CUSTOMER ENGAGEMENT

Customer engagement (CE) refers to the engagement of customers with one

another, with a company or a brand. The initiative for engagement can be either
consumer- or company-led and the medium of engagement can be on or offline.
Customer engagement marketing places conversions into a longer term, more
strategic context and is premised on the understanding that a simple focus on
maximising conversions can, in some circumstances, decrease the likelihood of
repeat conversions. CE aims at long-term engagement, encouraging customer
loyalty and advocacy through word-of-mouth. The concept and practice of online
Customer Engagement enables organisations to respond to the fundamental
changes in customer behaviour that the internet has brought about, as well as to
the increasing ineffectiveness of the traditional 'interrupt and repeat', broadcast
model of advertising. Due to the fragmentation and specialisation of media and
audiences, as well as the proliferation of community- and user generated content,
businesses are increasingly losing the power to dictate the communications
agenda. Simultaneously, lower switching costs, the geographical widening of the
market and the vast choice of content, services and products available online have
weakened customer loyalty.

The Four Cs program

There are four guiding principles when choosing and implementing a customer
engagement solution:
▪ Make it convenient.
▪ Make it comfortable.
▪ Make it consistent.
▪ Make it customized.

How engagement drives business success

Improved customer loyalty reduces the cost of doing business. For example, when
a company is able to gain the trust of its customers, it is also more able to create a
preference for its products and services. When customers are presented with a
wide range of similar loan products, they’re likely to choose the loan offered by an
institution that they are familiar with and with which they’ve had a history of
positive and satisfying interactions. The most secure route to achieving long-term
profitability is to accelerate customer onboarding, increase online usage, and
improve retention with more secure, personalized, and engaging interactions. By
increasing loyalty, firms can actually decrease the sales and marketing effort of
selling new features and product lines. With an engagement solution already in
place, financial services companies can:
▪ Improve customer acquisition and retention by delivering more
personalized and interactive service
▪ Grow sales by providing tailored recommendations quickly and easily
 ▪ Improve cross-channel integration by automating processes across touch
points
▪ Improve process efficiency by eliminating errors and manual workarounds
▪ Ease compliance requirements through automated structured processes and
information control and assurance
▪ Increase the productivity of indirect channels by delivering self-service
applications that are intuitive and easy to use
▪ Create the perception of higher “switching costs” for the customer

http://www.4point.com/pdf/customer-engagement-wp.pdf
http://en.wikipedia.org/wiki/Customer_engagement

Rural and ethnic young consumers' perceptions of bundled cellular telephone

features

Academy of Marketing Studies Journal By Jerrold Stark; Joan H. Rumpel;

Robert J. Meier; Reginald L. Bell ·
Executives seeking marketing strategies to retain or gain market share in the
highly competitive cellular telephone business need to understand young
consumers' perceptions of the importance of bundled features on the cellular
telephones (phones) they sell. One approach to seek a market advantage is to
segment the market to identify segments for which the product may be preferred.
For example, a marketer seeking to expand cell phone business among rural and
ethnic young consumers might wish to explore the environments where these
populations congregate naturally: small-town universities, in particular, Historic
Black Colleges and Universities (HBCU) for high concentrations of young ethnic
consumer populations. The following questions might be raised: Are demographic
variables in any way predictive of the bundled features young consumers
perceived important? Does the combination of cellular telephone features make a
difference to young consumers in rural or HBCU markets? Can pre-existing phone
features present on the phones young consumers already own be used to predict
their perceptions of the importance of bundled phone features? This study was
conducted at two Midwestern universities, with limitations, in order to answer
these and related questions.

Cellular telephone features were analyzed using the traditional multivariate

techniques with a significance level of .05. The selected telephone features pre-
existing on phones young consumers owned were examined regarding their ability
to be used as predictors of perceptions of the importance of these types of features.
Student phones and how the students evaluated the feature in terms of importance
of features was measured with a Likert-type scale (0= not important to 3=very
important).

These findings will allow marketers of cellular telephones to review their

marketing strategy as related to the method and basis for market segmentation they
use. There is opportunity to segment based on gender in marketing cellular
telephone features since males tended to evaluate telephone features higher than
females.

