Tag Archives: Customer

Turn customers into brand advocates by using participation marketing!


Consumer value creation is hot and happening! The successes that can be achieved when crowdsourcing production processes and relying on consumers to create value are plenty: Threadless’s users create and vote on clothing designs that eventually will be produced, Nike offers consumers to design their own pair of shoes, Lay’s challenged its consumers to come up with a new flavor, et cetera. One area in specific – marketing – is interesting when looking at how consumers could create value for a company.

“Participation marketing” or “engagement marketing” refers to a marketing strategy that encourages consumers to participate in the evolution of a brand. This marketing strategy treats consumers not solely as passive receivers of messages, but views them as actively involved producers and co-creators of marketing programs. Two big players are using it with success: Coca-Cola and Yoplait.

With the average person in the United States drinking the equivalent of 275 cans per year, there is no need for Coca-Cola to focus on increasing their immediate sales transactions and acquiring new customers. Coca-Cola is shifting towards creating a more long-term emotional connection with their customers. One successful example is their recent “Share a Coke” campaign, where they replaced their product logos with popular names. This invited consumers to start a big wave of referrals on social medium websites, which resulted, for instance, in a crazy 341,000 posts on Instagram with the hashtag #shareacoke. This is one of the ways Coca-Cola uses to build loyalty and engage customers.

Another example of participation marketing can be found at Yoplait. Yoplait’s annual “Save Lids to Save Lives” program donates 10 dollar cents to a breast cancer foundation for every pink foil yogurt lid that customers mail back to the company. Since 1997, around 35-50 million dollar has been donated by Yoplait and their parent company! This translates into hundreds of millions of customers mailing their yogurt lids to the company! When customers actively engage with the campaign in order to support the cause, they are more likely to purchase Yoplait’s products and encourage others to do it as well. Customers are becoming so-called brand advocates. This way, Yoplait is building brand loyalty whilst also increasing sales.

The lesson companies should take from these two examples is to shift their focus from viewing customers solely as receivers of marketing and buyers. They should engage with them to create value together. This way they will become lifelong loyal customers and brand advocates. Don’t think only big companies with enormous marketing budgets can pull this off: the ALS association created the “Ice Bucket Challenge”, which went extremely viral. This led to increased customer engagement and more donations.

What do you think? Do you know other great examples of companies that used participation marketing?

What the consumer wants, the consumer gets.


When a company’s vision is to offer “Earth’s biggest selection and to be Earth’s most customer-centric company”, they’ve got some big shoes to fill. Due to the popularity of the term “customer-centric”, everybody’s been claiming they’re dedicated on the customer, however, are their real-time activities supporting this claim?

Amazon’s Vice President of External Payments, Patrick Gauthier is not in agreement with the statement that everybody is truly focused on the customer, as too many are obsessed by the industry lingo, too fixated on generating the next big cash cow, and repeatedly overlooking who’s voice it is that they are representing, namely that of the consumer and the merchant. Payments and commerce leaders should analyze the situation with a customer-first mentality in this industry in order to enter into true innovation.

“Start with the customer and work backwards.”

Most companies claim they begin their processes with the consumer in mind, however in amidst of the translation, the lingo which is used in the industry – that of the insiders, in essence keeps innovation away from the vision, as the true message appearing in the lingo of the consumer is lost in translation. Gauthier perspective, also shared by payments, commerce and retail experts at Innovation Project 2015, proposes a backward motion of customer-first mentality in seeking what a business model needs to solve. For example, every Amazon product manager is known to write and internal press release, which focuses on the problem of the customer and the current solution they are offering and how this offering fails. Following this, the managers write down every single benefit that the new product will provide to this problem, and will not stop until the benefits will be of interest for the customer. They stay that the money will follow once the company focuses on what the customer truly want. In this new era, having the perspective of a customer-focused company is surpassing having a financial perspective. Starting with the consumer in the back of your mind and going backwards, thus focusing on what a company believes the business model is intended to solve, as this will deliver diverse methods of serving those customer needs. Innovation can occur quickly, but more importantly, instead of focusing on the speeds, it is more significant that innovation happens right as well as for the right target audience.

