Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
MKT 456-CRM Instructor: Cynthia Bellian, MBA E-mail: [email protected]
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Managing Customer Experience and Relationships: A Strategic Framework
Chapter 6
Differentiating Customers by Their Needs
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Chapter 6 Preview
Review IDIC Framework: Differentiate
Definitions
Differentiating Customers by Needs
Understanding Needs and Behaviors
Categorizing Customers by Needs
Characteristics of Customer Needs
Community Knowledge
Using Needs Differentiation to Build Customer Value
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
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Action
Analysis
…customers as unique addressable individuals
…by value, behavior and needs
…more cost -efficiently and effectively
…some aspect of the company’s behavior, offerings, or communications
Identify
Differentiate
Interact
Customize
Review: IDIC Framework
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Definitions
Needs: The “why” behind the behavior – what a customer wants or prefers from an enterprise
Customer: End user, retailer, etc.
Product benefits: Advantage from the use of the product – but not equivalent to customer needs
Product attributes: Physical features of the product
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
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Differentiating Customers by Needs
Customers may find different uses for the same product:
Legos used in make-believe role
Legos used as step-by-step building project
Legos used to create a child’s own configuration (not on the box)
Defining customer needs, rather than product benefits or attributes, allows company to develop and offer other products that also meet this need
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
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Understanding Needs and Behaviors
Needs are the “why”; behaviors are the “what”
Three different types of customer profiles:
1. Demographic (static)
2. Behavior-based (dynamic; the “what”)
3. Need-based (dynamic; the “why”)
Needs drive behaviors; behaviors drive value
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
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Categorizing Customers by Needs
Customer needs are unique, but too costly to create a need profile unique to every customer
To take action, customers need to be grouped, ideally according to need:
Market segment: customers with a similar attribute (women over age 45 with household incomes over $50,000)
Customer portfolio: customers with similar needs (women who value friendships and like to entertain)
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
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Characteristics of Customer Needs
Situational
Dynamic
Different intensities
Often correlate with customer value
Most fundamental are psychological
Some shared, some unique
No single best way to differentiate by needs
Whatever way most effectively changes customer behavior to increase value for company
Even in B2B, customers are still individuals
Not just a homogeneous company, but purchasing agents, end users, etc., with specific needs)
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
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Community Knowledge
Community knowledge is the accumulation of information about the preferences of a community of customers, allowing an enterprise to anticipate what a customer will need.
Fueled by collaborative filtering software, a matching engine that can serve up products and services based on what other customers with similar preferences have preferred
Most beneficial for companies that have:
Routine, cost-effective, interactive communications with customers
Customers highly differentiated by needs
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
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Using Needs Differentiation to Build Customer Value
Accumulate information about customer needs in the context of a Learning Relationship
Share this information, within the bounds of privacy protection, with everyone at the enterprise who will interact with the customer
Use this information to treat different customers differently
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
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Goal Tracker Template
IRS and Behavioral Observation Scales
Identify and define the problem to be measured. Please write as a SMART goal:
Identify and write which dimensions are to be measured (Intensity, Quality, Importance, etc.…) below:
Instructions for the chart:
1. Provide a description of the scale
2. List response categories (How many points are on your scale?)
3. Create tailored anchors for the high, low, and midpoints of your scale, and fill those in the designated column
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Description of scale: (e.g. intensity of school related anxiety) |
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Response Categories |
Anchors
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When and how often will this scale be completed? (e.g. at bedtime, three times per day, after each tantrum)
Develop a behavior observation measure to track your goal
Description of measure (include dimension) (e.g. Frequency of night wakings):
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Who?
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Create your own behavior tracking form below:
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