21GE022 Strategic Marketing Module 3 PDF

Strategic Marketing 2024-2025 Olivier Schunck [email protected] 21GE022 – Strategic Marketing - Module 3 1 Recognize this? Video 21GE022 – Strategic Marketing - Module 2b...

Strategic Marketing 2024-2025 Olivier Schunck [email protected] 21GE022 – Strategic Marketing - Module 3 1 Recognize this? Video 21GE022 – Strategic Marketing - Module 2b 2 Q_What is a great customer experience for you? (Describe in a few words) https://app.wooclap.com/events/YOURMIND/0 21GE022 – Strategic Marketing - Module 3 3 Q_When I get repeatedly exposed to a poor customer experience of a company, I am most likely to do... (Select one) https://app.wooclap.com/events/YOURMIND/0 21GE022 – Strategic Marketing - Module 3 4 PRODUCT CUSTOMER 88 262 21GE022 – Strategic Marketing - Module 3 5  Course Outline Marketing’s A brief history of Marketing Brand & Brand identity, trust and 1 6 Journey and where it stands today Purpose purpose-driven marketing Strategic Basics of Marketing Strategy Responsible Marketing in times of crisis: 2 7 Marketing explained, step-by-step Marketing Sustainable and Ethical Customer Customers’ behavior & needs Digital & Marketing strategy in the 3 8 Centricity and distinctive experiences Social Digital Era Research & Customer intelligence driven Emerging AI, Gen AI & emerging tech- 4 9 Insights by data/AI & human insights technology led Marketing Reinvention Market & Competitive advantage to Agile Resilient & agile marketing 5 10 Competition stand out and innovate Marketing operating models 21GE022 – Strategic Marketing - Module 2b 6  Today’s Focus Marketing’s A brief history of Marketing Brand & Brand identity, trust and 1 6 Journey and where it stands today Purpose purpose-driven marketing Strategic Basics of Marketing Strategy Responsible Marketing in times of crisis: 2 7 Marketing explained, step-by-step Marketing Sustainable and Ethical Customer Customers’ behavior & needs Digital & Marketing strategy in the 3 8 Centricity and distinctive experiences Social Digital Era Research & Customer intelligence driven Emerging AI, Gen AI & emerging tech- 4 9 Insights by data/AI & human insights technology led Marketing Reinvention Market & Competitive advantage to Agile Resilient & agile marketing 5 10 Competition stand out and innovate Marketing operating models 21GE022 – Strategic Marketing - Module 2b 7 Customer Centricity 21GE022 – Strategic Marketing - Module 3 Evolution of Marketing: An ever-growing Customer focus Product-driven Customer-led Human-centric Digital Customer 1:1 Customer Experience Immersive Customer Experience Source: Marketing 6.0: The Future Is Immersive, by Philip Kotler, Hermawan Kartajaya, Iwan Setiawan, 2023 21GEO22 – Strategic Marketing - Module 1 9 “The most important single thing is to focus obsessively on the customer. Our goal is to be earth’s most customer-centric company.” “We’re not competitor obsessed, we’re customer obsessed. We start with what the customer needs and we work backwards.” — Jeff Bezos 21GE022 – Strategic Marketing - Module 3 “People don't want quarter-inch drills. They want quarter-inch holes.” — Theodore Levitt Author of “Marketing Myopia”, HBR 21GE022 – Strategic Marketing - Module 3 Providing valuable benefit for customers Satisfaction comes from: What the “product” is 12 21GE022 – Strategic Marketing - Module 3 Providing valuable benefit for customers Satisfaction comes from: What the “product” is What the “product” does 13 21GE022 – Strategic Marketing - Module 3 Providing valuable benefit for customers Satisfaction comes from: What the “product” is What the “product” does What the “product” enables the customer to do 14 21GE022 – Strategic Marketing - Module 3 Providing valuable benefit for customers PRODUCT CENTRIC What the product is Offering centric Features Focus 21GE022 – Strategic Marketing - Module 3 Providing valuable benefit for customers PRODUCT PRODUCT JOB CENTRIC CENTRIC What the product is What the product does Offering centric Features Offering Job Centric Focus Functionalities Focus 21GE022 – Strategic Marketing - Module 3 Providing valuable benefit for customers PRODUCT PRODUCT JOB CUSTOMER CENTRIC CENTRIC CENTRIC What the product is What the product does What the customer gets Offering centric Features Offering Job Centric Customer job centric Benefit Focus Functionalities Focus Focus 21GE022 – Strategic Marketing - Module 3 21GE022 – Strategic Marketing - Module 3 There are different types of needs and wants Kano model EXPLICIT LATENT IMPLICIT 21GE022 – Strategic Marketing - Module 3 There are different types of needs and wants Kano model What a surprise ! EXPLICIT I don’t expect that! Nice. Better than before LATENT IMPLICIT It’s not as good as expected Of course, so what? Terrible, it’s broken 21GE022 – Strategic Marketing - Module 3 Needs evolve over time Kano model EXPLICIT LATENT IMPLICIT 21GE022 – Strategic Marketing - Module 3 Needs evolve over time and are influenced by digital 21GE022 – Strategic Marketing - Module 3 Customer insights - At the core of Marketing Understanding their needs, wants and behaviors ❖ Marketing relies on accurate & reliable customer information ❖ Customer insights are fresh understanding of customers and the marketplace derived from marketing information that become the basis for creating customer value and relationships ❖ Understanding the customer needs is simply vital 21GE022 – Strategic Marketing - Module 3 Customer insights – The Voice of Customers ❖ The Voice of the customer (VoC) can be seen as a systematic approach for gathering & understanding customer needs, preferences & feedback, lining that information for insightsand incorporating the insights into business decisions to improve the customer experience. ❖ VoC is a continuous cycle of 4 activities: ❖ Listen ❖ Interpret ❖ Act ❖ Monitor 21GE022 – Strategic Marketing - Module 3 Customer Experience (CX) 21GE022 – Strategic Marketing - Module 3 Customer Experience - CX What is it? “Customer experience is the overall impression that your customers have of your business and your brand. Whether that’s the language you use on your owned media, the effectiveness of your automated phone system and call centre team, or the cohesiveness of ad campaigns. Customer experience (CX) plays a pivotal role in the growth of businesses everywhere, regardless of sectors. It’s a subject that has become increasingly relevant for all customer facing business functions, and a company will stand or fall depending on how it manage its CX strategy." 