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CO-CREATING C U S T O M E R RELATIONSHIPSThoughts, Explorations & Concepts for Customer Driven Marketing & Service Innovationby Wim Rampen

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I’ve been thinking about writing a book several times. And this time I thought I’d do something about it. As it seemed sensible I started reading through the past three years of blog-posts that I’ve written. Having done so I decided I might as well share the ones I like best with you in a digital booklet.

This booklet has four ‘Chapters’.

The first chapter discusses Value. You can read all about adding value, offering value, value chains, value netwroks and even creating value. It can well be one of the most used words in business publications, but only very few seem to be worried about what it means, and how value can be a used on a conceptual level as to make it framework one can use in a business environnment. Since ‘Value’ is also used a lot in my blogposts, I thought I’d share with you how I think about the concept in the first Chapter.

Chapter two, a short one, contains two posts on The Net Promoter Score (NPS). Two light reads to express my love/hate affair with metrics in general and NPS in specific.

Chapter three is where the meat is. This is about Social CRM and how I think about Customer Relationship-building in the age of Service and Co-Creation. If you’re looking for my persepective on technological developments you will be dissappointed as I discuss Social CRM on a conceptual and company strategy level.

The last chapter (four) contains two posts in which I bring together my thinking from the past two years. The first one is on Service, the second one on Marketing. Both are quite long and have received lots of compliments, retweets, referrals and comments. They too have been the basis for several presentations and key-notes that I have conducted over the past year or so.

I consider this booklet my personal resource, a well of inspiration for writing my book and an important way to to collect feedback from you as to whether the idea of writing a book makes any sense ;)

Enjoy reading & please let me know what you think at http://wimrampen.com

IntroductionBy Wim Rampen

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People who know me through my writing, know that I’m very interested in understanding ‘value’. Make no mistake: I’m not talking ‘valueS’. That’s the field of thinkers like Umair Haque and many others following his footsteps. Even Michael Porter, the value chain guru, has come entered the debate with a plea for Shared Value(s).

No, I’m talking about the value Customers derive from the products and services we, the companies, provide. And if you know me really well, you know I don’t think in terms of ‘extracting, getting or deriving value from’. I think in terms of value as being co-created between Customers, firms and potentially many other participants. More about that later in this booklet.

One of the most important notions about value, to me, is that it can only be determined by its beneficiary. I once used the example of watching a football game with friends in a bar. Although, from an external perspective everyone had exactly the same experience, we all know that everyone will tell a different story the following morning.

And that is the case with all products and services we consume (or better: experience): we all experience in a different way. Hence, value is a very personal state of mind, a perception of what is expected or has been created.

This Chapter contains three posts, amongst the most popular of my blog over the past years. Thank in advance for reading.

“Value can only be determined by its

beneficiary”Steve Vargo and Robert Lusch - A Service Dominant Logic

Chapter I. Value Defined...or not actually...By Wim Rampen

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Over the past years most companies have recognized the contact center or customer services center as an important touch-point between the company and its Customers.

[...] I very much welcome the interest of Marketing (and Sales) for the call center environment as much as I do the attention for improvement of the Customer Experience.

The main strategy of call centers has been to develop itself from a cost to a value center. From a terminology perspective this works for me, but the practice, in my opinion, is mostly focused on single value creation or value extraction. Let me explain my thoughts:

The main elements of the cost to value-center strategy have been focusing around generating additional sales, through up- and/or cross-selling. [...] Some pro-active companies are aiming to improve the customer experience with things like welcome calls or any other form of courtesy calls (generating another sales-opportunity).

I'm a firm believer in the great opportunities for value creation there are on the customer services touch-point. I also see that, in lots of cases, after a promising first starting year, companies forget that value-creation is not only about extracting as much value possible out of the Customer into the company. Hence companies start increasing the sales-targets and more importantly, they start increasing the "sales-per-hour" target, which is just another productivity metric not aimed at customer value creation. Which leads me to the following statement:

"Deployment of a Value Center strategy will only have a chance to meet the desired result if one can leave behind Cost Center methodologies and metrics"

Becoming a Value Center is not about choosing to upsell or cross-sell when you want it. Becoming a Value Center is also not something one can decide to be by itself. Let the Customer be the judge of how much value is created through the Customer Services Experience, let the customer decide if your Call Center is a Value Center!

Call Centers are an important touch-point in the Customer Experience. It is also not the only point a Customer will touch in its lifetime. The design , delivery and decision making aspects within the Call Center change if a company thinks and manages the contacts as part of a lifetime of Customer interactions. [...]

Thus, to conclude, I believe the best way to go is not with a cost-centered, not with a profit-centered and not with a flawed value-centered approach. The best approach to Customer Services Call Centers is the Customer-centered approach.

To Be A Value (Call) Center is Not Your ChoiceBy Wim Rampen

Deployment of a Value Center strategy will only

have a chance to meet the desired result if one can

leave behind Cost Center methodologies and metrics

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One of the fundamental flaws in thinking about value is based on the persistent logic that value is something you add, or provide. I’ll try to explain why and how you should think about value creation instead.

Value is not derived from your product, but created with your productIt’s persistence is shown e.g. in the way we think about value chains. It is vested thoroughly in our minds that each step in the production and delivery of goods or services is about adding value, whilst at best it is about adding knowledge, features or capabilities. None of these elements are creating value for the Customer though before they are consumed or used.

As a consequence today’s marketers continue to focus on explaining to (potential) Customers what value they are providing or adding. Firms seem not to understand that the other side of the table is not deriving value FROM the product. The other side is trying to get a job done and your product or service is a means to that end, thus they are creating value WITH the product. And – this is really important – they

can’t do that job without themselves.. Indeed, themselves:

Customers can only create value for themselves WITH themselves..

If it weren’t for yourself, how would you be able to make a phone call? How would you be able to make dinner? How would you be able to enjoy it with your friends? How would you be able to use your satellite TV? How would you, well …. basically get anything done? I think you get my drift here. And although it sounds incredibly logical, this is not the logic most companies use when designing experiences or targeting new Customers.

Ignoring the Customer’s roleMost companies (their marketing departments in particular) are stuck in telling Customers what value for their money they get, based on the flawed thinking that the Customer derives value from the product itself. Yet, they are completely ignoring the Customer’s role in the process of value creation.

Value is Always Co-CreatedBy Wim Rampen

"A brand doesn't know what it is unless it knows what its customer is. That's why smart organizations focus on strengthening

relationships with actual customers, and not on the independent creation of content and

attention."Tom Asacker - A Clear Eye

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When they should be thinking how to further enable the Customer’s value creating capabilities, they are thinking of how to capture value from the Customer. Which in essence they ask in return prior to the value being created. (yes, most purchases are actually pre-payments). Why?

Because value only comes to life when Customers are using the product or

service.

Once you understand that the Customer has an important, even decisive, role in the process of value creation, and that value is only created in use, it is not a quantum leap to the next stage: asking yourself what Customers need to do, in order to be able to create the value they are after. Asking yourself: What do they need to know, understand, be able to? (and I’m not even touching upon the contextual and emotional side of value creation here). Or taken from the opposite angle: what is hindering them? what don’t they have? what don’t they understand? what can’t they do? and how come?

