By: Fernando Velasco

“”The issue is to sell an experience and not a mere product”".

Gian Luigi Buitoni, former president of Ferrari North America and creator of the Dreamketing concept.

A long time ago I found in books, fora and congresses the “marketing of experience” concept and ever since it became a familiar term for me. As a result of that I started to analyze cases and situations where the process happens in a real and tangible way, and I have found examples that illustrate this concept.

In the book Conéctese al futuro, (Connect to the future), Lys Marigold and Faith Popcorn mention that one of the current trends of consumers is individualism: “By feeling unconnected in the depersonalized information era, consumers resort to tailor made and personalized products and services”.

Undoubtedly, consumers are beings whose habits and preferences change. Those of us who have been engaged in marketing for several years are obsessed with the following paradigm: “Deliver everything finished so that the customer only has to use it / eat it / and wear it”, namely, the basic objective sought was the maximum comfort for customers / users and to go from standard to personalized services and now with the direct intervention of consumers themselves.

Time goes by and at present we are seeing a change in several paradigms, and the customer becomes an active agent of change – I would even go further – or until he or she plays the main role in purchases, whether by selecting the materials / ingredients / colors and even the integration or assembly of the final product.

Let’s see some current and successful examples:

IKEA

• Its objective is not to only sell furniture to be assembled.
• It provides a different purchase experience where you choose, measure, combine, transport and assembly a piece of furniture..
• Far from this process becoming a heavy burden, it is enjoyable, a ride, an experience that begins in the parking lot.
• Ikea thought about everything, measuring tape, pencil, notepad, catalogue, the children, food, a mini-supermarket, transportation, its own credit card, even if required, assistance in assembling..
• It has a simple but integrating and impact value proposal: “We do our part, you do the same … And together we will save money!”..
• Therefore, far from being the selection of a finished piece of furniture for the household, it even becomes a gathering of family, relatives and friends, and everyone participates and at the end they can all proudly say: “We build it and we made it!”..

BUILD A BEAR

• Then it went from selling standard and finished stuffed animals (as in many other businesses) to the active participation of a girl (customer), who chooses the colors, forms, eyes, heart and other components to at the end have a bear she built..
• The story does not end there, the girl gives it a name and registers it (birth certificate).
• The relationship continues because she will buy the bear clothes, accessories and novelties that are being constantly launched.
• A complete purchase experience where the isolated elements of a teddy bear are the ingredients to build a unique bear.

THE “ENCHILADAS” HOUSE

• From the sale of standard “enchiladas” (a special Mexican taco) where the client chooses the “tortilla”, the filling, the sauce and the finishing touch to the “enchilada”, and thus having a unique and personalized “enchilada”.
• Variety of tortilla types.
• Variety of sauces / “moles” (a special Mexican sauce).
• Variety of fillings (meat).
• Cheeses, onions and other elements to finish an “enchilada”.
• A Mexican cuisine business where the client participates in the ingredients he or she wants to use to prepare a unique and personalized “enchilada”.

With these three examples (two international and a national one) we prove the customers’ trend to actively participate in the preparation / assembly / setting of their products and services, playing this central role to create a personalized product. To compete with a different value approach the companies I mentioned established value variables that were nonexistent in the market.

Besides breaking the paradigm of competing only through prices, because these three companies cannot be compared (products / services) break the value perception generated:

• How much is an “enchilada” that has the ingredients, sauce, meat and decoration that I like? With what can I compare this?li>
• How much is a teddy bear worth to a girl who chose the pieces and gave it a name and who also has a birth certificate?
• How much is the piece of furniture I chose and assembled over a weekend with the participation of my entire family?

These are all unique experiences.

In conclusion, we all have before us the challenge to involve our customers in a process, and this is an interaction that will create a unique experience and a personalized product, and through it we can compete with added value and not only with price. And in closing, I quote a paragraph from the book La estrategia del océano azul (The blue ocean strategy), which undoubtedly synthesizes everything I mentioned above:

“Innovation in value is the cornerstone of the blue ocean strategy. We have given it this name because instead of whirling round victory over competition, the objective is to not be important because of the qualitative leap in value both for the buyers and also for the company, and by the way opening a new and unknown space in the market”.?