21GE022 – Strategic Marketing - Module 3 21GE022 – Strategic Marketing - Module 3 Customer Experience - CX It’s not just customer service, it’s much more… Customer Experience Customer Service 21GE022 – Strategic Marketing - Module 3 Customer Experience - CX It’s also not just user interface/user experience, it’s much more… CX – Customer experience is something far, far bigger. It’s Customer about advertising, brand Experience reputation, sales process, customer service, price UX – User Experience covers fairness, product, delievry… every different kind of touchpoint a user has with a product. CX is the sum of all UX is how it feels to use it. UX interactions/touchpoints between the company or brand and the outside UI – User Interface is what users UI world, digital and beyond. interact with directly, everything they see, touch and hear within a piece of software or a website. UI is what a website or app looks like 21GE022 – Strategic Marketing - Module 3 Customer Experience - CX This already is great… 21GE022 – Strategic Marketing - Module 3 Customer Experience - CX But this is much bigger… 21GE022 – Strategic Marketing - Module 3 Customer Experience: Why is it critical? It drives customer behaviors and loyalty 1 in 26 32% 62% unhappy customers will stop doing say they share their actually complain. business with a brand bad experiences with The rest, they just they loved after only others. leave! one negative experience. 21GE022 – Strategic Marketing - Module 3 Customer Experience: Why is it critical? Customers are willing to pay more for a great experiences 46% 32% 2.7x of consumers said they said they’d pay More likely to spend would pay more for a more for a fast and more when companies friendly and welcoming efficient service. communicate clearly experience. 21GE022 – Strategic Marketing - Module 3  Customer Experience: Why is it critical? Impact of poor/bad customer experience Damage brand reputation Increase customer churn rate Raise customer service costs Poor customer experience will Lead to loss of sales and revenue Decline brand loyalty & customer retention Kill conversions of leads 21GE022 – Strategic Marketing - Module 3  Customer Experience going wrong Bad customer experience comes in many shapes and sizes Source: The state of customer experience 2019, n = 2000 CX professionals, hotjar.com 21GE022 – Strategic Marketing - Module 3 Customer Experience going wrong “Friction in the customer journey” 21GE022 – Strategic Marketing - Module 3 Customer Experience: Why is it critical? Technology-led approach Video 21GE022 – Strategic Marketing - Module 3 21GE022 – Strategic Marketing - Module 3 Customer Experience: Why is it critical? Technology-led approach 21GE022 – Strategic Marketing - Module 3 Getting CX right 21GE022 – Strategic Marketing - Module 3  Customer Experience thinking Many thought leaders tackle the topic, also local ones… Top 50 Global Thought Leaders and Influencers on Customer Experience 2023 Source: https://www.thinkers360.com/top-50-global-thought-leaders-and-influencers-on-customer-experience-2023/ 21GE022 – Strategic Marketing - Module 3  Getting CX right… Source: stevenvanbelleghem.com 21GE022 – Strategic Marketing - Module 3 Getting CX right… Product Customer Centric Centric 21GE022 – Strategic Marketing - Module 3  Getting CX right… Source: stevenvanbelleghem.com 21GE022 – Strategic Marketing - Module 3  Video 21GE022 – Strategic Marketing - Module 3  Getting CX right… Source: theverge.com 21GE022 – Strategic Marketing - Module 3  Getting CX right… Source: stevenvanbelleghem.com 21GE022 – Strategic Marketing - Module 3  Getting CX right… Source: stevenvanbelleghem.com 21GE022 – Strategic Marketing - Module 3  Getting CX right… Source: stevenvanbelleghem.com 21GE022 – Strategic Marketing - Module 3 CX at the core of the business 21GE022 – Strategic Marketing - Module 3 Customer centricity at the core of the strategy 21GE022 – Strategic Marketing - Module 3 21GE022 – Strategic Marketing - Module 3 Q_In order to become customer-centric, which internal challenges can a company face ? (Describe in a few words) https://app.wooclap.com/events/YOURMIND/0 21GE022 – Strategic Marketing - Module 3 53 Challenges toward a customer-centric organization 21GE022 – Strategic Marketing - Module 3  It needs to involve all the ecosystem… Source: Accenture, 2017 21GE022 – Strategic Marketing - Module 3  Habits of customer centric organizations Source: gartner.com, 2017 21GE022 – Strategic Marketing - Module 3 CX starts with understanding… 21GE022 – Strategic Marketing - Module 3 From customer insight to CX journeys Consumers / B2C 21GE022 – Strategic Marketing - Module 3 What consumers do, want , expect… 21GE022 – Strategic Marketing - Module 3 59 Understanding consumer behavior Consumer Consumer Factors response decision of influence (behaviors, attitudes process & preference) 21GE022 – Strategic Marketing - Module 3 Understanding consumer behavior Consumer Consumer Factors response decision of influence (behaviors, attitudes process & preference) 21GE022 – Strategic Marketing - Module 3  Consumer Behavior: factors