Customer-Initiated Relationships Katherine N. Lemon, Ph.D. Boston College Katherine N. Lemon, Ph.D. Boston College

Why It’s Important to Get Your Customers to Make the First Move

Sometimes We Can’t Catch the Customer

Fragmented Media DVRs and “TiVo” Consumer-Generated Media

When traditional methods of reaching and attracting customers fail, what can companies do? Can they engage in activities that may influence customers to initiate contact with the firm? When traditional methods of reaching and attracting customers fail, what can companies do? Can they engage in activities that may influence customers to initiate contact with the firm?

Customers as Initiators: How Are They Different?  Feel more responsible  More highly motivated  Have a stronger need for your product or service  More invested in creating a successful relationship  More likely to use, repurchase and renew  Fewer privacy concerns  Feel more responsible  More highly motivated  Have a stronger need for your product or service  More invested in creating a successful relationship  More likely to use, repurchase and renew  Fewer privacy concerns

Customer Initiated Behaviors Will Influence  How customers think and feel  Satisfaction, Commitment, Regret, Power  What they do  Buying behavior, Co-production, Word of mouth, Responses to pricing or product/service failure  How much they’re worth  Customer retention, CLV, Profitability  How customers think and feel  Satisfaction, Commitment, Regret, Power  What they do  Buying behavior, Co-production, Word of mouth, Responses to pricing or product/service failure  How much they’re worth  Customer retention, CLV, Profitability

Example: Two US Airlines Six Years Ago

So what should we do?

How can we get customers to initiate?  How Can we get customers to try to “catch the firm?”

As a firm, you want to be “attractive enough” so that a customer will seek you out

How to Get Customers to “Catch the Firm” 6 Strategies

Strategy 1 Play Hard to Get Scarcity: When demand is so much greater than supply, it increases attractiveness and consumer initiation behavior Scarcity: When demand is so much greater than supply, it increases attractiveness and consumer initiation behavior

Strategy 2 Make it easy and useful for consumers to take the initiative  Be the source of all relevant information  Let them know how to contact you  Be the source of all relevant information  Let them know how to contact you

Relevant competitive prices

Relevant comparisons chosen by the customer

Team owner encourages s from fans during game

Strategy 3 Put consumers in control  Let them design their own products  Choose their own advertising  Customize their experiences  Let them design their own products  Choose their own advertising  Customize their experiences

Timbuk2 messenger bags: Build your own

Choose a model:

“A Private Social Network” You Control Your Space Who sees your profile What listings are on your site Who participates in your community “You even pick the advertising on your pages!”

Strategy 4 Deliver value through consumer initiation  Encourage customer initiation through interactive tools  Example: ING Retirement Planning  Customers provide significant input  ING professionals then customize solutions  Encourage customer initiation through interactive tools  Example: ING Retirement Planning  Customers provide significant input  ING professionals then customize solutions

Strategy 5 Create opportunities for customer initiation  Communities of customers  Customer co-creation of new products  Communities of customers  Customer co-creation of new products

“Become a member now and get exclusive access to special offers, insider information, and more!”

Kids, years, helped update package design, cereal color, and website

Strategy 6 Develop consumer trust  Brand perceptions become very important  Authenticity is critical  Brand perceptions become very important  Authenticity is critical

Customers Check Corporate and Brand Ethics “Swipe ’n Gripe 3000” Corporate Fallout Detector

Six Strategies 1.Play Hard to Get 2.Make it Easy and Useful for Customers to Take the Initiative 3.Put Customers in Control 4.Deliver Value through Customer Initiation 5.Create Opportunities for Customer Initiation 6.Develop Consumer Trust 1.Play Hard to Get 2.Make it Easy and Useful for Customers to Take the Initiative 3.Put Customers in Control 4.Deliver Value through Customer Initiation 5.Create Opportunities for Customer Initiation 6.Develop Consumer Trust

What to Measure?  What percent of all communication is customer initiated?  How many unsolicited contacts do you receive from customers?  How often do customers offer suggestions?  How often do they spread word of mouth?  What percent of all communication is customer initiated?  How many unsolicited contacts do you receive from customers?  How often do customers offer suggestions?  How often do they spread word of mouth? Source: Pete Blackshaw, Nielsen BuzzMetrics, from (7/26/05)

A Final Note: Privacy  Customer initiation behaviors reduce privacy concerns  Customer initiated communication may reduce risk of identity theft  Consumers can be proactive in choosing and managing their interactions with companies  Companies begin to engage with customers “on the customers’ terms”  Customer initiation behaviors reduce privacy concerns  Customer initiated communication may reduce risk of identity theft  Consumers can be proactive in choosing and managing their interactions with companies  Companies begin to engage with customers “on the customers’ terms”

When Customers Initiate Customers catch the firm!

How Can You Initiate?  Contact Dr. Lemon  Join a brand community (for a brand you care about)  Comment on “customer engagement” blogs  Create your own “customer initiation” community  Contact Dr. Lemon  Join a brand community (for a brand you care about)  Comment on “customer engagement” blogs  Create your own “customer initiation” community