By: Matthew G. Whitehouse

The concept of brand positioning, as well as its impact on the sale of products and services, has been a recurring theme in a large number of articles on marketing. However, the increasingly powerful presence of the Internet social networks and their impact on consumers’ purchase decisions has affected the positioning of both the brands and the companies themselves in an accelerated manner.

These are some of the basic principals of brand positioning:

• Positioning is in the mind of the consumer. It is related to the image and opinion he has of a brand or product. It may be an erroneous value judgment, but in marketing “perception is reality.” There is the idea that positioning is always a good thing, but a poor brand image or opinion means the positioning has been negative. However, the consumer knows (or thinks he knows) what each brand represents.
• Positioning directly influences the purchase decision. If it is negative, the sales opportunities are lower. A better positioning in the “scale of customer value ” can increase the probability of sale, if it is within his purchasing possibilities.
• Positioning is achieved through advertising, the consumers’ experience with the product or service, as well as the recommendations and comments from third parties.
• Positive positioning takes time to build, but it can be destroyed in an instant.
• Positioning is key in differentiating a product or service from another, especially when there is little real difference between what is being offered by the company and its competitors.
• Positioning means that the consumer knows the brand, its attributes and even the price range and where it is sold.
• Positioning is subjective, and may change with time
• Positioning applies to both brands and products as well as to people, companies and institutions. Consumers have a positive opinion of brands such as Bic or Bimbo because they know what they represent and they have a good image.

But what happens with the positioning of a brand or company – even a person – when, in a matter of minutes thanks to the electronic media, opinions about products are published, regardless of whether those who comment actually know anything about what they are talking about? In addition, through these means, it is possible to create discussions and forums with very different points of view.

It is impossible to control what is said on the Internet, so it is easy to damage the brand image (positioning), even with no valid reason. But it is also possible to “spread the word” in a positive manner with respect to a brand. There is such a bombardment of information that the consumer may have a difficult time making a decision or taking a position on any topic.

While working on a project for a well-known brand, we found surprising comments on the Internet. Some people shared their experience with the product, and their comments, both positive and negative, were accepted as valid, affecting the image and sale of the product.

This leads us to ask the following questions: Does the electronic social media make brands more vulnerable? How do you keep abreast of what is said about a brand and the consequences of what is disseminated through the social network? How can you take advantage of this new form of communication and interaction to strengthen brand positioning? How can we correct bad or incorrect information, which affects the purchase decision?

On the other hand, we must not forget that even though Internet social networks are becoming increasingly popular, not everyone has access to them. It has been reported that people over 40 tend to use this form of communication less, while low-income people lack the possibilities for accessing this media or do so infrequently.

Positive positioning becomes a competitive advantage and a factor of differentiation that also helps in the sale of products and services. This also applies to B2B. Considering the importance of positioning in the purchase decision process, it is essential to conduct periodic studies on consumers’ perception of a brand, as it may change from one moment to another.

Qualitative studies can provide us with specific information about consumer preferences and prospects in order to make better marketing decisions and possibly reverse negative positioning. Another simple way to obtain information about brand positioning is to navigate the different social networks and search for what is said about the brand, including directly asking for opinions about the product or service in question. This applies both to large companies as well as small ones and even to individuals because these brief surveys do not involve a large investment.

I have met a wide range of entrepreneurs who assume they know their brand or company positioning and rely on it to make decisions, which they later discover are not quite right or can even be destructive. I suggest that you conduct a small marketing study of your own brands on the Internet. Write down what you think customers are saying about your brand. Then, use search engines, like Google and networks like Twitter, to find out what is being said about the name of your brand or company. You might be in for some big surprises.  ?

Implementing Customer Relationship Management (CRM) as a business strategy is a major decision that implies making changes to corporate culture, the attitude and way a company operates, and that affects everything from its processes and people to its goals and responsibilities.