of influence ❖ Consumers make buying decisions every day, but it can be difficult to determine why, how, when, where they make certain decisions. ❖ Consumers are influenced by different factors Source: Philip Kotler, 2005 21GE022 – Strategic Marketing - Module 3 Consumer Buyer Behaviour 1. Cultural factors Culture Subculture Social Class The set of basic values, A group of people with shared It’s determined by a perceptions, wants, and value systems based on combination of factors behaviors learned by a member common life experiences and including family background, of society from family and other situations. Subcultures wealth, income, education, important institutions. Marketers include nationalities, religions, occupation, power, and are always trying to spot cultural racial groups, and geographic prestige. It affects consumer shifts so as to discover new regions. For example: Hispanic behavior by shaping products that might be wanted. America Consumers in the US. individuals’ perceptions of For example, the cultural shift Hispanics represent a large, their needs and wants. toward greater concern about fast-growing market. They tend People in the same social health and fitness has created a to be deeply family oriented class tend to have similar huge industry for health-and- and make shopping a family attitudes, live in similar fitness services. affair. neighborhoods, etc. 21GE022 – Strategic Marketing - Module 3 Consumer Buyer Behaviour 1. Cultural factors Example Geert Hostede’s Cultural dimensions framework Note: this is just one of the many academic frameworks 21GE022 – Strategic Marketing - Module 3 Consumer Buyer Behaviour 1. Cultural factors What can it mean for Marketing Strategy ? Example of how to go to market: Power Distance: How hierarchical or egalitarian should the marketing message be? Individualism vs. Collectivism: Should the marketing focus on individual benefits (e.g. personal achievement) or collective well-being (e.g. family values). Example Long-Term vs. Short-Term Orientation: Should the marketing focus on long-term benefits (like Geert Hostede’s sustainability) or immediate satisfaction Cultural dimensions framework etc… Note: this is just one of the many academic frameworks 21GE022 – Strategic Marketing - Module 3 Consumer Behavior: factors of influence 1. Cultural factors 21GE022 – Strategic Marketing - Module 3  Video 21GE022 – Strategic Marketing - Module 3 Consumer Buyer Behaviour 2. Social Factors Consumers in small groups such as in families can have a strong influence on their behaviour. But a person belongs to many groups beside the family: friends, clubs, online communities… Influencers of “opinion leader" are persons within a reference group who, because of skills, knowledge, personality or other characteristics, exert social influence on others. Buzz marketing involves creating opinion leaders to serve as brand ambassadors. 21GE022 – Strategic Marketing - Module 3 Consumer Buyer Behaviour 3. Personal factors Personal characteristics also have an influence on consumer buyer behaviour. These characteristics can be the person’s age and life-cycle stage, the person’s occupation and economic situation, but also lifestyle and personality: Lifestyle is a person’s pattern of living as expressed in his or her activities, interests and opinions. Personality is the unique psychological characteristics that distinguish a person or group. 21GE022 – Strategic Marketing - Module 3 Consumer Buyer Behaviour 4. Psychological factors Motivation/drive is a need that is sufficiently pressing to direct the person to seek satisfaction of the need (ref to Maslow’s hierarchy of needs). Perception is the process by which people select, organise and interpret information to form a meaningful picture of the world. Learning describes changes in an individual’s behaviour arising from experience. A belief is a descriptive thought that a person holds about something.Just as an attitude: a person’s consistently favourable or unfavourable evaluations, feelings and tendencies toward an object or idea. 21GE022 – Strategic Marketing - Module 3 Understanding consumer behavior Consumer Consumer Factors response decision of influence (behaviors, attitudes process & preference) 21GE022 – Strategic Marketing - Module 3  Consumer purchase decision process (B2C) Source: Philip Kotler, Principles of Marketing 21GE022 – Strategic Marketing - Module 3 Consumer purchase decision process Problem/need recognition What is the type of customer’s need? Rational needs Hedonic needs (utilitarian motives) (hedonic motives) 21GE022 – Strategic Marketing - Module 3 Consumer purchase decision process Problem/need recognition Maslow’s theory of needs 21GE022 – Strategic Marketing - Module 3 Consumer purchase decision process Problem/need recognition To be able to provide elements at the top, companies must provide at least some functional elements required 21GE022 – Strategic Marketing - Module 3 Consumer purchase decision process Problem/need recognition Illustration During COVID 19 consumers prioritized needs at the bottom of the Maslow pyramid. Post-pandemic some behaviors will stick, others less 21GE022 – Strategic Marketing - Module 3  Consumer purchase decision process Problem/need recognition Identifying unmet needs in a digital age Four ways for diversifying how and where you look to improve your vision of mainstream users or challenging your vision by looking at unconventional users. Source: HBR article, Identifying Unmet Needs in a Digital Age, 2022 21GE022 – Strategic Marketing - Module 3  Consumer purchase decision process Problem/need recognition Identifying unmet needs in a digital age Four ways for Nike's FlyEase LEGO Botanical diversifying how Sneaker and where you look to improve your vision of mainstream users or challenging your