Wednesday, December 29, 2004

Bestselling Books on Strategy and Competition

Tuesday, December 07, 2004

Customer S. taken beyond CRM

In the HBR of December 2004, Jeffrey F. Rayport and Bernard J. Jaworski write that the task of managing customer interfaces and managing interface systems is an underestimated strategic imperative. Those who deal with this in their customer S. cracking the code of interface systems will have a competitive advantage.

Advances in service technology have opened up new possibilities for how companies can create value not only through improvements in productivity but through better interactions with their customers. Businesses must change fast to embrace these new realities. Reengineering the front office will eliminate and displace many jobs, but it will also inevitably create new opportunities for human labor. Getting the balance right will require Corporate leaders to develop a subtle understanding of how to manage the intelligent division of labor between people and machines. A company's interface system works best when it combines the best of what people and machines can do.

Every customer interface must deliver high levels of customer-perceived value relative to the competition. This is possible along the four dimensions of a customer interface:
  1. physical presence and appearance
  2. cognition (recognize customers, draw intelligent conclusions and act upon that)
  3. emotion or attitude (right sense of humor, repect, etc, calibrated with the customer)
  4. connectedness (Amazon generates recommendations based on buying patterns of people with similar interests)
In all of this, the Personalisation Paradox should be kept in mind: the notion that a personalized interaction or relationship may be one that is actually coldly and impersonal (not all customers want to be treaded with lots of personal attention).
After years of cost cutting, it may well be that Customer S. will become more interesting now as a source of creating competitive advantage with so many new technology options to choose from.