Marketing Panel Calm Seas or Troubled Waters

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Marketing PanelCalm Seas or Troubled Waters?
Presented by Dana Baker Date August 15, 2006
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The Rest of the Story The Future buyer and how
to sell to them

• North Carolina Companies
• Network, Network, Network
• Psychology of New-product/service adoption
• Making Mistakes

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North Carolina Companies

Mission ATMC is dedicated to excellence in
customer service and providing communications
services that add value to the lives of our
customers and the communities we share.
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North Carolina Companies

Since 1921, Citizens Telephone has provided the
communications needs for Brevard and
Transylvania County. From your local telephone
line to voice mail and high speed data access,
our goal is to continue serving our customers
with the latest in technology.
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North Carolina Companies

CT Communications Customer Pledge We are
ethical, honest, and respectful in all our
relationships. We guarantee quality
telecommunications services. We are flexible,
knowledgeable, and dedicated to exceeding
customer expectations. We take ownership of
customer problems. We develop and deliver
creative, diversified services that are
competitive and dependable.
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North Carolina Companies

EMBARQ Corporation (NYSE EQ) provides a suite of
communications services to its customers in its
serving areas. EMBARQ, which is expected to rank
among the Fortune 500, brings common-sense ideas,
reliable service and a renewed commitment to the
communities it serves. EMBARQ focuses on
offering its customers practical, innovative
products and competitive pricing. The company
has 20,000 employees and operates in 18 states
offering local and long distance voice, data,
high speed internet, wireless and entertainment
services.
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North Carolina Companies
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North Carolina Companies

• Philosophy
• At Lexcom, the connections that matter go beyond
  a clear, static-free line. It's the
  person-to-person connection when you drop by our
  office it's fast repairs and technicians who
  listen and respond it's investing in new
  technologies that make your life safer, simpler,
  and more secure and it's giving back to our
  community. 
• That's why Lexcom lives by the motto  every
  connection matters

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North Carolina Companies

MebTel is the area's leading provider of advanced
communications services. People here choose us
for broadband Internet and for local and long
distance calling. We're here for you, right here
in our community. With innovative services,
packaged in ways to help you save time and money.
With customer care that let's you know our
customers are real people who really matter to
us.
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North Carolina Companies

Randolph Telephone Company Mission Statement
We will identify the needs of our subscribers and
the communities we serve through personal
communication with them, and we will focus our
resources and energies on meeting those needs in
the most technologically advanced and economical
way possible. We will measure our actions by
standards of honesty, trust, and fairness,
responding promptly to the needs of our
subscribers. We will provide products and
services that are equal to or better than those
of any competitors, and we will treat our
customers with courtesy, respect, ongoing
personal involvement, and attention to the
overall well-being of their families and
communities. We will be ever mindful of our
obligation to empower our employees with
training, support, and a working environment that
maintains a focus on meeting the needs of
customers with a positive attitude.  
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North Carolina Companies

To be a telecommunications company focused on
offering our members the best innovative services
available.  We are a member based company with
the members' wants, needs and expectations in
mind.
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North Carolina Companies
Mission Statement Our vision, goals, values and
beliefs are essential to all other business
issues. Our VisionTo be a telecommunications
provider that is focused on its members and
customers, always striving to earn their respect
and loyalty. Our desires are to create an
environment of trust and appreciation. Our Core
Business To build INFO structure in our
communities to the complete satisfaction of our
members and customers. To provide them with value
that exceeds expectations. Our GoalsTo
provide services at a quality, price and
reliability second to none. To provide all
telecommunications services needed or desired by
our members/customers that can be offered in a
resourceful, competitive, and cost-effective
method.
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North Carolina Companies

Mission Statement Our Vision We want to be
considered the premier telecommunications and
information provider in the areas we serve and by
those we serve. Our Fundamental Mission To
offer telecommunications services and information
to our customers, which meets their needs and
expectations. Our Goal To build an information
network to the complete satisfaction of our
customers, and provide services in a professional
and courteous manner.
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North Carolina Companies

our vision mission We will provide exceptional
voice, data and video services throughout rural
America. We will execute with excellence in all
that we do.
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North Carolina Companies