vision by looking at unconventional users. Netflix's Content Apple's Health Features Recommendations Source: HBR article, Identifying Unmet Needs in a Digital Age, 2022 21GE022 – Strategic Marketing - Module 3 Consumer purchase decision process Information search The more customers are involved, the more extensive they will search for information. Involvement is most frequently conceptualized as perceived personal relevance of the object (product or brand, advertisement or purchase situation) based on their inherent needs, values, and interests (Revised personal involvement inventory, Zaichkowsky 1994). Product involvement can range from very low to very high. 21GE022 – Strategic Marketing - Module 3  Consumer purchase decision process Information search The consumer can obtain information from any of several sources: Personal sources: family, friends, neighbors, acquaintances. Commercial sources: advertising, salespeople, dealers, packaging, displays. Public sources: mass media, consumer-rating organizations. Experiential sources: handling, examining, using the product. Source: Philip Kotler, Principles of Marketing 21GE022 – Strategic Marketing - Module 3 Consumer purchase decision process Evaluation of alternatives Beliefs Attitudes Behaviour “This coke can is red” “I like this coke” “I buy this coke” Beliefs: ideas you hold to be true, thought that a consumer holds about something Attitudes: how you approach situations, person’s enduring favourable or unfavourable evaluations, emotional feelings and action tendencies toward some object or idea. (Kotler, 2016) Behaviours: how you act 21GE022 – Strategic Marketing - Module 3 Consumer purchase decision process Evaluation of alternatives Some concepts that help examine consumer evaluation process: ❖ Product attributes – Consumer sees each product as a bundle of product attributes. Every consumer will have different rating for different attributes and will attach different degree of importance to them, depending on their needs & wants. ❖ Brand beliefs – The set of beliefs consumers hold about a particular brand based on each attributes. The set of beliefs buyers hold about a particular brand is called brand image. Based on the buyer’s experience and the effects of selective perception, distortion, and retention, the consumers’ beliefs may differ from actual attributes. ❖ Total product satisfaction – Consumer’s expectation of total product satisfaction will vary with levels of different attributes. ❖ Evaluation procedure – The consumer develops attitudes towards the different brands through some evaluation procedure. 21GE022 – Strategic Marketing - Module 3 Consumer purchase decision process Evaluation of alternatives 21GE022 – Strategic Marketing - Module 3 Consumer purchase decision process Purchase decision Which one would you choose? 21GE022 – Strategic Marketing - Module 3 Consumer purchase decision process Purchase decision ❖ Compensatory model: A compensatory decision-making strategy weighs the positive and negative attributes of the considered alternatives and allows for positive attributes to compensate for the negative ones. Consumers evaluate products and services by combining their brand beliefs according to importance. ❖ Non-compensatory models: A non-compensatory decision-making strategy eliminates alternatives that do not meet a particular criterion. - Conjunctive : “must have at least this much of these" - Disjunctive : “Ok I’m flexible, either this or that” - Lexicographic : “I will take the best on the most attribute” - terms of importance - Elimination by aspects : “At least this much of the most” - min required value Compensatory strategies are used when there are only few alternatives. Non-compensatory decision making is used when there are many alternatives to choose from; it allows people to quickly narrow down the number of options to one or a few. 21GE022 – Strategic Marketing - Module 3 Consumer purchase decision process Purchase decision Next to compensatory and non-compensatory decision-making strategies there are also products and services where consumer do not engage in a rational decision-making process (consciously or unconsciously). Their purchase decision (as well as the preceding information gathering phase) is then guided by emotion, intuition, habit or immediate need. This is for example the case for so-called convenience products and services that the consumer usually buys frequently, immediately and with a minimum of planning, comparison and buying effort such as emergency goods or impulse goods. 21GE022 – Strategic Marketing - Module 3 Consumer purchase decision process Post purchase evaluation 21GE022 – Strategic Marketing - Module 3 Consumer purchase decision process New products ❖ The buyer decision process can be different for new products. A new product is a good, service or idea that is perceived by some potential customers as new. The consumer must decide to adopt them or not. ❖ The adoption process is the mental process through which an individual passes from first hearing about an innovation to final adoption. ❖ There are five stages in the customer adoption process: awareness, interest, evaluation, trial and adoption. 