Many in the area of marketing, Customer experience or even Service design, try to

answer similar questions, yes. But dominantly in the context of selling goods or services (how can we make buying easier?). Too few ask themselves these questions in relation to the Customer’s experience when consuming the goods or services.

What could be, if you would truly understand?Imagine if you would understand what “resources” Customers bring to the table to create value, beyond the product or service you provide? How powerful would that understanding be? What if you would understand that better than your Customer’s alternative suppliers? What would happen if you could support your Customers creating value in a more easy, better or quicker way, not just make them buy in a more easy, better or quicker way?

Would that not provide you with the competitive advantage you want? Would that not create the advocates you want? Would that not allow you to capture higher margins over a longer Customer lifetime?

I think so..

Value is Always Co-CreatedContinued...By Wim Rampen

Most companies (their marketing departments in particular) are stuck in telling Customers what value for their money they get, based on the

flawed thinking that the Customer derives value from the product itself. Yet, they are ignoring the Customer’s role in the process of value creation.

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I'm a big fan of Business Model Generation and the Business Model Canvas. I find it rather useful in many situations to explain the essence of CRM Strategy, Customer Experience and the importance of the other building blocks to the blocks in the upper-right part of the Business Model Canvas.

I also find it not to provide the depth sometimes needed to explain how Company's resources and capabilities need to be aligned with Customer's resources and the Customer's

journey to result in a Customer's experience that creates value for both companies and Customers.. co-creates as one should say.

I played around with the canvas and came up with my own Value Co-Creation Canvas.. It's far from finished or perfect, but I believe it's good enough to present to you and ask you for feedback. I think it should be a self-explanatory canvas in the end, but am sure it isn't yet. So please ask all questions you might have. It will help me improve it.

Value Co-Creation CanvasBy Wim Rampen

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When I started with my blog, over 3 years ago now, I was mostly concerned with metrics and measurement frameworks. I even tried to rally up an international community of highly experienced people in the field of Customer Experience Management and measurement to co-create a new measurement framework to capture value co-creation.

What I didn’t know then is a) building a community is tough work because hardly anyone acts by himself completely b) it is impossible if the concept of value co-creation is not widely understood. And thus the initiative died.

But that never stopped me from writing and thinking about it, resulting in the best read post on my blog to-date. And it continues to be read very well almost every week. It never dissappears from the top 5 best read post.

On the next pages you will find two posts on NPS. Both resulted in heavy pro/con NPS debates. To-date I have mixed feelings about the concept. One thing is for sure: I’ll never buy into NPS being the one number you need to grow, like Reichheld c.s. suggested.

But please, judge for yourself, if you haven’t already.

THE QUESTION

How likely is it that you would recommend [your company] to a friend or colleague?

HOW IT’S MEASURED

Chapter II. Metrics, metrics, metrics..and how I love/hate NPSBy Wim Rampen

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Net Promoter Score, like Customer Satisfaction, is not a killer metric.NPS has been presented as ‘The One Number You Need to Grow’. [...] There has been, and still is, a fierce discussion on the validity of NPS with regard to its [...] predictive capabilities. One of the better publications, from my point of view, is this one from MIT Sloan (PDF). For a good overview of pro's and con's also take a look here.

Personally I do not take for granted any metric, let alone a metric like NPS that has been marketed like it is the silver bullet for businesses. The Customer Experience is not something one can take lightly nor are Customers. They are both way more complex than can be captured through measurement of one question (and an open feedback-question) that aims only to capture how many Customers would be willing to promote your company or product.

Maybe provoked by the fierce way NPS advocates approach the discussion and defend their positions, I developed an aversion to the metric. I still believe that a more profound measurement framework that focuses on measuring Customer (desired) Outcomes and Value Co-creation, and not Customer semantics, is a more powerful toolbox.

Zappos.com and a Customer Experience that makes the differenceNevertheless I also have to acknowledge that there are some great examples of companies that are successful and that have great Net Promoter Scores.[...] One example of the application of NPS I found has caught my attention: Zappos. Zappos is known for its great customer centric culture, wowing

customer service and sustainable growth. Zappos.com is maybe The Brand Icon of how it should be done. This video (featuring Zappos.com CEO Tony Hsieh) provides some insight in how they do it.

It is not measuring NPS that relates to the success, it is the other way aroundThe success of a clearly defined, and well executed strategy aimed at increasing positive Word of Mouth through "wowing" Customer Experiences, can be measured through NPS. The Key-differentiator is not the measurement, it is the strategy and the alignment of companies resources, culture and true understanding of the Customer Experiences that matter, which result in high NPS scores.

Let me try and explain through a quote from Graham Hill: There is absolutely NO POINT in measuring something if doing so doesn't allow you to change the system through management action. These are often different measures to those typically measured by management.

As the video shows, Zappos.com understands their Customers and the Outcomes they desire. Zappos.com knows how to leverage this knowledge and understanding. They are measuring far more elements of the Customer Experience than NPS. Net Promoter Score for Zappos.com is an outcome of management action. I even think they are able to predict their next months Net Promoter Score because they know what Experiences their Customers had.

Did NPS do that for them? I doubt it. It is their focused and well executed strategy in combination with a balanced measurement framework.

NPS & The Customer ExperienceBy Wim Rampen

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I know a lot has been said about Net Promoter Score (NPS), and I'm not in this world to judge anyone who's working with it, or developing it into a Net Promoter System.

I do like to share my experiences with it though, hoping to attract other people who'd like to share theirs, so we can all get a better understanding of what drives Customer loyalty and how to manage for it. Unfortunately the Net Promoter Score is not working for me right now. And here's why

In my role at Delta Lloyd Groep I have the pleasure to work together with Zanna van der Aa, who is working in my team as Program manager of the Customer Experience Program we've launched this year. Zanna recently received her PhD based on her research on the role of the customer contact center in relationship marketing. In short: she pretty much knows her stuff and she's as curious as I am to really understand what drives Customer Loyalty ;)

How we measureAs part of the program we are measuring Customer Satisfaction, Net Promoter Score and Customer Effort Score. The first two we are both measuring on the level of interactions (e.g. after a service call, or claiming damages) and the level of our annual Customer Satisfaction survey on a large proportion of our Customer base (including those not in interaction/transaction with us over the past year). Customer Effort Score we are only measuring on the level of interactions. Apart from these standard questions, we are asking more questions in different forms, including an open answer box to obtain qualitative

Sorry NPS, I’m not buying itBy Wim Rampen

A comment by Rags Srinivasan to this post provides some good additional

insights:

You make very valid points based only on experience but also looking at it from

broader context.

Since you already made some of the key points on customer satisfaction metric and

how NPS is all over the place, I will try to make other points.

1. By the very definition of the metric, when you measure it for the first time for any business you are highly likely to find

negative value. Take a case where respondents all answer randomly and

avoid rating 0 or 10. The NPS score for this business is going to be -55

(whether it is uniformly or normally distributed may change this, but still a

low negative number). On the other hand a simple average of the rating (like

customer sat) will show it is 5. A negative number creates a sense of really bad situation and helps to sell

add-on services to improve this score.

2. What is materially different between a 10 point scale used by ACSI and this 11

point scale? Why 0 to 6 are detractors when 5 is labeled on NPS survey

question as neither likely nor unlikely.

