[There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else. Sam Walton]

The above quote by Walmart’s founder said it best – business strategy is all about the customer! The customer-first message has spread to the workforce. During a recent one-week period, I was pleasantly surprised to hear three Millennials call me “boss” during routine transactions at the Fresh Market, Office Depot and Subway. The same week, I also got a “hey, chief” and “I appreciate you”. Yes, the word is getting out – the customer is in charge! Value-creating organizations demonstrate that they value their customers’ business.   

Customer orientation ascribes to David Packard’s (HP’s co-founder) philosophy that marketing is too important to be left to the marketing department. It is the responsibility of everyone in the organization. A customer orientation is a service organization practicing Japanese style marketing - putting the customer first. In fact, the Japanese word okyaku-sama literally means “honored customer” or the “customer is God.”  Is the customer really king in the U.S.? When leaving an American restaurant, sometimes one is barely acknowledged; in contrast, it is not uncommon at a Japanese dining establishment to have several parties graciously bow farewell in thanks for the customer’s patronage.    

 “We must be more customer focused, we need to create new market opportunities!” Undoubtedly, you have heard this management mantra or a variant of this theme recently. Executives use terms such as customer (or market) centric/driven/focused/ oriented and so forth to motivate their people to do a better job relating and responding to customers. While the idea is sound, too often it’s just lip service rather than a major investment to improve all facets of the organization. A true customer orientation changes the business culture to create and maximize customer value which in turn leads to an improved bottom line.

 Customer Commitment > Culture > Customer Value > Business Performance         

The healthcare market is fast growing and projected to be the largest employer in the services-producing economy in the United States. Globally, health care is a major challenge and vital industrial sector, as well. Many healthcare organizations, however, are slow adopters in creating superior value for customers. Successful healthcare organizations have embraced a customer-centered philosophy in the now economy – it’s not just about the care offered, but about the caring offered by service providers (physicians, nurses, technicians, front-desk personnel, and so forth.) 

Walk-in clinics or urgent care facilities are a relative new innovation in the industry as most consumers would prefer to not have to visit a hospital emergency room for a sprained wrist, flu shots, skin rash, common cold symptoms, or other minor maladies. Yet, some of these so-called urgent care centers may be viewed as semi-urgent, at best. They may be closed after 9 p.m. and on Sundays, their website says to call but no one answers the telephone, they have long waits for service, or are even ill-prepared to assist with basic medical issues since they are staffed by nurse-practitioners instead of seasoned physicians. In contrast, the Baptist Health System (17 centers in Miami-Dade and Broward counties) pioneered urgent care in South Florida more than 15 years ago and is all about the healthcare experience [www.GetTreatedBetter.com/]. Patients may call or e-mail ahead for appointments and have reserved free parking. Amenities include comfortable waiting rooms with large flat-screen televisions, wireless internet, and freshly brewed coffee and tea. An efficient expert team of highly skilled and compassionate doctors, nurses and technologists is readily available, and full service imaging services are provided, as needed.

Are You Obsessed about Your Customers?

Great companies such as Amazon and Apple are totally obsessed about their customers. Their CEOs, CMOs (Chief Marketing Officers), CCOs (Chief Customer Officers) and CXOs (Chief Experience Officers) stay awake at night strategizing how to improve the customer experience. They are masterful at creating and delivering value to their highly satisfied, loyal client base. Consider these examples: Federal Express changed its name and repainted its trucks to read FedEx, as that is what customers called them (“let’s FedEx this package to Zurich”).  Nordstrom’s sales associates have been known to buy products from a major competitor, Macy’s, to satisfy an unfulfilled customer’s request. Zappos, an online shoe and accessories retailer and an Amazon company, gives their customers a full year to return their product.

According to the 2017 Global Customer Experience Benchmarking Report by Dimension Data, 81% of companies stated that customer experience is their top competitive differentiator. Yet, only 13% of respondents acknowledged that their company’s level of service was excellent. Also surprising was the fact that more than 30% of organizations do not have anyone in charge of the design and delivery of the customer experience.

