Lecture 3

 It is a book on marketing  It lays out a strategy for dealing with the “commoditization” phenomenon (All products are being pushed toward commoditization)  It talks about establishing a new market position  It talks about controlling customer perception  It is a “how-to” book on modern marketing

 Why do professional IT people need to spend time with this book? (Shouldn’t we be passing this off to our co-workers in the marketing department?)  What is IT Alignment all about?  What is IT Governance all about?

 IT Alignment is the responsibility and process for creating maximum business value using IT resources. ◦ Can’t be done without knowing a lot about the business processes in the company ◦ Can’t be done without knowing a lot about the market position and marketing strategies of the company ◦ Can’t be done without understanding how to decrease customer sacrifice ◦ Usually, when IT adds significant value to the company, it is done by finding meaningful ways that IT services can reduce customer sacrifice.

 IT Governance is the process by which the other CXOs in the company take ownership of IT initiatives  Can’t be done without a focus on using IT to add value to the company  Can’t be done without understanding the market position and marketing strategy of the company  Can’t be done without understanding where the customers are sacrificing and how to work with others in the company to reduce that sacrifice

 IT professionals must understand marketing to be able to deliver the best IT value to the company  The book helps us discover how to use IT systems to reduce customer sacrifice  The book helps us discover how to use IT to add value to the company (how to increase company profit margins)

 Discover how to reduce the amount of customer sacrifice  This is a great way to approach the discovery of how to develop meaningful experiences for your customer in a B2C business  It may be the ONLY WAY to approach the discovery and development of meaningful experiences for your customer in a B2B business

 Searching for Uniqueness ◦ Examining your research studies anew and search for uniqueness (customization opportunities) (p. 82) ◦ Cyberspace provides a great new place for understanding sacrifice (p. 83)

 Cultivating learning relationships ◦ As the number of customer interactions increases (and are analyzed), customer sacrifice is decreased (p )  Collaborative Customization ◦ Collaborative customizers to determine what they need and then produce it for them (p. 88) ◦ Adaptive customizers offer one product designed to let users alter it themselves (p. 89)

 Cosmetic Customization: customizing packaging or presentation ◦ Cosmetic customizers present a standard good or service differently to different customers (p ) ◦ Example: T-Shirt logo/picture customization  Transparent Customization ◦ Transparent customers provide a tailored offering without customers knowing that is is customized for them (p. 93) ◦ Examples: Ritz-Carlton and Amazon.com

 To truly differentiate themselves, businesses must focus ◦ First on increasing customer satisfaction ◦ Then on eliminating customer sacrifice ◦ And finally on creating customer surprise. ◦ (And then stage customer suspense) (p. 99)

 That’s where theater staging comes in ◦ Improv ◦ Platform ◦ Matching ◦ Street (Chapt 7)  But first there is “Acting” …

 Business performances must rival those featured on Broadway and in ballparks (p. 103)  Theater is not a metaphor, but a model (p. 104)  Whenever employees work in front of customers, an act of theater occurs (recent visit to Best Buy)

 Where does work begin, climax, and have its denouement? (p. 105)  With theater as the model, even mundane tasks engage customers in memorable ways (p. 106)  Any work a customer observes directly is an act of theater (p. 107)  The act of acting differentiates memorable experiences from ordinary activity (p. 109)

 You are a performer. Your work is theater. Now act accordingly. (p. 111)  Acting is taking deliberate steps to connect with the audience. (p. 112)  Proper characterization turns service activities into memorable performances. (p. 113)  Act with intention. (p. 117)