Our values Customers First - We are relentless
and passionate in creating raving fans both
internally and externally. We value exceptional
customer experiences and are easy to do business
with. Individual Responsibility - We are
responsible for developing ourselves, our
employees, celebrating wins, rewarding
performance and providing an engaging environment
where we thrive. When "I own it" I take
initiative and deliver results. Execution
Excellence - We are disciplined and laser focused
in our planning and execution with a bias towards
action. We make informed decisions and manage
with facts. Amazing Teamwork - We rely on each
other and are committed to succeed together. We
act as ONE team, because we are. We embrace
change in order to improve. We value having
fun. Dynamic Communications - We communicate with
our customers and with each other directly,
concisely, openly and intentionally. We
respectfully "push back." Accountability Always -
We are highly accountable to our customers,
communities, shareholders and each other. We
listen and respond with a sense of
urgency. Continuous Commitment - We are committed
to delivering on our promises. We do what we say,
fostering a risk-taking environment in support of
the company's success. Foundation of Integrity -
We do the right thing. Strong integrity and
ethics guide our actions and behaviors. We are
fair, honest and trustworthy.
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North Carolina Companies

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North Carolina Companies

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NETWORK, NETWORK, NETWORK

• Network Building
• Internal
• Marketing
• Financial
• Customer service
• Engineering
• CO OSP
• Board

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NETWORK, NETWORK, NETWORK

• Network Building
• External
• City
• County
• State Association
• National
• Not just a CEO/Manager network anymore

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NETWORK, NETWORK, NETWORK

• Learn from the Network
• Dont adopt
• Test
• Modify to meet your specific needs

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NETWORK, NETWORK, NETWORK

• Learn from the Network
• Recent samples
• Marketing on a shoestring budget by Kay Dunn _at_
  Yadkin Valley
• Networking
• Engaging in target marketing
• Cost effective methods
• Complimentary and trial services
• Evaluate publications and advertising costs
• Monitor return on Marketing investment
• Use your resources

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NETWORK, NETWORK, NETWORK

• Learn from the Network
• Recent samples
• Savvy marketing tips to gain competitive edge by
  Kurt Gruendling_at_ Waitsfield-Champlain Valley
  Telecom in VT.

• Listen to customers
• Get to know your business customers
• Utilize bundling
• Employ direct marketing
• Dont forget public relations

• Brand definition and marketing
• Play the local card
• Enhance customer experience
• Manage churn
• Use the internet as an effective marketing tool

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NETWORK, NETWORK, NETWORK

• Learn from the Network
• Recent samples
• The Battle of the Bundle by Dave Nieuwstraten _at_
  Pivot Group, LLC.
• The value of benchmarking
• Steps top consider when developing bundles
• Data collection
• Situation analysis

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NETWORK, NETWORK, NETWORK

• Learn from the Network
• Recent samples
• Angry and Bored? You must be a customer _at_ CFO
  Magazine
• Any and all forms of surveys can result in bad
  data driving poor decisions.
• In drafting questions, one must understand the
  original problem that drove the need for the
  survey. If the right question is asked, the
  answer to the problem is there.

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NETWORK, NETWORK, NETWORK

• Learn from the Network
• Recent samples
• Angry and Bored? You must be a customer _at_ CFO
  Magazine
• Most traditional satisfaction surveys have lulled
  firms into believing that the majority of
  customers are happy.
• Bain research indicates that 80 percent of the
  companies are convinced that they provide
  superior customer experience, yet on 8 percent of
  their customers agree.
• More than two-thirds of the customers are either
  passive or detractors. Develop ways to turn
  detractors into promoters. Are your customers
  willing to promote you?