Forrester identified four levels of customer-centricity. These are: 1) customer-naïve companies, 2) customer aware companies, 3) customer committed companies, and 4) customer obsessed companies. Based on their research, two-thirds of the firms are customer naïve or customer aware (only 10% were customer obsessed). Therefore, a majority of businesses should restructure to implement customer-obsessed operations. Organizations will need to build a culture to mobilize around customers, high performing teams, developing technologies, processes, and metrics.  Forrester adds that customer-obsessed organizations such as Coca-Cola, HSN, and the Lego Group follow four guiding principles. They are customer-led, insights driven, fast, and connected. They define a customer-obsessed enterprise as, “one that focuses its strategy, operations, and budget to enhance its knowledge of and engagement with customers.” 

Realize that greatness in marketing and customer service is a function of attitude, not resources. Here’s how a local dry cleaner delivers exceptional value. I pulled up in front of the store in a South Florida rainstorm and the owner jogged out with a large umbrella to greet me and my clothes for drop-off. He stated, “I can afford to get wet, but not you!” Another time when I visited there for a pick-up, the store clerk quickly hung up the telephone when I entered. She said, “I was only talking to my boss, customers are way more important.” How’s that for mastering customer value thinking?

Other companies do not do a very good job in customer service - you probably can identify many of these firms. We have all been put on hold endlessly when calling for technical support, been ignored or treated indifferently when visiting a retail site, and sold inferior goods or services upon occasion. While second-rate firms may survive in the short term, they will not last in business unless they become value-creating for customers.

So, is your company truly obsessed about its customers? If not, WHY NOT? How can your organization design and deliver outstanding value to your customers in the now economy?

This blog post is the second in a series extracted from Superior Customer Value – Finding and Keeping Customers in the “Now” Economy, 4th Ed. (2018 forthcoming, Routledge Publishing/ Taylor & Francis). For further information, contact Art Weinstein at art@nova.edu, www.artweinstein.com/, 954-309-0901 .

 

 

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There are only two types of companies: the quick and the dead.

           -Michael Dell 

For more than 20 years, we have heard about the benefits, excitement, promise and impact of a digital revolution and a technologically-driven society. Concept albums by iconic rockers such as Radiohead (OK Computer), Rush (2112) and David Bowie (The Rise and Fall of Ziggy Stardust and the Spiders from Mars) sung about the all-encompassing power of technology – for good and evil -- before the new economy was born. And, a half century ago, Rod Serling relayed ironic tech-based themes in his brilliant television series, THE TWILIGHT ZONE (e.g., Time Enough at Last, Third from the Sun, To Serve Man, and so many more spell-binding episodes).

          In the 1990s, Internet pioneers such as America Online, Amazon, Cisco Systems, Dell, eBay, E-Trade, Expedia, and Yahoo! dramatically changed how consumers and businesses bought products and services in a 24/7 global market space. A seismic shift in the new economy has taken shape over the past ten years led by the FAANGs -- Facebook, Apple, Amazon, Netflix and Alphabet’s Google. These digital leaders focus on speed, service, selection, sociability and solutions.  

        What has been the result of this 5-S transformation? Welcome to the now economy! Just as a toddler cannot possibly wait for a chocolate chip cookie and absolutely, positively must have it right now -- today’s consumers are equally impatient and demand immediate satisfaction. Hence, the rise of Amazon Dash, Fresh, and Prime; Apple’s iTunes; Couchsurfing; TaskRabbit; ZipCar; and a multitude of other “I gotta have it now!” business models.

          Strategic differentiation combined with technology and consumers’ interest in choice has led to industry disruption. Marriott and Hilton have sure felt the effects of Air BnB in the lodging industry. Today, target marketing means segment-of-one personalization. Mass promotion has evolved into two-way dialogues with consumers and business users. Customer relationships lead to lifetime brand advocates. The new economy has morphed into the now economy!

           The now economy is service dominant. This includes business, consumer, professional, and government services. Knowledge workers and the creative class turbocharge this economic sector. In addition, digital services (the platform economy) and consumer-to-consumer services have surged in the past 5-10 years. Realize that a strong traditional backbone of manufacturing, agri-business, construction, and infrastructure is still a key economic priority in industrialized nations. And, let’s not forget the trade segment (retail and wholesale), as well as the burgeoning e-commerce marketspace and the rise of smart products (e.g., appliances, energy regulation, and the internet of things) – see Table 1 which summarizes the key components of the now economy.

