Database Reference
In-Depth Information
from customers, or in other words, the objective is to maximize contribution to fixed capacity and
to profit from each sale. The price will range between the customer value at the upper limit and the
larger of the cost of delivery or the competitor's price at the lower limit.
However, the final price is determined by the customer's perception of a reasonable price in
light of the corresponding hassles (to identify the right solution) and the risks (see Section 1.2.6
“Customer Relationships”). Evidently, the customer will pay a premium for response commit-
ments like guaranteed response, time of day, lead time, and response level.
The frontline worker can make the pricing decision based on information like customer value,
cost of delivery, competitor's charges, and alternative use of capacity.
1.2.3 Compelling Customer Experiences
For an enterprise, to get the positive reinforcing loops that produce the increasing returns of
customer capitalism depends on its ability to link benefits and deliver a totally integrated experi-
ence to its customers over time. The pervasiveness and convergence of information technology
is transforming the traditional feature-benefit-oriented marketing to experiential marketing. As
recognized by B. Joseph Pine II and James Gilmore, experiences have emerged as the latest step
in the
progression of economic value
. However, the experience economy envisaged by them is
only another manifestation of the overarching customer economy whereby customers are now
demanding not only the quality of the enterprise solutions and services but also the quality of
the experience of
using
these solutions and services. While solutions and services are external to
the customer, experiences are inherently individualistic, involving and engaging the customer's
attention directly. The competitive edge in the future would lie in staging engaging, compelling,
and memorable experiences. Thus, the same product delivered with the same portfolio of sur-
round services may still be perceived to generate varying levels of value depending on the final
rendering or performance for individual customers.
Customer-responsive enterprises recognize that customers may not be aware of what they
really need unless they experience it and, hence, realize the importance of anticipating rather than
reacting to expressed need after it is too late.
1.2.3.1 Personalization
Relationships evolve and grow through trust, responsibility, and the mutually beneficial exchange
of value. Personalization is a combination of technology and prior information to tailor customer
interactions with the enterprise. Using information previously obtained or provided in real time
about these and other customers, the conversation between the parties is altered dynamically to fit
the customers' interests, preferences, and needs so that the interaction/transaction locates the best
suited product or service with minimal expenditure of time and cost. Deliveries are personalized
to suit the evolving, unique, and multiple needs of individuals, as opposed to only providing the
standard offering in that range that the company makes or has in stock at that moment of time.
This strengthens the bonding that enables the corporation to be proactive and the deliveries to be
more customized—this is what gets customers to
lock in
(see Section 1.2.1.5 “Increasing Returns
and Customer Capitalism”).
Delivering content, products or services, and pricing specific to a unique customer's interests
and needs is based on collection of information about individual customer preferences, interests,
and buying behavior by employing the following techniques:
