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Managing Customer Experience and Value Summary (MADS)
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6PROGRAMMA:
, 1
WEEK 1
CUSTOMER EXPERIENCE AND CUSTOMER VALUE
DEVELOPMENT OF MARKETING
Outside-in perspec.ve ➜ study the market first and, based on that, create marke.ng strategies.
In the first half of the previous century, demand exceeded supply. Over .me, changes occurred
gradually, and the selling concept remained effec.ve in ensuring profitability. However, it became
essen.al to move beyond just adver.sing and focus on studying the market. This involved
conduc.ng customer analysis, industry analysis, and compe.tor analysis, and then linking these
insights to the company's capabili.es. Marke.ng efforts were directed towards groups of
customers rather than individual customers, emphasizing segmenta.on. This marked the
beginning of the shiG towards customer-centric concepts in marke.ng strategies.
The customer concept becomes more important. It is about the value that the firm derives from its
customers.
In previous marke.ng courses, the dominant principle was the Marke.ng Concept, which focused
on:
- The value a firm derives from its products.
- Decision-making aimed at improving product/ brand performance (Product sales, Market share
and Product profitability)
- Within specific segments, without knowing (or caring) who the individual customers are.
However, in the last decades markets are changing:
- Growing customer diversity
- More fragmented markets
- Shorter lifecycles of products
- Compe..on for customer more intense
- Value consciousness and intolerance for low service levels
- Decreasing customer loyalty
- Social media /social networks
- Informa.on availability
, 2
- Development of technology
- Increase data storage opportuni.es
- Increasing level of customer-to-firm and customer-to-customer interac.ons
The interac.ons between customers and firms have been changing over the years:
Nowadays it’s not just two-way communica.on, but it’s also that we communicate to firms, but we
also communicate among each other (customers). This also implies that the way in which we
communicate has changed drama.cally. Makes it more difficult for companies to control their
marke.ng ac.vi.es. The customer now has become part of the company and its marke.ng
ac.vi.es and contributes to value crea.on in a couple of ways. This shiG has reduced the control
companies have over their brand value, as it is increasingly influenced by customer
communica.on.
Understanding customer interac.ons is crucial to discern whether customers are advocates or
cri.cs. What happens and how we talk about it influences the value of the brand and increase/
decrease the number of customers. Therefore, it is impera.ve for companies to gather individual-
level informa.on about customers.
The primary principle in this course is the Customer Concept, which emphasizes:
- The value that a firm derives from its individual costumers.
- Decision-making strategies aimed at improving customer performance:
• Customer purchases
• Customer share (share of wallet): the part of the relevant budget that the specific company/
brand has in the wallet of the customer. The larger the share, the more important the brand/
company is to the customer.
• Customer profitability
- The value a firm provides to its costumers.
, 3
Customer centricity focuses not on how to sell products but on dual value crea@on. This approach
aims to generate value for both the customer and the firm, focusing first on crea.ng value for the
costumer and, by that, crea.ng value for the firm.
The difference between product-centric approach and customer-centric approach (Shah et al.,
2006):
Product-centric approach ➜ thriving on homogeneity in segments
Customer-centric approach ➜ thriving on heterogeneity among costumers
CORE CONCEPT: CUSTOMER VALUE
There are two types of value:
- V2C ➜ the value that the firm delivers to its costumers
- V2F ➜ the value that the costumers delivers to the firm
V2C
The Value that the firm delivers to the Customer.
• What value does the customer a[ach to the (e.g.):
- Rela.onship with the firm
- The brand
Measured in metrics such as:
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