Table 1.  Key Sectors of the Now Economy

Services

B2B, B2C and Professional Services

Knowledge Work and the Creative Class

Digital Services and the Platform Economy

Consumer-to-Consumer (C2C) Services/Sharing and Access Economy

Manufacturing +

Customized Manufacturing

High Technology

Emerging Technologies

Agribusiness, Construction, Mining

Trade

Retail, Wholesale

E-Commerce

Internet of Things (IoT)

            The 24/7 now economy is always-on and always open. Buyers will no longer accept shopping from 9 a.m. to 9 p.m. daily and noon to 6 p.m. on Sundays.  Online shoppers will expect their orders to be delivered immediately, within the next two hours, or overnight (not in 5-10 business days). Bricks-and-clicks business models allow consumers to pick up their purchases at a neighborhood store. Sub-par customer service will not be tolerated. Buyers expect to be wowed with amazing experiences and will not settle for yesterday’s ordinary store visits. Table 2 summarizes what customers want in the now economy.

Table 2.  What Customers Want from the Now Economy

The 5 - S’s

Speed

Service

Selection

Sociability

Solutions

Customers Value

It now! – Immediacy and convenience

Superb service

Many options and quality products -- goods, services and ideas

Ongoing, long-term relationships with companies that truly value their business

Doing business with innovative, problem-solving companies that are perceived market leaders

Millennials Also Seek

Technology to manage and simplify daily activities – e.g., apps for immediate access

Interesting, enjoyable and memorable experiences

Product access and benefits -- not necessarily product ownership

Emotional connections with companies, brands and user groups via social media platforms as well as supporting organizational/ environmental causes that they are passionate about

Doing business anytime in any location via multiple channels

Consider this example of the now economy in action.

I recently dropped my dog off at a neighborhood pet spa for one-hour grooming services. I visit the Target Superstore down the street to grab a cup of dark roast in the mini Starbucks. The café is sparsely populated but employees (mostly millennials) drop by to consume premium coffee and pricy pastries. Occasional shoppers, largely female, young and old of all ethnicities, stop by to get their caffeine fixes, too. The fresh produce section in the grocery department is right across from me, part of the one-stop shopping experience. A hundred or so yards away is the embedded CVS Pharmacy -- once a formidable competitor and now a strategic partner. Paralleling the unstoppable movement towards online buying, I notice very few shoppers in this cavernous establishment. Is it any wonder that H.H. Gregg, Sears, Macy’s and dozens of other retail leaders have closed stores or went out of business? (The death of retail is a very real threat in the industry). I get a text message from the groomer – it’s time to pick up Maya.    

           The now economy is also about sharing and access. Users are bypassing traditional market structures and business channels to work directly with other consumers to solve individual problems – think about an Uber instead of a taxi. The redefinition of buyer behavior has spawned a vibrant consumer-to-consumer sector and impacts the future of work.

            While most of us would love to be like Tim Ferriss, rich and only work four hours a week, such incredible wealth is unlikely. In the now economy, many individuals are turning to multiple entrepreneurial ventures to pay the bills to survive or thrive. Just as struggling musicians work hard and hope for that big break, many millennials (and others) are juggling multiple gigs such as driving for Lyft, creating apps, writing blogs, posting YouTube videos and starting innovative businesses as they seek the “big deal” and navigate their individual path to success.  

Consider:

1.      What impact does the now economy have on your personal life?  

2.      What impact does the now economy have on your professional life?

3.      Is your company creating superior value in the now economy? If not, what strategic changes are called for?

4.      Identify 1-2 other companies that may ascend as a potential rival(s) to the FAANG giants.

Art Weinstein, Ph.D., is a Professor of Marketing in the Huizenga College of Business and Entrepreneurship, Nova Southeastern University. He can be reached at art@nova.edu

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The late Ed Koch, a recent New York City mayor, always asked, “How am I doing?” Marketers — as well as government leaders — need to know if their “customers” are happy.

Perhaps you head the marketing operations for your company and want to get a better handle on customer metrics. You heard about the idea of a marketing dashboard at a recent trade association meeting and think that may solve your problem. How should you proceed? What should be on your dashboard? 

Progressing beyond a single item to monitor the effectiveness of business performance, leading organizations often use a set of key metrics called marketing dashboards to understand their key performance indicators.

