotional and ego-expressive. This duality of purpose is capture in the Brand Resonance Pyramid. Resonant brands enjoy high levels of loyalty and are the brands in which consumers form strong relationships.Positioning: The Essence of Marketing StrategyWhat is Positioning?A position (or statement of position) is a cold hearted, no-nonsense of how you are perceived in the minds of your prospectsPositioningis the process by which marketers try to create an image or identity in the minds of their target market for itsproduct,brand, or organization.What is a Positioning Statement?A positioning statement, in contrast, expresses how you wish to be perceived. It is the core message you want to deliver in every mediumIt is not an advertising strategy, a slogan, or a tag line. It is an internal document, and it often very dull and straightforward. No embellishment. No hype. The positioning statement guides the development of marketing communications to reach the target customers. Among (target market), (x) is the brand of (frame of reference) that (point of difference) because (reason to believe).Example, Among snackers, Snickers is the brand of candy bar that satisfies your hunger because it is packed with peanuts.What are the various components/elements of a positioning statement?Target Market: Snackers? Busy people? Hungry people? The target market decision should be made prior to the position statement. You are concerned of how your product is positioned in the minds of your target, not the whole world.Frame of Reference: This reflects how you define the market in which your product competes. Often this is expressed as a product category. Is it a candy bar? Chocolate candy bar? Energy bar? A snack?Point of Difference: Within the frame of reference, your product must be different from the competitors on one or more dimensions that is meaningful to customers in your target market. Ideally, you specify the single most compelling and persuasive reason your target market would purchase your product over the competitors.Reason to Believe: Customers have to believe that your product can deliver its point of difference.Vetting the Positioning Statement?The following 6 criteria are useful for vetting (evaluating, selecting) your positioning choice: Relevance: do consumers care? Clarity: will consumers get it? Credibility: will consumers believe it? Uniqueness: from our consumers viewpoint, does it set apart from our competitors in a meaningful way? Attainability: can we deliver? are our claims consistent with our performance? Sustainability: can the position be maintained over time?7What are Perceptual Maps?They are used to answer strategic questions such as how do customers or potential customers view our brand? How do they view our competitor? What brands are our closest competitors?It is a two-dimensional graphic that shows the relative location products or brands occupy in the minds of the consumers.

Inspirational Power of Purpose (YouTube)Pritchard calls this "the inspirational power of purpose" and discussed how each P&G brand is defining its purpose to find those deep human insights that touch lives and improve life. This means a fundamental change from simply marketing to consumers to serving people. It also requires Big Ideas that are surprising and engaging enough to encourage participation in the world of a brand.We must move out of the selling products business to the business of improving lifeMarc Pritchard, P&GK.Maccurates some of the inspirationalleadership, business transformation andmarketing strategynews that catches our attention. In this post, Marc Pritchard, P&G Global Marketing and Brand-Building Officer introduces 5 key concepts describing the inspirational power of purpose and creative innovation that has allowed P&G to thrive during uncertain economic conditions and times.We live in uncertain times. These times are challenging and will continue to be challenging. Our world is one of uncertainty, mistrust, cynicism. Technology continues to change the way we live and its evolving at warp speed. We are all connected, all the time, operating in a 24/7 world. Technology is building communities and reshaping the way we communicate with each other. As individuals, we are inundated with thousands of messages daily. For business, Challenging? Yes. For business leaders and marketers, Opportunities to Grow your business? Even more so!So, what are these opportunities? As a business, how do you break through to connect with your customers? As business leaders and marketers, how do you build your brand or business to thrive during these tumultuous times?A recent talk by P&Gs Marc Pritchard caught my attention. P&G Global Marketing & Brand-Building Officer Marc Pritchard explains how the Company usespurpose-driven brand buildingandcreative innovationto thrive during uncertain economic conditions and times. Pritchard introduces5 key conceptsdescribingthe concept of the power of purpose, presents three examples for how P&G brands bring this concept to life and illustrates the Companys core marketing strategy: that by improving peoples lives, P&G can do well by doing good Touching Lives, Improving Life.Marc Pritchard begins his talk noting that people have changed.People want to know what brands stand for such as doing good and they expect brands and companies to be doing good.People want to engage and participate, they want brands to speak to them directly.The world is changing so we (P&G) must change to keep up.Marc comments Welcome to our world the wonderful world of vertigo the world we once knew is gone. We live in a world of24/7 real time information,we are all connected,the recession changed us and we have todo less with less. Thenew heroes are everyday people while the actions of once admired icons and institutions have pretty much shattered our trust and confidence. In todays world, everydaypeople are stepping up expect us to do so too. Dowe share the same values as these people? Transparency is imperative so for business, tell the truth fess up if things dont go as planned. Social media gives everyone a microphone, so tothrive, theres been a shift in how we build brands we must move out of the selling products business to the business of improving life. Change has transformed us into a creative and innovate force for good.We need to change the way we build brands we need the inspirational power of purpose touch lives and improve lives for the worlds consumers this gives meaning is now our driving force.Each brand at P&G is guided by a purpose each brand is required to define a purpose which defines how it uniquely touches and improves lives. This is thesoul of the brand purpose springs from and reinforces the essence of the brands core benefit. When people buy purpose they also buy a benefit purpose opens up new possibility to deliver that benefit.Itsshifting the company mindset from marketing to serving.P&G is changing from marketing to people to (getting people to do what we want them to do) to serving people with our brands to make lives better.P&G brands now offer non-product services, use entertainment that brings people together and demonstrate and participate in acts of kindness where the brands become part of a larger community.When changing the focus to serving people,brands are forced to gain a deeper understanding of their livesand give them what they want to make their lives better. Brands need to uncover human insights, define the essence of those human behaviour, the truths, motivations, intentions that must be solved by benefits of brands.From these insights, the brands need tocreate big ideas, this is the currency of industry that lift the entire brand and make it relevant in peoples lives. Ideas need to be engaging, surprising and invite people to participate in brand community. This incorporates and generates pr advocacy, Facebook and website participation and YouTube. The net result is participation means purchase. People become personally associated with the brand loyal members of the community and become advocates/ambassadors.Example #1 of Purpose Inspired Marketing:Old Spice Smell Like a Man ManBig Idea: Hello Ladies Im the man your man could smell like!Anything is possible to smell like a man. The idea is to help guys navigate the seas of manhood.Guys have lots of uncertainties and in most cases dont like to ask for advice. TheBenefit is smell good long lasting scent. The idea tapped into a deep human insight in this case guys want to be manly. It tapped into manhood insecurity competition challenged my manhood. The idea was brought to life via:1:1 response videos creatingengagement, spoofsResults: first place in share of market andinvited unprecedented participation 40,000,000 + views as at April 16, 2012.Example #2 of Purpose Inspired Marketing:Always AfricaDeep Insight: 1/6 girls dont complete education because theydont have adequest protection.Big Idea: allow girls to stay in school while having their period so they can have an opportunity to be the best they can be and thrive.Always has a purpose to empower women to positively embrace womanhood. The benefit is dry protection, free of movement, confidence enables women to be at their best.Example #3 of Purpose Inspired Marketing:P&G Corporate Olympic CampaignThe first P&G Corporate Campaign was build to demonstrate whats behind the company, what it stands for, what it cares about, values and allows people to discover and feel better about the company and its brands.The Olympics touch people. The process started with agencyWeiden presenting to P&G 7 tips to make Olympics work, and, they told P&G you will be judged. The program brief stated that the big idea had to unite P&Gs purpose with purpose of Olympics.P&G: Touch lives, improves lifeOlympics: make life better through sportBig Idea: every Olympic athlete has mom.P&G is in the business of helping moms. She is the unsung hero and P&G wanted to recognize her for that and thank her. The idea Proud sponsor of moms Deep human insight: to their moms theyll always be kids. The program started with a tv creative Never walk alone, then introduced the Thank you mom platform. Mom is always there every step of the way. During the 2010 Winter Olympic Games in Vancouver, P&G updated the campaign with real time brand building moms of the athletes, cheering kids onto victory. The realBig Idea an act of generosity for lifetime of dedication to be at pinnacle moment.Families and athletes cant get together while at games so P&G facilitated by bringing moms to the Olympic Games and by offering services from the P&G lounge such as oral care smiles centre, a grooming spa and laundry services.Results: The Thank you Mom initiative became part of Olympic conversation.2 billions impressions fromP&G, 1 billion digitally and builtsales $130mm . The next step is totake this program to rest of world for London 2012.Takeaway: 5 key changes for purpose inspired, benefit driven brands that make life better:Marc Pritchard wrapped up by asking everyone to think about the following points:1. change the definition of why brands exist guide brands with a purpose focused on how the brand benefit uniquely touches lives and mkakes better2. change mindset from marketing to consumers to serving people3. change the definition of who we serve not consumers as a target but as people we seek to serve with brands4. key to have an understanding of people deep human insights that drive behaviour motivations and intentions5. move from small ideas to big ideas that build initiative so they are engaging, inviting, participating want to become part of community and invite participation

