07 Sep Refer to chapter 3, Think about the companies you do business with as a customer.? Name an example of a company that identified and recognized you, one (different from the previous one) tha
Refer to chapter 3, Think about the companies you do business with as a customer. Name an example of a company that identified and recognized you, one (different from the previous one) that differentiated you by need or value, one (different from the previous ones) that has made interaction easy and fun, and one (different from the previous ones) that has changed something about the way it does business with you now, based on what it knows about you.
1. Think about the companies and organizations with which you have
had interactions.
2. Which of these are able to identify you (i.e., to recognize you as an
individual over time, between touchpoints, and across channels)?
3. What tactics and procedures did these companies use to accomplish
4. Among those that were not able to identify you, what are the factors
hindering their accomplishment of that objective?
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
MKT 456-CRM Instructor: Cynthia Bellian, MBA E-mail: [email protected]
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Managing Customer Experience and Relationships: A Strategic Framework
Chapter 3
Customer Relationships: Basic Building Blocks of IDIC and Trust
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Review from Chapter 2
Characteristics of a genuine relationship:
Mutual
Interactive
Iterative
Provides ongoing benefit to each party
Requires behavioral change for both parties
Unique
Requires and produces trust
Based on views presented in Chapter 2, a genuine relationship can be nonemotional, yet emotional connection does not necessarily indicate a relationship (e.g., if not mutual)
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
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Chapter 3 Preview
Trust and relationships happen in tandem
The IDIC model
Relationship development: IDIC and trust
How does trust characterize a learning relationship?
Trust myths
The trust equation
The trusted agent
When trust is lost: key elements of an effective apology
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
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Trust and Relationships Happen in Tandem
The final characteristic of relationships – trust – is so central that it might be a summary term for all aspects of a genuine, successful relationship
A genuine business relationship will require enterprises to treat different customer differently
This creates a feedback loop, or learning relationship, in which feedback from each party changes the behavior of each party, and the relationship gets better and better
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
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Feedback loop also includes social media conversations for three main reasons:
1. Social networks highly impact flow of information – customers prefer to rely on their peers
2. Information within networks disseminates quickly
3. Social networks carry implication of trust, as information is more personalized when delivered by members of a social network
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
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Trust and Relationships Happen in Tandem
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Action
Analysis
…customers as unique addressable individuals
…by value, behavior and needs
…more cost -efficiently and effectively
…some aspect of the company’s behavior, offerings, or communications
Identify
Differentiate
Interact
Customize
The IDIC Model
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Relationship Development: IDIC and Trust
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
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Identify
Differentiate
Interact
Customize
Analysis
Action
Developing trust
Customer information is an economic asset, and trust is the currency of all commerce.
Feedback
Loop
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How Does Trust Characterize a Learning Relationship?
Trust is not a “soft” concept, but has practical results:
Stephen M.R. Covey: trust is a function of character and competence
Trust results in quick decisions and business transactions
Trust is not required in a relationship, but its presence increases the relationship’s long-term value
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
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The Trust Equation (Green)
Common trust myths:
Intimate customer relationships require time and proximity (Truth: can be instantaneous and via interactive technologies)
Trust takes time (Truth: not all aspects of trust require time)
More customized contact is better (Truth: context and content are everything)
People trust companies (Truth: most aspects of trust associated with individual persons)
People like to be asked their opinion (Truth: people like to be listened to)
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
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The Trust Equation (Green)
Trust equation:
Trust=(C+R+I)/S
C=Credibility (words)
R=Reliability (action)
I=Intimacy (safety)
S=Self-orientation (focus)
The power of self-orientation has more weight than the other three components combined
Enterprises need a genuine customer-focused business model, not just CRM technologies, to build trust
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
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Rational
Non-rational
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The Trusted Agent
According to Green’s Trust Equation, the degree to which a customer will trust a company is inversely proportional to any “me-first” attitude discerned in the company
Trusted agent: an enterprise the customer trusts to act in his own interest – even if it conflicts with the enterprise’s self-interest (in the short-term)
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
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Corporate heresy
Becoming a trusted agent flies directly in the face of traditional belief that the customer’s and enterprise’s interests are diametrically opposed
The conditions that make it competitively important for a company to become a trusted agent:
Transparency: Interactive technologies make it virtually impossible for companies or individuals to hide disingenuousness
Commoditization: Internet technologies have made products easier than ever to find, compare, and purchase, so companies must offer something more for competitive advantage
Customers are looking to meet needs, not just purchase products
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
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The Trusted Agent
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Always prioritizes customer’s interest – even if it means referring a competitor’s product – because such a transaction builds trust
Improves the customer’s ability to make choices that best manage his life or business
Is confident that knowledge of customer’s needs and preferences will be monetized at a higher value and with greater dependability long term than a product-based model
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
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The Role of The Trusted Agent
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Customer Information Comes Only with Trust
Only with trust will customers share information the enterprise needs to serve them better
If a mistake is made in handling customer information, a prompt apology most effectively can restore trust
Elements of effective apology:
Must be sincere, forthrightly acknowledge the wrongdoing, and reiterate importance of trust
Must accept responsibility for the mistake
Must articulate what it has learned and how it is improving its procedures to ensure it will not happen again
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
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