Just as an automobile dashboard captures critical driving information such as speed, distance, fuel levels, vehicle and engine temperature, navigation and so on, a marketing dashboard summarizes pertinent information on branding, channels, customer contact, promotion, sales performance, service profitability, the Web, and customer value. 

Consider the benefits

Some specific benefits of using dashboards include the following: business intelligence, trend tracking, measuring efficiencies or inefficiencies, real-time updates, visuals (charts, graphs, maps and tables), customized reporting of performance and aligning goals and strategies with results. Major downside considerations include the cost, time and the talent needed to administer marketing dashboards.

The main value of the dashboard framework is that it consists of a multitude of practical information that is current, accessible and easy-to-understand. Dashboards can be designed for top C-level executives as well as the managers working in the trenches.

The accompanying figure illustrates an example of an executive marketing dashboard. This dashboard features the following metrics: sales levels and growth targets, the decision-makers, exceptions, key accounts (including revenues), the marketing pipeline (status of marketing activities throughout the buying cycle), and tracks leads and dollars generated over an annual period. 

Decide what to measure

What should you measure? The spectrum of opinion varies widely from a single metric such as the Net Promoter Score to 50 or more performance indicators. Just as we don’t want to be overwhelmed with our automotive dashboard, keeping the marketing dashboard simple helps measure what matters and aligns with business objectives. That said, here’s a good starting point to consider in choosing five to ten key performance indicators that may include the following:

• Financial measures: revenues, contribution margins, turnover ratios, profitability
• Competitive measures: market share, advertising/promotional budget, image map
• Consumer behavior: market penetration, customer loyalty, new customers
• Consumer intermediate measures: brand recognition, customer satisfaction, purchase intention
• Direct customer measures: distribution level, intermediary profits, service quality
• Innovativeness measures: new products launched and the percentage of annual revenue from these new products
• Customer value measures: process metrics, customer retention rates, customer lifetime value, RFM (recency, frequency, monetary value) 

Realize that doing business today requires a new level of accountability for performance. Superior customer value means knowing customers’ behaviors and buying patterns.

Metrics are an important part of the strategic marketing process to understand: (1) How successful the organization is now; (2) What it needs to accomplish to become even more successful in the years ahead.

Smart marketing managers will embrace this challenge and use metrics as a planning tool to improve business strategies.

                                                                                                                                                                                                        Image Source: www.fishformetrics.com

                                                                                                                                                                                                         *Reprinted from Smart Business, September 3, 2013.

Art Weinstein, Ph.D., is a Professor of Marketing at Nova Southeastern University and author of “Superior Customer Value: Strategies for Winning and Retaining Customers.” He may be reached at art@nova.edu or (954) 262-5097. For more information, visit his website at www.artweinstein.com.

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Does your company suffer from any of the following marketing deficiencies – fuzzy business mission, unclear objectives, information that is not decision oriented, lack of agreement as to segmentation’s real role in the organization, products/services that reflect corporate desires rather than customer needs, unfocused IMC strategy, and/or failure to attack niche markets and customize offerings?

Over the years, many top B2B marketing executives have asked me how to build and implement a true segmentation-driven culture in their organizations.  Based on my more than 20 years of experience as a professor, researcher, and consultant, here are a few of my thoughts on how to get the segmentation process in high gear.

1. Create a 1-day segmentation training workshop for the marketing group to generate excitement and stimulate project development. This will lead to a set of specific, market-based strategic initiatives and research opportunities. Bayer Diagnostics, Citrix Systems, Motorola and other companies have implemented such a plan. 
2. Begin with 3-5 small, focused and low-cost initiatives to demonstrate success and build enthusiasm. Realize that all segmentation projects may not be a resounding success (good news -- most will be if properly designed and executed). Cordis, a Johnson & Johnson company, benefited from the strategy of hitting many singles rather than going for grand-slam homeruns.
3. Review previous segmentation studies and make sense of the summary reports. Via a meta-analysis methodology, a fresh set of objective eyes can add significant value to good work and extend segmentation reports buried in computer files or file drawers. At one time, Blue Cross Blue Shield of Florida had undertaken 18 segmentation studies with no synthesis, integration or strategic analysis.
4. As Intel learned, segmentation audits with marketing managers, channel members and customers can pinpoint current and potential problems as well as overlooked market opportunities and niches.
5. Successful segmentation means being able to answer these 6 “what” questions -- what do you want to accomplish? (e.g., find new markets, get better customers, upgrade business relationships, align products to customer desires, create a segmentation model/typology, etc.); what methodologies will help you get the necessary information?; what is unique about your segmentation view of the world?; what is your budget?; what is your timeline?; and, what are reasonable expectations for the work?

