Todays Presentation If Your Customers Could Talk Oh

Today’s Presentation If Your Customers Could Talk. . . Oh, Wait a Minute, They CAN! Diane Hessan Chief Executive Officer Communispace Corporation Tom Peters tompeterscompany! © 2003, Communispace Corporation 23 -January 2003

Today’s Topic 10 Myths About Engaging Your Customers © 2003, Communispace Corporation 23 -January 2003

Myth #1: Cost-Cutting As The Top Priority In today’s business climate, costcutting is strategic priority #1. . . © 2003, Communispace Corporation 23 -January 2003

Myth #1: Cost Cutting As The Top Priority The Reality: Senior Executive Surveys report that Customer Focus is the Top Priority © 2003, Communispace Corporation 23 -January 2003

Myth #1: Cost-Cutting As The Top Priority 91% Senior Executives in Accenture study stating a greater focus on customer service and building loyalty is critically important in economic downturn and positioning for recovery © 2003, Communispace Corporation 23 -January 2003

Myth #1: Cost-Cutting As The Top Priority 2001 CEO Challenge Survey*: > #1 concern among CEOs in North America: Customer Loyalty > Customer loyalty has been the number one management challenge for US CEOs two years running *Conference Board/Accenture © 2003, Communispace Corporation 23 -January 2003

Myth #2 – Nothing New There’s Nothing New In Marketing © 2003, Communispace Corporation 23 -January 2003

Myth #2 – Nothing New The Reality: It’s no longer JUST the four Ps PPPP © 2003, Communispace Corporation 23 -January 2003

Myth #2 – Nothing New It is now also about: Segmentation Branding Conversations © 2003, Communispace Corporation 23 -January 2003

Myth #2 – Nothing New "Customers are more empowered and companies have not yet caught up to that empowerment. " - Kelly Mahoney, Chief Marketing Officer, Staples © 2003, Communispace Corporation 23 -January 2003

Myth #3 – Price is #1 In a tough economy, customers buy on price © 2003, Communispace Corporation 23 -January 2003

Myth #3 – Price is #1 The Reality: It’s still the Experience Economy © 2003, Communispace Corporation 23 -January 2003

Myth #3 – Price is #1 1. 2. 3. 4. 5. 6. Quality Price Environmental Advertising Social Coupons © 2003, Communispace Corporation 23 -January 2003

Myth #4 – Talking and Listening Are Balanced Companies spend equal time/budget talking to and listening to customers © 2003, Communispace Corporation 23 -January 2003

Myth #4 –Talking and Listening Are Balanced The Reality: Companies Spend dramatically more time and $ TALKING AT CUSTOMERS! © 2003, Communispace Corporation 23 -January 2003

Myth #4 –Talking and Listening Are Balanced 1 - Veronis Suhler 2 - ESOMAR $305 B $6. 1 B 50 X 1 2 © 2003, Communispace Corporation 23 -January 2003

Myth #4 –Talking and Listening Are Balanced Advertising Messages: 3, 000 per day 188 per hour 3 per minute © 2003, Communispace Corporation 23 -January 2003

Myth #4 –Talking and Listening Are Balanced Business Email: 64 billion permission based emails in 2000 (NFO) 210 billion annual number of emails sent by US marketers by 2004 (Forrester) 40 average pieces of spam received per consumer in 1999 (Jupiter) 1, 600 average pieces of spam received per consumer by 2005 (Jupiter) 34% internal business email considered occupational spam (Gartner) © 2003, Communispace Corporation 23 -January 2003

Myth #4 –Talking and Listening Are Balanced "Times change, and it's time. . . to evolve from a model predicated on advertising and direct mail to one based on building customer goodwill. The continuous, mind-numbing marketing repetition that clogs the arteries of our attention every day is like one of the common definitions of insanity: doing the same thing over and over again and expecting different results. “ Creating Customer Evangelists: How Loyal Customers Become a Volunteer Sales Force © 2003, Communispace Corporation 23 -January 2003

Myth #5 – Good Listeners Ask The Best Questions When it comes to understanding customers, the companies that listen well are those ask the best questions © 2003, Communispace Corporation 23 -January 2003

Myth #5 – Good Listeners Ask The Best Questions The Reality: Asking Good Questions is only part of the trick © 2003, Communispace Corporation 23 -January 2003

Myth #5 – Good Listeners Ask The Best Questions © 2003, Communispace Corporation 23 -January 2003

Myth #5 – Good Listeners Ask The Best Questions "The minivan didn't come from the customer, the Walkman didn't come from the customer, but customers can tell you whether they like something when you show it to them. The fact is, too many people tend to go to one extreme or the other. They either don't listen to the customer at all, or they think that the customer will create the product for them. “ - Paul Cole, Global Director, CRM Practice, Cap Gemini Ernst & Young © 2003, Communispace Corporation 23 -January 2003

Myth #5 – Good Listeners Ask The Best Questions © 2003, Communispace Corporation 23 -January 2003

Myth #5 – Good Listeners Ask The Best Questions © 2003, Communispace Corporation 23 -January 2003

Myth #5 – Good Listeners Ask The Best Questions © 2003, Communispace Corporation 23 -January 2003

Myth #5 – Good Listeners Ask The Best Questions FROM TO Talking at Conversations Event driven Persistent Historical Forward looking Ask Engage © 2003, Communispace Corporation 23 -January 2003

