Thursday, February 26, 2009

Customer Experiments

The February 2009 issue of the Harvard Business Review includes a nice article on designing business experiments ("How To Design Smart Business Experiments). Lots of the examples deal with customer performance issues that look at testing innovations. This article connects well with our work on customer performance issues associated with the Smart Grid (smart meter systems), in terms of research and experiment recommendations we're making.

Thursday, February 12, 2009

Incentives Reduce Smoking

The WSJ (Feb 12, 2009, p D1) reports a New England Journal of Medicine study in which smokers paid to quit smoking were more successful than smokers who were not paid. From a customer performance standpoint, this piece of research links directly to the Incentives component of the coproduction experience model.

Treatment group subjects received $750 in cash, spread out through multiple payments that encouraged long-term behavior change.

Friday, February 06, 2009

Customer Needs and Jobs

An interesting twist on customer performance, which relates to the "understanding" aspect of our coprodution experience model is that of customer needs. Bettencourt (Marketing Management, Jan/Feb 2009) has an interesting take on customer needs, looking at them from a job perspective. As a job, there is a goal or problem the customer wants to solve, with specific outcomes they desire. This view is consistent with the chapter on Vision in our CDIYC book.

However, they way these "jobs" are portrayed are very rational -- the job that needs to be done. But what about the emotional? I exchanged email with the author to investigate this further.

PCH: Your article forms a clear argument for what I’ll call “rational customer needs” – the job and outcome – and is well done. However, I’m unclear about how you are addressing “emotional customer needs”. For example, I might define a rational need for a residential customer as, “Reduce my greenhouse gas emissions by 2% per year.” Clear job and outcome, consistent with your formula, precisely measurable). However, an emotional customer need, such as, “Lead a low carbon lifestyle” or “Possess cool, designer technology” is much different (it has those imprecise, subjective words, but more accurately describes the “feeling” the customer wants).

Lance: Although not reported in the Marketing Management article, we also capture emotional jobs – feel this way, be perceived this way. Although this is true, I believe that at least one of your “emotional” job statements is actually quite functional – though it may have an emotional/value-driven motivation. Thus, I would say that “Lead a low carbon lifestyle” is very functional, and might even be recorded as “Leave a small carbon footprint” which makes this more evident, whereas be perceived as caring about the environment (perhaps an underlying emotional motivation) is the true emotional job. In a similar way, someone might be tempted to say that a job such as “Find a person to marry” is an emotional job because it has such a strong personal component. However, I would disagree. Such a job is highly function even though it resonates on an emotional level because people want to “avoid feeling lonely” or “feel loved.” I agree that it is hard to say which comes first, though we both agree that they are definitely related. My personal belief is that emotional jobs and values are key drivers of the relative importance of different jobs and the priorities of outcomes on getting a job done. In reverse order, satisfaction of functional needs is a means of satisfying the emotional/value ends – consistent with means-end laddering.

Tuesday, February 03, 2009

Customer Relationship Types

We've been doing some work recently on helping a client redefine its relationship with customers. Another model we've come across that aims to "classify" types of customer relationships is one in the Jan/Feb 2009 Marketing Management article by Slater, Mohr, and Sengupta. It creates four types of customer relationships: True Friends, Butterfiles, Barnacles, and Strangers (based upon customer value).