B.C. Forbes said, “You can drive your business or be driven out of business.” I leave you with 5 thoughts to share with your management team to get them inspired and on-board to invest in segmentation thinking.

• I am convinced that market leadership is dependent upon how successful firms are at defining and selecting markets appropriate to their capabilities, resources and competitive situation.

• Segmentation findings provide a systematic basis for controlled market coverage as opposed to the hit-or-miss, random efforts of mass or unfocused marketing.

• Segmentation-based marketing is the essence of sound business strategy and value creation.

• Segmentation will continue to grow in stature as a fundamental marketing tool and foundation for marketing strategy in business organizations, large and small.

• A more thoughtful approach for market selection can assist marketers design winning target marketing strategies.

Realize that firms in all industry sectors are discovering the power of strategic segmentation as a marketing tool for attracting and retaining customers in fast changing, globally competitive markets. How about you?

*Post reprinted from LinkedIn, May 16, 2015

Image source: www.b2binternational.com, 2016.

 Art Weinstein, Ph.D., Professor of Marketing, Nova Southeastern University and author of Handbook of Market Segmentation, 3rd Edition. Professor Weinstein can be reached at art@nova.edu

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The size of the service sector, global competition, rising labor and technology costs and demanding customers all force companies to create excellent customer experiences.

The challenge firms face today is knowing their customer’s definition of service quality and how to deliver that at a reasonable cost to create superior customer value.

Customers use service encounters to assess the quality of a firm’s offering. So, how can we “wow” customers? 

It’s all about the service experience

Seventy percent of customer defections are due to service problems. Improving service quality is like taking vitamins, eating healthy and exercising regularly. Although the results may not be immediate, long-term benefits are significant. Service quality is not a “quick fix,” but rather a way of life for companies who are serious about improvement. Here are 10 recommendations that can lead to superior customer value:

1. Co-create services with customers. Learn what customers value by incorporating the “voice-of-the-customer” into the service development process.

2. Focus your improvement programs outward, on market “break-points.” By defining and mapping episodes (service cycle), you can see the service experience as the customer sees it. Realize that customers view service as a totality, not an isolated set of activities.

3. Create a tangible representation of service quality. Hertz Gold Plus Rewards communicates a premium, value-added bundle of services to business travelers seeking a hassle-free car rental experience.

4. Use teamwork to promote service excellence — service workers who support one another and achieve together can avoid service burnout.

5. Create a “service-bias” based on key SQ determinants such as professionalism, attitudes/behaviors, accessibility and flexibility, reliability/trustworthiness and service recovery.

6. Develop metrics that are specific in nature, such as a 95 percent on-time delivery, customer wait time or order processing time.

7. Employee selection, job design and training are crucial to building customer satisfaction and SQ. The ability to respond quickly, competently and pleasantly to customers needs to be a priority.

8. Reward quality efforts in marketing. Seek opportunities to reinforce quality behaviors when they occur. Reward employees on the basis of commitment and effort, not just sales outcomes.

9. Think of service as a process, not a series of functions. Service quality occurs when the entire service experience is managed and the organization is aligned to respond accordingly.

10. Integrate customer information across sales channels. The information made available to online and offline service representatives should be consistent.

Checklist — improving service quality

1. Does your company really listen to its customers? Give a specific example of how good listening improved the service experience.

2. Reliability means performing the promised services dependably and accurately. On a 10-point scale, where 1 is unreliable and 10 is perfectly reliable, rate your company and explain why.

3. How well does your company perform the “service basics?”

4. How effectively does your company manage service design — systems, people and the physical environment? Provide an example of how lack of planning in one of these areas resulted in a “fail point” during a customer encounter.

5. Service recovery refers to how effectively companies respond to service failures. Cite an example when a service failure occurred and how it was handled.

6. Teamwork is an important dynamic in sustaining service workers’ motivation. How can you improve teamwork in your organization?