Myth #6 – Great Research is Always Highly Structured Good research is tightly structured, statistically significant, and analytical © 2003, Communispace Corporation 23 -January 2003

Myth #6 – Great Research is Always Highly Structured The Reality: Great Research is ongoing and it acknowledges that customers are human beings. © 2003, Communispace Corporation 23 -January 2003

Myth #6 – Great Research is Always Highly Structured Human Beings: • Emotional • Inconsistent • Disorganized • Spontaneous © 2003, Communispace Corporation 23 -January 2003

Myth #6 – Great Research is Always Highly Structured One Great Solution: Customer Communities © 2003, Communispace Corporation 23 -January 2003

Myth #6 – Great Research is Always Highly Structured Characteristics of an Online Customer Community: > 24/7/365 access to customers > Company-confidential, invitation only, private > Ability to capture both qualitative and quantitative feedback > Synchronous (all online at the same time) and Asynchronous functionality > Ability for non-Ph. Ds to ask questions > Customer to customer: talking “across the table” vs. “down the table” > Process driven/ongoing vs. one shot © 2003, Communispace Corporation 23 -January 2003

Myth #6 – Great Research is Always Highly Structured © 2003, Communispace Corporation 23 -January 2003

Myth #6 – Great Research is Always Highly Structured What people do in Communities: > > > > Brainstorm Product Ideas React to Concepts Discuss Market Trends Form relationships with one another and the company Talk about preferences Test product features, usability and durability Research and react to product placement and pricing Vote on their favorite concepts Rate Creative Ideas Create insights Talk about the competition Give advice (solicited and unsolicited) Redesign products and store layouts Learn about/sample new products Surface emerging needs Ask to help MORE © 2003, Communispace Corporation 23 -January 2003

[Sample Community Screens] © 2003, Communispace Corporation 23 -January 2003

Myth #6 – Research "The lesson is the importance of relentless readjustment. . at Microsoft, they never get it right, but they're constantly, relentlessly adjusting. And somehow, through constant readjustment practice over time, they gradually weave their way to the right place. “ - George Colony, Chairman & CEO, Forrester Research © 2003, Communispace Corporation 23 -January 2003

Myth #7 – Communities are for Women © 2003, Communispace Corporation 23 -January 2003

Myth #7 – Communities are for Women The Reality: Both Men and Women are Participating Actively in Customer Communities in the B 2 C and B 2 B spaces. © 2003, Communispace Corporation 23 -January 2003

Myth #7 – Communities are for Women Media Consumption Men (18– 34) > Internet: 32% > TV: 31% > Radio: 26% > Magazines: 5. 5% © 2003, Communispace Corporation 23 -January 2003

Myth #8 – The Next Generation To succeed, you must understand the “next generation” © 2003, Communispace Corporation 23 -January 2003

Myth #8 – The Next Generation The Reality: For most businesses, you need to understand women, the elderly and Hispanics © 2003, Communispace Corporation 23 -January 2003

Myth #8 – The Next Generation WOMEN © 2003, Communispace Corporation 23 -January 2003

Myth #8 – The Next Generation OVER 50 s. . . Own more than 70% of U. S. financial assets Control 70% of U. S. households Purchase 61% of all new cars and 48% of all luxury cars Account for more than $2 trillion in income More than 79% own homes © 2003, Communispace Corporation 23 -January 2003

Myth #8 – The Next Generation THE HISPANIC MARKET 38. 5% growth 1990 -2000 (vs. 9. 3% for overall population) 18% of population by 2025 © 2003, Communispace Corporation 23 -January 2003

Myth #9 – Acting on Information Companies are great at acting on customer information © 2003, Communispace Corporation 23 -January 2003

Myth #9 – Acting on Information The Reality: Most Customer Data is in STORAGE. © 2003, Communispace Corporation 23 -January 2003

Myth #9 – Acting on Information Research from Customer-Centered Growth 100% INPUT © 2003, Communispace Corporation 23 -January 2003

Myth #9 – Acting on Information Research from Customer-Centered Growth 42% INPUT SHARED © 2003, Communispace Corporation 23 -January 2003

Myth #9 – Acting on Information Research from Customer-Centered Growth 27% INPUT SHARED APPLIED © 2003, Communispace Corporation 23 -January 2003

Myth #9 – Acting on Information Research from Customer-Centered Growth 8% INPUT SHARED APPLIED CUSTOMER BENEFIT © 2003, Communispace Corporation 23 -January 2003

Myth #9 – Acting on Information "Virtually everybody collects a lot of data. . . we could fill rooms with computer reports and statistics that nobody reads. “ Tom Mc. Laughlin, former head of Customer Administration, Toyota © 2003, Communispace Corporation 23 -January 2003

Q&A QUESTIONS? © 2003, Communispace Corporation 23 -January 2003

Myth #10 – 5 X A loyal customer is 5 X as profitable as a new customer © 2003, Communispace Corporation 23 -January 2003

Myth #10 – 5 X The Reality: A loyal customer is more than 5 X as profitable as a new customer © 2003, Communispace Corporation 23 -January 2003

Thanks for your time and participation today! To replay this web seminar (available 1/27): go to www. Marketing. Power. com/webcasts For copies of today’s presentation (available 1/24): Visit www. communispace. com For more information on today’s presentation: Email: Diane. And. Tom@communispace. com Web: www. tompeters. com or www. communispace. com Questions for AMA: Bob Wallach 312 -542 -9020 wallach@ama. org © 2003, Communispace Corporation 23 -January 2003