How to approach this according to Gauthier:

  1. Being part of more dialogues with outsiders
  2. Connecting to the merchant and consumer
  3. Having more conversations that are focused on actual consumer needs
  4. Conversing less regarding payments
  5. Conversing more about the commerce experience

Drop the industry jargon

When the industry jargon is dropped, a focus can be given to consumer identity and true innovation, and in turn enables a full customer experience. Companies can only provide this by forming an open setting of transparency, enabled through conversations. Listen and acknowledge who the consumer is, and it will answers how the consumer prefers to pay will come to the surface. This in turn has the potential to open gateways to a richer commerce experience for the company as well as the customer.

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Botch the customer and the merchants in essence want be part of a commerce experience, in contrast to a payment experience. Gauthier states that companies need to focus less on payments and more on the individuals that are making the transactions. He discusses identity and economics in the same sentence, as he believes it is pivotal.

“Who I am [as a consumer] is pretty key to what I’m going to do. Today, the economics is very centered around how I pay. And maybe at some point the economics should be centered, or certainly migrated, not with just so much just how I pay, but who I am. The who I am, and the willingness to share who I am — what I choose to share — should potentially change the economics of a transaction.”

– Patrick Gauthier, Amazon’s VP of External Payments

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Both identity and payment experience are part of the commerce experience. Yet, from the merchants’ side, the occurring conversations focus on the payments side. The downside of this occurrence is that it diminishes the key role of the retail and commerce experience during the transaction stage, loosing out on the important achieving merchant-centric experience.

The industry is battling with conflicts due to having opposing viewpoints, on how payments and commerce ought to be engaged into the consumer experience. This tension of sort is a result of commerce innovation is completely being overtaken by payments innovation, similar to the example of a current successful business model Uber.

“The [retail] industry needs to embrace customer-centricity in order to really get to what it can be in the next 10 years.”

– Patrick Gauthier, Amazon’s VP of External Payments

Many views, and opinions from payments-, retail- and commerce sectors as well as managers with innovative perspectives are opening up discussion points. What is essentially needed though is a dialogue regarding what and who these individuals are actually chatting about.

References:

Pymts (2015) “Amazon’s customer-centric Focus.” pymnts.com. 24 Mar. 2015. Web. <http://www.pymnts.com/in-depth/2015/whos-talking-about-innovation/#.VT0yIxOUee4&gt;.

McAllister, Ian. (2012) “What Is Amazon’s Approach to Product Development and Product Management?” Quora.com, 18 May 2012. Web. <http://www.quora.com/What-is-Amazons-approach-to-product-development-and-product-management&gt;.

Bulygo, Z. “Becoming a Customer Centric Company” 9 June 2014. Web. <https://blog.kissmetrics.com/customer-centric-company&gt;

Header image: http://pretiumsolutions.com/wp-content/uploads/2012/02/Customer-Experience-Management-Customer-Centric-Organization-copy.jpg

Infographics: Web. <https://blog.kissmetrics.com/wp-content/uploads/2014/06/how-to-survive-and-thrive-in-the-customer-revolution-exacttarget-infographic.png&gt;

Crowdsourcing in co-innovation: a SAP HANA example


Let me start by saying something we all already know: in the current digital world, innovation is critical. Disruption from new agile competitors becomes a continuous threat for many businesses.

As we all expect, innovation needs fresh thinking, open minds, experiments and new approaches. In the last years many new technologies were launched. However, in many cases it is hard to unlock the full innovation potential of these technologies – such as data analytics, mobile and digital. To unlock this potential, I claim that within big firms innovation leaders need to lead this innovation and use dynamic new approaches to co-creation and collaboration.

A great example of such a dynamic new approach is crowdsourcing. Crowdsourcing is a dynamic approach to the generation of ideas, without being bounded to traditional (firm) boundaries. Crowdsourcing gives the possibility to include input from the entire business ecosystem, which includes the input from employees, partners, suppliers and customers.