7. Internal service is crucial to service improvement, as customer satisfaction often mirrors employee satisfaction. To what extent does your company assess internal service quality?

Art Weinstein, Ph.D., is Chair and Professor of Marketing at Nova Southeastern University and author of “Superior Customer Value: Strategies for Winning and Retaining Customers.” He may be reached at art@nova.edu or (954) 262-5097. For more information, visit www.artweinstein.com. Link with Art Weinstein on LinkedIn http://linkd.in/1hQcrHJ.

*Reprinted from Smart Business, September 3, 2013; Image source: Revelconsulting.com

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Harry Houdini, born Ehrich Weiss in 1874, dazzled American and European audiences with spectacular magic and illusion feats until his death on Halloween, 1926. Adapting his name from his hero, J. E. Robert-Houdin, a French magician, Houdini quickly established himself as the top entertainer in the world in the late 19th and early 20th centuries. While everyone knows about his marvels as a legendary magician and escape artist, few know that much of his success was due to superb marketing.

Here are five marketing lessons learned from Houdini that you can apply to your entrepreneurial venture (and you don't need to wear a strait-jacket or be handcuffed to pull off this marketing magic).

1. Always be prepared!   Houdini always had a plan and was very resourceful. He was ready for any physical or mental challenge. While Houdini clearly took chances, he believed in managing risk. He used his superior intellect to conduct research and obtain knowledge of all situations and always had the right tools to get the job done. It was not uncommon for Houdini to spend up to 10 hours a day practicing challenging escapes.

2. Leap-frog the competition. Houdini constantly studied the market and prepared for imitators and new competitors. He dissected strategies used by his rivals and never let his competitors know what he would do next. He read every book that was published on magic acquiring a personal library of more than 5,000 volumes on the subject. While rivals were content to break out of handcuffs, Houdini did this while suspended upside down from skyscrapers, on top of bridges or immersed in water.

3. Fine-tune your positioning strategy. Houdini understood the sheer power of a brand name a century before this became all the rage in marketing. Quality was at the heart of his value proposition, always exceeding customers' expectations in his live performances. He knew that perception was reality and had every detail worked out in advance to provide a superior customer experience. While other magicians made rabbits disappear, Houdini vanished a full-grown elephant in plain sight. To extend his brand, Houdini went global and conquered Europe, as well as America.

4. Build a world-class product. Houdini carefully guarded his trade secrets and invested in his product. He diversified to build his product line and product mix. An advocate of the kaizen approach (continuous improvement), Houdini regularly sought incredible new offerings while enhancing his existing repertoire of tried and true stunts. His three minute water torture escape from a steel-encased cabinet was world renowned. This was one of his several signature acts that could not be replicated.

5. Be creative and never stop promoting. Houdini was the consummate sales pro as well as the master showman and publicist. He stimulated word-of-mouth promotion in every city he visited by promising unimaginable events that he later successfully executed.  Houdini often dropped in on local police stations during the day in the cities he was visiting and challenged them to keep him from escaping their most secure chains/restraints, handcuffs, jail cells, or locks (his arsenal of four hidden keys/picks always got the job done). The publicity gained from these teaser appearances drew huge interest to his evening shows. The word spread nationally and internationally in an era that had no television or internet!

Suggested reading: Cannell, J.C. (1989), The Secrets of Houdini, NY: Bell Publishing Company.

Art Weinstein, Ph.D., is Chair and Professor of Marketing at the Huizenga School. His research interests are customer value, market segmentation and entrepreneurial marketing strategies. He may be reached at art@nova.edu  

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I recently completed a major research project with 70 top-level marketing executives on best practices in market segmentation in 13 high-tech business sectors. The study was  conducted in California, Florida and nationwide. My findings were published in the Academy of Marketing Science and Society for Marketing Advances proceedings, as well as the Journal of Strategic Marketing (JSM) and Journal of Marketing Analytics (JMA).

I began exploring this fascinating B2B marketing arena in 1990 when I did my doctoral dissertation "Market Definition in Industrial High-Tech Markets". A quarter of a century later, I am still learning from the experts in the field and sharing the insights gained with academic, practitioner and student audiences. For example, this work was recently featured in presentations/webinars with organizations such as the Business Marketing Association of Northern California, Direct Marketing Association, Market Research and Intelligence Association of Canada, amongst others.

