The single most important thing to remember about any enterprise is that
there are no results inside its walls. The result of a business is a satisfied customer.

A lot of marketers call the Internet an “attention economy.” They are looking for consumers who will pay attention to their product, and they try to calculate consumers’ propensity to purchase. They think that attention means intention. But it doesn’t. The reality is, people don’t go online to give attention, but to get it. They don’t want to be part of the audience. They want to perform and to be heard, to be present. It’s an almost biological urge.

People spend a lot of time online not looking for something, or at least not for something that can be bought or sold. Marketers need to understand that the Web is not about them; it’s about us. Marketers and media sites keep thinking, “Well,if we can only tweak our banner ads right, we can get the same success rate as Google.” But they can’t, because a banner ad is usually shown to someone who is not looking for the item advertised.

I believe CRM is built on a fallacy because customers don’t want a relationship with their bank or their grocer or their supermarket.

Tesco does not have a CRM programme. Tesco has a loyalty scheme and what this is saying is, ‘we get your data for giving you money back, and with the data we will give you a more relevant experience in our shops because you choose to shop there’.

Much of the hype surrounding CRM overlooked the customer. There was nothing in it for the customer. CRM became a means of doing things more cheaply - such as introducing a paperless relationship and offering the customer a £5 discount for signing up online. And many customers were underwhelmed by such propositions.

In many systems, the whole is not the sum of its parts. The system takes on its nature by the interactions of its parts.

A customer is the most important visitor on our premises, he is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us an opportunity to do so.

Loyalty is not necessarily an emotional connection to the brand. True brand evangelists—or even potential evangelists—are at best rare and possibly non-existent. Companies need to recognize, develop and manage more than one kind of customer loyalty: conditional, emotional and passive—using more than one kind of strategy.

An organization must, at the outset of considering using a CRM system, decide whether the main goal of the CRM system is to guide future behavior of the employees of the organization to shape the future (increase sales, number of satisfied customers, number of new leads generated, reduced turnover of key sales personnel, etc.) or to predict future sales so that the company can position itself appropriately to meet the expected demand. For a CRM system to provide both types of services (predicting the future and helping shape the future) a huge undertaking must take place and one that understands that these two uses of CRM are separate. Using CRM in both of these ways at once, (predicting and shaping the future of sales for the organization) may even require separate, but integrated planning teams to pull off this type of "daily double."

One way to generate a precise customer value proposition is to think about the four most common barriers keeping people from getting particular jobs done: insufficient wealth, access, skill, or time.

The central challenge of a segmentation strategy isn't how to develop one—a variety of approaches work—but how to make it useful and integrate it into a company's ongoing planning and performance-management efforts. The segmentation must explicitly link corporate financial objectives to the behavior of people in a segment and to customer experience goals. This linkage allows general managers and marketers to understand how the experiences of valued customers influence behavior and how behavioral shifts drive core product or service objectives. It also provides predictive (as opposed to static) measures of customer profitability.

Abundance has satisfied, and even over-satisfied, the material needs of millions—boosting the significance of beauty and emotion and accelerating individuals’ search for meaning.

Most large companies have a foundation of fact about their customers in their data warehouses and business intelligence systems in the form of structured data: purchase history, coded responses to surveys, service ticket types, and so on. This foundation, however, lacks critical customer information, which floats above the fact plane. Call-center notes, open note sections of surveys, emails, weblogs, chat rooms, online forums, product reviews—and more—must be incorporated into the intelligence-gathering and analysis functions of a company.

Many companies are learning that the only way to be customer-centric and to have a customer-driven business strategy is to leverage this feedback across the organization methodically, comprehensively, efficiently, and effectively.

[In sales] we talk about acquisition, penetration and retention. I don’t know about you, but I don’t want to be acquired. I certainly don’t want to be penetrated, and I don’t want to be retained. When you think about the language we use—targeting an audience, launching a campaign, capturing a market—what does that have to do with relationships?

The studies we’ve conducted are 100% conclusive: customers who’ve had an issue that was resolved effectively became more loyal than those who experienced trouble-free service! Why? Because until a problem occurs, the customer doesn’t get to see us strut our service.

A lot of our energy and drive as a company, as a culture, comes from trying to build these customer-focused strategies. And actually I do think they work better in fast-changing environments, for two reasons. First, customer needs change more slowly—assuming you pick the right ones—than a lot of other things. Second, close following doesn't work as well in a fast-changing environment. The strategic value of close following is in not having to go down all the blind alleys. You let smaller competitors check those out, and when they find something good, you just quadruple down. If you're following close enough, and the arena is slow-moving enough, the fact that you're not first down that path doesn't hurt you much.

In the past 20 years, American companies have perhaps learned too well a lesson they had long been inclined to ignore: Businesses should be customer oriented rather than product oriented.

...At last, however, the dangers of too much reliance on this philosophy are becoming apparent.

...The argument that no new product ought to be introduced without managers undertaking a market analysis is common sense. But the argument that consumer analyses and formal market surveys should dominate other considerations when allocating resources to product development is untenable. ...Customers may know what their needs are, but they often define those needs in terms of existing products, processes, markets, and prices.

Deferring to a market-driven strategy without paying attention to its limitations is, quite possibly, opting for customer satisfaction and lower risk in the short run at the expense of superior products in the future. Satisfied customers are critically important, of course, but not if the strategy for creating them is responsible as well for unnecessary product proliferation, inflated costs, unfocused diversification, and a lagging commitment to new technology and new capital equipment.

