Managing the New Customer Relationship Strategies to Engage the Social Customer and Build Lasting Value

Praise for MANAGING THE NEW CUSTOMER RELATIONSHIP

“Gordon delivers an impressive synthesis of the newest methods for engaging customers in relationships that last. No organization today can succeed without the mastery of customer relationship management strategy fundamentals. But to win in the decades ahead, you must also understand and capitalize on the rapidly evolving social computing, mobility and customer analytics technologies described in this book. Checklists, self-assessments and graphical frameworks deliver pragmatic value for the practicing manager.”

— William Band, Vice-President, Principal Analyst, Forrester Research Inc., Cambridge, MA

“A very comprehensive and practical book on managing relationships with existing customers in the age of social media! I particularly enjoyed reading chapters on teaching customers new behaviors, which were illustrated by excellent case studies.”

— Jagdish N. Sheth, Ph.D. , Charles H. Kellstadt Professor of Marketing, Emory University, Atlanta, GA

“The strategic breadth and depth of this book is impressive as Gordon explores the new customer and how to plan and manage the new customer relationship. I found his review of strategies, techniques and technologies for social, mobile, mass customization and customer analytics to be particularly insightful. Gordon urges marketers to live and breathe one-through-one marketing and to master social engagement techniques. The checklists, cases and examples make the content grounded and actionable. This is an important, current and detailed book to which every organization should pay close attention to improve customer relationships and create shareholder value.”

— Marcus Ruebsam, Vice-President, Line-of-Business Marketing Solutions, SAP AG, Walldorf, Germany

“There are many books on CRM, but I recommend this one because Gordon’s book does what others do not. He considers CRM strategy and evolves it to recognize a new customer, one who is always connected, socially available and influential. The book doesn’t just discuss many point solutions for specific marketing challenges; it integrates technology with strategy, people, process and customer analytics to develop relationships continuously. This book is a broad and deep exploration of CRM, providing practical, fact-based perspectives that every company can use to validate and rethink their customer and stakeholder relationships.”

— Helmuth Cepeda, Small, Medium and Distribution Director, Microsoft Mexico, Mexico City, Mexico

Marketing has changed fundamentally in the last few years and has become an entirely new discipline, one that focuses on a new customer and a new relationship, framed by new principles, strategies, processes, roles and tactics. Individual customers are economically targeted and served, and treated as segments of one rather than members of a target market. Word of mouth and recommendations are vital as customers influence one another more than a company can do within its own advertising or customer dialogs. Today’s customer is always online, accessible and connected. Now marketing is not only direct and customer-specific but a continuous process by which companies seek to engage customers and be progressively more relevant, attractive and valuable. This is the era of a new customer relationship—an individual relationship that is social, mobile and local, influenced by peers and shaped by cognitive, behavioural and social psychological principles. New techniques, processes and technologies transform what it means to implement marketing strategy and achieve improved business results.

The new customer relationship requires that even those companies that have embraced customer relationship management ought to reassess their customer management. Now every marketing decision, whether online or in the physical world, whether of a technological nature, whether it affects customer experience, communications, dialogs, teaching or organizational memory, every decision should be seen through a single lens focused on the individual customers who matter most. Managing the New Customer Relationship provides a strategic and practical guide to help companies attract, develop, sustain and build more valuable relationships by:

• Expanding upon existing customer relationship management theories, concepts and methods to make these considerations more useful, strategic and contemporary
• Recognizing the profound importance of social media and how to plan customer engagement in the social context of each customer
• Exploring new technologies that offer new opportunities for engaging customers, including mobile, local, the cloud and customer analytics
• Demonstrating how to develop customer-specific understanding, predict what customers will want next, and how to manage each individual customer, and
• Offering perspectives to help the organization endure by focusing a chain of relationships on the end customer and creating meaning for stakeholders that can make relationships more intense and robust.

Managing the New Customer Relationship is for organizations of all sizes in all industries, for private- and public-sector organizations and not-for-profits. In short, every organization can apply the new principles, strategies, techniques and technologies discussed here to recognize important marketplace changes, plan to improve relationship and financial results and capture new shareholder value from new customer relationships.

