SUPERIOR CUSTOMER VALUE IN THE NOW ECONOMY

[You can drive your business or be driven out of business.  B.C. Forbes]
                               Reprinted with permission of InetSoft Technology, Piscataway, NJ, www.inetsoft.com
The late Ed Koch, a former New York City mayor, always asked, “How am I doing?” Marketers — as well as government leaders — need to know if their “customers” are happy. Perhaps you head the marketing operations for your company and want to get a better handle on customer metrics. You heard about the idea of a marketing dashboard at a recent trade association meeting and think that may solve your problem. How should you proceed? What should be on your dashboard?  Progressing beyond a single item to monitor the effectiveness of business performance, leading organizations often use a set of key metrics called marketing dashboards to understand their key performance indicators. Just as an automobile dashboard captures critical driving information such as speed, distance, fuel levels, vehicle and engine temper…

People generally fear losses more than they covet gains; losses are weighted more heavily than an equivalent amount of gains, e.g., the absolute joy felt in finding $50 is a lot less than the absolute pain caused by losing $50, a phenomenon known as “loss-aversion”.  Kahneman and Tversky stumbled upon loss aversion after giving their students a simple survey, which asked whether or not they would accept a variety of different bets. The psychologists noticed that, when people were offered a gamble on the toss of a coin in which they might lose $20, they demanded an average payoff of at least $40 if they won. The pain of a loss was approximately twice as potent as the pleasure generated by a gain. As Kahneman and Tversky aptly put it, “In human decision making, losses loom larger than gains.” If you ever kept a gym membership long after it has become clear that you are not now and will never be a gym rat, then you have felt the effects (i.e. “dead-loss” effect) of loss aversion. Think ab…

[Co-creation is the purposeful action of partnering with strategic customers, partners or employees to ideate, problem solve, improve performance, or create a new product, service or business. Christine Crandell]

Customer focus no longer means just researching current and future needs to design expected or desire goods or service. A rising trend in business today is co-creating value with customers. Value is created when product and buyer come together within a particular use situation. Examples include retailers getting the customer involved in the shopping experience to save time (Home Depot’s self-checkout) or costs (IKEA’s assembly and delivery by customers), smart phone personalization through app selection, Dell’s online built-to-order computers, and management consultants collaborating with clients to add value in research projects. As the table below explains, co-creation of value has a dual emphasis on the customer and company as value creators. 

Value Creation and Marketing Op…