3. If we treat 7 and 8 as Passives, what about those who did not even bother to respond to the survey? By its own logic

this scale should treat all non-

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feedback as well. Response rates are quite high on the transactional surveys, and very satisfactory on the annual one.

What we seeCustomer Satisfaction ratings are quite stable and have been increasing steadily over the past years. The scores are also very similar throughout both methods. We seem to have a good understanding on what needle we need to move to get improvement on Customer Satisfaction. How different is this with Net Promoter Score. The score itself is all over the place. It seems to change from quarter to quarter going up and down without any reason (and we have been looking for them).

I'm 'bothered'A recent event really makes me doubt the Net Promoter Score question/methodology: Our own measurement showed a score, whilst a survey held by the same research firm on exactly the same sample, as part of an industry benchmark as little as two months later, produced a difference of 20 points in the score. And Customer Satisfaction scores in both surveys showed the exact same result. On top of this there are even bigger differences between the score in our own measurements and other so-called 'industry benchmarks'. Since for the latter we don't know the exact way the questions are asked and in what order, we could not really be bothered. But with current 'evidence' that's exactly what we are..

Oh.. and the judge is still out on Customer Effort Score (CES), but so far we don't see the higher relationship with Customer loyalty, as promised..

So, what do you think? Back to Customer Satisfaction as the primary metric?

Sorry NPS, I’m not buying itContinued...

By Wim Rampen

respondents as Passives. It cannot switch scales for its own

convenience.

4. When you ask respondents a rating question, regardless of whether it it

about satisfaction or recommendation, the answers are

not going to be that different. It is an interval scale with continuous data.

But in order to brand and monetize it they invented this complex Net math

that converts customer level data into a useless company level net metric.

5. Segmentation? The method and metric absolutely fail to ask any

question about segmentation and do not care how this metric differs

across segment. What is the use of aggregate metric that ignores

segmentation?

In essence we have an arbitrary irrelevant metric that has captured the minds of

some

You can find some excellent insights from Rags on his blog at http://iterativepath.wordpress.com

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Ever since I ‘set foot’ on Twitter I was introduced to the concept of Social CRM. I’ve had some amazing talks, discussions and blog-exchanges and with many smart and leading people in the world of CRM and Social Media, trying to figure out what Social CRM could be(come). If you select the category Social CRM on my blog you will find many articles about the concept and its development over time.

My musings on Social CRM are, volumewise, probably worthy of a book, but I’m pretty sure Paul Greenberg is beating me to it ;) And I can’t even begin to walk in his shadow.

Paul Greenberg is one of the very few people I know that are really open minded and truly enjoy helping and connecting people. I’m not only glad I can count Paul Greemberg as a friend, I’m really grateful he introduced me to his world by inviting me to the world’s first Social CRM Strategy for Business Seminar in Washington DC, early 2010.

Ever since we have been in contact irregularly, but I know I can reach out to him when I need his help, his point of view or his support. Thank you Paul!

And, that also goes for the bunch of people we refer to as the “Social CRM Accidental Community”: Brian Vellmure, Mark Tamis, Mitch Lieberman, Prem Kumar, Esteban Kolsky, Mike Boysen, Michael Krigsman, Paul Sweeney and Laurence Buchanan. All must follows.

If you’re interested in Social CRM please read some of my posts on the next pages. Before you do, it does make sense to read Paul Greenberg’s seminal post: “It’s time to put a stake in the ground”.

Enjoy, and son’t hesitate to contact me through my blog, if you have any questions or views to share.

Chapter III. Social CRMDefinitions, Concepts, Strategy & MoreBy Wim Rampen

Yeah, though Po the Kung Fu Panda became the Dragon Warrior by understanding that theres no secret ingredient in his father's secret ingredient soup as also theres no secret in the dragon scroll, he did have a great training in making

soup as well as kung fu. ;)

Methods, tools, techniques are necessary but insufficient condition for success

Prem Kumar - Social CRM Evangalist

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It has been a while since Paul Greenberg put the stake in the ground by writing down the definition of Social CRM. For further reading purposes I will repeat it here:

“SCRM is a philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & social characteristics,

designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a

trusted & transparent business environment. It’s the company’s response

to the customer’s ownership of the conversation.”

On top of the definition I think there is a more specified set of elements needed to define a Social CRM strategic framework statement. A statement that can provide some direction how to design processes, services and experiences in line with the SCRM philosophy and the latest thinking on Customer Centricity and CRM.

Three Strategic questions: Who? - What? - How?I think of strategy in three simple questions: Who are your Customers? What are their needs? How will those needs be met? Answering these questions will provide you with a rough strategic statement that enables you to communicate both internally and externally on what your Company is all about. At the end of this post I will provide you with my view on the Strategic Framework Statement for Social CRM.

Before I do I will take you through some steps I think are important for understanding the

framework-statement I propose. First of all we need to understand how Social CRM changes the way we answer those 3 questions?

What has changed through Social CRM that is significantly different from the pre-scrm era?Paul Greenberg makes a statement in his “staking”-post that relates to this last question, which I totally agree with:

“What this means is that SCRM is an extension of CRM, not a replacement for CRM. Its a

dramatic change in what it adds to the features, functions and characteristics of CRM but it is

still based on the time honored principle that a business needs its customers and prefers them profitable and that same business needs to run

itself effectively too.”

But there is a change! Another quote from Paul Greenberg:

“The lesson for business, in terms of Social CRM is that we are now at a point that the

customers’ expectations are so great and their demands so empowered that our SCRM

business strategy needs to be built around collaboration and customer engagement, not

traditional operational customer management.”

This is the fundamental change, that has been discussed and is still being discussed all over the (virtual) globe.

On top of this Graham Hill said the following in a comment to Paul Greenberg’s post:

“Social CRM [...] extends CRM from being something predominantly inside-out, to something that extends out into the

What a Social CRM Strategy is All AboutBy Wim Rampen

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conversations that customers are having between themselves. If we want to engage customers we need to really understand [...] the jobs customers are trying to do and the outcomes they are trying to achieve by doing them. This i s best practice in understanding customer needs today [...] Once we understand what customers need, we can innovate around delivering exactly that [...]. And we can use service-dominant logic to provide experience platforms that allow customers to co-create value together with companies. Co-creating value with customers is the modern definition of customer-centricity.”

This is not a light read and Graham Hill has since written several posts that shed some more light on the value co-creation concept. I wrote a post on the definition of Value Co-creation myself based on (among other) Graham Hill’s views (you can find links to his post there) because I had a need myself to better grasp the concept of value co-creation and furthermore because I felt the need to be able to explain it in as few words as possible to anyone who is newly introduced to the concept.

I advise you to read the whole post as well as the comments on it. This has been one of the most valuable posts for myself when it comes

to better understanding the concept of value co-creation and the way it differs from different shades of “co-production” or “mass-customization” (the differentiating element is `personalization of experiences - in use`).

A Social CRM Strategic Framework StatementIf I now take the definition of Social CRM from Paul Greenberg, the understanding of Service Dominant Logic, Customer jobs and desired outcomes as explained by Graham Hill as well as the differentiating element from the value co-creation definition, and I put them all together in context by answering the who-what-how questions, I get what I would like to define as the Social CRM strategic framework-statement as shown below on this page.

