Tag Archives: customer relationship management

Customers-first philosophy: Success of e-commerce giant Alibaba

The chairman and CEO of Chinese e-commerce giant Alibaba has a deep appreciation for the role of consumers in navigating a business. Alibaba’s social responsibility includes providing 0.3% of their revenue to environmental protection. His priority list, even surpassing social responsibility, includes businesses concentrating on Alibaba’s beliefs and hopes, the reasons as to why they got into this business and their approach in satisfying consumers, in contrast to focusing solely on profits and margins.

There are vital lessons that other businesses can learn from Alibaba’s customers-first philosophy:

  1. Businesses need to think like their customers.

Many technology innovators accentuate technology and place products above everything else, thus loosing sight of the target audience. Alibaba states that they look at technology through the eyes of their consumers. The great achievement of Alibaba thus far has been achieved through placing consumers first. This can be seen by their acquired knowledge and understanding of the Chinese Market, which has had an effect on their approach to even their product variety. They help small businesses and are adamant about caring more about them than caring for yourself.

“Focus first on customer satisfaction and second on teamwork. Shareholders’ interests come third because they are outcomes, not inputs.”

-Jack Ma, Alibaba chairman and CEO

Alibaba makes it effortless for small businesses to use their website as they have constructed a customer-oriented design that makes it more easy for consumers to seek and buy items on this website.

  1. Businesses should treat their consumers like a crystal ball.

Alibaba is dedicated on having a long-term vision for their business. The company has previously stated that this long-term vision requires them to not be sidetracked by transitory of the economy as it will have its ups and downs.

Alibaba achieves this by being focused on the consumer and watching their actions as they have also predicted the rise of customer-to-business (C2B) corporate strategies for the near future, and predict that consumers will be empowered resulting in fully commanding their needs to companies.


  1. Businesses must create value for their consumers.

Alibaba acknowledges that consumers are more then customer who buy products. The consumer of today is a member of society that is concerned with their environment and social outcomes.

“Your business model, it should create value and be good to society.”

– Jack Ma, Alibaba chairman and CEO

Companies must have this wider lens perspective when it comes to consumers. In this new era of empowered consumers, they select the brands that demonstrate the same ideals that support theirs, making them the values-driven consumers.


Najberg, A. (October 20, 2011) “Jack Ma: Business Model ‘Should Be Good to Society’” The Wall Street Journal (WSJ Blog) Web. http://blogs.wsj.com/digits/2011/10/20/jack-ma-business-model-should-be-good-to-society/

Claveria, K. (December 8, 2014) “What CMOs and CEOs can learn from Alibaba’s Jack Ma” Visioncritical.com Web. https://www.visioncritical.com/jack-ma-customer-centric/

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Can co-creation help in service recovery?

This post is about understanding the co-creation effect: when does collaborating with customers provide a lift to service recovery? By Roggeveen, A., Tsiros, M. and Grewal, D. (2011) 

Co-creation is the process of jointly producing a mutually valued outcome. This means that consumers can help shape or personalize the content of their experience, in other words, it can affect satisfaction of a recovery. A recovery is required when equity of a customer-company relationship is damaged. The research investigates the impact on equity for service delays outside the company’s control in the airline industry.

Study 1:

The first study demonstrates that using co-creation during severe and less severe delays yields different results. When consumers face a sever delay, co-creation improves the evaluation of the company, whereas less severe delay evaluations are not affected. Furthermore, the study demonstrates that co-creation works as good as compensating customers for severe delays. When faced with less severe delays, co-creation performs just as well or even better than compensating a customer.

Study 2:

The second study expands on the first study by expanding the knowledge on repurchase intentions, after co-creation recovery. The study demonstrates that recovery extends beyond the increased evaluations, it increases consumers repurchase intentions as well. This relationship is however mediated by equity, which is the difference between what consumers have received and what they expected to receive.

Study 3:

The third study looks at the perception of consumers of the recovery task. When consumers view the recovery strategy negatively, hence if the view it as akin to work, co-creation can harm evaluation. This is especially the case when consumers are asked to co-create during less severe delays.

Study 4:

The fourth and final study is the most interesting. The researches explore what happens when a company does not meet or exceeds the customers’ expectations after a recovery or compensation. As expected, companies that do not meet a customer request achieve lower evaluations. However, when a company exceeds customer expectations, the customer does not evaluate the company higher than when meeting customer requirements.

Especially the last study has large managerial implications. Consumers evaluate a business the same as when a company meets or exceeds the requirements set by the customer, which means that it is far more economical to only meet the necessary requirements. From this study we can therefore learn that using a co-created recovery for severe problems achieves good results for both customer evaluations and repurchase intentions. As noted by a manager: “if a guest perceives a failure to be just horrible, then they want to be more involved in rectifying the problem. If they perceive that it’s a minor inconvenience, then they don’t want so much input on it.”


Roggeveen, A., Tsiros, M. and Grewal, D. (2011). Understanding the co-creation effect: when does collaborating with customers provide a lift to service recovery?. Journal of the Academy of Marketing Science, 40(6), pp.771-790.


Heading picture: Travelsort.com [Accessed on 02-04-15] http://travelsort.com/blog/getting-united-to-pay-eu-compensation-for-a-flight-delay

Recommendation Agent 2.0

Just like Don Corleone in the epic Godfather movie, the folks at Washington-based e-commerce giant Amazon are about to make offers to their business partners, the company hopes they can’t refuse. That the firm, like Corleone, relies on ‘capos’ to enforce these offers, can be doubted, but they have a treasure the Mafia never possessed. Amazon’s immense knowledge about their business partners, generated from all sorts of data, takes the firm to a stage where it plans to rely a huge part of its channel domain on its recommendation system. But let me explain.

After establishing overnight delivery years ago and the introduction of the ‘drone delivery service’ last summer, the firm filed a patent in January with the bulky name ‘anticipatory shipping’. The idea behind it could revolutionize the e-commerce environment. According to techcrunch.com the system is the next ‘step towards cutting out human agency entirely from the e-commerce roundabout’ (1). When set up properly the automated collaborative filtering algorithm will learn from the behavior of registered consumers and anticipate what they could possibly be interested in, before the consumers themselves think about it. When matched with a specific product, Amazon plans to wrap the item and send it towards the potential customers before an order has been placed. This means slashing down shipping time by relying on clients’ historical buying patterns, preferences expressed via surveys, demographic data, but also browsing habits, wish-lists and even mouse movements (1). Essentially, the system entirely outsources the consumers’ shopping experience and direct communication with Amazon on basis of an online recommendation agent.

Continue reading Recommendation Agent 2.0

Council of the Wise

If you have ever been to a theme-park you know it is all about the great experience it delivers. Now how would it be if you could be part of enriching this experience. As most Dutch people know (for having been there as kids) the Efteling is a theme-park initially build around the fairytale-like artwork of Anton Pieck. They’ve set up a research panel for everybody to join in which you can tell them everything from wishes, opinions, preferred pastimes and even preferences of brands you can buy in the stands. Basically everybody can join, of any age, after filling in a basic questionnaire.

The Efteling describes their team on the webpage with (1) the manager being the initiative-taking person regarding the panels, who loves to interview, (2) a person behind the Continue reading Council of the Wise