21GE022 – Strategic Marketing - Module 3 Consumer purchase decision process New products S-Curve ❖ In the Diffusion of Innovation Theory developed by E.M. Rogers in 1962, identified five established adopter Innovation diffusion categories: Innovators, Early adopters, Early majority, Late Majority and Laggards ❖ The corresponding cumulative adoption of an innovation and market share evolution for the company is called the S-Curve (because of its shape) 21GE022 – Strategic Marketing - Module 3 TASK – Identify how digital technology impacts the diffusion of innovation Discuss in groups and search on Google, Copilot… 21GE022 – Strategic Marketing - Module 3 90 TASK – Identify how digital technology impacts the diffusion of innovation Non-exhaustive answer Digital technology impact the innovation diffusion by: ❖ Speed & scale: much faster & broader diffusion ❖ Blurring of categories between consumer clusters ❖ Easier trialability (= ability to try an innovation before committing) ❖ Broader observability (how visible the results of the innovation are to others) ❖ etc… 21GE022 – Strategic Marketing - Module 3 91 TASK – Identify how digital technology impacts the diffusion of innovation Possible answers on how technology has impacted innovation adoption and S-curves Source: Accenture, Strategy at the pace of technology, 2023 21GE022 – Strategic Marketing - Module 3 92 Understanding consumer behavior Consumer Consumer Factors response decision of influence (behaviors, attitudes process & preference) 21GE022 – Strategic Marketing - Module 3  Response in terms of buying behavior Four types Complex buying behaviour is characterized by high consumer involvement in a purchase and significant perceived differences among brands. The buyer will pass through a learning process, developing beliefs and attitudes and then a purchase choice will follow. Variety-seeking buying behavior has the lowest customer involvement because brand switching is your norm. It’s a matter of brand switching for the sake of variety rather than because of dissatisfaction with your previous purchase. Dissonance-reducing buying behavior occurs when consumers are highly involved in a purchase but see little difference among brands. They select a brand rather quickly, but then, after the purchase, they experience post-purchase dissonance when they see disadvantages or hear that other brands are better. Habitual buying behaviour is consumer buying behaviour characterized by low consumer involvement and few significantly perceived differences. Repetition of advertisements can create brand familiarity, which can lead to habitual purchases. Source: Philip Kotler, Principles of Marketing 21GE022 – Strategic Marketing - Module 3  Response in terms of buying behavior Link with most common loyalty profiles True Deal chasers Emotional loyals Most likely to leave, not Strong emotional bond to connected to brands primary brand Shop around and trade Do not shop for deals off for low price Trust and product/Service Attracted by engaging quality are key drivers messaging Inertia-based loyals Conditional loyals Stay with brand out of Align to brand “under condition” habit, inertia-driven Open to re-evaluate frequently Re-evaluate brands in Add new brands rather than rare occasions replacing existing ones Traditional channel use Value for money and trust are key Source: Accenture, Serving the Nonstop Customer, 2012 21GE022 – Strategic Marketing - Module 3 From decision process to Marketing Funnel Awareness Consideration Evaluation Conversion Use/Service Loyalty/Advocacy 21GE022 – Strategic Marketing - Module 3 The Marketing Funnel Overview 21GE022 – Strategic Marketing - Module 3 The Marketing Funnel Example: Gen Alpha marketing funnel 21GE022 – Strategic Marketing - Module 3 TASK – How does digital technology impact the process? Discuss in groups and search on Google, Copilot… Awareness Consideration Evaluation Conversion Use/Service Loyalty/Advocacy 21GE022 – Strategic Marketing - Module 3 99 The digital era is driving important evolutions… Consumer purchase process and Marketing Funnel is going from… Awareness Consideration Evaluation Dynamic Conversion #1 Linear Complex Use/Service Unpredictable Loyalty/Advocacy Holistic #2 Discrete Nonstop Life-Cenric 21GE022 – Strategic Marketing - Module 3 #1 From a linear to dynamic, complex & unpredictable CX journey 21GE022 – Strategic Marketing - Module 3 #2 From a discrete to holistic, nonstop & open CX ❖ Exploring CX strategies forces to step back and look at the entire, holistic customer journey, not just the purchase decision cycle. That’s how CX helps to improve the experience a brand delivers. ❖ Every customer touchpoint comes into view, helping to understand the interfaces. Thanks to digital channels, customers can now interact nonstop (24-7) with the brand. ❖ Each element – whether it’s brand-controlled or from outside and open channels - influences customer behavior, altering the customer pathways along their lifecycle. Customer journey maps are a way of visualizing the entire experience. They document everything a user thinks, feels, does, interacts with and experiences from a brand across all touchpoints. 21GE022 – Strategic Marketing - Module 3 #2 Visualizing e2e CX with the Customer Journey Map Example: Customer Journey Map – Music Sharing 21GE022 – Strategic Marketing - Module 3 #2 Visualizing e2e CX with the Customer Journey Map Example: Customer Journey Map – Music Sharing (detail 1) 21GE022 – Strategic Marketing - Module 3 #2 Visualizing e2e CX with the Customer Journey Map Example: Customer Journey Map – Music Sharing (detail 2) 21GE022 – Strategic Marketing - Module 3 #2 From Customer Centric to Life Centric Journeys Anticipate/make the difference at moments of truth of the customers' life 21GE022 – Strategic Marketing - Module 3 From customer insight to CX journeys B2C examples 21GE022 – Strategic Marketing - Module 3 Examples of great CX along the funnel Meet your customers...where they are 21GE022 – Strategic Marketing - Module 3 Examples of great CX along the funnel Give a service that customers value and that connects with reputation 21GE022 – Strategic Marketing - Module 3 Examples of great CX along the funnel Acts of kindness 21GE022 – Strategic Marketing - Module 3  Video 21GE022 – Strategic Marketing - Module 3 111 Examples of great CX along the funnel Answer personally, even to inquiries to the top Tony Hsieh, The late