Obviously I like it and I will discuss in future posts what I think the implications of this statement are for a more detailed strategy.

Of course I am not a guru and I’m definitely not perfect in what I think and write. So it is now up to you all to blow it to bits or otherwise let me know what you like or not about the statement. And I would appreciate any views on the implications of the SCRM strategy framework statement when it comes to building a detailed strategy.

What a Social CRM Strategy is All AboutContinued..By Wim Rampen

Social CRM Strategy Framework StatementA Social CRM strategy is about understanding who the Customer is through

listening to, engaging with and collaboration between Customers, employees and partners. It is aimed at developing innovations, interactions in networks of relationships that support customers in doing the jobs they

need to do. The means are a personalized design of the service experience that empowers Customers, employees and partners to influence how well

they can meet their desired outcomes

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I think most Social CRM definitions share a company centered logic of building and/or leveraging a relationship between the Customer and the company.

I believe we need to let go of the company centered relationship logic and put Customers' relationships at the center of our thinking, when we are designing our answer to the Social Customer's ownership of the conversation.

Most Customers don't want a relationship with you.Your Customers value you mostly on the bases of their experiences when using your product or service. That's because they hired your product or service to do a job for them, that they desire to do. It's the outcome of the job your Customers want, not the relationship.

Your Customer's relationships, not yours..Also from a company's perspective, a relationship with your Customers is not what you need most. You need most to understand what job it is your Customers are trying to get done. Company's can do that without any relationship with Customers at all. If the relationship with Customers was required no start-up would be able to make it in this world. Fortunately they do.

Where CRM focused on the Customer - company relationship, a Social CRM strategy

will only succeed if it centers around ALL of your Customers' relationships.

And here's why:Because a Customer does not value a relationship with the company, but mostly

values the outcome generated from the experience of using your product or service, it should not be difficult to understand that Customers value knowledge or information on how to improve that outcome, over relationships (with the company). Even if the company is involved in providing this knowledge, it is not the interaction or relationship, but the actual knowledge or outcome of the interaction that is of value to your Customer.

We all understand and experience ourselves that the Customer does not depend on the company for knowledge or information. Customers turn to peers in their networks to obtain this information, or to rating sites, Customer support communities and what have you. And all this information is valued higher than the information a company provides.

Tap into the knowledge-flowHence, in the era of the Social Customer, you may want to better understand how your Customers leverage ALL their relationships (strong and weak ties) and other ways of tapping into the knowledge-flows that matter to them, to obtain the information they need to increase the value they create with the products and services they use.

Social CRM is not about managing the relationships with your Customers, it is (increasingly) about managing the knowledge-flows through the relationships of your Customers. And yes, you as a company maybe part of this eco-system of your Customers' relationships. But please, don't put yourself at the center of it..

Social CRM - What Relationships Should You Care For, And Why? By Wim Rampen

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Today I read a tweet by Ray Wang where he states that he

"doubts Social CRM (SCRM) will replace CRM. They augment each other. S is just a

new but powerful channel. What do you think?"

I fully agree that Social CRM will not replace CRM. I have a different view though on the meaning of the S. Here's what I think the S in SCRM is about, and why:

1. From 1-2-1 to M-2-MI wrote a post almost two months ago on what relationships you should care for in Social CRM. In this post I argue that I believe we need to completely let go of this company centered relationship logic and put Customers’ relationships at the center of our thinking. Hence, in the era of the Social Customer, after understanding your Customers’ needs, you may want to better understand how your Customers leverage ALL their relationships (strong and weak ties) to obtain the information they need to increase the value they get from the products and services they use.

This does not mean that 1-to-1 conversations between Customer and company are no longer relevant. Nothing is less true, yet we need to think of Customers as part of networks, of which we the company may be a part. And the company is not at the center of it: the Customer is.

2. Segmentation the Customer's wayIn traditional CRM companies segment Customers along the lines of socio- and

demographics and/or lines of profitability, lifetime value and share of wallet. If there is one thing we (should) learn from emergent on-line communities it is that people join these communities to perform a certain job (to-be-done). This can be a social job, functional job or emotional jobs, mostly formed around a shared interest. It is these jobs & interest that bond the people in a community. On-line (and off-line) communities are in fact the Customer's natural way of segmenting. I believe it is not difficult to understand that capturing the understanding of the jobs your Customers are trying to do and the way they are trying to do it, is the Social CRM way of Customer segmentation.

Again, this doesn't mean that traditional ways of segmenting have become obsolete. For me it comes second though. Social CRM is not replacing CRM, it is extending, or improving, it.

3. A new entry in the front-officeThe third reason why the S in SCRM is more than adding a channel is the new entry to the front-office. CRM has a clear focus on the traditional front-office: Sales, Marketing and Services. With the S added to CRM innovation made it into the front-office, in my humble opinion. More and more we see companies co-develop new products and services together with Customers (and partners) in close collaboration. This can vary from inviting Customers to present new ideas to a full process of co-development. It is clear to me though that product development and innovation departments are having meaningful dialog with Customers, which, to me, allows them for a seat in the front-office row of a Company.

The S in SCRM is not about Social MediaBy Wim Rampen

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4. Breaking down silo'sBreaking down silo's has been on the agenda for quite some time. Unfortunately, as a consequence of the high focus on transactions and transaction efficiency (by example: much of SFA is basically nothing more than monitoring transactions, from lead-generation numbers, to appointment numbers, to RFI's answered numbers etc etc..), this has not happened. Specialization and task-oriented jobs have become the norm in business (no need to explain I think.. we can all relate, not?), whilst sharing knowledge and collaboration are becoming increasingly important in the rapidly changing and complex systems that we are all part of these days. If we are ever going to turn CRM from the inside out to the outside in, we need to break down the silo's. Before the S was added to CRM, companies could still get away with it. Increasing Customer empowerment is turning this ship around, through Customers complaining about the Customer experience in open innovation communities, by marketing talking to Customer service if they can help them turn service into sales (as a consequence of the lack of outbound sales) etc etc..

Much more water will flow through the Rhein, before the Silo's will be broken down. For me, it is a "sine-qua-non" if you want to add the S to CRM.

5. Answering to the Social CustomerLast, but not least: According to Paul Greenberg this is the essence of Social CRM, and I agree. The Social Customer is not (only) a person that engages through Social Media. The Social Customer is any Customer these days. A Customer that is not becoming more vocal and knowledgeable, but already is. A Customer who

knows how to leverage his voice and knowledge to his (and his peers') advantage. Also a Customer that does not want to be treated as an opportunity for exchange at any convenient moment, from a Company's point of view. But a Customer who wants to be treated with respect and wants to have options to choose from. Moreover the Social Customer wants to have influence on how he creates value from the products and services you provide.

The S in SCRM is about catering for these needs and adopting approaches that show respect for the way the Customer wants to be treated (this last point in it's essence: no more unsolicited direct mail, e-mail and outbound-campaigns, in which unsolicited is very different from not opting out!).

To conclude: to me adding the S to CRM is much more than just adding Social Media to the other channels available for communications with Customers. Which is also why I disagree with any definition of Social CRM that puts the channel at the center of it.

This is my interpretation of the S in SCRM. I'm interested in learning yours. Please share them, and your comments to mine, below.

