Customer Retention

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Why Customer Participation Matters

These days, many businesses are focused on increasing customers’ positive word of mouth. But emphasizing customer participation — such as providing feedback or suggestions — may be a more important vehicle for generating valuable repeat business. As one COO said, “Levels of feedback is a way we identify our most profitable customers. Those that bother to write to us do care. And they do spend money with us.”

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What Matters Most in Internet Retailing

Online retailing is the fastest growing retail sector in the United States. The growth is being fed by two forces: (1) traditional retailers getting their “Internet acts” together, and (2) “pure play” online retailers becoming innovative.

This article does a deep dive into two groups: online retailers selling popular-brand consumables for the home; and online retailers selling specialty items. The findings have implications both for pure-play Internet retailers and for traditional retailers.

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The Benefits of Combining Data With Empathy

Everyone has experienced the frustration of having to repeat voice commands multiple times before finally asking to speak to a service representative. Many large companies have become so focused on optimizing their business processes and systems that they have become all too willing to forget about cultivating emotional connections with customers. But in order to detect and respond to shifting customer needs, companies need to show more, not less, empathy with their customers.

Mark Yolton, senior vice president of SAP Communities & Social Media

SAP: Using Social Media for Building, Selling and Supporting

SAP runs a 10-years old, online community network that has more than a million unique visitors a month. Mark Yolton, senior vice president of SAP Communities & Social Media, tells how his company is using social media for “outside-in” market insight and as a mechanism to immediately tell the world about its new products.

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Is It Time to Rethink Your Pricing Strategy?

Companies differ in their approaches to price setting, but most fall into one of three buckets: cost-based, competition-based or customer value-based. Customer value-based pricing uses data on the perceived customer value of the product as the main factor to determine prices.

However, implementing customer value-based pricing is not easy. Developing a customer value-based pricing program is a multiyear project demanding executive attention and requiring substantial changes in corporate processes.

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Dethroning an Established Platform

Increasing numbers of companies, whether providing hardware devices, traditional software or software in the cloud, are trying to become platform masters by releasing application programming interfaces that allow others to build software and hardware products or complementary services on top of their offerings.

But what can you do when a competitor has already established a leading platform? Learn from Apple’s iPhone, Google’s Gmail and Facebook — and how they overtook earlier market leaders.

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Enhancing Relationships With Customers Through Online Brand Communities

Online brand communities can bring customers closer to a brand, generate “buzz” and enhance brand loyalty. Yet, important as online brand communities are to consumer markets, little is known about the role they play in consumer decision-making. Although the popularity of online brand communities as a means of gathering pre- and post-purchase information continues to grow, knowledge about how to effectively manage those conversations remains scant.

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Collaborating With Customer Communities: Lessons From the Lego Group

Customer-oriented companies pride themselves on understanding the marketplace and integrating the best ideas into future products. But what would it be like if you found that you had hundreds, if not thousands, of knowledgeable users ready and eager to spend nights and weekends acting as extensions of your research and development department? For the Lego Group, the Danish maker of children’s creative construction toys, this close bond with the user community is not a pipe dream but a reality.

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How to Identify New Business Models

Companies traditionally pursue growth by investing heavily in product development so they can produce new and better offerings; by developing consumer insights so they can satisfy customers’ needs; or by making acquisitions and expanding into new markets. This article identifies a fourth method: “business model experimentation,” or using thought experiments to quickly and inexpensively examine new business model possibilities.

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Why Dominant Companies Are Vulnerable

Research has shown that several factors influence a company’s ability to retain market leadership. However, one factor has largely been ignored: the psychological forces that drive decisions consumers make and, specifically, the degree to which people feel they have choices. Once people have learned a company’s technology interface, they become more efficient using that interface and are often reluctant to switch to products requiring new skills or allowing limited transfer of current skills.

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How to Get Your Messages Retweeted

Many companies are trying to leverage the power of Twitter to connect with customers and promote their brands and products. This article identifies factors that increase the likelihood of “retweeting” so that a company’s tweets will be shared with recipients’ networks.

There are several practices that don’t work well. The most important to avoid is blatant hard-sell messages. Twitter may be better suited for building brands than for building markets for new offerings.

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Quick Wins Help Avoid Culture Obstacles on the Path to Value

“The biggest predictor of success…has been when there’s a strong business sponsor involved,” says Randy Bean, co-founder of NewVantage Partners. Broad-based organizational support usually follows when the business sees how analytics will improve the top and bottom line.
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The Age of the Consumer-Innovator

It has long been assumed that companies develop products for consumers, while consumers are passive recipients. However, this paradigm is flawed, because consumers are a major source of product innovations. This article suggests a new innovation paradigm, in which consumers and users play a central and active role in developing products. The article also summarizes key findings from studies on consumer product innovation conducted in the United States, the United Kingdom and Japan.

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The Business Models Investors Prefer

Why are investors so bullish on companies like Apple and Disney? Is it metrics, management, industry prowess, good investor relations or good timing? Probably all of these. But something else may be at work, too. According to research conducted at the MIT Sloan School of Management, the stock market consistently values certain types of business models more highly than others. In recent years, investors have favored models focused on intellectual property and highly innovative manufacturing.

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What Really Happened to Toyota?

Consumers were surprised in October 2009 by the first of a series of highly publicized recalls of Toyota vehicles in the United States. Citing a potential problem in which poorly placed or incorrect floor mats under the driver’s seat could lead to uncontrolled acceleration in a range of models, Toyota announced that it was recalling 3.8 million U.S. vehicles. The article discusses two root causes for Toyota’s quality problems.

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Why CRM Fails — and How to Fix It

Customer relationship marketing was supposed to be a “new paradigm” that yieldied more loyal customers and more profit for companies. It hasn’t. Researchers from Cranfield School of Management write that the problem is fundamental: “Most senior management teams have an unbalanced approach to managing marketing investments, and this is particularly evident in the case of CRM.” Their suggestion: successful CRM investment begins with new capabilities to improve customer relationships and then backfills the capital investment as needed.

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