An excellent illustration of such corporate crowdsourcing is the SAP HANA Innovation Challenge. HANA is SAP’s in-memory database technology. Yearly, also this year, they organize a crowdsourcing contest. The SAP HANA Innovation Awards were designed to showcase and honor customers innovating with SAP HANA. Because current year’s contest is still active, I will illustrate this example based on the 2014 contest.

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The contest was organized the following. Customers using SAP HANA in production were invidted to enter their innovation story in a certain category. 22 finalists were selected by public voting. The social buzz for the conteste hashtag #HANAStory generated over 6 million impressions on Twitter, 6.7 thousand votes and 76.1 thousand website visits. SAP User groups were invited to nominate judges and 11 judges reviewed and scored each of the 22 finalists using a score card to select the final winners. This lead to a massive attention to SAP HANA innovation and mulitiple ideas were executed and implemented on a larger scale.

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The crowdsourcing contest at SAP is every year a great success, as illustrated with the 2014 example. For the innovation leaders willing to lead the innovation in this collaborative way, there are some important considerations:

1. Open up innovation processes to third parties
CIOs can open up their innovation process by partnering with third parties who share their aims and are prepared to collaborate. To identify potential allies, innovation leaders must study their partners’ portfolios to find common areas of interest.

2. Accede collective brainpower
If a small group starts to define innovation opportunities, it can result in a very narrow approach being taken. Opening up for a wider group can give you a greater diversity of input. It also can give you insight in the end-user experience.

3. Decide how to evaluate ideas
The end goal of idea crowdsourcing is to implement innovative ideas. To reach this goal, it is important to have a clear appraoch towards prioritizing and selecting the best ideas. In most cases such an approach consists of two stages: structuring and selecting.

What can innovation leaders learn from this blog?
Very straightforward, that the people at their organization,  and the people around their organization, are full of innovative ideas. It is key to find new ways to unlock the potential innovative value of these ideas and exploit it.
Innovation leaders should start experimenting now: where can crowdsourcing be used to move product/service/technology from a deployment to a genuine innovation?

Sources:
http://www.sap.com/corporate-en/about/our-company/our-boards/members/profiles/ingrid-helen-arnold.html
http://scn.sap.com/docs/DOC-59874
http://www.news-sap.com/partner-quote-sheet-sap-unveils-next-generation-enterprise-software-new-business-suite-sap-s4hana/
http://www.pristineworldwide.com/?p=1087
http://events.asug.com/2012BOUC/1310_Success_Stories_and_Lessons_Learned_Implementing_SAP_HANA_Solutions.pdf
https://blogs.saphana.com/2014/10/01/innovation-and-liberation-with-sap-hana-you-get-both-part-one-of-a-two-part-blog/
http://scn.sap.com/community/hana-in-memory/blog/2014/07/08/first-sap-hana-innovation-award-an-exciting-inauguration

The Dark Side of Customer Co-Creation


In this blogpost I will talk about the article “The dark side of customer co-creation: exploring the consequences of failed co-created services” by Heidenreich, Wittkowski, Handrich and Falk (2014).

Co-Creation
Co-creation becomes more and more common. Co-creation can take place in product development and service development. The authors focus in this article on co-creation in services, whereas in services “innovation always starts with customers’ unmet needs” (Ostrom et al. 2010, p. 16). Co-creation is beneficially for both firms – which are able to adapt changes better to customer needs – and customers – who will be more satisfied because of more empowerment. However, more involvement asks for more contact points between the firm and the customer, which in turn leads to higher complexity of the process and service. And as we all know, higher complexity increases the risk of failure.

Whereas current literature emphasizes the positive effects of co-creation, this article highlights potential negative influences of co-created services. The authors conducted four studies to investigate this dark side of customer co-creation. In this blog post I will highlight the outcomes and implications of these four studies, without mentioning all methodological and statistical characteristics.

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Study 1 + Study 2
The authors show that in case of service success, highly involved customers are more satisfied than customers who barely participated in co-creation. However, in case of failure, co-creation triggers a greater imbalance between customers’ expectations of delivery and the actual outcome. As a result, negative disconfirmation is enahnced, leading to a decline in satisfaction.