The S in SCRM is not about Social MediaContinued...By Wim Rampen

Capturing the understanding of the jobs your Customers are trying to do is the Social

CRM way of Customer segmentation.

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There have been some interesting discussions around what elements your Social CRM efforts can or cannot do without. It started with Bob Thompson asking whether one can do Social CRM without Social Media/Networks, or CRM Systems.

Another interesting thread can be found where Prem Kumar asks whether Apple is using Social CRM. I recommend you read both posts and the discussions in the comments.

These discussions made me think though what would be the one thing your Social CRM Strategy cannot do without. THE sine-qua-non of Social CRM.

In my humble opinion the sine qua non of Social CRM is: Empowering the Customer in the process of creating value for the Customer.

This actually is also the missing element of my previous post: The “S” in SCRM is not about Social Media. It is not only missing.. it's the key element that is missing.

Implementing social tools, and doing absolutely nothing differently than before, would not make it part of a Social CRM strategy. Just like adding e-mail or chat to the channel-mix wasn't truly game-changing. And increasing your listening capabilities by adding Social Media Monitoring, however important, is not game-changing the value creation capabilities of your Customers either.

From 18 to 2 Use Cases?Having said this, it is also clear to me what popular "use cases" under discussion would not imply a Social CRM Strategy. This does not mean, by the way, that there's no value in these use cases. To me, they would be part of regular CRM or CEM programs, like we have been running them for quite some years now. They are either about using or adding the Social Media channel and tools or improving upon practices that should have been part of being Customer Centric long before Social Media. Again: still lots of value to capture for you and your company by implementing these use cases.

The Only Thing Your Social CRM Strategy Cannot Do WithoutBy Wim Rampen

Social CRM's value is that it opens up communications between the company and the customer in a way that allows the customer to sculpt his own experience with the company - thus enhancing the value of the company's relationship with him. [...] meeting the company's objectives on the one hand,

but on the customer's terms on the other.

- Paul Greenberg -

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I reviewed the 18 use cases of Social CRM as published by Altimeter early March of this year. I believe the following 2 use-cases described there, would fit as use cases for a Social CRM Strategy sincy they are about empowering the Customer in the process of creating value for the Customer (themselves or their peers, that is). They are about involving and empowering the Customer in the design and delivery of experiences:

# 11: Social Support and Service - Peer-2-Peer Unpaid Armies or Customer Support Communities - Where smart organizations find ways to harness the collective expertise available within their networks of Customers (and providing the platform for Customers to exchange that expertise with their peers).

# 13: Social Innovation streamlines Complex Ideation - Crowdsourced R&D - Where companies find ways to harness the collective expertise available within their networks of Customers for ideation, product development etc..

All other use cases are smart things to do, but mainly about doing smart things you (should) have been doing before. Social tools or channels may help you to get these jobs done better than before, but they do not significantly change the game of providing value for your Customers.

Use cases as such can be found all around by the way. They are cases that involve the Customer to customize the products before ordering or even build their own (Lego), cases that bring Customers together in communities of practice or social networks and allow them

not only to share, but shape their experiences with their peers (much like Nike + is doing), and cases that allow your Customers to sell, share or distribute their own ideas and products through your platform (E-bay, Amazon, P&G Connect & Develop etc).

These use cases require a higher level of creativity and "guts" than just implementing social media or social tools to existing processes. They require you to re-invent the process and, more importantly, to change the way you perceive your own role and that of your Customer in that process.

Transferring the powerAcknowledging that Customers own the conversation is not enough. Having meaningful conversations on online social networks with your Customers is not enough either.

You need to design experiences and experience platforms that will allow the Customer to influence their experiences or that will allow your Customer to support their networks and peers in creating personalized experiences.

It is about actually transferring the power from the company to the Customer, and that is much harder to do, than implementing social tools to do a better job at the things you (should) have been doing before. And, in my humble opinion, it is the most appropriate answer to the Social Customers' ownership of the conversation.

What do you think? Are you ready to transfer power to your Customers?

The Only Thing Your Social CRM Strategy Cannot Do Without Continued...By Wim Rampen

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I think trying to define something is a very good exercise to understand what you are dealing with or what you are trying to do it for. It also helps to communicate internally. And regardless of what many say, I don't think there are enough definitions of (Social) CRM, at least not good ones.. But that is a personal opinion, not relevant to today's post.</em>

If, for whatever reason, you have a need for a definition of (Social) CRM, please take into consideration the 5 things you need to know about (Social) CRM for you to make your own definition, described here:

1. What's your point of view?The concept of (Social) CRM has been defined and explained by many different people inside and outside "the industry". Be it marketeers, scholars, IT-consultants, vendors etc etc. they all have their own point of view, they all take with them their own backgrounds and biases.

Definitions only tells you so much about (Social) CRM itself. Definitions will tell you a whole lot more about the person who made the definition. And I do not mean that in a bad way. I do think it is important that you are aware though, because it will help you understand the response from other stakeholders that read and comment on your definition, better..

2. What's your concept of (Social) CRM?Regardless of the definition you'll read or try to tweak, it will be one that fits into the following 6 (valid and viable!) concepts of CRM:

• (Social) CRM as a process (or function)• (Social) CRM as a strategy• (Social) CRM as a philosophy (or mindset or

logic)

• (Social) CRM as a (cap)ability• (Social) CRM as a technology• (Social) CRM as a practice (or as practices)

OR, as a combination of all or some of the above concepts, in a non-alphabetical order.

Most of the times you'll find that the writers point of view is highly related to the concept of CRM he's trying to define. But it's not always the case. It will not take you a long time to find a CRM strategy definition from a PR/marcom specialist. Again, no pun intended.

3. In what context?(Social) CRM, regardless of your point of view or the concept you defined, is not similarly successful under all circumstances. E.g. it matters if your industry is one with high commoditized products versus industries with low commoditisation. CRM is more successful in highly commoditized industries, because there it provides a way to differentiate oneself from competition.. yes.. CRM is what people mean they need when they say that Customer service must be a differentiator. They just don't always realize it..

It also matters if you want to define (Social) CRM in the context of a recently failed CRM project within your company, or that you are just about to start your first. It thus is of vital importance that you understand and articulate the context in which your definition is (to be) used.

4. How does it effect performance?CRM is at its best when it is supportive of a business strategy of differentiation and/or cost-leadership. Most people understand the differentiation part, because it highly relates to

5 Things You Need To Know About (Social) CRM (Definitions)By Wim Rampen

21

the "treating different customers differently" paradigm it so strongly supports. (Although we still see many CRM system implementations with companies strongly holding onto standardized business processes for each and every Customer.)

Cost-leadership is basically the first one to think of. Not so much in relation to higher efficiencies, but to improved effectiveness. It is easy to understand that increasing a conversion rate from 5 % to 10 % can be achieved through creating the same total number of leads, but with higher quality, or through creating better targeting within a smaller number of leads. The latter is more likely the case in most DM/Cross-sell programs. Which is fine, because it saves you from costs to reach out to these targets. And, most important these days: it also saves your Customers from being targeted (and trust me, they don't mind).

What I'm trying to say: don't link your CRM definition to business performance directly, link it to the high end strategies everyone supports and show it supports those strategies.