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NETWORK, NETWORK, NETWORK

• Learn from the Network
• Recent samples
• Paul McMurray _at_ Insight Management Consulting at
  NTCA Regional -Myrtle Beach
• Consumer demand meets customer service

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NETWORK, NETWORK, NETWORK

• Learn from the Network
• Recent samples
• Paul McMurray _at_ Insight Management Consulting at
  NTCA Regional -Myrtle Beach
• Great marketing source book ESRI source book
• http//store.esri.com
• http//www.esribis.com/books/sourcebookamerica.htm
  l
• Paul sells it for 100 per zip code, the module
  cost 1,000 and 500 for the next
• Where do you stand on penetrations? See
  PEW/Internet.
• www.pewinternet.org

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NETWORK, NETWORK, NETWORK

• Learn from the Network
• Recent samples
• Paul McMurray _at_ Insight Management Consulting at
  NTCA Regional -Myrtle Beach
• You are not like your customers! Most companies
  assume they are.
• You are in the computer business whether you
  believe it or not.
• Chesney Tel south of Charlotte- Banners at local
  football and record games for later viewing.
  This drives value in community and the service.

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NETWORK, NETWORK, NETWORK

• Learn from the Network
• Recent samples (cont.)
• NRTC does churn analysis.
• You are a niche market, use it to your advantage.
• Customer service is key
• All resources available

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NETWORK, NETWORK, NETWORK
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• Learn from the Network
• Recent samples
• TNS Telecoms is the world's largest telecom
  market information company.

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Understanding the psychology of new
product/service adoption

• New products often require consumers to change
  their behavior. Behavior changes entail economic
  cost.
• Activation fees to switch cellular service
  providers
• Learning cost
• PBX to VOIP PBX
• Text Messaging
• Obsolescence cost
• VCR to DVD
• Analog to video phones

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Understanding the psychology of new
product/service adoption

• Need to include psychological cost associated
  with behavior change.
• People irrationally overvalue benefits they
  currently possess relative to those they dont.
  The bias leads consumers to value the advantages
  of products they own more than the benefits of
  new ones.
• Leads executives to value the benefits of
  innovations theyve developed over the advantages
  of incumbent products. (Move toll business over
  to new VOIP solution when reduction in toll rates
  will give same effect.)

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Understanding the psychology of new
product/service adoption

• Need to include psychological cost associated
  with behavior change.
• Consumers will reject new products that would
  make them better off and executives are at a loss
  to anticipate failure. The curse of innovation
  Companies have long assumed that people will
  adopt new products that deliver more value or
  utility than existing ones. Everett Rogers,
  communications scholar called the concept
  relative advantage and identified it as the
  most critical drive of new-product adoption.

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Understanding the psychology of new
product/service adoption

• How individuals value choices in the market place
• People evaluate the attractiveness of an
  alternative based not on its objective, or actual
  value but on its subjective or perceived value.
• Consumers evaluate new products or investments
  relative to a reference point, usually the
  products they already own.

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Understanding the psychology of new
product/service adoption

• How individuals value choices in the market place
• People view any improvements relative to this
  reference point as gains and treat all
  shortcomings as losses.
• Most important- losses have a far greater impact
  on people than similarly sized gains loss
  aversion. Most people will not accept a bet in
  which there is a 50/50 change of winning or
  losing. The gain must be 2 or 3 times to be
  attractive.

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Understanding the psychology of new
product/service adoption
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Understanding the psychology of new
product/service adoption

• The endowment effect consumers value what they
  own, but may have to give up, more than they
  value what they dont own but could obtain.
• The experiment
• They gave coffee mugs to a group of people
  (sellers) and asked at what price point from 25
  cents to 9.25 the sellers would be willing to
  part with those mugs.

