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Managing Customer Experience and Relationships
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Managing Customer Experience and Relationships
by Philip Kotler, Martha Rogers, Don Peppers
Managing Customer Experience and Relationships, 3rd Edition
Foreword: The View from Here
Getting Better at Consumer Marketing
Note
Preface
How to Use This Book
Note
Acknowledgments
About the Authors
Part I: Principles of Managing Customer Experience and Relationships
Chapter 1: Evolution of Relationships with Customers and Strategic Customer Experiences
Roots of Customer Relationships and Experience
What Is a Relationship? Is That Different from Customer Experience?
The Technology Revolution and the Customer Revolution
Summary
Food for Thought
Glossary
Notes
Chapter 2: The Thinking behind Customer Relationships That Leads to Good Experiences
Why Do Companies Work at Being “Customer-Centric”?
What Characterizes a Relationship?
Customer Loyalty: Is It an Attitude? Or a Behavior?
Summary
Food for Thought
Glossary
Notes
Part II: IDIC Implementation Process: A Model for Managing Customer Relationships and Improving Customer Experiences
Chapter 3: Customer Relationships: Basic Building Blocks of IDIC and Trust
Trust and Relationships Happen in Unison
IDIC: Four Implementation Tasks for Creating and Managing Customer Experiences and Relationships
How Does Trust Characterize a Learning Relationship?
Becoming More and More Trustable to Customers
Do Things Right and Do the Right Thing
Be Proactive
Relationships Require Information, but Information Comes Only with Trust
Summary
Food for Thought
Glossary
Notes
Chapter 4: Identifying Customers
Individual Information Requires Customer Recognition
What Does Identify Mean?
Customer Data Revolution
Summary
Food for Thought
Glossary
Notes
Chapter 5: Differentiating Customers: Some Customers Are Worth More Than Others
Customer Value Is a Future-Oriented Variable
Different Customers Have Different Values
Summary
Food for Thought
Glossary
Notes
Chapter 6: Differentiating Customers by Their Needs
Definitions
Differentiating Customers by Need: An Illustration
Understanding Customer Behaviors and Needs
Why Doesn’t Every Company Already Differentiate Its Customers by Needs?
Categorizing Customers by Their Needs
Understanding Needs
Community Knowledge
Using Needs Differentiation to Build Customer Value
Summary
Food for Thought
Glossary
Notes
Chapter 7: Interacting with Customers: Customer Collaboration Strategy
Dialogue Requirements
Implicit and Explicit Bargains
Do Consumers Really Want One-to-One Marketing?
Technology of Interaction Requires Integrating across the Entire Enterprise
Customer Dialogue: A Unique and Valuable Asset
Not All Interactions Qualify as “Dialogue”
Cost Efficiency and Effectiveness of Customer Interaction
Complaining Customers: Hidden Assets?
Summary
Food for Thought
Glossary
Notes
Chapter 8: Customer Insight, Dialogue, and Social Media
Listening to Customers
Age of Transparency
As Interactions Multiply, Trust Becomes More Important
Summary
Food for Thought
Glossary
Notes
Chapter 9: Privacy and Customer Feedback
Privacy in Europe Is a Different World
Privacy Pledges Build Enterprise Trust
Submitting Data Online
Summary
Food for Thought
Glossary
Notes
Chapter 10: The Payoff of IDIC: Using Mass Customization to Build Learning Relationships
How Can Customization Be Profitable?
Technology Accelerates Mass Customization
Customization of Standardized Products and Services
Value Streams
Culture Rules
Summary
Food for Thought
Glossary
Notes
Part III: Measuring and Managing to Build Customer Value
Chapter 11: Optimizing around the Customer: Measuring the Success of Customer-Based Initiatives and the Customer-Centric Organization
Customer Equity
Customer Loyalty and Customer Equity
Return on Customer
Leading Indicators of LTV Change
Stats and the Single Customer
Summary
Food for Thought
Glossary
Notes
Chapter 12: Using Customer Analytics to Build the Success of the Customer-Strategy Enterprise
Summary
Food for Thought
Glossary
Notes
Chapter 13: Organizing and Managing the Profitable Customer-Strategy Enterprise, Part 1
Relationship Governance
Summary
Food for Thought
Glossary
Notes
Chapter 14: Organizing and Managing the Profitable Customer-Strategy Enterprise, Part 2: Transitioning from Traditional Business to Customer Centricity
Pilot Projects and Incremental Change
Picket Fence Strategy
Segment Management
Customer Portfolio Management
Transition across the Enterprise
Transition Process for Other Key Enterprise Areas
Managing Employees in the Customer-Strategy Enterprise
Summary
Food for Thought
Glossary
Notes
Chapter 15: Futureproofing the Customer-Centric Organization
Leadership Behavior of Customer Relationship Managers
Maintain and Increase the Trust of Customers
Summary
Food for Thought
Notes
Name Index
Term Index
EULA
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Prev
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Managing Customer Experience and Relationships
Next
Next Chapter
Foreword: The View from Here
CONTENTS
Foreword:
The View from Here
Getting Better at Consumer Marketing
Note
Preface
How to Use This Book
Note
Acknowledgments
About the Authors
Part I: Principles of Managing Customer Experience and Relationships
Chapter 1: Evolution of Relationships with Customers and Strategic Customer Experiences
Roots of Customer Relationships and Experience
What Is a Relationship? Is That Different from Customer Experience?
