Conceptual Framework for Profitable Business

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Conceptual Framework for Profitable Business

• Mutually beneficial relationships with customers
• Profit objective
• Cost to acquire customers
• Repeat customers provide profit
• Service encounters
• Relationships built and nurtured one encounter at
  a time
• Promises
• A way to think about managing relationships
• Customers - motivations, benefits, rewards

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Business Overview(Customer Information Centric)
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Service Encounters Form Relationships

• Service experience - typically multiple
  encounters
• Sales calls
• Ordering
• Delivery
• Installation
• Training
• Billing
• Repair
• Returns
• Disney - 74 encounters in a single visit
• Cumulative effect of a series of positive or
  negative encounters
• Momentous encounters
• Break or MAKE
• Marriott - early events - loyalty
• You never get a second chance to make a first
  impression

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Promises - Key to Customer Relationships
Promise includes explicit and implicit
components
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IS - Keeping Promises

• IS track record is poor
• Promises not kept
• Problems
• Over-promising by IS
• Customer unclear about promise
• Customer part of promise not clear, not kept
• Project requirements scope change over time
• Technology changes
• Technology over-hyped
• Not communicating changes
• Little attention to Making and Accepting promises

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Relationship Marketing for IS

• Target customers who want a mutually beneficial
  relationship
• IS Makes the Explicit Promise
• Time
• Resources
• Project Scope
• Roles responsibilities - Customer IS
• Contingencies for unanticipated events
• Customer Accepts Promise (implicit components)
• Critical to have clear understanding of the
  promise in writing
• Who Makes, Accepts, and Keeps Promises in IS?
• Initially
• Throughout the project
• How do we deal with changes?
• Agreement and understanding throughout the
  organization

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Views of Customers Motivations, Benefits,
Rewards

• Service view of customers - satisfaction
• Returns, information, problem resolution
• Dissatisfaction non-linear with time
• Operations view of customers - deliver order
• On time, complete, reliable, as expected, quality
• Advertising view of customers - motivate
  customer behavior
• Communicate for awareness, knowledge, liking,
  preference, action, reassurance
• Marketing view of customers - build customer
  relationships
• Branding, bonding
• Market/product segmentation
• Technology adoption view of customers
• Innovators, Early adopters, Late adopters,
  Laggards
• Internet Status view of customers
• Time and familiarity

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How Customers Benefit from Service Relationships

• Direct value of each transaction
• Get what you pay for
• Extra value from mutually beneficial relationship
• Sense of well-being and overall quality of life
• Predictable relationship reduces customer stress,
  provides comfort
• Precludes need to change - switching costs
• Simplify ones life
• Service provider may become part of customers
  social support system

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External marketing - Making Promises

• What customers can expect, how it will be
  delivered
• Employees, design decor, service process
• Service guarantees, two-way communication
• Set consistent and realistic expectations
• How does a Web Site fit into Making Promises
• Expectations of technology

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Internal marketing - Enabling Promises

• Employees must be enabled
• Employe skills, tools, abilities, motivation
• Recruiting, training, rewards

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Interactive marketing - Keeping Promises

• Promises most often kept or broken by employees
  and/or technology
• Moment of truth - customer interacts with
  organization
• Tested EVERY TIME customer interacts
• Service relationships built in moments of truth