CEO of Zappos 21GE022 – Strategic Marketing - Module 3 Examples of great CX along the funnel Act on feedback...beyond expectations Why is tiger bread called tiger bread? It should be called giraffe bread. Love from Lily Robinson age 3 and 1/2 21GE022 – Strategic Marketing - Module 3 From customer insight to CX journeys Entreprises / B2B 21GE022 – Strategic Marketing - Module 3 B2B/business purchase decision process 8 stages of the business buying process Problem recognition: someone in the company recognises a problem or need that can be met by acquiring a good or a service. General need description is the stage in the business buying process in which a buyer describes the general characteristics and quantity of a needed item. Product specification is the stage in the business buying process in which the buying organisation decides on and specifies the best technical product characteristics for a needed item. Supplier search is the stage in which the buyer tries to find the best vendors. Proposal solicitation is the stage in which the buyer invites qualified suppliers to submit proposals. Supplier selection is the stage in which the buyer reviews proposals and select a supplier or suppliers. Involvement of procurement. Order-routine specification is the stage in which the buyer writes the final order with the chosen supplier(s), listing the technical specifications, quantity needed, expected time of delivery, return policies and warranties. Performance review is the stage in which the buyer assesses the performance of the supplier and decided to continue, modify or drop the arrangement. 21GE022 – Strategic Marketing - Module 3  B2B/business purchase decision process B2B buying journey The B2B purchase process is highly complex. Decision typically are getting influenced and made by a large number of stakeholders which do not necessarily have the same objectives Source: Gartner, 2019 21GE022 – Strategic Marketing - Module 3 B2B/business purchase decision process Typical stakeholders involved Initiator: starting point of the request. It can be a person at any level of the organization Influencer: has no direct stake in the decision itself but can exert influence on the decision-maker. Gatekeeper: person (or sometimes processes) to ensure that minimum conditions are met (e.g. legal) Buyer: typically, this is the procurement/sourcing function of the organization Decider: is the person(s) at the highest organization level to make the final decision (department head, BU lead, CEO…) User: the purchase my involved persons that will have to use the product or services (e.g., a new software) supplier or suppliers. Involvement of procurement. Objectives of different stakeholders differ based on their own needs and aspirations. 21GE022 – Strategic Marketing - Module 3  B2B/business purchase decision process B2B Elements of Value Pyramid The value elements in a B2B context are a combination of the values of the different individual stakeholders as well as the broader organizational values. Bain has, for example, organized 40 distinct kinds of value that B2B offerings provide customers into a pyramid with five levels. The most objective kinds of value are found at the base, and the higher a level is, the more subjective and personal the types of value it contains Source: Bain, “The B2B Elements of Value”, 2018 21GE022 – Strategic Marketing - Module 3  B2B/business purchase decision process B2B consumerization One important change brought by the digital transformation is that B2B stakeholders increasingly expect consumer-like experiences and have become much more empowered by using online channels As a consequence, providers of goods or services to enterprises more frequently struggle to become involved early on to influence the buying decision and provide personalized experiences. Source: Accenture, “B2B companies lose control over the customer experience”, 2017 21GE022 – Strategic Marketing - Module 3 Measuring CX 21GE022 – Strategic Marketing - Module 3 121 Customer Experience Measures Many metrics exists, 3 prevail for overall experience measurement… Customer experience can look like a subjective concept that's difficult to measure. That's why you need to rely on a number of different CX metrics that can be used individually or together to get an indication of customer experience in your business. By having a measurable indicator of CX, you can track how it improves (or worsens) over time and use it to evaluate the success or failure of changes you make. Many metrics exists… A few are widely used… Churn Rate Total time to respond (TTR) Customer Lifetime Value Repeat Purchase Rate First Contact Resolution Customer Engagement Score Customer Effort Score (CES) (FCR) Customer Retention Rate Average Handling Time (AHT) Net Emotional Value (NEV) Net Promoter Score® (NPS) Average Resolution Time and more... Customer Satisfaction Score (CSAT) Customer Advocacy Score Social Media Sentiment 21GE022 – Strategic Marketing - Module 3  Customer Experience Measures #1 NPS – Net Promoter Score Companies typically ask this question: ‘On a zero-to-10 scale, how likely is it that you would recommend this company [or this product] to a friend or colleague?’ A follow-up question asks the primary reason for the score. Ratings of nine or 10 indicate promoters; seven and eight, passives; and zero through six, detractors. Promoters passives detractors The Net Promoter score is simply the percentage of promoters minus the percentage of detractors. Source: https://www.bain.com/insights/introducing-the-net-promoter-system-loyalty-insights/ 21GE022 – Strategic Marketing - Module 3  Customer Experience Measures #1 NPS – Net Promoter Score It provides a competitive benchmark for the situation analysis... Source: https://www.netpromotersystem.com/about/net-promoter-system-framework ; https://www.bain.com/es/insights/webinar---nps-3.0---latam/ 21GE022 – Strategic Marketing - Module 3 Customer Experience Measures #1 NPS – Net Promoter Score On the other, beyond brand level, it provides insights at two additional levels. Fundamentally, there are three types of NPS scores (and many variations in between). These help organizations measure NPS after an individual experience or specific customer journey/episode, at the relationship or brand higher granularity level, and competitively—at both the experience and relationship levels. Experience NPS (interaction) Relationship NPS (product, business unit) Competitive benchmark (brand) 21GE022 – Strategic Marketing - Module 3  Customer Experience Measures #2 Customer Satisfaction Score (CSAT) Customer Satisfaction Score (CSAT) CSAT surveys measure customers’ satisfaction with the product or service they receive. They can be expressed with a 5- (or sometimes 7-point scale) from ‘very unsatisfied’ to ‘very satisfied’). Taking answers 4 and 5 as option of all responses, provides the score Unlike the Net Promoter Score, which asks customers to consider their overall feeling towards the brand (and thus, their likelihood of recommending it or not), CSAT focuses the customer’s attention on specific touchpoints Note: The CSAT score probably came about in 1994 when the University of Michigan established the American Customer Satisfaction Index (ACSI) 21GE022 – Strategic Marketing - Module 3  Customer Experience Measures #3 Customer Effort Score Customer Effort Score (CES) Customer effort score (CES) is a single metric that measures how much effort a customer has to exert to get an issue resolved, a request fulfilled, a product purchased/returned, or a question answered. CES surveys typically ask the question, “on a scale of 1 to 7, ‘very easy’ to ‘very difficult’, how easy was 1 2 3 4 5 6 7 it to interact with [xxx].” It is calculated by the % of customers that at least “somewhat agree” Customer Effort Score (CES) The idea is that customers are more loyal to a product or service that is easier to use. Note: At the basis of CES is a research from CEB (now part of Gartner) in 2010. It found that reducing the amount of effort a customer has to do to get their problem solved is a higher indicator of customer loyalty than delight. 21GE022 – Strategic Marketing - Module 3  Customer Experience Measures NPS, CSAT and CES in comparison NPS, CSAT, and CES are the three main customer service metrics used to measure different aspects of customer experience. CES is effective for tracking customer effort over time and predicting loyalty, but it should be complemented by NPS for a fuller picture. NPS measures long-term customer loyalty and overall relationship with the brand, making it a strong indicator of potential company growth. CES focuses on a single interaction, while NPS covers the entire customer relationship, making them complementary metrics. CSAT assesses short-term customer satisfaction with specific interactions or touchpoints. While CSAT is versatile, it is limited in evaluating long- term loyalty and should be used alongside other metrics. Source: www.qualtrics.com/experience-management/customer/customer-effort-score/ 21GE022 – Strategic Marketing - Module 3  Customer Experience Measures NPS, CSAT and CES in comparison – Example from health sector This example, for a specific health procedure experience, demonstrates that NPS, CSAT, and CES measures can not be compared one-to-one because their definition and objectives vary. However, a complementary use of these metrics is possible to provide the organization with a broad picture on the level of delivered customer experience. Source: Research article: Satisfaction with and reliability of in-hospital video-EEG monitoring systems in epilepsy diagnosis – A German multicenter experience, June 2021 21GE022 – Strategic Marketing - Module 3 CX Best practice examples 21GE022 – Strategic Marketing - Module 3 Customer Experience – Best practice example #1 Disney’s seamless Magic Band system 21GE022 – Strategic Marketing - Module 3 Customer Experience – Best practice example #2 Ritz-Carlton empowers its employees 21GE022 – Strategic Marketing - Module 3 Customer Experience – Best practice example #3 Southwest Airlines massive investment in CX 21GE022 – Strategic Marketing - Module 3 134 135 Customer Experience – Best practice example #4 Amazon always on availability 21GE022 – Strategic Marketing - Module 3 Customer Experience – Best practice example #6 Dyson Minimize friction, maximize convenience 21GE022 – Strategic Marketing - Module 3 Customer Experience – Best practice example #5 TD Bank showing appreciation 21GE022 – Strategic Marketing - Module 3  Video 21GE022 – Strategic Marketing - Module 3 The future of CX in the Age of AI 21GE022 – Strategic Marketing - Module 3  The Future of CX Customer Experience in the Digital Era and beyond ❖ Between 2010 and 2020 a new type of customer “Customer Experience” popularity relations came into being, based on the increasing (https://trends.google.com/) ease of use of digital applications and the emergence 100 of digital-only disruptors. 90 AI/Gen AI ❖ Companies like Uber, Amazon, Airbnb, Booking.com and 80 many other digital natives leveraged changing 70 IoT explosion expectations and new experience possibilities perfectly, 60 allowing some to develop into the largest companies in the 50 world. The underlying digital technologies that made this 40 Digital disruptors possible were 4G, mobile and social media. 