Segmentation based on age should be fruitful. Targeting younger buyers by

emphasizing the importance of cellular telephone features, especially those
relating to the E-Commerce bundles should be successful. A major finding of this
study was the students who had specific features on their cellular telephones
tended to rate that features higher than those who did not have the feature. A
marketing implication of this finding is marketers should design programs that
allow buyers to experience each product feature for a short time as a "trial" with
the expectation that the buyer would evaluate the feature higher after the "trial"
and would be more likely to purchase. Since the earpiece was a predictor of the
"safety" factor there appear to be many opportunities to market cellular telephones
with the safety feature and differentiate their offering based on the safety feature.
Marketers could differentiate the feature based on ease of use, appearance, size
etc. to gain a differential advantage.

The domestic market for cellular telephones is generally considered to be

approaching saturation which means competitors in the market can no longer
expect growth by marketing to nonusers. The normal response to marketing in
saturated markets is to add value to the product by "line extension", i.e., adding
new features to the existing product or "product development", replacing the old
product with one which includes these new features. Either approach requires an
appreciation of the value placed on each feature by consumers. Of course the
cellular telephone market is in constant change similar to other electronic
products, thus, marketers should constantly review buyers' attitudes, opinions and
values regarding changing cellular telephone features.

BENCHMARKING

The term benchmark comes from surveying where it was used to denote a notch or
mark representing a given altitude and against which other heights could be
calibrated or ‘benchmarked’, since when it has come to mean any standard against
which something is compared; and some of the leading exponents in business
include Xerox and GE. In business terms there are numerous definitions of
benchmarking, but essentially it involves learning, sharing information and
adopting best practices to bring about step changes in performance. So, at its
simplest, benchmarking means:
Improving by learning from others – i.e. ‐ benchmarking is simply about making
comparisons with other organisations and then learning the lessons that those
comparisons throw up.
Another definition is:‘Benchmarking is the continuous process of measuring
products, services and practices against the toughest competitors or those
companies recognised as industry leaders (best in class)’
In practice, benchmarking usually encompasses:
• regularly comparing aspects of performance (functions or processes)
with others;
• identifying gaps in performance;
• developing performance improvements to close the gaps thus identified;
• implementing the improvements;
• monitoring progress and;
• reviewing the benefits.

The following are the steps involved in the process of benchmarking:

Plan: Select the key areas to be benchmarked for study. Then form a team.
Understand the vital points and then carry out the documentation process.
Consequently, establish performance measures.

Search: First of all list the criteria for selecting a partner. Then conduct a
general or a secondary research. Decide the level to benchmark. Then
identify potential partners and contact.

Observe: During, this stage necessary information is collected using a

questionnaire sent to partner, telephone contact and direct observation or
site visit.

Analyze: The data and information obtained in the previous stage is sorted.
Quality control information and data are also taken. Normalize data if
necessary. Identify gaps in performance level and the causes for gaps.

Adapt: The last stage involves identification of opportunities for

improvement. Then a target is set for improvement .An implementation
plan is developed and the progress monitored. The final report is
documented.

A model for benchmarking study, given below is called benchmarking

wheel. (Anderson, 1995)
 ADAPT PLAN

ANALYSE SEARCH

OBSERVE

Fig.3 Steps involved in benchmarking process

1.3 Types of benchmarking

Internal benchmarking: The internal benchmarking process allows a

company with a number of facilities that operate the same supply chain
processes to compare and contrast the ways in which the process is
performed in those facilities. For example if a company operates five
distribution centers in the US and Canada, the benchmarking process can
examine a number of operations that take place at each of the distribution
centers and compare how they are performed and what improvements can
be made by comparing the results of the benchmarking. If a company
benchmarks the processes around inventory accuracy, shipping accuracy
and storage density, the results of the assessments of the facilities can help
a company to improve on those processes at all of the facilities.

External benchmarking: For companies that have performed internal

benchmarking and want to investigate new ways in which to improve
performance of their internal processes, external benchmarking can produce
significant improvements. Many companies believe that their processes are
as efficient as possible, but quite often, the efficiencies are limited by the
knowledge within the company. The external benchmarking process takes a
company outside of its own industry and exposes them to different methods
and procedures. For example, a manufacturer and distributor of electrical
components have internally benchmarked their warehouses for a number of
 years and have exhausted ideas on improving efficiencies. They approached
a very successful retail company to visit their central warehouse and
benchmark the processes that occur there to compare to their own
warehouse processes. The external benchmarking allowed the manufacturer
of the electrical components to assess the processes seen in the retailer’s
warehouse and develop an improvement plan for their own facilities based
on the results.