5. How about your Customers goals?This is an important reality check.. Research shows as much as two thirds of your Customers do not really want a relationship with you. The even do not expect the benefits of such a relationship (or could have a low expectation of such benefits?).. And the worrying part is that it's mostly the young and wealthy people who are not  interested in these relationships.

But that doesn't mean you do not need to develop (Social) CRM (capabilities/strategy/

processes etc etc..). How else are you going to understand which Customer does and which doesn't value the relationship? How are you going to understand what is of value to them, and let all your people know? How else are you going to differentiate your service offering based on such understanding?

And yes, the same seems to be valid for the Social species as well. Most Customers are just connecting on-line with brands for the purpose of getting a perk or discount. They are not there for the engagement.

Bottom line: never ever (!!) say you need to do (Social) CRM because your Customers

want a relationship with you..

Last, but not least, I just realized all of the above is valid for both Social CRM and CRM (tradizionale if you want ;) definitions. Does this mean that I'm ready to leave the Social part on the table and get back to using good old CRM (of which "social" is an integrated part..). I think it does.

You? Let me know what you think!

5 Things You Need to Know About (Social) CRM (Definitions) Continued... (1)By Wim Rampen

Adopting a Social CRM strategy is NOT about trying

to get a spot inside Customer’s circles and at the same time letting them

wait in the cold after knocking on your touch-

points door!

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No, I won't claim Social CRM is dead, to the contrary. It just isn’t growing up fast enough to really have a business impact.

This is more likely due to the slow pace at which companies are responding to changing market environments than it is due to the advancement of technology...

There are a few observations I would like to share with you. Observations I see as hindering us in the advancement of service being practiced as the dominant logic, Social CRM as the supporting strategy and Customer engagement as it’s underlying tactic.

It's company centricCompanies continue to think mainly how social technology in general and on-line social networks can help them, not their Customers. All talk on Google+ (and any other on-line social network for that matter) seems to be focused on how companies can use it to engage Customers, mine their conversations and to become part of their circles (to sell them stuff). Companies continue to ignore that CRM should shift it’s focus from the Company - Customer relationship to the Customer - Customer relationship.

Influence, not valueSocial Network analysis is targeted to understand how influence flows through them. But it’s not influence that creates value for Customers. We would make a lot more progress if we would direct all these resources to understand how Customer’s value is created in, and flows through, social networks. Because this will help us design and align touch-points that facilitate value co-

creation with Customers, not just supportive of transactions.

Mono-channel focusThe current logic of many companies is that investments should flow to mobile and social channels, because this is where, and how, the Customer “hangs out”.. They seem to be forgetting that way too many Customers continue to fail doing what they need to do at the “traditional“ touch-points like the Call Center or the company’s web-site.

Adopting a Social CRM strategy is NOT about trying to get a spot inside the Customer’s

circles and at the same time letting them wait in the cold after knocking on your touch-points

door!

Lack of accountabilitySocial CRM or engagement initiatives are currently supported by good-will mostly. All energy is directed to getting social working, without a clear view on what types of value it should generate for companies. Most are on the train, or almost ready to jump on it, few know where it’s heading. If we are not tying Customer engagement tactics to Customer engagement value, your social initiatives will not outlive the next crisis.

Analyst paralysisOn top of all of the above, analyst firms, like Gartner, continue to publish quadrants and posts that make no sense and by doing so confusing companies even more. (You should read Paul Greenberg's post on this topic! He's spot on.)

Observations Why Social CRM Isn’tBy Wim Rampen

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Catching the waveThe root cause, if you ask me, is that many just consider this to be a wave that they need to catch long enough to jump the next one.. To me it looks like this wave is heading towards

the doldrums, if it hasn’t arrived there already. And if you do not have a strategy to navigate those, you should not expect to get out of there anytime soon!

Observations Why Social CRM Isn’tContinued...By Wim Rampen

If there is one person who influenced my thinking it is Graham Hill. I highly recommend following him on Twitter and reading his posts over at Customer Think. Below are the 15 trends Graham described in 2009 that are driving Social Business. That post is as valid as it was three years ago. A must read.

A Manifesto for Social BusinessNo1. From Individual Customers… to Networks of Customers

No2. From Customer Needs, Wants & Expectations… to Customer Jobs-to-be-Done

No3. From Company Value-in-Exchange… to Customer Value-in-UseNo4. From Delivering Value to Customers... to Co-Creating Value with Customers In No5. From Marketing, Sales & Service Touchpoints… to the End-to-End Customer

Experience

No6. From One-Size-Fits-All Products… to a Long-Tail of Mass-Customised Solutions No7. From Competing on Products, Price or Service… to Competing over Multi-

sided Platforms

No8. From Company Push… to Sensing and Responding in Real-Time to Customers No9. From Technology, Processes & Culture… to Complementary Capabilities and

Micro-Foundations

No10. From Made by Companies for Customers... to Made By Customers for Each Other

No11. From On-premise Applications… to On-demand Solutions from the Cloud No12. From Stand-alone Companies… to an Ecosystem of Networked Partners

No13. From Hierarchical Command & Control… to Collaborative Hybrid Organisations No14. From Customer Strategy… to a Portfolio of Emergent Customer Options

No15. From Customer Lifetime Value… to Customer Network Value

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There are two books I always recommend when I’m talking about Customer Service. You should read them too.

What I’ve tried most, over the past years of blogging, is bringing together (Social) CRM, Customer Experience Management, Customer Service, Marketing and as of late also Innovation & Service Design. From my prespective all these disciplines are trying to solve the same challenges, but are either limiting themselves to a specific discipline, technology or methodology, or are trying to compete with the others.

And that’s too bad, because either of the disciplines has a lot to offer. I even think they all need each other.

I therefor would like to conclude this booklet with two posts: The first is about Customer Service and how Managers of Customer Service Departments should break free from the silo’d after sales support role. The second one is about how Marketing with a Service mindset requires new approaches and most of all 7 new “jobs” for marketers to perform.

Thank you in advance for taking the time to read this far. I hope you enjoy the last two articles, and look forward to your feedback on my blog at http://wimrampen.com

Chapter IV. Marketing With a Service LogicAnd Service With a Marketing MindsetBy Wim Rampen

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Despite the economic crisis, the rise of the "Social Customer" and the popularity of Customer engagement strategies through Social Media, I sometimes get the feeling that managers in Customer Services put in a lot more effort to ensure the company does not get bad press, or negative "buzz" in stead of providing a better then expected Customer service experience.

We know companies do not always take Customer service seriously. I think though many managers of Customer Services should start taking their discipline a lot more serious than they are doing today..

Apart from the fact that it is useful to improve waiting & ticket-processing times, Customer's self-service capabilities, complaints handling, first contact resolution, quality monitoring scores and what have you.. I believe there is a necessity for a more fundamental change in both the mental model and governance systems guiding current design and execution of Customer Services operations. Not only because great Customer service can be a differentiator, but mostly because Customer service needs a (mental) makeover for it to really become one.

The best service is no serviceTo date, the best proxy for good and effective Customer Services (operations), has been set by Bill Price, with his book (and proven methodology) "The Best Service is no Service". You can see a good summary in this slideshare presentation.

Key to the methodology is that it very closely looks at what contacts are of value to the Customer and to the company, continuously

eliminating contacts that are of no value to both, by means of improved processes etc. Furthermore reducing time and Customer effort as well as implementing self-service capabilities for high value contacts to Customers OR company. Last, but not least, investing in those contacts regarded valuable to both Customers AND company.

