Managing Customer Experience and Relationships A Strategic Framework

Every business on the planet is trying to maximize the value created by its customers

Learn how to do it, step by step, in this newly revised Fourth Edition of Managing Customer Experience and Relationships: A Strategic Framework. Written by Don Peppers and Martha Rogers, Ph.D., recognized for decades as two of the world's leading experts on customer experience issues, the book combines theory, case studies, and strategic analyses to guide a company on its own quest to position its customers at the very center of its business model, and to "treat different customers differently."

This latest edition adds new material including:

• How to manage the mass-customization principles that drive digital interactions
• How to understand and manage data-driven marketing analytics issues, without having to do the math
• How to implement and monitor customer success management, the new discipline that has arisen alongside software-as-a-service businesses
• How to deal with the increasing threat to privacy, autonomy, and competition posed by the big tech companies like Facebook, Amazon, and Google
• Teaching slide decks to accompany the book, author-written test banks for all chapters, a complete glossary for the field, and full indexing

Ideal not just for students, but for managers, executives, and other business leaders, Managing Customer Experience and Relationships should prove an indispensable resource for marketing, sales, or customer service professionals in both the B2C and B2B world.

DON PEPPERS is the co-founder of CX Speakers, which offers workshops and consulting on customer experience, customer relationships, marketing technology, corporate culture change, and other issues. He is the co-author, with Martha Rogers, of The One to One Future and 7 other bestselling business books.

MARTHA ROGERS, PHD, is an author, speaker, and consultant. She is the co-founder of CX Speakers, and the founder of Trustability Metrix, designed to help companies understand how they are trusted by customers, employees, and business peers.

Foreword by Phil Kotler ix

Preface xiii

Acknowledgments xvii

About the Authors xix

PART I Technology’s Rainbow 1

CHAPTER 1 Evolution of Marketing and the Revolution of Customer Strategy 3

Roots of Customer Relationships and Experience 6

What Is a Relationship? Is That Different from Customer Experience? 20

CHAPTER 2 Treat Different Customers Differently: How Learning Relationships Lead to Better Experiences and Higher Profit 25

Focus on Relationship Equity 25

The Strategy: Treat Different Customers Differently (TDCD) 26

The Technology Revolution and the Customer Revolution 28

What Characterizes a Relationship? 31

Customer Loyalty: Is It Emotional? Or Behavioral? 34

Customer Retention and Enterprise Profitability 37

Why Do Companies Work at Being Customer-Centric? 45

CHAPTER 3 Better Customer Experiences for Better Shareholder Return 49

Frictionless: The Ideal Customer Experience May Be No Experience at All 49

Understanding Customer Experience through Customer Journey Mapping 62

CHAPTER 4 IDIC and Trustability: Building Blocks of Customer Relationships 69

IDIC: Four Implementation Tasks for Creating and Managing Customer Experiences and Relationships 69

How Does Trust Characterize a Learning Relationship? 78

Becoming More and More Trustable to Customers 80

Do Things Right and Do the Right Thing 85

Be Proactive 86

Relationships Require Information, but Information Comes Only with Trust 91

Behind Their Customers’ Backs 94

How Trustable Companies Operate 96

Recovering Lost Trust 97

Part I: Food for Thought 100

PART II Customer Experience and Relationships: Trust Is the Foundation and IDIC the Building Blocks 103

CHAPTER 5 IDIC Step 1: Identify Individual Customers 105

Individual Information Requires Customer Recognition 106

What Does Identify Mean? 116

Customer Data Revolution 120

CHAPTER 6 IDIC Step 2: Differentiate Customers by Value 129

Customer Value Is a Future-Oriented Variable 131

Different Customers Have Different Values 144

Final Thoughts on Value Differentiation 162

CHAPTER 7 IDIC Step 2, cont.: Differentiate Customers by Needs 165

Definitions 166

Differentiating Customers by Need: Some Examples 171

Understanding Customer Behaviors and Needs 176

The Difference Between Customer Behaviors and Needs 177

Why Doesn’t Every Company Already Differentiate Its Customers by Needs? 179

Categorizing Customers by Their Needs 181

Understanding Needs 183

Community Knowledge 186

Using Needs Differentiation to Build Customer Value 190

Final Thoughts on Needs Differentiation 191

CHAPTER 8 IDIC Step 3: Interact to Learn and Collaborate 195

Dialogue Requirements 197

Implicit and Explicit Bargains 198

Do Consumers Really Want One-to-One Marketing? 200

Ubiquitous Interactivity 201

Omnichannel: Myth versus Reality 202

Customer Interaction Redefines “Integrated Marketing” 205

Customer Dialogue: A Unique and Valuable Asset 206

Efficient and Effective Customer Interaction 211

Complaining Customers: Hidden Assets? 213

Empowering Customers to Defend the Brand 221

Listening to Customers 223

Age of Transparency 226

As Interactions Multiply, Trust Becomes More Important 227

Cultivating Customer Advocates 234

CHAPTER 9 IDIC Step 3, cont.: Interact/Privacy Considerations 237

Customer Loyalty: Customer Loyal to a Company, or a Company Loyal to a Customer? 248

Privacy Pledges Build Enterprise Trust 253

CHAPTER 10 IDIC Step 4: Customize to Build Learning Relationships 261

How Mass Customization Works 262

How Can Customization Be Profitable? Answer: Configuration 266

Technology Accelerates Mass Customization 273

Customization of Standardized Products and Services 277

Value Streams 282

Customer Success Management 284

Culture Rules 289

Technology’s Real Rainbow: Collaborative Learning Relationships 289

Part II: Food for Thought 290

PART III Making It Happen 297

CHAPTER 11 Measuring and Managing to Build Customer Value 299

Customer Equity 308

Customer Loyalty and Customer Equity 321

Return on Customer 325

Leading Indicators of LTV Change 339

Stats and the Single Customer 343

CHAPTER 12 Customer Analytics, Martech, Critical Thinking, Data Science, and the Customer-Strategy Enterprise 347

Customer-Specific

Data and Longitudinal Insight 349

Big Data 354

Likelihoods, Probabilities, and Reality 362

A Small Section on a Big Topic : Using Martech to Build Customer Value and for Marketing Tasks 379

An Analytical Fable 381

CHAPTER 13 Organizing and Managing the Profitable Customer-Strategy Enterprise 383

Who Owns the Customer Relationship? 383

What Is the Financial Case for Investing

in Customer Experience? 386

Understanding the Customer Perspective 387

Relationship Governance 395

Making It Happen 401

How Does Relationship Governance Affect

Customer Service Management? 410

CHAPTER 14 Leading to Build Customer Value 411

Reprise: Culture Rules 420

Leadership Behavior of Customer Relationship

Managers and Others Leading the Customer-Centric

Organization 431

Part III: Food for Thought 436

Glossary 439

Name Index 455

Term Index 000

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