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The Customer Rules


Monitor customer satisfaction in near-real time and end-to-end performance, and ... custom-tailor information presentation and offers based on customers' profiles ... – PowerPoint PPT presentation

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Title: The Customer Rules

The Customer Rules
  • MIS 7223
  • Fall 2002

  • Customer Value
  • Customer Demands
  • What Businesses Should Track
  • Creating a Great Total Customer Experience
  • Steps to E-commerce Success
  • Critical Success Factors

Customer Relationships
  • Mgmt indicators in the past
  • ROI
  • Profit/Loss
  • Mgmt indicators now
  • Customer retention
  • Most highly valued companies are managing
    themselves by and for customer value.

Seybold, et al., 2001
Customer Value (Metrics)
  • Customer retention
  • Customer satisfaction
  • Growth in of customers
  • Growth in customers spending
  • Predictors of customer defection

Seybold, et al., 2001
Customers are in Control
  • Try before they buy
  • Buy by the piece
  • Mix and match
  • Reshape and repurpose goods
  • Share with others
  • Publish their own mixes
  • Co-brand material

Seybold, et al., 2001
Customer Demands
  • Open, equal access
  • Real-time info
  • Specialist info
  • Convenient access
  • Info portability
  • Process transparency
  • Logistics transparency
  • Pricing transparency
  • Fair, global pricing
  • Ability to set prices
  • Choice of distribution channels
  • Control over their info

Seybold, et al., 2001
E-Market Value
  • Example eBay
  • electronic trading communities made up of buyers
    and sellers with common needs
  • Easier and more cost-effective to locate and
    procure everything
  • B2B e-Markets

Seybold, et al., 2001
Customer Relationships Count
  • They drive the value of business
  • Customer capital
  • Sum of the value of all existing customer
    relationships ( of customer relationships, depth
    and quality of those relationships in terms of
    capacity to generate current and future earnings,
    duration of those relationships (customer
    retention), and profitability of those customer
  • Customer momentum
  • Ability to attract and sustain new customers
  • Customer franchise
  • Total present value of the projected earnings
    from current and future customers

Seybold, et al., 2001
Customer Lists
  • Added value?
  • Privacy policy
  • Rights to sell
  • Who counts as a customer?
  • Customers, distributors, dealers, etc.

Seybold, et al., 2001
What Businesses Should Track
  • of end customers
  • Who customers are
  • Profits per customer
  • How profits per customer are growing
  • What customers care about
  • How satisfied customers are
  • How loyal customers are
  • Actions that will keep customers loyal

Seybold, et al., 2001
Managing Customer Value
  • Customer Metrics
  • Asset accumulation
  • Customer satisfaction
  • Customer retention
  • Employee retention
  • Etc.
  • Focus on the total customer experience

Seybold, et al., 2001
Customer Experience
  • Branded Experience build brand name around the
    product and the customer experience (service)
  • Customers prefer multi-touchpoint, multi-channel
  • Identify with brand
  • Customer relationship
  • Trust
  • Reliable, fulfillment, delivery, support
    integrity value efficient use of my time ease
    of doing business, interactions, and
  • Channels catalog, call center, dedicated retail
    store, web, eMail, partner, multi-product store,

Seybold, et al., 2001
Steps to Create a Great Total Customer Experience
  • Create compelling brand personality
  • What customers can identify with personality
    and a core brand idea
  • Deliver seamless customer experience across
    channels and touchpoints
  • Touchpoints stores, telephones, mail, fax,
    kiosks, ATMs, Web
  • Channels deal direct with customers or indirect
    through a set of partners
  • Care about customers and their outcomes
  • Corporate culture and core values that center
    around caring about customers (customer loyalty
    and lifetime customer value)
  • Customer-centric instead of product-centric

Seybold, et al., 2001
Steps to Create a Great Total Customer Experience
  • Measure what matters to customers
  • Focus on customer wants instead of business wants
  • What are the most common tasks customers need to
  • Hone operational excellence
  • Design back-end processes first
  • Allow customers to see and interact with every
    step of every customer impacting process
  • Monitor customer satisfaction in near-real time
    and end-to-end performance, and take
    responsibility for the end-to-end experience
  • Monitor and manage every element that impacts
    customers, shortens cycle time, and improves
    costs to serve

Seybold, et al., 2001
Steps to Create a Great Total Customer Experience
  • Value customers time
  • Make it easy for customers to make decisions
    (multiple searching types, decision-making tools,
    side-by-side product comparisons,
    photographs/illustrations, price, availability
    and arrival times, and access to trouble-shooting
    and installation info)
  • Offer ubiquitous, convenient access (24 hrs/day
    on any device)
  • Place customers DNA at the core
  • The customers life electronically managing
  • Design to Morph
  • Change business model typically 4X a yr.
  • One business spawns into 2-3 parallel business

Seybold, et al., 2001
  • Customer demands reshape business
  • Investors want to know customer numbers
  • Manage company by customer value
  • Deliver great total customer experience