Competitive benchmarking: For companies that are not performing as well

as their competitors they may want to identify the reasons why their
processes are not as efficient. Consulting and research firms can perform
competitive benchmarking studies for companies that will identify the
strengths and weaknesses of their processes based on those of their
competitors. The company can then produce improvement plans based on
the results of the competitive benchmarking.

http://www.training-management.info/PDF/benchmarking-training.pdf
http://totalqualitymanagement.wordpress.com/2008/09/12/benchmarking/

SPACE Matrix Strategic Management Method

The SPACE matrix is a management tool used to analyze a company. It is used to

determine what type of a strategy a company should undertake. The Strategic
Position & ACtion Evaluation matrix or short a SPACE matrix is a strategic
management tool that focuses on strategy formulation especially as related to the
competitive position of an organization.

The SPACE matrix can be used as a basis for other analyses, such as the SWOT
analysis, BCG matrix model, industry analysis, or assessing strategic alternatives
(IE matrix).

To explain how the SPACE matrix works, it is best to reverse-engineer it. First,
let's take a look at what the outcome of a SPACE matrix analysis can be, take a
look at the picture below. The SPACE matrix is broken down to four quadrants
where each quadrant suggests a different type or a nature of a strategy:

▪ Aggressive
▪ Conservative
▪ Defensive
▪ Competitive
This particular SPACE matrix tells us that our company should pursue an
aggressive strategy. Our company has a strong competitive position it the market
with rapid growth. It needs to use its internal strengths to develop a market
penetration and market development strategy. This can include product
development, integration with other companies, acquisition of competitors, and so
on.

Now, how do we get to the possible outcomes shown in the SPACE matrix? The
SPACE Matrix analysis functions upon two internal and two external strategic
dimensions in order to determine the organization's strategic posture in the
industry. The SPACE matrix is based on four areas of analysis.

There are many SPACE matrix factors under the internal strategic dimension.
These factors analyze a business internal strategic position. The financial strength
factors often come from company accounting. These SPACE matrix factors can
include for example return on investment, leverage, turnover, liquidity, working
capital, cash flow, and others. Competitive advantage factors include for example
the speed of innovation by the company, market niche position, customer loyalty,
product quality, market share, product life cycle, and others.

Every business is also affected by the environment in which it operates. SPACE

matrix factors related to business external strategic dimension are for example
overall economic condition, GDP growth, inflation, price elasticity, technology,
barriers to entry, competitive pressures, industry growth potential, and others.
These factors can be well analyzed using the Michael Porter's Five Forces model.

Every business is also affected by the environment in which it operates. SPACE

matrix factors related to business external strategic dimension are for example
overall economic condition, GDP growth, inflation, price elasticity, technology,
barriers to entry, competitive pressures, industry growth potential, and others.
These factors can be well analyzed using the Michael Porter's Five Forces model.

Step 1: Choose a set of variables to be used to gauge the competitive advantage

(CA), industry strength (IS), environmental stability (ES), and financial
strength (FS).

Step 2: Rate individual factors using rating system specific to each dimension.
Rate competitive advantage (CA) and environmental stability (ES) using rating
scale from -6 (worst) to -1 (best). Rate industry strength (IS) and financial strength
(FS) using rating scale from +1 (worst) to +6 (best).

Step 3: Find the average scores for competitive advantage (CA), industry strength
(IS), environmental stability (ES), and financial strength (FS).

Step 4: Plot values from step 3 for each dimension on the SPACE matrix on the
appropriate axis.

Step 5: Add the average score for the competitive advantage (CA) and industry
strength (IS) dimensions. This will be your final point on axis X on the SPACE
matrix.

Step 6: Add the average score for the SPACE matrix environmental stability (ES)
and financial strength (FS) dimensions to find your final point on the axis Y.

Step 7: Find intersection of your X and Y points. Draw a line from the center of
the SPACE matrix to your point. This line reveals the type of strategy the
company should pursue.

http://www.maxipedia.com/SPACE+matrix+model+strategic+management+meth
od

Strategic Marketing – Tony Proctor