• .
• Strategy as love, not war - MITSloanReview
• Personas Make Blue Ocean Strategy Proactive - TynerPlain
• Three Steps That Guarantee Every Word of Your Copy Gets Read - CopyBlogger
• The Art of the Customer Quote - RocketWatcher
• Tackling Telecom: Innovation at Telus - AtomicaCreativeBlog
• In Pictures: 10 Remarkable, Recession-Proof Entrepreneurs - Forbes
• Spectrum of Online Friendship - Graphic - MikeArauz
• Listening to Customers is Not Enough: You Need to Adapt and Act - CustomerThink
• Creating Killer Content in 3 Simple Words - CopyBlogger
• Win/Loss Analysis:  Part 1 - MarketingProfs Part 2 - MarketingProfs
• Visual Complexity Site - VisualComplexity
• The MYTH of Customer Loyalty - RightOutOfMyMind
• 8 Steps To Calculating Maximized Customer Lifetime Value - JohnHayes
• 37 Data-ish Blogs You Should Know About - FlowingData
• You Experience Innovation Success … Strategyn Uk 2009 - Strategyn
• Pictures and Ideas for Powerful Whitepapers - TynerBlain
• Game of Life in APL - DyalogLtd
• When Customer Loyalty Is a Bad Thing - HarvardBusiness
• What People Want (and How to Predict It) - MITSloan
• BCAMA Vision Conference 2009 Notes - MichelleEvans
• My Google Talk On Disruption - FredWilson
• When Being Rational Kills Your Business – Clayton Christensen - HutchCarpenter
• Think and Act Like a Nonprofit - MarketingProfs
• Logos with Hidden Messages - GraphicDesignBlog
• A Product Marketing Case Study: Rypple - RocketWatcher
• Emotional Infrastructure: Wipro’s Virtual Bench - VijayGovindarajan
• The Emotionally Bonded Organization: Emotional Infrastructure - VijayGovindarajan
• Why Focus Groups Fail Customers and Companies - MarketingProfs
• JOBS Approach - job-focused innovation - Innosight
• C-Level Execs on Marketing Success - eMarketer
• Can You Hear Me Now? Top Five Voice of Customer Pitfalls - CustomerThink
• Yes! 50 Scientifically Proven Ways to Be Persuasive - AlexMoskAlyuk
• The value of customer value management - MyCustomer

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Photo credit:  Inju

Much of the discussion is about customer retention - how to keep customers in times when everyone is reducing costs and overhead.

Okay, but which customers should you keep. Which customers are profitable? Which ones are costing you the most to serve? Do you know?

RETHINKING CUSTOMER VALUE

Not all customers, even all loyal customers, bring equal value to the firm. According to Sabrina Helm in the Journal of Relationship Marketing:

This is true for all companies but particularly for professional services firms who have fewer clients and may have less clearly demarcated levels of service.

DEFINING CUSTOMER PROFITABILITY

In customer value circles, customer equity is defined as the total of the lifetime discounted values of all your firm’s customers. Customer profitability is an individual customer’s worth, defined as sales minus the cost to get the sale and the cost to manage the ongoing relationship.

How can firms identify profitable customers?

FIRST, HOW DO YOU THINK ABOUT  CUSTOMERS?

While senior management often talk about their different types of customers, many don’t take the necessary steps to actually strategically align their company’s efforts to each customer type (segment).

In fact, it’s just impossible to do anything strategically with your customers if you think of them  as one big homogenous group. Worse, it’s very inefficient.

ALIGN BY CUSTOMER SEGMENT

In contrast, when companies segment their customers they can align their marketing strategy by customer segment and get these benefits:

• Clients self-qualify

• Your marketing spend is more targeted and efficient

• Success is much easier to measure and direct

• Low-value segments easier to discard; high-value ones easier to introduce

• Concentration within segments leads to deeper specialization which attracts higher-value clients

DOES THIS GIVE PROFITABLE CUSTOMERS?

Not in itself, but now you can begin to measure customer profitability. You can discover what segments are profitable, which ones need your resources and even which customer segments to kill.

The good news is that for firms who have not yet taken this approach, results can be very dramatic with relatively little effort.

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• A Primer: Here’s How To Calculate Customer Lifetime Value - CustomerThink
• Using values: connecting deeply with customers - JohnCaddell
• Demand Generation Best Practices - FutureLab
• Reseeding R&D - HarvardBusiness
• Buyer Behaviour in a Recession - Marketo
• Managing Innovation - Pages from Alessi’s Handbook - McKinsey
• Why Logic and Value Propositions Matter Less Than You Think - RainToday
• Engage Different Consumers in Different Ways - FutureLab
• The One-Minute Marketing Test - FixYourBrokenMarketing
• Marketers Are Neuroscientists Too - JonahLehrer
• B2B Buyers’ Purchase Decisions Hinge on Emotion, Not Facts - JohnCaddell
• Listening to Customers - Walker
• How the Right Words Help you Sell Better - CopyBlogger

If you liked this post, please subscribe (see Email & RSS options on my right menu). ]]> http://www.outsideincredible.com/blog/?feed=rss2&p=614 http://www.outsideincredible.com/blog/?p=614 http://feedproxy.google.com/~r/CreatingOutstandingCustomerValue/~3/xU9bl0OSqQA/ http://www.outsideincredible.com/blog/?p=639#comments Fri, 01 May 2009 18:26:42 +0000 TomWGibson http://www.outsideincredible.com/blog/?p=639

I read The Age of Engage by Denise Shiffman last July. I continue to refer to it (more pages have my underlines and notes than don’t) and think I’ll give it another read-through because in the past year I’ve seen through experience how spot-on Denise is.

