Marketing

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The Multiplier Effect of Social Business Tools

Mondelez International’s brands include some well-recognized names, including Oreo, Ritz, and Cadbury. Yet as Mondelez’s vice president of global media and consumer engagement Bonin Bough explains, even a powerhouse like Oreo must work to engage its customers — and in the modern era, that means using social media. In his interview with David Kiron, Bough describes the company’s innovative methods for expanding its reach.

Image courtesy of Flickr user Roy Luck.
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Ethnography in Action at Wells Fargo

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How do companies gain value from ethnography — the in-person study of how people actually use a product or service? Wells Fargo Bank commissioned an ethnographic project and found out for itself. The bank was able to determine that customers approach retirement with three styles: they were either Reactors, Poolers or Maximizers. The bank learned, for instance, that the language of customers who were Maximizers would not resonate with Poolers — and so it developed new kinds of messaging for each.

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Should Your Business Be Less Productive?

Research suggests that productivity improvements can have counterproductive results in a service business. Productivity gains are not always easy to make without sacrificing perceptions of quality, and unlike on the assembly line, increased productivity may not always lead to increased profitability. Instead, in a service business, productivity must be treated as a strategic decision variable.

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Finding the Value in Social Business

A recent survey by MIT SMR and Deloitte shows that companies are starting to derive real value from social business — with the payoff concentrated most strongly in companies that have reached a certain level of sophistication in relation to their social business initiatives. The higher a respondent rated his or her company on a “social business maturity” scale, the more likely he or she was to report that the company is deriving business value from its social business initiatives.

Image courtesy of Flickr user Sjors Provoost

How to Win a Price War

There are usually no winners in price wars. But under the right circumstances, it’s possible to win a price war by leveraging a specific set of strategic capabilities. These include the ability to read how things are changing, the skills to analyze data to identify trends and opportunities and the wherewithal to implement organizational changes both internally and across the value chain. Albert Heijn, a Dutch grocer, started and won a price war through its strategic capabilities and skills.

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Is Your Brand a Living Entity?

Traditional ways of building brands have passed their sell-by dates, while social media opens up new possibilities. Effective Twitter strategies, for instance, are helping brands such as Starbucks and Whole Foods gain a special status and sense of personality among some of their Twitter followers.

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What Unhappy Customers Want

Companies have tried for decades to improve customer complaint resolution — without notable success. Customer expectations are rising; customers now expect positive results and not just the chance to complain. Many customers want nonmonetary remedies, such as an apology or a chance to vent. In addition, companies must recognize that they must treat every customer interaction as if it were playing out on a Facebook page or a YouTube video, because it might be.

Image courtesy of Flickr user mike fabio.

The High Price of Customer Satisfaction

No company can last for long without satisfied customers. But misguided attempts to improve satisfaction can damage a company’s financial health. Research finds that the relationship between customer satisfaction and customer spending behavior is very weak, and that the return on investments in increasing customer satisfaction is often trivial or even negative. What matters is how customers rank your brand in satisfaction relative to your competitors.

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From the Editor: How Important Is the Customer’s Voice?

It’s easy to say customer satisfaction is very important – but harder to put that into practice. The Spring 2014 issue of MIT Sloan Management Review features a special report on understanding your customers, from gauging global clients’ satisfaction through the use of big data to figuring out better strategies for improving customer complaint resolution.

Image courtesy of Flickr user Peyri Herrera.
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The Big Upside of Customer Participation

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Encouraging customers to provide feedback and recommendations directly to a company engages them in valuable ways. Researchers looked at customers of a global bank who engaged in either positive word of mouth, or provided suggestions, or both. They found that customers who ranked high in participation tended to purchase more products and services. In other words, participation was more closely associated with customer spending than word of mouth was.

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Tying Customer Engagement to Employee Engagement

Turning an organization into a social business — one that knows how to use new forms of collaboration and communication via social media — is a challenge for any operation, but it’s especially challenging for multinational, highly regulated companies. Boston-based financial services company State Street has become an industry model for how to use social business to make the business more innovative.

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Reading Global Clients’ Signals

How can geographically distributed companies monitor large clients’ attitudes about their services? Traditional customer satisfaction surveys can lack sufficient timeliness and detail. But taking a big data approach to analyzing collaborations lets companies gain valuable and timely insights into client satisfaction. Examining the structural properties of email communication patterns and correlating them with external performance metrics can offer managers helpful insights.

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The Art of Selling with Social Tools

“Our lives have increasingly migrated online in recent years, so why wouldn’t [sales] reps want to connect with customers on the social media front as well?” That’s the logic of Hearsay Social, whose platform lets sales people keep track of what their customers are posting on Twitter, LinkedIn and even Facebook. Says Gary Liu, vp of marketing, “social media can be used very effectively to enhance real-world interactions.”

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The Untapped Opportunity of Visual Logos

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Research shows that corporate logos can have a significant positive effect on customer commitment to a brand: “separate visual symbols used as logos tend to be more effective than brand names at creating a sense of emotional connection with consumers,” write C. Whan Park (University of Southern California Marshall School of Business), Andreas B. Eisingerich (Imperial College Business School at Imperial College London) and Gratiana Pol (Marshall School of Business).

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DBS Bank Pumps Up the Volume on its Technology

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DBS Bank, Singapore’s largest, is using analytics, social media and mobile technology to boost customer satisfaction and its bottom line. The company is using technology more effectively, filling in with outside vendors where it feels it cannot achieve top performance on its own. The bank is also building on its traditional transaction model to leverage information more effectively — a process it expects will radically remake the way it interacts with its customers.

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The Problem With Online Ratings

Studies show that online ratings are one of the most trusted sources in e-commerce decisions. But research suggests that these ratings are systematically biased and easily manipulated. The heart of the problem lies with herd instincts — natural human impulses characterized by a lack of individual decision making — that cause us to think and act in the same way as other people around us.

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Stories That Deliver Business Insights

Companies are gaining value from ethnography, the in-person study of how people actually use a product or service. Through its attention to the details of people’s lives, ethnography can be a powerful tool to help executives gain insights into their markets. Ethnographic stories can also be indispensable in helping executives rethink their assumptions about what customers care about and about overall strategic direction.

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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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How to Position Your Innovation in the Marketplace

Should a new product or service launch at the high end of the market and move downward or at the low end and move up? In truth, there’s no one-size-fits-all approach for entering the market, but a new research-based framework helps identify the best strategy for a particular product or service. The two key questions to ask: Is the basic functionality of the new offering better or worse than that of existing competitive products? And how groundbreaking are the novel attributes of the new product?

Image courtesy of Flickr user Stuck in Customs.

The Power of a Good Logo

The authors’ research found that corporate logos that express a brand’s symbolic, functional or sensory benefits, have a significant positive effect on customer commitment to a brand — and thereby a significant impact on company performance in terms of revenues and profits. The research also indicated that separate visual symbols used as logos tend to be more effective than brand names at creating a sense of emotional connection with consumers.

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