Conventional marketing wisdom holds that predicting success in cultural markets is mostly a matter of anticipating the preferences of the millions of individual people who participate in them. From this common-sense observation, it follows that if the experts could only figure out what it was about, say, the music, songwriting and packaging of Norah Jones that appealed to so many fans, they ought to be able to replicate it at will. And indeed that's pretty much what they try to do. That they fail so frequently implies either that they aren't studying their own successes carefully enough or that they are not paying sufficiently close attention to the changing preferences of their audience.

The common-sense view, however, makes a big assumption: that when people make decisions about what they like, they do so independently of one another. But people almost never make decisions independently - in part because the world abounds with so many choices that we have little hope of ever finding what we want on our own; in part because we are never really sure what we want anyway; and in part because what we often want is not so much to experience the "best" of everything as it is to experience the same things as other people and thereby also experience the benefits of sharing.

There's nothing wrong with these tendencies. Ultimately, we're all social beings, and without one another to rely on, life would be not only intolerable but meaningless. Yet our mutual dependence has unexpected consequences, one of which is that if people do not make decisions independently - if even in part they like things because other people like them - then predicting hits is not only difficult but actually impossible, no matter how much you know about individual tastes.

The reason is that when people tend to like what other people like, differences in popularity are subject to what is called "cumulative advantage," or the "rich get richer" effect. This means that if one object happens to be slightly more popular than another at just the right point, it will tend to become more popular still. As a result, even tiny, random fluctuations can blow up, generating potentially enormous long-run differences among even indistinguishable competitors - a phenomenon that is similar in some ways to the famous "butterfly effect" from chaos theory.

Popular metrics such as customer satisfaction, acquisition, and retention have turned out to be very poor indicators of customers' true perceptions or the success of marketing activities. Often, they're downright misleading. High overall customer satisfaction scores, for example, often mask narrow but important pain points-areas of major dissatisfaction-such as unhappiness with poor customer service or long wait times. They can also mask backsliding against competitors; while gently climbing satisfaction scores may be reassuring to management and the board, if competitors' scores are increasing faster it should be a cause for alarm. Acquisition rates may be robust, but if old customers are abandoning ship as fast as new ones are coming on board, strong acquisition can give a deceptive picture of marketing performance. And what, exactly, should the board make of stable customer retention? If customers are staying on because they're held hostage by a contract, good retention may be obscuring the truth that customers will flee the instant they can.

Differentiating and measuring degrees of loyalty is an evolving craft. Companies first tried to measure and manage their customers' satisfaction in the early 1970s, on the theory that increasing it would help them prosper. In the 1980s, they began to measure their customers' rates of defection and to investigate its root causes. By measuring the value of the customers themselves, some companies also identified high-value ones and became better at preventing them from defecting. These ideas are still important, but they are not enough. Managing migration-from the satisfied customers who spend more to the downward migrators who spend less-is a crucial next step.

...Customers-people and companies-have "jobs" that arise regularly and need to get done. When customers become aware of a job that they need to get done in their lives, they look around for a product or service that they can "hire" to get the job done. This is how customers experience life. Their thought processes originate with an awareness of needing to get something done, and then they set out to hire something or someone to do the job as effectively, conveniently and inexpensively as possible. The functional, emotional and social dimensions of the jobs that customers need to get done constitute the circumstances in which they buy. In other words, the jobs that customers are trying to get done or the outcomes that they are trying to achieve constitute a circumstance-based categorization of markets.

Like it or not, although market researchers often develop a solid understanding of the jobs that customers are trying to do, the primary language through which the nature of the opportunity must be described in the resource allocation process is the language of market size. Asking marketers to understand this concept is not the solution to the problem-because whether it is called "marketing myopia" or "jobs to be done," this concept has been taught before. It is a process problem. Because senior managers typically hire market research to quantify the size of opportunities rather than to understand the customer, the resource allocation process systematically and predictably perverts companies' concept of the structure of their market so that it ultimately conforms to the lines along which data is available.

If you really want to understand what's going on inside the minds of your customers, do the following: set up an easy response form on-line with two open-ended questions people can respond to in less than 90 seconds. Ask your customers what your company does that adds value to them, and what gets in the way of adding value to them. Ask if they have any suggestions for improving the value they get in the future. Boom. That's it. Now leave them alone.

Most metrics of customer satisfaction are individual-centric and ignore the fact that many experiences with products and services are actually jointly consumed. Our research indicates that people might evaluate products or services differently depending on whether they consumed it alone or with someone else.

...When designing experiences...it's important to create conditions where people can actually observe and subtly interact with each other. What you want to do is facilitate people being able to see each other; to pause and share glances.

Customer segmentation divides customers into groups based only on those needs and factors actually driving purchase decisions. A common mistake is to segment customers based on peripheral characteristics that, while interesting, provide no help in achieving the fundamental goal of segmentation: selling more product more profitably.

Every company has metrics that track performance. The key question is whether these metrics really provide visibility to performance as viewed by the customer.

Companies have tended to concentrate on differences between different groups of customers. They have divided them into ever smaller and neater segments so they can customize their offerings to meet the needs of those segments.

We found that value innovators take a different approach. Instead of looking at differences between customers, they focus on the basic commonalities across customers. When companies create unprecedented value on those commonalities, the core of the market is pulled toward them as customers are willing to forgo their individual preferences. Value innovation desegments and collapses established market boundaries by challenging accepted and assumed market order. Unlike the strategy framework built on environmental determinism driven by competition, value innovation takes a constructionist view of the market, where its focus is on shaping the market by cognitive reorderings in managers' strategic thinking.