The Technology Revolution and the Customer Revolution
Summary
Food for Thought
Glossary
Notes
Chapter 2: The Thinking behind Customer Relationships That Leads to Good Experiences
Why Do Companies Work at Being “Customer-Centric”?
What Characterizes a Relationship?
Customer Loyalty: Is It an Attitude? Or a Behavior?
Summary
Food for Thought
Glossary
Notes
Part II: IDIC Implementation Process: A Model for Managing Customer Relationships and Improving Customer Experiences
Chapter 3: Customer Relationships: Basic Building Blocks of IDIC and Trust
Trust and Relationships Happen in Unison
IDIC: Four Implementation Tasks for Creating and Managing Customer Experiences and Relationships
How Does Trust Characterize a Learning Relationship?
Becoming More and More Trustable to Customers
Do Things Right and Do the Right Thing
Be Proactive
Relationships Require Information, but Information Comes Only with Trust
Summary
Food for Thought
Glossary
Notes
Chapter 4: Identifying Customers
Individual Information Requires Customer Recognition
What Does
Identify
Mean?
Customer Data Revolution
Summary
Food for Thought
Glossary
Notes
Chapter 5: Differentiating Customers: Some Customers Are Worth More Than Others
Customer Value Is a Future-Oriented Variable
Different Customers Have Different Values
Summary
Food for Thought
Glossary
Notes
Chapter 6: Differentiating Customers by Their Needs
Definitions
Differentiating Customers by Need: An Illustration
Understanding Customer Behaviors and Needs
Why Doesn’t Every Company Already Differentiate Its Customers by Needs?
Categorizing Customers by Their Needs
Understanding Needs
Community Knowledge
Using Needs Differentiation to Build Customer Value
Summary
Food for Thought
Glossary
Notes
Chapter 7: Interacting with Customers: Customer Collaboration Strategy
Dialogue Requirements
Implicit and Explicit Bargains
Do Consumers Really Want One-to-One Marketing?
Technology of Interaction Requires Integrating across the Entire Enterprise
Customer Dialogue: A Unique and Valuable Asset
Not All Interactions Qualify as “Dialogue”
Cost Efficiency and Effectiveness of Customer Interaction
Complaining Customers: Hidden Assets?
Summary
Food for Thought
Glossary
Notes
Chapter 8: Customer Insight, Dialogue, and Social Media
Listening to Customers
Age of Transparency
As Interactions Multiply, Trust Becomes More Important
Summary
Food for Thought
Glossary
Notes
Chapter 9: Privacy and Customer Feedback
Privacy in Europe Is a Different World
Privacy Pledges Build Enterprise Trust
Submitting Data Online
Summary
Food for Thought
Glossary
Notes
Chapter 10: The Payoff of IDIC: Using Mass Customization to Build Learning Relationships
How Can Customization Be Profitable?