Here’s what resonated most with me. In the “live web”, control has shifted from sellers to consumers .. and that makes customers value and acquire products differently.

This is obvious to newer age consumers and producers (see Grown Up Digital by Don Tapscott) but I think many companies, though willing, don’t know what to do. This book is the place to start.

HOW THIS BOOK HELPED ME ..

Perspective - gave me a sense of the entire Live Web landscape
Framework - gave me a model based on the new Live Web values
Players - tons of example companies and products that were new to me
Notes - well-referenced launchpad to more reading

It’s a terrific read for companies who still market to and serve customers in the traditional way, and would be a good early read in any strategic marketing or business program curriculum.

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Lots of TV screens (ugh) but not intrusive as compared to some places . Being of the TV generation, I’m naturally drawn to them. I noticed three things (in my defense, these are sports channels I rarely see):

• “Best car for the money” - tagline on a Toyota ad. When was the last time you saw the grubby “money” word in a tagline? If you search on it you will see it’s a leading hook line for automobile reviewers. Smart of Toyota to just say it plain. If not now, when?
   
• Coca Cola with a blue background. Okay .. but I was a little disappointed.
   
• Ellen DeGeneres a new CoverGirl. 

Safe back home now.

Here’s a short and light Harvard Business post: Innovate Like Chris Rock.

As an experimental innovator, Chris “conducts thousands of small experiments”. He tries out new material at a small club in New Jersey. Some jokes fall flat, some sort of work, a few get a good laugh.

It’s just hard to predict where the laughs will come from. And that’s the whole point. The desired outcome is a laugh. It doesn’t really matter what works. Try them out to see what sparks - there’s just not that much invested in each one yet.

SOUND FAMILIAR?

Have a look at how very early-stage consumer Internet product companies get funded these days. Like comedy, it’s just too hard to predict what will work so investors make “small investments” into many potential desired outcomes - whatever they may be. There are more money rounds, but much smaller and only if progress is demonstrated at each step. To investors it’s a risk distribution game. To the entrepreneurs, I don’t think much has changed - they may operate on the cloud to keep costs low, but I see them still putting their time and hearts into it.

ONE BIG DIFFERENCE - CHRIS ROCK EXPERIMENTS WITH PAYING CUSTOMERS

Chris Rock pitches his material to people who pay to have a laugh, and he gets rewarded with early, honest feedback. He finds out right away from his paying customers what works, what can work, and what will never work. True prototyping.

Surprisingly, the challenge for some consumer Internet product companies is that at the very early stage they don’t yet know who they will be collecting the money from: consumers , integrators, advertisers, etc. 

For companies who do have a clear pricing/monetization plan, the remaining challenge is finding authentic, potentially paying customers to validate the market before they have committed too much. As per this incremental funding model, the investors won’t care much in the first few rounds. That very early go/no go decision burden has been shifted to the entrepreneurs.

How will they get early, honest feedback? It’s a problem.

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Photo credit stijnbokhove  -  thanks!

• In a Downturn, Provoke Your Customers - HarvardBusiness
• Less Can Be More: Preparing for the Recovery in Uncertain Times - FutureLab
• Time to Start Listening to Front-line Employees - FutureLab
• The salesperson’s point of leverage - John Caddell
• Front Line User Intelligence Gathering (1 of 2) - John Caddell
• Front Line User Intelligence Gathering (2 of 2) - John Caddell
• The Best Way to Understand Your Customers - HarvardBusiness
• Silver Lining Questions  - HarvardBusiness
• Now Featuring Benefits! - CopyBlogger
• Beyond Eyeballs: The Three Body Parts that Create Real Revenue - CopyBlogger
• Selling to Large Companies: Avoid These Mistakes - Jill Konrath
• Eggcorn Database - Eggcorns
• Doing Market Analysis - Easy Right? - PragmaticMarketing
• Porter five forces analysis - Wikipedia
• Use Value Propositions to Validate Your Product - PragmaticMarketing

If you liked this post, please subscribe.  See Email & RSS options on my right menu. ]]> http://www.outsideincredible.com/blog/?feed=rss2&p=559 http://www.outsideincredible.com/blog/?p=559 http://feedproxy.google.com/~r/CreatingOutstandingCustomerValue/~3/Lh8voFCfn70/ http://www.outsideincredible.com/blog/?p=523#comments Fri, 13 Mar 2009 20:04:55 +0000 TomWGibson http://www.outsideincredible.com/blog/?p=523 Gary Vaynerchuk’s get-with-the-program take: the value of each viewer/user/customer is NOT THE SAME!  

Well worth viewing on just about every level. Read the comments to his blog post to see how the whole choir ‘gets it’ .  

• Freemium Business Model - TylerBlain
• Telling Customers to Not Purchase Your Products - Harvard Business
• How companies make good decisions - McKinsey Quarterly
• Confused Grocers and Won Customers with Canned Pancakes - Fast Company
• Evan Williams: How Twitter’s spectacular growth driven by unexpected uses - TED
• Thoughts on the marketing Ps - WebInkNow
• The panhandler’s secret- Seth Godin
• Three things you need if you want more customers - Seth Godin
• When Having No Competition is a Problem - RocketWatcher
• Dieter Rams and His 10 Design Commandment - FutureLab
• How Google and P&G Approach New Customers, New Markets - Harvard Business
• The 7 new truths about your customers - Canadian Business
• Being Rational About Emotions in Customer Service - FredZimny’s Blog
• Amazon CEO Jeff Bezos explains Customer Experience - Cust Exper Labs
• What am I learning at the Sales 2.0 Conference? - Jill Konrath
• Ten Reasons Your Brochure Gets No Sales - Fix Your Broken Marketing

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