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Customer-Initiated Relationships

Customer-Initiated Relationships. 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. DVRs and “TiVo”. Fragmented Media. Consumer-Generated Media.

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Customer-Initiated Relationships

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

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

  3. Sometimes We Can’t Catch the Customer

  4. DVRs and “TiVo” Fragmented Media Consumer-Generated Media

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

  6. 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

  7. 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

  8. Example: Two US Airlines Six Years Ago

  9. http://gmj.gallup.com/

  10. So what should we do?

  11. How can we get customers to initiate? • How Can we get customers to try to “catch the firm?”

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

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

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

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

  16. Relevant competitive prices

  17. Relevant comparisons chosen by the customer

  18. Team owner encourages emails from fans during game

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

  20. Timbuk2 messenger bags: Build your own

  21. Choose a model:

  22. “A Private Social Network” www.redtoucan.com 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!”

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

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

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

  26. Kids, 11-15 years, helped update package design, cereal color, and website

  27. Strategy 6Develop consumer trust • Brand perceptions become very important • Authenticity is critical

  28. Customers Check Corporate and Brand Ethics “Swipe ’n Gripe 3000” Corporate Fallout Detector http://www.jamespatten.com/cfd/

  29. Six Strategies • Play Hard to Get • Make it Easy and Useful for Customers to Take the Initiative • Put Customers in Control • Deliver Value through Customer Initiation • Create Opportunities for Customer Initiation • Develop Consumer Trust

  30. 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? Source: Pete Blackshaw, Nielsen BuzzMetrics, from www.clickz.com (7/26/05)

  31. 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”

  32. When Customers Initiate Customers catch the firm!

  33. How Can You Initiate? • Contact Dr. Lemon (kay.lemon@bc.edu) • Join a brand community (for a brand you care about) • Comment on “customer engagement” blogs • Create your own “customer initiation” community

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