The strategic pathway

1. Strategic thinking and thinking strategically Market sensing and learning strategy Strategic market choices and targets Customer value strategy and positioning Strategic relationships and networks Strategic transformation and strategy implementation The strategic pathway

2. The customer is always right-handed:Customer satisfaction, customer sophistication and market granularity

3. The customer comes in all shapes and sizes

4. Agenda • The customer conundrum (puzzle) • The sophisticated customer • Market shifts and quakes • consumer market changes • market granularity • re-shaped business-to-business markets • How can marketing processes respond to these changes?

5. Customer service is bad all over Customer satisfaction and customer loyalty satisfaction and loyalty are not the same The real customer problem do we know what service to maximise? can we deliver what we promised? happy customers and happy employees? The problem is strategy The customer conundrum

6. 4 BOXES • We do it all for you - the customer

7. Customer satisfaction versuscustomer loyalty Customer loyalty High Low High Happy wanderers Satisfied stayers Customer satisfaction Hostages Dealers Low

8. Customer expectations and outcomes The service and quality we promise High Low Good I am in LOVE – I didn’t know you were this good! OK. You get what you pay for. The service and quality the customer receives OK. It’s bad, but it’s what I expected. I HATE you bastards – you lied to me! Bad

9. Service and quality versus customer satisfaction Impact of service and quality on customer satisfaction/retention High Low High Smart servicers Over- servicers Service and quality level Under- servicers Non- servicers Low

10. Customer satisfaction and the internal market External customer satisfaction High Low Synergy “happy” customers and “happy” employees Internal euphoria “Never mind the customer, what about the squash ladder?” High Internal customer satisfaction Coercion “you WILL be committed to customers, or else… Alienation “unhappy” customers and “unhappy” employees Low

11. The sophisticated customer Issue Customers and markets have changed: • Customers wised up to marketing • Know what marketers are up to • Traditional marketing consistently underestimates intelligence of customer

12. DO YOU AGREE? • Your parents • Unwised to marketing • No idea what marketers were up to • Their intelligence underestimated by marketers who now recognise it

13. The typical family a new phenomenom? The MySpace Generation – ok, but they eat, drink, clothe themselves etc Saga Louts – that’s me! The pink market – women are a new phenomenon The wealthy - too The poor – too – a novelty! Market shifts and quakes – Consumer markets

14. Market shifts and quakes – Consumer markets • Ethnic markets • – 21st C.? • The green and ethical consumer • – vegetarians? Ethical? • The Neo-Cromwellians – • Puritans existed pre Cromwell • Scared consumers – • ho yus!

15. Market shifts and quakes – Market granularity • Shift in focus from “megatrends” to “microtrends” • Broad market trends average out important differences • The issue shifts from huge cultural shifts to new “identity groups”

16. Dominant customers Impact of customer power Bad customers who play the rules who break the rules who make the rules Market shifts and quakes – Reshaped business-to-business markets

17. Radical and disruptive changes in market structures have left traditional marketing behind The urgent challenge is to update how we “do” marketing to reflect how customers and markets have changed ???? How can marketing processes respond?