Seybold, et al., 2001
5 Steps to Success in EC
  • 1. Make it easy for customers to do business with
  • Use technology to streamline customer
  • 2. Focus on end customer for your products and
  • 3. Redesign your customer-facing business
    processes from the end customers point of view
  • 4. Wire your company for profit design a
    comprehensive, evolving e-business architecture
  •   integrate info and applications
  •   5 stage of e-bus.
  •                 i. Supplying co. and product
  •          ii. Providing customer support and
    enabling interactions
  •          iii. Supporting electronic transactions
  •              iv. Personalizing interactions
    with customers
  •                v. Fostering community
  • 5.  Foster customer loyalty, the key to
    profitability in ecommerce

Seybold, et al., 1998
Critical Success Factors
  • target the right customers
  •   know who your customers and prospects are
  •   find out which customers are profitable
  •   decide which customers you want to attract
    (or keep from losing)
  •   know which customers influence key purchases
  •   find out which customers generate referrals
  •   dont confuse customers, partners, and

Seybold, et al., 1998
Critical Success Factors
  • 2. own the customers total experience
  •  deliver a consistent, branded experience
  •  focus on saving customers time and irritation
  •  offer peace of mind
  •  work with partners to deliver consistent
    service and quality
  •  respect the customers individuality
  •  give customers control over their experience

Seybold, et al., 1998
Critical Success Factors
  • streamline bus. processes that impact the
  •   start by identifying the end customer
  •   streamline the process from the end
    customers point of view
  •   streamline the process for key stakeholders
  •   continuously improve the process based on
    customer feedback
  •   give everyone involved a clear view of the

Seybold, et al., 1998
Critical Success Factors
  • 4. provide a 360-degree view of the customer
  •   provide one-stop shopping for the customer
  •   remember everything your company knows about
    the customer
  •   ensure that everyone in the company has
    access to the complete customer picture
  •   put an underlying technical infrastructure
    into place to provide a 360-degree view

Seybold, et al., 1998
Critical Success Factors
  • let customers help themselves
  •   let customers help themselves to information
    and perform transactions on-line
  •   let customers check on the status of orders,
    pay or adjust bills, and access service
  •   let customer interact using whatever media
    they choose
  •   give customers the ability to design their
    own products

Seybold, et al., 1998
Critical Success Factors
  • 6. help customers do their jobs
  •   develop a deep understanding of how your
    customers do their jobs
  •   continuously refine your business processes
    to make it easier for your customers to do their
  •   give customers direct access to your
  •   give customers the ammunition and tools they
    need to make purchasing decisions
  •   prepare bills the way your customers need
  •   make it easy for your customers to satisfy
    their customers

Seybold, et al., 1998
Critical Success Factors
  • deliver personalized service
  •   develop a warm, personal relationship with
    each customer
  •   let customers specify and modify their
  •   custom-tailor information presentation and
    offers based on customers profiles
  •   provide appropriate service and information
    based on customers needs
  •   give customers access to their transaction
  •   encourage customers to leave something of
    themselves behind

Seybold, et al., 1998
Critical Success Factors
  • foster community
  •   seduce customers into the fold
  •   introduce customers to others with common
  •   introduce and reinforce common terminology
    and values
  •   let customers strut their stuff
  •   encourage customers to become part of the in

Seybold, et al., 1998
Customer Service
  • Offer customer choices and multiple decision
  • Be accountable for your mistakes
  • Empower people in your company to oversee
    customer service
  • Know your customer (and what interests them)
    feedback mechanisms contact them
  • Value your current customers
  • Customer-service reps should treat customers like
    human beings
  • Measure customer service customer-satisfaction
    level and cost savings achieved

Mollison, 2001
7 Cs of the Customer Interface
  • Context sites layout and design
  • Commerce sites capabilities to enable
    commercial transactions
  • Connection degree that site is linked to other
  • Communication the ways the site enables
    site-to-user, user-to-site, or two-way
  • Content text, pictures, sound, and video that
    the website contains
  • Community the ways that the site enables
    user-to-user communication
  • Customization sites ability to tailor itself
    to different users to personalize the site

Rayport and Jaworski, 2002
  • Mollison, C. (2001). Driving Customer Service
    Seven Practical Ways to Become Fanatical on
    Behalf of Your Customers, Internet World, 15
    September, pp. 28-34.
  • Rayport, J.F. and Jaworski, B.J. (2002).
    Introduction to E-Commerce, McGraw-Hill
    Companies, Inc. New York.
  • Seybold, P. B. and Marshak, R. (1998). How to Create A Profitable
    Business Strategy for the Internet Beyond,
    Patricia Seybold Group Inc.
  • Seybold, P. B., Marshak, R. T. and Lewis, J. M.
    (2001). The Customer Revolution How to Thrive
    When Customers are in Control, Patricia Seybold
    Group Inc.