Here are 10 recent knowledge chunks I gained in this latest round of inquiry:

A.    Segmenting B2B Technology Markets via Psychographics (JSM, 2014)

1.    While psychographics has captured the imagination of consumer marketers, only 22% of B2B companies used psychographics as a segmentation dimension.

2.    The top 5 B2B segmentation dimensions were application, firmographics, geographics, benefits, and value (psychographics was rated 9th).

3.    Those firms that did use psychographics were richly rewarded. It was the most effective segmentation dimension resulting in a 24% increase in business performance.

4.    While only 1 in 5 companies used "formal" psychographics, 3 of 5 (59%) used "informal" analysis - i.e., many years of marketing experience is a good proxy information source for sound decision making. Using formal or informal analysis led to better insights than not using psychographic thinking.

5.    Barry and Weinstein's 3 component, 8 item B2B psychographics model was strongly supported by the respondents (Journal of Marketing Management, 2009).

B.  Target Market Selection in B2B Technology Markets (JMA, 2014)

1.    The 3 most important criteria for target market selection were opportunities in the industry, sustainable differential advantage and profitability.

2.    Market oriented firms were more successful in using technology than production oriented firms.

3.    75% of companies used a differentiation strategy (target 2 or more market segments with 2 or more strategies). 54% of these companies were successful or very successful in their marketing strategy.

4.    Competitive analysis was a strong predictor of target market success accounting for 22% of explained variance.

5.    Firms using creative market selection criteria were more successful than those companies using traditional approaches.

What has been your experience in segmenting and targeting business and technology markets? What are your major challenges in truly understanding your customers and designing winning marketing strategies? What questions do I need to ask marketing executives in follow-up studies?

Art Weinstein, Ph.D., is Chair and Professor of Marketing at NSU. He is an internationally known expert in B2B segmentation who has written four books and dozens of scholarly articles on this subject. He has provided segmentation research, consulting, and training to some of the largest technology companies in the world. Contact him at art@nova.edu to request a copy of articles A or B.

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A business model describes how an organization designs and delivers value by providing stakeholders with a shared understanding of how the business operates. A strong business model offers a competitive advantage by demonstrating that the firm does something different, more innovative, and better than its rivals. The digital era has driven many recent business model transformations.

Apple’s iTunes is a great example of the changing music industry. In the past, record companies, distributors, and retailers controlled channels and profits, now the artist and platform (iTunes) has the market power.  Newspapers have struggled to become information providers as their readers aged and defected to other media. Google, Facebook, Apple, and Salesforce.com are examples of shapers since they open up platforms for third-parties and create new market space. Participants embrace and enhance shapers’ platforms and may include applications (apps) developers, service firms, or online e-tailers. For example, millions of Farmville gamers manage virtual plots of land, grow crops, raise animals, and use online tools such as tractors. It has been estimated that there are more than 20 times more people playing this Zynga app than there are actual farms in the U.S. Consider these ten business models as you develop your business strategy.

Digital Business Models

Bricks and clicks: Retail, e-tail (Examples: Best Buy, Target).

Internet pure-play: Online presence (Examples: Blue Nile, Overstock.com).

Software as a service (SaaS): Delivering applications over the Internet (Examples: Salesforce.com, ADP).

Community of users: Users generate knowledge, solve problems (Examples: eBay, Wikipedia)

Shaper: Open up new market space (Apple, Facebook).

Platform participant: Enhance platforms by creating user applications (Examples: Foursquare, Zynga).

Multi-sided markets: Serve multiple segments – e.g., readers and advertisers (Examples: USA Today, Visa).

Long tail: Millions of products offered, most sell very few (Examples: Amazon, Netflix)

Free as a business model: Products provided to users at no cost, revenues generated elsewhere (YouTube, Hulu).

Open business model: Companies share products for low cost [way below branded options] (Linux (Red Hat), Qualcomm).

Think about these seven questions as your management team assesses your business model and market performance.

1. Can you clearly explain your business model?
2. What is unique about your strategy?
3. How does it compare with your direct and indirect competitors?
4. Have you broken any industry rules lately?
5. Can you develop a more innovative and interesting business model?
6. Will your business model win in the market?
7. Does your organization truly deliver superior value for customers?

