Commerce in the 21st centuary Chapter 01

Discussion topics Understanding the landscape Defining customer loyalty Loyalty in the new market place Building & managing relationships in the new market place

1. Understanding the landscape The internal landscape The new market place The impact The result

1. Understanding the landscape A. The internal landscape The value discipline model

1. Understanding the landscape A. The internal landscape Operational excellence Involves building business processes that provide the best product quality, best price and the best purchasing experience, yielding the best total cost to the customer Product leadership Involves focusing investment and energy into developing the product that is the newest or most revolutionary or most sought after, offering the best product to the customer Customer intimacy Involves building strong customer relationships, really getting to know your customers so you are sure to really understand their situation, which should yield the best total solution for the customer.

1. Understanding the landscape B. The new market place internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet internet yet the basics still count.

1. Understanding the landscape B. The new market place Access More information in customer’s hands Control Customers will do business when and how they want to do it Speed You want it now, you get it now Globalization World is an open marketplace for everyone Automation Internet has eliminated many of the employees

1. Understanding the landscape C. The impact Internet effects Operational Excellence Product Leadership Customer Intimacy Access Easier to compare & swap Commoditization Providing human contact Control Always on Broader choice, less differentiation Interaction preference Speed Process expectations Products unique for shorter periods Efficiency, not loyalty Globalization Language, localization Localization of products Unknown language, culture automation Process disconnects Distance from customer needs Loss of human memory, connection Summary of changes in the marketplace

1. Understanding the landscape D. The result Customer loyalty is the single most important differentiator for ensuring competitiveness and success in 21st centuary CRM is a continuation of marketing practices and brand management, it keeps you apart.

2. Defining “customer loyalty” Developing a common language for terminologies/jargons a. What is a customer A customer is a human being. Only human beings can make decisions and use products. A customer is a person who has acquired or is considering the acquisition of one of our products. Anyone who is involved in making a decision, from the financial decision maker to the decision influencer to the end user is a customer. A customer company is an organization that has characteristics that influence the group of people who work there.

2. Defining “customer loyalty” b. What is loyalty? Customer loyalty is a behavior, built on positive experiences and value. This behavior is buying our products, even when that may not appear to be the most rational decision. Loyalty occurs when an individual has a vested interest in maintain a close relationship, usually resulting from a series of positive experiences that have occurred over time. These experiences can be either tangible or intangible.

3. Loyalty in the new marketplace Loyalty & disloyalty Loyalty and profits Loyalty and value discipline model loyalty and operation excellence Loyalty and product leadership Loyalty and customer intimacy Lower profit = less R&D money Less R&D money = less differentiation Less differentiation = commoditization Commoditization = lower profits

4. Building & managing relationships in the new market place Match our operational processes to known customer expectations Build the products we know the customer needs and wants Build and customize our product and service offerings to meet specific customer expectations