CRM seeks to improve a company’s performance by optimizing its relations with its market segment(s), which, in turn, requires knowing, understanding and anticipating the needs of existing and prospective customers. However, implementing such a business strategy demands time, know-how, experience, risks and costs. Not only should the customer be at the core of all the company’s strategies, but a personal and personalized relationship should be sought with each. This is the business model, which is defined as “a representation of a firm’s underlying core logic and strategic choices for creating and capturing value within a value network.” (Shafer, et al., 2005).

The key element of CRM is the value proposition the company develops for the customer, which is the result of an external (customer) and internal analysis (that takes into account the company’s limitations and capacities). The value proposition establishes the set of features the goods or services the company is going to offer to one or more types of customer will have and crystallizes the value, benefits, costs and risks it represents for customers. The value proposition should “communicate what the company expects to do better or different than its competitors for its customers” (Kaplan & Norton). It is the overall concept that attracts the customer and that aims to convince the latter to purchase the company’s goods or services.

External and internal factors (see Figure 1) come into play in the identification and creation of a value proposition. Demand, as an external force, is based on an understanding of the customer’s needs, gained via in-depth, regular and systematic analysis (Bligh & Turk) that asks questions such as: Who are my customers? What do they want? What do they need? What do they hold to be most valuable?, while seeking to make the products and/or services offered as personalized as possible by means of messages and offers.

Figure 1

Building a Value Proposition

From an internal perspective, the goal is to offer a value proposition based as much on an understanding of the customer as on the company’s resources and capacities. Some questions that need to be asked in this context are: What is the value proposition? How will it be offered? What resources and capacities are required? How will capacities -processes and roles- be deployed and crystallized? (Bligh & Turk).

Kaplan & Norton identify four main types of value proposition, which will have direct implications on the design of process and during the implementation phase, depending on specific goals for each customer type:

1. 1.Low total cost, which hinges on “attractive prices, excellent and consistent quality for the attributes offered, good selection -variety-, short production times and easy purchases” (an assembly plant, for example, would fit this bill).
2. 1.Product leadership and innovation, being the first to market with new functional or performance features and high prices. The expectation is that customers will attach valor to these specific features and will be willing to pay their high price tag (for example, technology firms).
3. 1.Complete customer solutions, where the customer feels the company meets his specific needs and understands him completely. Supply is designed by taking it into account directly. What is important here is not so much innovation, technology or price, but that the company offers a “complete package” that properly meets the customer’s specific needs (consulting firms or advertising agencies are good examples).
4. 1.System lock-in, where the customer will come up against high costs if he tries to go elsewhere. This type of value proposition is generally employed by companies that have few competitors and in industries with high entry barriers (such as the Apple system).

The successful implementation of CRM, as an integral system, should take into account a series of activities (Figure 1), which will vary according to the four types of value proposition discussed. Below are some of the problems commonly encountered when implementing CRM and suggestions as to how to correct situations that may hinder or limit its success:

Problem: The company is unfamiliar with the customer and his needs.

Design, build and use a simple, direct information system that facilitates an understanding of the customer by systematically and periodically identifying his needs. Two main types of activity can be discerned in such a system:

• Compilation of periodic, systematic information, which is generally obtained by formal methods, such as surveys, interviews and focus groups. There are, however, methods that are traditionally deemed informal, but that allow for the collection of useful data. These include simply observing the customer; engaging in valuable conversation with him with a view to obtaining “quality” qualitative information for decision-making purposes; asking informal, but explicit questions; and trying out new ideas on customers to “test” their level of acceptation.
• Analysis of previously collected information using methods, statistical techniques and models (analytics, for example) that lead to better knowledge of the customer and that enable the company to segment and evaluate its customers. The goal is to avoid getting lost in technicalities and focus the analysis on practical information that will help with decision making.

Problem: The company doesn’t offer products/services of value to the customer.

Design a simple, easily identifiable value proposition for the customer that adequately meets his needs. The value proposition should take into consideration both the customer’s previously identified needs and the company’s limitations in terms of capacities and resources. The customer’s consumer experience (goods or services) will be based on the value proposition and made up of a series of processes that crystallize it.

Problem:The company lacks information on new and past customers.