Introduction xv

Chapter One: Managing the New Customer—and the New Customer Relationship 1

Relationships Matter 1

The Old Rules of Marketing Don’t Work 3

Technology Has Changed Everything 6

The Truth Is Visible 6

Marketplaces Are Social 8

Marketing Is Sociology 9

One-Through-One Is More Important Than One-To-One 11

Defining the New Customer Relationship 12

Implications for Managing the New Customer Relationship 13

Chapter Two: Strategies for Better Customer Relationships 23

A Strategic Context for Relationship Management 23

Relationship Management Capabilities 25

The Cultural Imperative 44

Beyond Culture: The Strategic Enablers 46

Chapter Three: Planning Relationships with Existing Customers 57

What’s In a Relationship Management Plan? 57

Customer Selection 58

Relationship Objectives 76

Engagement 86

Value 92

Innovation 99

Teaching 102

Sharing 102

Chapter Four: One-Through-One: Engaging Social Customers 107

The “Peoplescape” of Social Media 108

The Company is No Longer Center Stage 109

The Customer is Speaking 110

Listen 111

Social Media Taxonomy 113

Social Media Objectives 115

Social Media Planning 118

Individual Customer Engagement 131

Chapter Five: B2B Relationships 141

Consumer and Business-to-Business Relationships 142

Buyer–Seller Relationship 150

Managing the B2B Relationship 152

B2B, Social Media and Product Lifecycles 153

Social, Internal to the Enterprise 158

Chapter Six: Relationships with Mobile Customers 163

Defining Mobile Relationships 164

Mobile Relationship Objectives and Strategies 166

Selected Application Categories for Mobile Devices 171

Emerging Technologies 181

Chapter Seven: Mass Customization 183

Mass Customization Defi ned 183

An Expensive Option? 184

Technology for Mass Customization 185

Enabling Relationships through Mass Customization 186

Approaches to Mass Customization 189

Customization versus Standardization 190

A Mass Customization Plan 191

Chapter Eight: Customer Analytics 199

The Meta is the Message 202

The Upside of Customer Analytics 205

Putting Customer Analytics to Work 208

Online Customer Analytics 216

Customer Analytics Soft ware 218

Customer Analytics and the Cloud 220

Net Promoter Score 221

Chapter Nine: Teaching Customers New Behaviors 223

What’s Wrong with Existing Customer Behaviors? 224

Pedagogy and Teaching Customers 226

Emotional/Affective Pedagogy 229

Cognitive Pedagogy 230

Behavioral Pedagogy 231

Individual/Social Pedagogy 232

Developing Pedagogy for Teaching Customers 236

Learning Relationships 238

Best Pedagogy Practices 239

From Teaching to Addicting 241

The Consumer as a Functional Addict 241

Chapter Ten: Case Studies: Making it Happen 255

Dell 256

Leicester City 259

New York City, Health and Human Services 261

TransGaming 265

TransLink 270

Chapter Eleven: Strategy, Stakeholders and Semantics 275

Planning a Strategic Relationship 276

Customer Management 277

Direct and Indirect Stakeholders 279

Direct Stakeholder Management 280

Indirect Stakeholder Engagement 290

Strategic Response-ability 291

Society and Response-ability 292

Appendix A: Selected Customer Analytics/Data Mining Soft ware Solutions 297

Notes 303

About the Author 317

Index 319

Ian Gordon is a management consultant with over thirty years of marketing and strategy experience. He is president of Convergence Management Consultants in Toronto, Canada, where he heads the Relationship Marketing-CRM practice, assisting clients to develop customer acquisition and relationship management strategies. He has worked with companies such as Alcan, Amadeus, Apple, Bell Canada, Canada Post, Chrysler, Eastman Kodak, Ethyl, Experian, Ford Electronics, General Electric, Goodyear, HP/Compaq, IBM, Kodak Canada, MasterCard, Microsoft, Mitel, NCR, Nortel Networks, Ontario Power Generation, Parker Hannifin, RBC, Thomson Reuters, Toshiba, Westinghouse and Xerox.

Ian is author of three previous books including the best-selling Relationship Marketing: New Strategies, Techniques and Technologies to Win the Customers You Want and Keep Them Forever (John Wiley & Sons Canada, 1998). He was the founding president of the Association for the Advancement of Relationship Marketing, and a past president of the Industrial Marketing and Research Association of Canada. He has lectured in relationship marketing, CRM and other marketing courses to undergraduate and MBA university students for over 20 years.