Art Weinstein, Ph.D., is Chair and Professor of Marketing at Nova Southeastern University and author of Superior Customer Value – Strategies for Winning and Retaining Customers. He may be reached at art@nova.edu or 954-262-5097; visit his website www.artweinstein.com     

This entry was posted on February 3, 2014 at 8:49 PM and has received 5559 views. There are currently 25 comments. Print this entry. Download attachment.

Dramatic shifts have occurred in technology and have transformed how firms do business and connect with their customers.  Innovation is enabling firms to organize in new ways, design better products, and manage supply chains. Winners in today’s economy will be those companies which can clearly define their processes, organize around those key processes, and work closely with their business partners.

      A key question is how do managers employ innovation as a best practice tool to effectively create maximum value for customers? There are three sources of technological “know-how”  --product technology (the set of ideas embodied in the product), process technology (the set of ideas embodied in the manufacture of the product), and management technology (the set of procedures associated with selling the product and administering the business unit).

      In a national study of 70 B2B technology companies, research found that process technology was the weak link with only 49% of firms mastering this activity (in contrast, product technology and management technology were successful in 81% and 70% of companies, respectively). Success rates were 67% for innovative cultures and 60% for research and development expertise. Medium and large companies were more successful in technology usage than smaller firms.

     There are many ideas on how to best innovate. Typically, various multi-step approaches are used to illustrate the innovation process. The accompanying video advocates a 5-step approach to innovation consisting of: 1) identifying the problem/challenge, 2) generate ideas, 3) find a solution, 4) test with customers, and 5) go to market/adjust.

     Innovation management can be studied as a process improvement technique across a spectrum of activities (R&D, new product management, cycle time reduction, creative personality types, etc.) and over the short-term and longer planning horizons. A variation in these findings may depend on organizational size, business or nonprofit, industry sector, environmental dynamics, or other considerations (management commitment to innovation, organizational capabilities, resources, etc.).

Video On Innovation

 

Reference

Weinstein, Art, Jin, Yan, and Barrett, Hilton (2013), “Strategic Innovation in B2B Technology Markets: A Need for a Process Perspective ,” Journal of Supply Chain and Operations Management,  11 (1), 64-76.    http://www.artweinstein.com/uploads/strategicinnovationB2Barticle.pdf

*Photo Credit: Forbes.com

 Art Weinstein, Ph.D., is Chair and Professor of Marketing and the co-creator/advisor for the Huizenga School Means Business Success!  Faculty Blog. He is the author of 7 books and more than 70 scholarly articles. His latest book is Superior Customer Value – Strategies for Winning and Retaining Customers, 3rd Edition, CRC Press (2012). More Info

This entry was posted on October 28, 2013 at 10:02 AM and has received 7403 views. There are currently 15 comments. Print this entry. Download attachment.

American society is intrigued by image. Consider this related word - imagine. Disney is all about the customer experience and emotionally and magically transports guests to another time or place. Image is often associated with entertainment, fashion, and technology markets. Corporate image is the reputation of an organization viewed by its various stakeholders – investors, employees, customers, business partners, communities, etc. All companies have a singular corporate personality that differentiates them from their rivals. The communication challenge is to manage and enhance the firm's identity over time.

A perceived image is based on two components: 1) what the company does and says, and 2) what the customers/market say about the organization - this is more important. Companies must manage a strong IMC (integrated marketing communications) program consisting of advertising, selling, sales promotion, online, social media, and public relations activities. Customer-generated content such as Facebook posts, tweets, blogs, and online communities can dramatically impact organizational performance.

Perhaps your company is not a global giant – does image research make sense for you? Consider these queries as you revisit your marketing communications strategy. How important is image in your value proposition? Should it be even more important? Does your image clearly resonate with your target market? How can you get your customers and the market to share more positive messages about your company? What is your main point of differentiation from your competitors? Should coolness be a major or minor part of your IMC strategy? How can you best tell your business story to communicate value?

Art Weinstein, Ph.D., is Chair and Professor of Marketing at Nova Southeastern University and author of Superior Customer Value – Strategies for Winning and Retaining Customers. He may be reached at art@nova.edu or 954-262-5097; visit his website www.artweinstein.com Read More

This entry was posted on May 23, 2013 at 9:02 AM and has received 6511 views. There are currently 21 comments. Print this entry. Download attachment.