Service Recovery
After failure of service delivery, a firm must make up for its mistakes. The process of fixing failures is referred to as service recovery. Current literature even shows that sometimes customer satisfaction, customer loyaly, and customer repurchase intentions are higher after successful service recovery than if the service delivery was successful in the first time. The authors now include the degree of customer co-creation.

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Study 3 + Study 4
The outcomes of studies 3 and 4 indicate that consumers who experience a mistake in the service delivery of a highly co-created servicetend t oblame themselves for the flawed outcome and thus feel a sense of guilt. In such cases it is best to have no recovery process at all to restore customer satisfaction.

The outcomes of this study lead to some interesting implications for managers. First it highlights the importance of awareness of the potential negative consequences of offering highly co-created services. However, because of the high potential positive influences, firms might want to offer highly co-created services. Therefor, firms should implement measuring indicators to minimize the change of co-created service failure caused by human mistakes. Because not all failure is inevitable, managers must focus on higher customer satisfaction along with the overall service. This can mitigate negative effects in case of  failures. The importance of a proper recovery system is highlighted in this research.

Finally, even though there exists a dark side in customer co-creation, managers must try to overcome these difficulties and create light in the darkness…

References
Heidenricih, S., Wittkowski, K., Handrick, M. & Falk, T. (2014). ‘The dark side of customer co-creation: exploring the consequences of failed co-created services’. Journal of the Academic Marketing Science.
Ostrom, A. L., Bitner, M. J., Brown, S. W., Burkhard, K. A., Goul, M., Smith-Daniels, V., et al. (2010). ‘Moving forward and making a difference: research priorities for the science of service’. Journal of Service Research, 13 (1), pp. 4 – 36.

Students-to-Students: Making Free Study Spots Visible


As any consumer that switches from one company to the other, I’m prone to compare the one to the other. With universities, this is no different. When I switched from Utrecht University (UU) to Erasmus University Rotterdam (EUR), I saw a lot of points that both universities did differently and where they could learn from each other. But the one thing that the EUR needs most, I know exactly what that is.

As any good student, I regularly spend a lot of time on the university, working on projects, reading articles, doing research for my thesis, you name it. In between classes, before or after, I spend this time behind university computers (as I didn’t own a laptop) in the library, in computer rooms, etcetera. However, space is scarce in Utrecht’s university library. Whole generations of students have already been complaining that there are never enough study spots. Discussed measures have gone from a time limit on any computer use to banning HBO students from the library, but these were all rendered impossible to implement for the university. Of course there already existed a rule (and the on-screen timer that goes with it) that you are not allowed to spend more than 30 minutes away from your computer, or you’ll  be logged out and lose your current files, but this solves little as students usually don’t take other peoples stuff away if they want to sit somewhere.

Continue reading Students-to-Students: Making Free Study Spots Visible

The path of Philips to customer centricity


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Last week I was reading the article of Shah et al. (2006), The Path to Customer Centricity[1]. This article identifies fundamental issues and challenges that typically deter a firm from becoming customer-centric. However, Philips is a well-known company who executes a customer driven strategy already for a while, but is becoming more customer centric at the last decade.
According to Shah et al. the path to customer centricity is driven by a strong leadership Continue reading The path of Philips to customer centricity

Will 2013 be the year of the loyalty programs?


Yesterday group 4 presented the idea how to stay in touch with customers. There are many articles about customer loyalty, brand communities i.e.. The most remarkable thing, what I already mentioned in the presentation, is that the costs of loyal customers are not lower then the costs of new customers. Loyal customers wanted to be rewarded for the loyalty to a brand or a company.

The rewarding of loyal customers is not by definition an extra discount. The rewarding of loyal customers can also be an email with useful tips how to, for instance a grocery shop, combine different ingredients to make a delicious ‘midia’ (Greek food). This is needed to improve and maintain the customer relationship with a company or brand. Continue reading Will 2013 be the year of the loyalty programs?