Social Media5-Step framework for Managers to leverage Social Media:1. Immerse: learning about social media is like learning a new languageInvest time to learn the new language and tools of social media.2. Reflect: connect knowledge of social media with your organizations strategy. An organization must contemplate how social media might reinforce, modify, or disrupt its overall strategy. There a 3 things to consider when reflecting on this:a. Loss of control over your brandb. Symptom of a deeper problem (i.e. the fear of negative feedback)c. A sandbox where consumers can play3. Define: set clear objectives for your social media strategy4. Engage: create engaging content that generates excitement and buzz5. Evaluate: determine measures of success, gauge process, and modify tacticsWhat are the various reasons why some brands/companies are reluctant to use social media? Cost and time Knowledge risk Incentive structure: advertising firms with traditional media expertise have strong incentives to maintain the current fee structure Measurement: gross rating points and click-through rates are more comfortable measures that page views or engagement Loss of controlWhat are the three primary objectives in social media utilization?a. Market research (starbucks launched a website called mystabucksidea.com)b. Brand building: firms believe their brand is too boring social media can boost its overall brand and build it into something more engaging, informational, etc. c. Driving purchases (on twitter, dell keeps its followers abreast of promotions at its online store. They then track users who click through the website and complete a purchase.)

Compare and contrast the Traditional Media Approach and the Social Media Approach. -

What are the 5 characteristics of excellent social media content?

Branding in the Digital Age (notes on paper)

Marketing Capabilities for the Digital Age

Major benefits delivered by digital marketing:Greater brand equity, increased sales, better customer service, lower costs, product innovation, more loyalty and advocacy, and higher consumer awareness overallBest in class companies use digital media to achieve core business and marketing objectives, such as greater consumer awareness, better information to improve decision making, deeper consumer engagement, a higher rate of conversion and sales, and greater customer satisfaction and usage. Principles of PricingDesigning a pricing strategy that simultaneously creates a consumers incentive to buy that product and the firms incentive to sell that product.Pricings role in the marketing mix is to tap into the value created and generate revenues (1) to fund the firms current value-creation activities, (2) to support research that will lead into future value creation, (3) to generate profit from the firms current activities. The Value-Pricing Approach(see paper notes)Assessing a Products Value to ConsumersBut how does a firm determine the objective and perceived value of a product to a customer?Determining Objective Value through Cost Structure Studies