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Understanding the psychology of new
product/service adoption

• They asked another group (choosers) to whom they
  give the coffee mugs, to indicate whether they
  would choose the mug or the money at each price
  point. (Mug or money) in two trials,
• Results
• The sellers priced the mug at 7.12 7.00 on
  average and the choosers were willing to pay on
  3.12 3.50. Similar experiments with goods as
  diverse as lottery tickets, hunting licenses,
  fine wines have show people demand two to four
  times more compensation to give up products that
  they already posses

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Understanding the psychology of new
product/service adoption

• Status quo bias
• 1989 Experiment Coffee mug VS chocolate bar
• One test group got a choice of nice coffee mug or
  swiss chocolate (56/44 per cent split)
• Second test group he gave them a mug and in a
  short time later gave them option to trade for a
  chocolate bar (11 percent opted to change)

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Understanding the psychology of new
product/service adoption

• Status quo bias
• 1989 Experiment Coffee mug VS chocolate bar
• Third test group he gave them the chocolate and
  much later gave them the choice to switch for a
  coffee mug. (10 percent opted to change)
• Results
• Static quo intensifies over time to a factor of
  4.
• General rule is factor of 2

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Understanding the psychology of new
product/service adoption

• Building a behavioral framework
• The new product or service
• Gain vs loss syndrome
• The consumer that has to adopt
• Consumer use of existing products is part of an
  endowment and they compare the new product with
  existing on a gain or loss.
• Gas vs electric cars
• Paper vs e-books

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Understanding the psychology of new
product/service adoption

• Building a behavioral framework
• The company that developed
• There is a mismatch of 9 to 1 on what the company
  sees the customer what and what the customer
  truly desires
• Bias to the product/service
• They fall to endowment effect just like consumers
  
• Due to the (curse of knowledge), companies expect
  consumers to see the same value
• Left unchecked the 3x3-9 mismatch is recipe for
  disaster

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Understanding the psychology of new
product/service adoption

• Building a behavioral framework

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Understanding the psychology of new
product/service adoption

• Balancing product and behavior changes

Degree of behavior change required
LOW
Degree of product change involved
HIGH
LOW
HIGH
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Understanding the psychology of new
product/service adoption

• Balancing product and behavior changes
• Accept resistance
• Strive for 10X improvements

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Making Mistakes

• Two types of mistakes
• Non-deliberate mistakes
• Deliberate mistakes

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Making Mistakes

• Non-deliberate mistakes
• Most managers recognize value of experimentation
  but usually designed to confirm initial
  assumptions.
• Advertising companies may try different
  approaches to see which tactics work best but
  wont run an ad that it presumes will fail.

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Making Mistakes

• Deliberate mistakes
• Have a negative expected value but if such a
  mistake unexpectedly succeeds, then it has
  undermined at least one current assumption.
  Companies need to carefully analyze the trade-off
  between the potential expense of a mistake and
  the potential benefits of learning.
• The potential gain greatly outweighs the cost of
  the mistake.
• Cost of running ads maybe small considering the
  potential benefit of learning about what worked.

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Making Mistakes

• Deliberate mistakes
• Decisions/assumptions that are made repeatedly.
  Valuable in environments where core assumptions
  drive large numbers of routine decisions
• Hiring
• Running ads
• Devising promotional tactics
• Assessing credit

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Making Mistakes

• Deliberate mistakes
• The environment has dramatically changed. In the
  new environment, current approaches may no longer
  work.
• Procter Gamble operates in a market where very
  few product introductions succeed fail often,
  fast and cheap.
• The problem is complex and solutions are numerous

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Making Mistakes

• Deliberate mistakes
• Your organizations experience with a problem is
  limited. If you are expanding into a new market,
  executives will be tempted to apply models and
  strategies borrowed from the old market.
• The Whole foods story- growing market for organic
  foods.

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Making Mistakes

• Which mistakes to make?
• Identify assumptions
• Select assumptions for testing
• Ask what you would do differently if you knew the
  assumption was false. The more differently you
  would behave, the more important to consider.
• What would you be willing to bet that it is
  correct? The company, reputation, career?

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Making Mistakes

• Which mistakes to make?
• Rank the assumptions
• Create strategies for making mistakes
• Execute the mistake
• Learn from the process

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Making Mistakes

• Many wrongs can make a right.

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Closing