The methodology basically prescribes you to:

• Listen to "What (y)Our Customers Are Saying" (WOCAS)

• Improve your products and processes so that you do not get repeat contacts and many complaints

• Implement self-service with the utmost rigor possible

• Use the remainder of contacts to do smart up- & cross-selling

• Segment your service (e.g. better service for high value Customers)

And if you do this well, you'll see that your Customer services unit does not have to grow, or can even shrink in headcount (significantly!), whilst company revenue can double and transaction volume can multiply with a factor five (Amazon case).

Five perspectivesWhilst I believe there is a lot of greatness to be found in this methodology and/or approaches like Lean/SixSigma, which have similar claims and approaches, I believe we need a more fundamental change in perspective to get out of the "call center is the end of the line or the organization's drain"-paradigm. And, of course, to finally start having a real and sustainable impact on business results, not just sitting on the cost-side of the equation.

Because It Is Time You Take Customer Service SeriouslyBy Wim Rampen

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I would like to explain so by elaborating on the "Five perspectives on Customer Services" we need today.

1. The Value-perspective2. The Customer-perspective3. The Experience-perspective4. The Relationship perspective5. The Network-perspective

Combining these perspectives and projecting them onto Customer services operations shows we are far away from integrating the logic, the views and ideas that can be found in these perspectives. All the more reasons to take a closer look.

1. The Value perspectiveThe most important shift in logic and customer services governance we need to make is the shift in our value logic. The entire governance system is based on a value-logic that embraces value to the company and aims at maximizing Customer value extraction.

The current value logic has been perfected into such detail that almost every KPI the industry uses breathes value-to-the-company on each contact. Some examples:

• A call cannot take longer than 5 minutes• A call must be solved within the first contact

in 80 % of all cases• A service representative cannot have more

than zero fatal errors or 2 non-fatal errors in her quality monitoring sheet.

• Customer satisfaction on the call must be at least a 6 (on a scale of 0 - 10)

The "transaction" or "interaction" (=the call) is central to all we are doing. Contact Centers are managed by the day, the week at most. even

the quality management systems put in place look at the transaction. 3 mistakes on a call, and you're out. Maybe, just maybe this improves Customer Satisfaction on the call, but if this also relates to improved value to the company as a whole, or the Customer in specific, is only assumed, if at all. Besides that: satisfactory results are good enough, most certainly if it's possible to reduce costs further without reducing Customer Satisfaction.

This all may be a little better in the Best Service is No Service approach, but even there it is the contact and the transaction that is center to the approach and the upper right corner of the value to the Customer vs Value to the Firm matrix shows "sales campaigns" as one of the activities to fit in there. I would argue there is no value to the Customer in being sold to..

Goods versus Service Dominant LogicTo put it bluntly: the Customer Services management system is designed with a production-based logic from the pre-war decades of the previous century. The founding fathers of Service Dominant Logic (Vargo & Lusch) name this old logic a "goods dominant logic".

It is time, contact center and customer services operations management switch to a Service Dominant mindset. A mindset that understands that the Customer can bring more to the table than money alone, like knowledge, feedback from her experiences, on all touch-points, not just the regular survey or after the "feedback"-button. A mindset that does not see service as something offered after the sale, but as the basis for value creation between company and Customer. And a mindset that values the role of

Because It Is Time You Take Customer Service Seriously Continued... (1)By Wim Rampen

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the employee, not just the value he/she is able to extract from the Customer in exchange.

And whilst the "Best Service is No Service" approach is more than half way of this direction, most Customer Services (operations) needs to redefine what it means with "Value Center", for the current understanding and application has "goods-dominant-logic" written all over it.

More guidelines as to what this means can be found in the four remaining perspectives.

2. The Customer PerspectiveI did not only not put this one first to avoid the obvious trap, but more so because I wanted you to understand first, from the previous paragraph, that from my point of view most Customer Services operations are not about Customers. They are about transactions. Throughout my career I have not seen one Manager Customer Services reporting Customers, not transactions. Not one of them could say, on a weekly bases even, how many Customers dialed in, and how many have been helped to their satisfaction.

They can tell you how many calls they handled, and what the average satisfaction score was, but they cannot tell you how many Customers are considered at risk for retention, because they had a complaint. But this was not logged as a complaint, because the Customer did not use the complaint procedure (usually sending in a written letter.. )

Hardly any Customer Services manager will be able to tell you how many unique Customers call into the call center or visit a service site in

any period, nor what the calls of the heavy users are about, compared to the light users.To cut it short: any Customer Services department that has not already should get started tomorrow on building a Customer centered view of their operations, not a transaction based view.

I guarantee you the "a-ha.. now I see what's the issue" look on your face.

3. The Experience PerspectiveFurthermore it is of vast importance to stop seeing service as something just offered after sales when something went wrong. From the Customer's perspective everything you do is service (or not, most of the time ;). The way service is perceived is through the experiences Customer have over all your touch-points. From the fine-print to the mail-delivery company used, to the advertisements in a magazine (with a coupon for new Customers with a nice discount..), to the invoice, the payment arrangement, the collections calls etc etc..

And, more and more experiences from others are part of the Customer's perspective of the service you provide, through ratings and reviews shared by others, whether shared through (online) social networks or not.

Understanding the Customer's journey throughout her lifetime should go beyond listing Customer Services as the after sales touch-point. The role of Customer Services should also go beyond providing feedback and (actionable) insights to the organizations as to (incrementally) improve the Customer Experience. Customer Services should expand

Because It Is Time You Take Customer Service Seriously Continued... (2)By Wim Rampen

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their horizon by understanding the Customer's journey and how their key-capabilities to help Customers when things are not running smoothly, could be put to use to improve the Customer's experience when getting her job done.

4. The Relationship PerspectiveThe fourth perspective is the Relationship perspective. CRM traditionally consists of Marketing, Sales and Service. In the name of CRM though, many companies have done their very best to exploit their relationships with Customers at the lowest possible costs. And when the relationships comes to a divorce, companies even ask for alimony. CRM is not there to improve the Customer's nor the employee experience, CRM is there to improve the company's control.

In stead of conversion-rates, revenue per hour or per contact, I believe the next generation Customer Services will need to make a serious effort to manage their Customer interactions with respect for the (individual) Customer's lifetime value, network value AND referral value. These long-term relationship-indicators should shed a different light on what is important to manage on a contact, and which contacts are of value to the company and/or the Customer.

5. The Network PerspectiveLast, but not least: in the name of CRM the 1 on 1 relationship between Customer and company is center. In the meantime, in Customerland, the Customer, increasingly armed with numerous social tools, cannot only solve issues better herself, she can do so faster than you can, and most of the time even better. Where your legal department is still fighting over wording issues, to avoid future compliance or

other legal actions, your Customer is already doing what has been advised by her peers or "experts".

Where many companies are stars in describing what situations are NOT covered by Customer services, companies that see themselves as service providers to their Customers, arrange for their Customers to have access to networks of Customers and/or experts, outside the company firewall, to increase the likelihood that the best resolution is offered in the fastest possible way, with the least possible Customer effort. Please take a look at this post by Laurence Buchanan about GifGaf to see the benefits of this Network perspective.