Technology Accelerates Mass Customization
Customization of Standardized Products and Services
Value Streams
Culture Rules
Summary
Food for Thought
Glossary
Notes
Part III: Measuring and Managing to Build Customer Value
Chapter 11: Optimizing around the Customer: Measuring the Success of Customer-Based Initiatives and the Customer-Centric Organization
Customer Equity
Customer Loyalty and Customer Equity
Return on Customer
Leading Indicators of LTV Change
Stats and the Single Customer
Summary
Food for Thought
Glossary
Notes
Chapter 12: Using Customer Analytics to Build the Success of the Customer-Strategy Enterprise
Summary
Food for Thought
Glossary
Notes
Chapter 13: Organizing and Managing the Profitable Customer-Strategy Enterprise, Part 1
Relationship Governance
Summary
Food for Thought
Glossary
Notes
Chapter 14: Organizing and Managing the Profitable Customer-Strategy Enterprise, Part 2:
Transitioning from Traditional Business to Customer Centricity
Pilot Projects and Incremental Change
Picket Fence Strategy
Segment Management
Customer Portfolio Management
Transition across the Enterprise
Transition Process for Other Key Enterprise Areas
Managing Employees in the Customer-Strategy Enterprise
Summary
Food for Thought
Glossary
Notes
Chapter 15: Futureproofing the Customer-Centric Organization
Leadership Behavior of Customer Relationship Managers
Maintain and Increase the Trust of Customers
Summary
Food for Thought
Notes
Name Index
Term Index
EULA
List of Tables
Chapter 5
Exhibit 5.7
Chapter 6
Exhibit 6.1
Exhibit 6.2
Chapter 10
Exhibit 10.2
Chapter 11
Exhibit 11.1
Exhibit 11.2
Exhibit 11.3
Exhibit 11.4
Exhibit 11.5
Exhibit 11.6
Chapter 12
Exhibit 12.3
Exhibit 12.4
Exhibit 12.6
Exhibit 12.7
Exhibit 12.8
Exhibit 12.11
Exhibit 12.12
Exhibit 12.13
Chapter 15
Exhibit 15.1
List of Illustrations
Chapter 1
Exhibit 1.1
Increasing the Value of the Customer Base
Exhibit 1.2
Enterprise Strategy Map
Exhibit 1.3
Objective of Customer Centricity
Exhibit 1.4
Comparison of Market-Share and Share-of-Customer Strategies
Exhibit 1.5
Profit One Customer Generates over Time
Exhibit 1.6
Benefits of CRM in Financial Services
Exhibit 1.7
Customer Acquisition Costs (2015)
Chapter 3
Exhibit 3.1
IDIC: Analysis and Action
Exhibit 3.2
The Trust Equation
Exhibit 3.3
Components of Trustworthiness
Chapter 5
Exhibit 5.1
Treating Different Customers Differently
Exhibit 5.2
(a) Bell Curve or Normal Distribution and (b) Power-Law or Log-Normal Distribution
Exhibit 5.3
Customer Value Matrix
Exhibit 5.4
Decile Analysis of Customer Spending Values (CSVs) and Customer Referral Values (CRVs)
Exhibit 5.5
National Accounts’ Actual versus Unrealized Potential Value
Exhibit 5.6
Managing the Mix of Customers
Chapter 6
Exhibit 6.3
Common and Shared Needs of Customers
Chapter 7
Exhibit 7.1
Development of Golden Questions
Chapter 9
Exhibit 9.1
The Trust Advantage
Exhibit 9.2
Levels of Trust and Consumer Reactions
Chapter 10
Exhibit 10.1
How Mass Customization Works: Example
Exhibit 10.3
Expanded Need Set
Exhibit 10.4
(a) Infrequent Sales versus (b) Continuing Value Streams
Chapter 12
Exhibit 12.1
The Big Data Landscape
Exhibit 12.2
Impact of Analytics on Data-Driven Marketing Campaigns
Exhibit 12.5
Cumulative Percentage Units Sold by Month in FRED’s New Project
Exhibit 12.9
Consumer Segments by Average Income
Exhibit 12.10
Percentage of Disposable Income Used for Mortgage Payments across Segments
Chapter 13
Exhibit 13.1
U.S. Customer Experience Leaders vs. Laggards vs. S&P 500, 2007–2012
Exhibit 13.2
Share of Customer = Share of Need
Exhibit 13.3
Product Management Organization
Exhibit 13.4
Customer Management Organization
Exhibit 13.5
Managing Customer Portfolios for the Long Term
Exhibit 13.6
Product Managers Become Capabilities Managers
Exhibit 13.7
CEMM Measured Customer Orientation and 3-I Capabilities
Exhibit 13.8
Customer Experience Maturity Continuum
Exhibit 13.9
Competitive Advantage Accrues with CEM Maturity
Chapter 14
Exhibit 14.1
Set Up a Picket Fence
Exhibit 14.2
How to Treat Customers behind the Picket Fence
Guide
Cover
Table of Contents
Preface
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