WMF Home Page Newsletter – November 2007
Last month I left my sabbatical retreat in Israel’s wine country south of Haifa to travel to San Francisco to attend the 16th Annual Frontiers in Service Conference, and I want to share with you some of the exciting things I saw and heard there. The sheer scope and scale of service industries and the growing importance of the service component of businesses traditionally not considered “services” makes it very hard to summarize the event, but a few important themes emerged which impact all of us in the marketing and strategy fields. For one thing, technology continues to be a critical variable of all attempts to improve the ways we use information that we collect from our customers. One area is intelligent process automation (IPA), which refers to an application that improves a business process by integrating model-driven intelligence into a business process to replace some human decision-making. This impacts how much data mining and analytics can be enhanced to provide competitive advantage. In addition, the presenter from Cisco cited Frederick Reichheld’s (Loyalty Rules!) finding – that a 5% increase in customer retention due to increased loyalty leads to a 75% increase in the net present value of an existing customer – to emphasize the need for better customer intelligence.
Related to technology and customer intelligence is the increasing emphasis on social media. Social media is any user-generated content that is created by individuals and freely accessible to anyone. A presenter from Wells Fargo Bank reported at the meeting that they are mining such social media for the purpose of enhancing customer insights. Although search engines provide a less expensive source of such insight, they are also less customized, and the speaker emphasized that it is worth paying extra for the more customized ability social media tracking vendors can offer. This extra investment will allow you to do more than just listen to the customer, but actually enable your organization’s intelligence gathering to advance to dialoguing with the customer. The sequence proceeds from (1) customers talking to the service provider to (2) customers talking to each other about the service provider to (3) the customer actually conversing with the service provider in real-time two-way communication. The newly empowered customer was also emphasized by the presenter from IDEO who reminded us that customers are not only connecting to each other, but they are also turning to new services to work around the system, and finding ways to get around old restrictions on what they do and making their own choices. This user-generated content, these peer-to-peer services, and their activism makes innovating services somewhat unpredictable. But the challenge is what makes marketing such an exciting field to be in right now. Let the games continue…..
Yours until next month,
Kenneth Alan Grossberg