Design, build and use customer information cards to help identify new customers and follow up on regular ones efficiently and effectively. This will require a system in which information can be inputted and consulted with ease, to ensure it is used and kept updated. Any commercial software package should be sufficient to maintain this card index system, while its level of sophistication will depend on the company’s needs, resources and capacities. The idea is to keep a systematized record of each customer’s activities that requires a minimum of technology and/or training.

Problem: The company treats all customers the same, regardless of their differences.

Clearly identify the different types of customer your company serves. This is a practical measure that will allow you to personalize the value proposition for each category, avoid generalizations and offer special processes or propositions for each type of customer. For example, you could take into account different levels of customer discernment, satisfaction, conducts, professional profiles or economic strata, to name just a few. There are many ways of classifying customers, but the new unit of measurement is “customer lifetime value”.

Problem:The company lacks “fresh”, systematic information on its customers that could be useful in redesigning the value proposition.

Conduct a study that explicitly measures employees’ and managers’ capacity to relate to and obtain information, with a view to assigning them certain types of customer, times, moments in the process and actions conducive to the collection of the information needed to better monitor the customer and detect changes in his needs or behavior patterns. This information will serve as a basis for redesigning the company’s value proposition.

Delegating responsibility for company-customer relations solely to the PR director can be exceedingly inefficient and ineffective, as can a lack of realistic information on which to base the value proposition. Instead, the PR director should conduct a capacity study of employees and managers and delegate accordingly.

Generally speaking, it’s a good idea to actively involve employees who come into direct contact with the customer -so-called front office employees- instead of waiting until the last phase in the process, when, say, they are paying their bill. This is because customers are more likely to be short on time and concentration at this phase, or may simply be eager to leave.

Some examples of this type of situation include:

• In clothes stores, when the customer is choosing or trying on clothes, the sales assistant could ask questions that don’t appear to be part of a formal market research study.
• In a restaurant, the waiter, chef or barman could strike up an informal conversation when the customer orders his meal or drink, while he is eating or enjoying his favorite drink at the bar.
• In a hotel, choose a moment when the customer is at his most relaxed and has more time to spare. This could be at the beach or in the pool area, but not when he is paying his bill and heading for the airport. The hotel manager could intentionally create such a situation, for example, by organizing a dinner with important customers.
• In a bank, while the customer is standing in line or being attended to in person by an executive.

Conclusions.

Problems with implementing CRM can be attributed to one or more causes: lack of understanding of the global concept CRM and its derived strategies represent; lack of clear goals and the means by which these will be achieved at each phase in the process; more direct operating or practical limitations stemming from failure to properly manage the CRM process; a lack of commitment; or inadequate training of the people involved.

Only by identifying and clarifying the causes of deficient CRM implementation can the problem be corrected or solved. Tackling some of the main problems encountered during the implementation phase can serve as a basis for a diagnosis or, at the very least, a better understanding of the situation, thereby enabling the company to come up with a series of corrective actions that result in a successful CRM system.?

References

Bligh, P. y Turk, D. (2004). CRM Unplugged: Releasing CRM´s Strategic Value. Estados Unidos, John Wiley & Sons, Inc.

Brown, S. y Gulycz, M. (2002). Creating a CRM vision: Tips to optimize CRM performance. Estados Unidos, John Wiley & Sons.

Kaplan, R. y Norton, D. (2004). Strategy Maps. Harvard Business School, 82(2).

Shafer, S., Linder, J. y Smith, H. (2005). “The Power of Business Models”, en Readings in Crafting and Executing Strategy. Business Horizons, 48(3).

Woodcock, N. y Williams, D. (2003). Improving marketing effectiveness. CMAT.

By: Jorge Corona
Q Solutions

Today market research has been transformed into a confusing maze that forces us to become more precise in designing qualitative methodologies. It seems that we increasingly need more theoretical tools to be able to better understand the consumer’s mind, although this may not necessarily be true.

While analyzing the consumer’s perception of brands (needs to see himself reflected in them), the complexity of qualitative research methodology is not only evident in communication and psychology, but also in anthropology, sociology and even neurology. The objective is to seduce the heart and mind of the consumer.

The evolution in the understanding of the consumer has been extraordinary in recent years. Various tools have facilitated this objective, but efforts to understand the complexity even of the same methodologies often cause our objectives to be lost in the search for marketing insights.

