Customer Centrality Essay

5844 words - 24 pages

Running Head: CUSTOMER CENTRALITY

Customer Centrality
[Name of the Writer]
[Name of the Institution]

Table of Content

Part A 1
Introduction 1
Discussion 1
Interaction Response Capacity 3
Customer Empowerment 3
Customer Value Management 4
Customer Centricity 5
Evolution of Customer Centricity 7
Path to Customer Centricity 9
Customer Initiated Contacts and Competitive Intensity 14
Conclusion 15
Part B 16
References 20

Customer Centrality

Part A

Introduction

The roots of customer centricity can be traced all the way back to the late 1960s, when a ...view middle of the document...

Maybe, like National Car
Rental, they are creating a unique customer loyalty program that will allow them to serve their customers more efficiently than anyone else in the marketplace. Maybe, like Harrah's casinos, they have come to the understanding that although they might not be able to compete on sheer size, they can compete with kindness that is, "kindness" delivered via a sophisticated patron-tracking program that ensures each customer visit to a Harrah's floor is a profitable visit.
Or maybe, having just heard the famous Nordstrom tire story for the umpteenth time, your competitor's top executive is starting to reconsider her strategy by asking whether that Nordstrom clerk's kindly action-the decision to take those tires back even though Nordstrom didn't sell the tires in the first place-actually made any sense. In the realm of customer centricity, at least, it's a question that can only be answered if one is given the right information-the kind of information that customer-centric companies use every single day to identify, serve, and leverage their best customers and maximize profits. Was the tire guy a regular Nordstrom shopper? If so, how often did he stop by-and how much did he spend? Was he really committed to Nordstrom? What was his business really worth? And if it turned out that business was worth a lot (or not much at all), well, what then? Accepting that bizarre return request may have been a good public relations decision, judged by the wisdom of hindsight. But it probably wasn't a good business decision.
A retailer like Sears would treat the individuals that buy products from its various stores as the unit of analysis. An IT vendor like IBM would have its divisions interacting with its retailers or resellers on one hand and with direct institutional customers on the other. Here, retailers and direct institutional customers are both independent units of analyses. Thus, while the definition of the customer could vary, the customer concept would be widely applicable across various types of markets.

Interaction Response Capacity

Interactivity has been defined as the degrees to which a communication technology can create a mediated environment in which participants can (one-to-one, one-to-many, and many-to-many) both synchronously and asynchronously participate in reciprocal message exchanges. In the marketing context, interactivity is not limited to messages, but encompasses monetary transactions and product, service, and relationship experiences. Interaction response capacity represents the degree to which the firm is capable of offering successive products, services and relationship experiences to each customer by dynamically incorporating feedback from previous behavioural responses of that specific customer individually, and of other customers collectively. It requires the firm to invest in customer interface technologies, supplier networks and facilities for database analysis. It thus...

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