To concludeBest practices in Customer Services are hard to come by, mostly because bad Customer service stories have better reach and because there is more to gain for the story-teller. The best methodology so far comes from the heart and mind of Bill Price: The Best Service is No Service. I do think though Customer services in general, and the Best Service is No Service, are in need of a thorough iteration, based upon the latest insights and developments.

The five perspectives discussed above are not new in a stand alone way of discussing. I wanted to bring them together as guiding principles, with practical implications, for the future directions of Customer Services management and governance. Directions that go beyond operational excellence, process efficiency and other tactics.

Because it is time we take Customer services seriously..

Because It Is Time You Take Customer Service Seriously Continued... (3)By Wim Rampen

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If there ever was a reason for me to write about the future of marketing it was in 2009. The theme though is as alive today as it was then. Some argue little has changed, others state the new era has already arrived. And there is Nilofer Merchant who suggests Marketing is Dead and then comes up with 5 ways to replace it.

All in itself these five ways are things I can relate to, but they don't make it as replacements for Marketing, in my humble opinion.

I recommend you read Ron Shevlin's post, a response to Merchant's post, titled: The Death of Marketing (Madness). The subtitle of his blog (A (Mostly) Humorous Look at Marketing in the Age of Social Media) says it all. A very welcome critical and lighthearted voice in this age of Marketing deadly replacements.

What Really Replaces Marketing (Madness)Here's my take on What Really Replaces Marketing (Madness). I will do so following the story line of my recent Guest Lecture for the Marketing faculty, headed by Peter Verhoef, of the University of Groningen (The Netherlands). The guest lecture was titled: Marketing Leadership in age of Service.

I largely agree with Nilofer Merchant that Marketing needs to change its act. I have had that feeling for a long time, before 2009, when working in Customer Services, seeing the debris of (direct) marketing campaigns, failed brand promises and what have you. Early 2009 I started reading into the works of Steve Vargo and Robert Lusch named A Service Dominant Logic and I was introduced to the Customer-Jobs-to-be-Done innovation framework. Both combined provided a thinking

framework that just made all pieces I had in my mind come together.

Three Concepts CombinedThe bottom line in my thinking is that, since Value is dominantly created in-use and is a result of co-creation between company and Customer, marketing strategies should shift their focus from creating momentum for value exchange (the sale) to creating momentum for interactions that support Customers in creating value for themselves.

And since value is something that can only be defined by its beneficiary we need to understand what outcomes Customers desire when they hire a company's resources to get their jobs done.

The Customer's journey towards that outcome is where opportunity for marketing lies to design service that support Customers, employees and partners to co-create more (or better?) value together.

That may sound a bit posh (or a little more than a bit), but the combination of the three concepts (Service Dominant Logic, Customer Jobs-to-be-Done, Service Design) has been a powerful one for me. Not only to explain the outside world, but also to drive innovation in Marketing in my current role.

Three Ways Marketing Needs to ChangeMarketing needs to change in three fundamental ways. First marketeers need to understand that they need to let go of a (communication) campaign driven methodology. Marketeers need to turn into Service Designers that are capable of designing end-to-end experiences. And they need not only design,

What Really Replaces Marketing (Madness)By Wim Rampen

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orchestrate and market the experience (or value proposition in Service Dominant Logic terminology), they also need to ensure the company's capability to deliver on the promise. And this also means involving, and taking responsibility for, company partners in the value network.

Secondly, marketeers need to start understanding that it really matters who you drive through the sales funnel. Goods-logic Marketeers don't care about the quality of the lead, Service-Logic marketeers do, because they truly care about how they make their Customers feel in the end, and because they know serving the right Customer is a lot easier and vastly more profitable than serving just any Customer.

Thirdly, the next generation of marketeers should understand that there's more to value in a Customer than just their wallet. Obviously we understand these days that a Customer's connections matter, if only because they can tell a whole lot more about the Customer, than she will tell you herself. When seeing Customers as co-creators a lot more opportunities open up, like having them do work for you, because the Customer ends up with a better outcome, or by valuing their feedback as opportunities to improve on the Service you provide.

7 Marketer Jobs in the Age of ServiceTo make it a little more concrete I wrote down 7 jobs Marketers need to get done, if they want to make it in the age of Service. Here they are:

Marketing's first job is to understand Customer's jobs & outcomes (or value creation process) and where in that process they fail to

meet their desired outcome.

This will involve both analytical approaches and qualitative approaches (like Customer Journey Mapping) for understanding the voice of the Customer. And these programs need to be focused outside the building, not within the walls of the firm (e.g. internal process mapping).

For their second job Marketers need to build relationships in communities of individuals with

similar Jobs-to-be-done and desired Outcomes.

Traditional ways of segmenting Customers by their age or other demographic qualities have become largely obsolete in the worlds individualistic melting pot of cultures, lifestyles and routines. People bond with people that think and act alike. People bond with different people for different outcomes. Think Nike Plus and you know what I'm talking about.

Their third job is to start supporting Customers to create value, not doing stuff to create value

to the company.

Stop trying to design a service that helps solve your problem of liquidity. Solve your Customers problem and they will solve yours in return. Sounds like basics, but I stumble upon the self-centered version still several times a month.

Marketing's fourth job is to design for interactions that stimulate engagement in these

networks or communities (=your Customer segment!).

Whereas most businesses seem to be focused on reducing (costly) interactions with their Customers, smart companies focus on increasing value co-creating interactions with

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their Customers and between Customers. Think GiffGaff and Best Buy as good examples of companies doing just that. Result? Keeping costs low and making Customers happy.

More and more I think that the fifth job is one of the most important ones: engaging employees and partners in supporting

Customers to co-create value.

You can name it internal branding or your HR-policy to motivate employees, it is of vital importance that they understand what you are doing with your Customers and why, and what their role is in this journey. I find it helps a great deal if you get the first job done right. This will provide you with tangible frameworks and memes that will make it easier to get people involved and move towards a pro-active state of mind, the one that Customers need :)

Your sixth job is to extract actionable insights out of 360 degree feedback to foster

innovations and design new value propositions that attract new Customers.

If you don't listen, you don't win. If you don't improve, you will loose. If you don't innovate, you'll die (oops.. I did it..)

Your seventh job is to redesign metrics that capture the engagement value to firm and to

ensure that there is a high correlation to these metrics and Customer's value created.

If you can't measure, you can't manage. Old metrics focused on transactions and/or interactions are there to stay. The new way is to combine them with Customer value metrics and not evaluate them in isolation, but as a system (balanced scorecard still works for me..).

That's it. Marketing's new madness, according to me. Nothing really complex, but also easier said than done. And not the only ones either. You still need to sell you know, so go on and make nice commercials and create advertising. Just think different about what you are advertising for..

And I know it works and that this is a change I can "sell" to the C-level. Jobs 1 to 7, I'm doing them a little better every day. You?

What Really Replaces Marketing (Madness)Continued... (2)By Wim Rampen

There are numerous blogs, articles, papers etc. I’ver read over the past years. I was about to summarize them here, until I found this excellent resource-list from Service360. You can download it at their website.

While you’re there, please also subscribe to their blog. It’s excellent!

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THAT’S IT (FOR NOW).Please let me know what you think at http://wimrampen.com