Archive for May, 2012
Human performance … does not often fit the bell curve or what scientists call a normal distribution. Rather, it is more likely to fit what scientists call a power distribution. “Paretian or power law distributions, are typified by unstable means, infinite variance, and a greater proportion of extreme events.“
Studying the performance of 633,263 people (from entertainers to politicians to academics to collegiate as well as professional athletes), researchers Ernest O’Boyle Jr., of Longwood University’s College of Business and Economics, and Herman Aguinis at Indiana University’s Kelley School of Business “found that a small minority of superstar performers contribute a disproportionate amount of the output.“
“More than 80 percent of all Emmy-nominated entertainers, for example, fell below the mean in terms of the number of nominations they received. A small but sizable minority, meanwhile, enjoyed outsize success and accounted for a disproportionately large number of Emmy nominations.“
“If you unconstrain the situation and allow people to perform as best as they can, you will see the emergence of a small minority of superstars who contribute a disproportionate amount of the output.“
This challenges both research and policy making and has implications for equality and merit and similarly fairness and bias.
Last I saw, marks at Universities are fitted to a normal distribution …. hmm shall we discuss that result again?!
You gotta love Hans Rosling, this guy makes data interesting, if not fun!
A more ‘normal’ discussion of data next post.
The notion of treating the customer journey as an ongoing cycle resonates for me in Why Experience is Key to Customer Loyalty. The cycle puts wheels (oops sorry) on the notion of maintaining and building ongoing loyalty. The more times successfully around the journey cycle imbues a momentum of loyalty and that great human trait of habit can take hold. (By the way, I am not sure what Lego has to do with it.)
I have touched on the journey idea before in Mapping The Customer Journey.
It is interesting the concept of ‘fairness’ that is introduced by Valeria which is put in context in her linked post re: Lufthansa as “transparency”. This reminds me of an article Tim Baker of Baker Richards and The Pricing Institute recommended written by yet another Tim, Tim Hartford The Undercover Economist, Enough Whingeing About Price Gouging. Tim discussed the concept of dynamic pricing which is the darling of many an airline’s Revenue Management strategies. After mooting dynamic pricing as a way of better managing the finite supply of Easter Eggs to less garden watering bans to the need for a lottery to allocate Olympics tickets, one of the comments by a reader raised a very interesting extension of dynamic pricing that highlights the question of fairness. We are used to passengers paying very different prices for an airline seat depending when it was bought in response to demand and the finite supply. Just imagine the extension of dynamic pricing to the equally scarce commodity of storage for hand luggage, yes you can take on that hatbox madam, but it will cost you $100 extra. Whoohoo, that would cause some air rage (well ground rage ) and accusations of price gouging, before they got airborne. BUT it would help solve the problem of luggage locker hogs on planes and provide space for the rest.
Another poster, Joanna mentioned an application of dynamic pricing that was new to me, street parking in San Francisco. At peak times around special events parking charges on meters are raised in response to the increased demand and finite supply. The result is that if you want a car park you can find one … but you will pay a premium for the privilege. That reminds me of the car park outside a tax office somewhere in Scandinavia (I think) that wanted to ensure that the bays were only used for dropping off tax returns, not parking. Rather than higher charges and fines, they used the Nudge: you could park as long as you liked as long as your car lights were left on, otherwise you would be towed away. Guess what problem solved.
No I don’t necessarily think so, but to keep mixin’ up the metaphors it is not unlike Field of Dreams with the oft-used mantra “build it and they will come“. Just because you build or buy a CRM at great expense and turn it on does not mean that “… they will come”, let alone continue to come again, more often, with increasing loyalty across the various constituent lifecycles.
As many others suggest CRM is but infomation enabled Relationship Marketing that requires equal investments in strategy, people AND technology.
The reason for my initial question is a recent blog post from Lisa Baxter of The Experience Business Customer Relationship Management: Pulling the wool over our own eyes.
Lisa, I suspect you and I are singing from the same hymnsheet (oops analogy three and counting), but I worry about your vilification of CRM at the start or am I getting the wrong end of the stick (oh oh four).
I think an essential element of a CRM in assisting Audience Development is initiating and then building an ongoing relationship, but an important part of that is trust. Trust is based on mutual respect and organisational actions and tactics must align with that as part of a sustainable long term strategy. The tactics that you mention may be useful components, but as you suggest, on their own with out the coordinated organisational committment that builds trust each and every contact, they are just cheap tricks (and are perceived as such).
CRM like marketing is about managing an exchange of value and that means providing value for both sides, the customer and the vendor. Lisa, the examples you give do seem to be framed to sound “predatory”, but the language does not include the value that such actions may have for the customer (whether prospective, first time, recent or frequent, lapsed or refused and so-on)
Maybe our perspectives are very similar, I agree with you that maybe it is the people and strategy components at fault. A selling orientation is increasingly out of place in this day and age and push marketing is limited by its short term perspective.
I don’t disagree with your ‘platitudes’ that Relationship Marketing may deliver via a CRM: gratitude, helpfulness & empathy, inform, delight, connect and value. In fact, they sound like worthwhile values to aspire to in any initiative.
Yes, retention is the way forward. Retention in all its guises from return attendance to frequency recency and monetary value to upselling, cross-selling and value adds and so-on. But it is a two-way exchange of value that ensures longer term success.