service logic – a new dominant logic for social customer relationship marketing

Service Logic – a new Dominant Logic for the Social Customer Relationship Marketer

by Wim Rampen

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Goods dominant logic:value is created at the moment of

exchange, after that, the Customer is on his own

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value exchange: when money and ownership or

rights change hands

The new dominant logic:

Service Logic

is not about selling services

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Service Logic: value co-creation happens AFTER value exchange

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Value for customers means that, after they have been assisted by a self-

service or full-service process, they are – or feel – better off than before

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Whether a Customer is – or feels – better off is determined by the Customer

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Value is co-created when customer desired outcomes are met

in other words: when the Customer’s job is done to his satisfaction

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Fact: most Customers can use some help in creating value

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If value for the Customer is dominantly created after value exchange, i.e. IN USE, both scope and content of marketing strategies should shift from dominantly focused on creating momentum for value exchange to a continuum of interactions in networks of relationships aimed to support customers’ value creation

The “new” goal for marketing is to support (and improve) customers’

value creation “in use”

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Value “in use” is determined by Customer outcomes of experiences

during the lifetime of consumption of products & services

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Touch-points and interactions (in networks) of relationships are the

building blocks of personalized experiences in a socially networked

eco-system

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The firm (marketing) should strive for engagement in interactions and relationships with its customers’

(net)work or process to create valueimage courtesy: http://www.flickr.com/photos/caribb/185905926/

5 Questions for today’s marketers

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1. Do you understand how and to what extent your customers are meeting their desired outcomes when using

(experiencing) your product or services (over its lifetime)?

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2. What interactions with your product, services, partners,

employees, touch-points, their networks and relationships influence and shape customers’ experiences in

use?

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3. What opportunities do you see to engage in the customer’s value-

creation process?

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4. What opportunities do you see to pro-actively help the customer meet their desired outcomes through (new

ways of) interacting (in & via networks) and building relationships?

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5. Who do you need to collaborate with to purposefully design & execute experiences over a lifetime of use to

exploit these opportunities?

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How does “Social” tie into all this?

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A social crm strategy is about understanding who the customer is through listening to, engaging with and collaboration between customers, employees and partners. It is aimed at developing innovations, interactions in networks of relationships and communities that support customers in doing the jobs they need to do. The means are a personalized design of the service experience that empowers customers, employees and partners to influence how well they can meet their desired outcomes

A. SOCIAL CRM STRATEGY FRAMEWORK STATEMENT (version 2)

Courtesy: Graham Hill

B. 3 out of 15 new trends driving Social Business

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B#1. From Individual Customers to Networks of Customers

B#12. From Stand-alone Companies to an Ecosystem of Networked Partners

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B#15. From Customer Lifetime Value to Customer Network Value

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Implications for Marketing

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Marketing’s 1st job is to understand customers’ value creation process (=

jobs & desired outcomes) and where in the process Customers fail to meet

their desired outcomes.

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Marketing’s 2nd job is to build relationships in communities of individuals with similar desired

outcomes and behavior

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Marketing’s 3rd job is to support Customers’ value creation process

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Marketing’s 4th job is to design experiences that stimulate company’s engagement through interactions in

networks of relationships

Marketing’s 5th job is to engage employees and partners in supporting

Customers in their process of value creation

Marketing’s 6th job is to extract actionable insights from 360-degree feedback to foster innovations and to turn them into value propositions that

attract new Customers

image courtesy: http://www.flickr.com/photos/ableman/534153791/in/set-72157600321756478/

Marketing’s 7th job is to redesign metrics to capture the network value

for the firm and to ensure there is high correlation between these metrics an

Customers’ value created.image courtesy: http://www.flickr.com/photos/toastforbrekkie/3440023097/

What about Marketing Laws?

The P’s remain valid, but less dominant. Focus is no longer

dominantly on product and value chain towards value exchange.

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Segmentation based on demo/sociographics come 2nd, after

segmentation based on Customer jobs & (desired) outcomes.

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THANK YOU

LET’S START THE DEBATE

Leave a comment or contact me on Twitter:

twitter.com/wimrampen

RESOURCES

Gummeson, Evert (2007): Exit Services Marketing – Enter Service Marketing

Michael A. Merz & Yi He & Stephen L. Vargo (2008): The evolving brand logic: a service-dominant logic perspective

David Ballantyne & Richard J Varey (2008): The service-dominant logic and the future of marketing

Sara Sandstro¨m, Bo Edvardsson, Per Kristensson & Peter Magnusson (2008):Value in use through service experience

Christiaan Grönroos & Anika Ravald (2009)Marketing and the Logic of Service; Value Facilitation, Value Creation and Co-Creation and their marketing implications

Graham Hill (2009)A Manifesto for Social Business