30 ❖ While customer experience improvements based on these digital technologies have become ‘common’, the 20 years ahead will see the further development of new 10 types of customer experiences anchored in big data, AI, 0 2004-01 2009-01 2014-01 2019-01 2024-01 generative AI, VR/AR and IoT. Experiences become Note: 100 indicates the highest level of popularity of the keyword. immersive (cf. Ph. Kotler, Marketing 6.0) 21GE022 – Strategic Marketing - Module 3 The Future of CX It remains key, it evolves - Selected thought leadership articles Leading themes for the future - illustrative The future of customer experience… …requires cross-functional commitment and collaborative execution. …has internal capabilities, talent, and organizational structure that are aligned …must be intertwined with customer service to keep pace with customer needs …balances customer empathy with technology. Automation shouldn’t set the tone for interactions. …put scalded AI-driven personalization at their core, they become intelligent experiences...harnesses the power of tech and analytics – enabled by generative AI to realize full impact. Source: based on 2023/24 articles from HBR, McKinsey and IBM 21GE022 – Strategic Marketing - Module 3 Customer Experience: Why is it critical? It becomes increasingly challenging in today and tomorrow’s world 21GE022 – Strategic Marketing - Module 3  The Future of CX It remains key, it evolves - Steven Van Belleghem (illustrative) The new customer expectations are influenced by three elements: The coming decade will see the growth of technologies such as 5G, artificial intelligence, quantum computing and robotics. Each of these technologies has the potential to change whole industries. But the combination of the four technologies together is set to revolutionise the way we live and work. The technologies will also offer new possibilities to take customer relations to a higher level. Everyone has their own personal dreams, fears, wishes and ambitions. As digital ease of use becomes the new norm, the question for companies will be how they can make the difference by responding successfully to the more emotional aspects of their customers’ lives. Digital ease of use will guarantee transactional convenience. The next step is to provide greater ease and convenience for customers’ emotional expectations. More and more people are asking questions about the future of society. Challenges relating to technology, health and the climate are now at the top of many people’s agendas. As a company, you can make use of your strengths to create a positive added value for the community Note: https://www.stevenvanbelleghem.com/insights/the-core-message-of-the-offer-you-cant-refuse/ 21GE022 – Strategic Marketing - Module 3  The Future of CX It remains key, it evolves - Steven Van Belleghem (illustrative) You can develop The Offer You Can’t Refuse by investing in the following three axes, which will allow you to react in an appropriate manner to the new generation of customer expectations: ► Ultimate Convenience: this is the use of new technology in a smart way to make interfaces ever more automated, so that the customer needs to make no effort to do business with your company. This leads to the perfect transactional relationship. ► Partner in Life: this is not about your customer journey, but about the life journey of your customer. Which aspects in the lives of your customers create negative or positive energy? What things cost them too much effort? If you can provide answers to these questions, you can optimise your emotional relationship with your customers. ► Save the World: this is about companies taking their responsibility to do good for society as a whole. Every company has strengths that it can use to create a societal added value. Search for concrete solutions and contributions that will allow your company to make a truly tangible impact. Note: https://www.stevenvanbelleghem.com/insights/the-core-message-of-the-offer-you-cant-refuse/ 21GE022 – Strategic Marketing - Module 3  The Future of CX It remains key, it evolves - Steven Van Belleghem (illustrative) You can develop The Offer You Can’t Refuse by investing in the following three axes, which will allow you to react in an appropriate manner to the new generation of customer expectations: ► Ultimate Convenience: this is the use of new technology in a smart way to make interfaces ever more automated, so that the customer needs to make no effort to do business with your company. This leads to the perfect transactional relationship. ► Partner in Life: this is not about your customer journey, but about the life journey of your customer. Which aspects in the lives of your customers create negative or positive energy? What things cost them too much effort? If you can provide answers to these questions, you can optimise your emotional relationship with your customers. ► Save the World: this is about companies taking their responsibility to do good for society as a whole. Every company has strengths that it can use to create a societal added value. Search for concrete solutions and contributions that will allow your company to make a truly tangible impact. Note: https://www.stevenvanbelleghem.com/insights/the-core-message-of-the-offer-you-cant-refuse/ 21GE022 – Strategic Marketing - Module 3  Video 147 21GE022 – Strategic Marketing - Module 3  Thank You! Do you have questions or would like to share your feedback? [email protected] 21GE022 – Strategic Marketing - Module 3 Links to videos in this presentation Poor Customer Experience https://www.youtube.com/watch?v=2Mvx17k1T8w Steve Jobs on tech-led vs. customer-centric https://www.youtube.com/watch?v=r2O5qKZlI50 Walmart Pick-Up Experience https://www.youtube.com/watch?v=ppN6H2DVEZU Kit Kat in Japan https://www.youtube.com/watch?v=6zuIeGQtv68 Ikea – Buy with time https://www.youtube.com/watch?v=cz423OGObjU TD Bank – Show appreciation https://www.youtube.com/watch?v=bUkN7g_bEAI&t=1s Steve Van Bellghem – Partner in Life https://www.youtube.com/watch?v=VUGbR1wpWTg 21GE022 – Strategic Marketing - Module 2b 149