Simplicity, Everything Else is Incidental

Consumer motivations have a clear and specific origin. The essence of this feeling is expressed in a spontaneous gesture, a phrase or a corporal response at the start of the investigation. These signs are a reflection of consumer opinion in relation to the brand and on which they must propose much of the hypothesis of the research. Simplicity of the processes helps guarantee the certainty of the objectives. “Know the consumer” is the essence of all research; we must return to this concept to generate strategies that break down paradigms and become protagonists in this shift toward true innovation.

Simplicity means returning to the roots of qualitative analysis, understanding the consumer:

• Their key emotional concepts: the first feelings they show (words or gestures)..
• Their key rational concepts: true reactions toward the brand (modern, old, fun, etc.).
• Their limitations: what they do not feel they are getting from the brand.
• Their needs: what they clearly ask for in a brand/product.
• Motivations: the feeling or emotion behind the brand.

Often, in market research, the abundance of clichés gets in the way while one tries to extract truths that simply do not exist for the consumer. In a focus group, this makes it difficult to understand the results of consumer opinions and expectations of the brand.

Sometimes preconceived ideas of the planners of the brand make it difficult for them to take into consideration what consumers have actually expressed. They must go back to a simple study, a maze of concepts that do not necessarily achieve the objectives of the brand. We need to reflect on how we can recover our capacity to wonder at the simplicity that represents the objective of market research: “listen and understand the consumer.” Precise questioning directed at the search for simplicity while investigating a problem reveals what is most important for the consumer without the need of mixing the original variants.

New Methodologies in Search of Simplicity

Semiotics has gained vital importance in market research; with its correct application we can turn our brand into a live entity capable of generating concepts and trends.

Today we must rethink the idea that culture is a maze of connotations created by the consumer because it is almost imperative to understand their context from a symbolic dimension.

Through signs, semiotics sets the framework of reference within which consumers conduct their lifestyle. Therefore, any object or attitude may be charged with a particular meaning, becoming a sign to interpret.

Semiotic methodology allows you to identify these signs, providing meaning through something as simple as a gesture, a bracelet or intonation, a brand or the answer to a question. In this way, semiotics deals with the possibility of simplifying everyday life of consumers, reaching a deep understanding of their context and motivations. Semiotics applied to market research analyzes the simpler and more intimate details of consumers’ reality in search of meanings that are expressed voluntarily or involuntarily.

Practical Example

Among the concept evaluation projects for the design of a communication platform, the ideas involved in the product include the presentation of benefits, features and an emotional “hook” that links the consumer to the product.

For example, in the case of personal-care products, consumers generally purchase a brand for no more than three specific reasons: price, prestige and perception of a positive result. This information is the result of the simplicity of the first investigations.

When concepts are presented, sometimes there is an attempt to discover a new rational for consumption, forgetting the reasons expressed initially by the consumer. For example, if we talk about a shampoo against hair fallout, we can assume that the only thing the consumer wants is to avoid hair fallout – any additional benefits the product may offer will be of little significance.

From experience we know that within a focus group consumers begin to feel pressure when questioned about the same topic repeatedly, and that this begins to distort the dimension of certainty in their comments. At the end of the day, you have a lot of rich and marvelous information to analyze that does not necessarily cover basic consumer needs. Or these needs are developed from the reconstruction of the concepts: an ideal product but in real life is far removed from their buying motivations.

Taking It With You

Understanding the consumer requires more than mere inquiry. It means listening to simple opinions and capturing spontaneous feelings – these discrete expressions that may reveal what motivates consumer choice in different brands and products. We often lose sight of the roots and process of the investigation, while the consumer on his own may change his opinion during a session. To avoid this detachment, we must get closer to the consumer: listen to what seems to be important to him, but also what does not seem to be important. The latter will most likely become so. Today simplicity is synonymous with innovation – something the different brands should consider to avoid confusing consumers with too much information.

This simplicity must be reflected in all aspects when launching or improving a product or service, in order to achieve a better marketing position and greater consumer retention. A simple proposal will generate simple consumer feedback.?

References:

www.trendwatching.com

www.research-live.com