Customer Reviews

Customer Connections: New Strategies for Growth

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This is NOT a book for everyone - it is complex and takes time to fully absorb, but it is worth reading as there are numerous practical observations of how to look at customer interactions. I used it for my PhD and this is the level at which this book is best considered - if you know your stuff then this is worth buying - amateurs keep your money (for more Phantom comics)

I found that this book is useful as it introduced a useful tool for customer relationship. The author introduced a great customer relationship model, ¡§The Value Compass¡¨.

I think that it is important for the company to understand that ¡§reduce cost¡¨ is not the most important element to achieve success. Instead, company should put effort on creating value in order to achieve goal. And we have already known that the cost of retaining customer is much lower than the cost of acquiring new customers. So, why look for new customers, when you can improve the ones you¡¦ve already got?

Customer satisfaction is one of the elements of retaining customers. And customer satisfaction can be done by ¡§creating value¡¨. This book introduced you with ¡§The Value Compass¡¨ which provided you a great tool to create value and thus build up long-term customer relationship.

With the help of ¡§The Value Compass¡¨, company can position itself among different dimensions of relationship value. After know ¡§where you are¡¨, company should decide ¡§where are you going to be¡¨, according to ¡§The Value Compass¡¨. Then the company can achieve the target position by prepare customer connection strategy, which has discussed by this book.

So, if you are in the management level of your company, if you want your company to create value to the customers in order to build long-term customers relationship, you may read this book to achieve your goal more efficiently and effectively.

I like books that combine qualitative and quantitative techniques to describe what must be done. Customer Connections takes on the challenge of providing that perspective.

The book's basic point is that logical thinking can be applied to developing better economic results through analyzing and pursuing the potential of different ways to have relationships with various customers. For example, some customers buy more, more often, and of higher margin products or services. Find ways to attract more of their business and your enterprise is going to be more profitable and valuable. An example of Scrub-a-Dub the car wash company explores this idea.

You are encouraged to think through this opportunity by analyzing your mix of customers, the ways that you can add value for these customers, the risk involved in acquiring them, and ways of sharing risks and rewards with customers and suppliers. Then, you create a solution that combines all four elements to produce more economic value (discounted cash flow) for your company.

To do this, you are going to need to know more about your customers than many companies know today, keep them better informed about what you are doing, and use technology to strengthen your connections in economically beneficial ways. So, there's a basic knowledge management issue to be resolved.

Like many consultants, the authors propose a complicated model that requires lots of data-gathering, analysis, building of new data bases, and improved IT systems. Ultimately, the benefits can only be estimated in advance. A set of interviews with 200 Fortune 1000 executives suggests that knowing more about customers is associated with higher growth.

In the last four years I have done a lot of research into ways that companies have changed their business models to be more successful. In that research, I was struck that the kinds of thinking described in this book were hardly ever used. So although there are lots of examples in the book of applying these concepts, I really wonder if the process to be followed is the one described here. Ultimately, the book's process reminded me of the kind of mechanical "left-brained" planning that failed for so many companies in doing their strategic thinking. The methods I have seen used were based much more on inexpensive experiments, gut feel, and rapidly rolling out the successes. The approach here is more of the opposite. Find something that should be great. Make a big bet on it. Keep your fingers crossed that your one expensive experiment will work.

The value thinking in the book is also very primitive, basically only describing the expected discounted cash flow. Every enterprise has many different economic values at a given time (depending on its value form), and expected discounted cash flow is only one. You could have removed all of the "value" references and equations in this book and not lost very much.

Ultimately, I was concerned about the book's basic concept -- that you should be customer-based in your thinking rather than customer-driven or customer-led. Being customer-based in doing value calculations can be very misleading. Few market innovations have followed from understanding customer profitability better. You still have to understand customers better . . . as they see and feel themselves.

Create more beneficial results for all those you meet!

Wyland and Cole seems to caught up in their own ivory tower and show a lack of real experience on how to implement customer focus. Very dissapointing.

Given both author's background, it is not surprising that they have taken a quantitative approach to the material. That said, the book clearly lays out what CEO's are wrestling with in trying to center strategy around customers. After years of focus on internal processes, this work guides early stage thinking about a different infrastructure. As a consultant working in this area, I am giving this book to my clients for the holidays. This is not light reading. The authors have passed the popular motivational style that is prevalant in current works about customers in favor of serious content. While I could argue that the emphasis on quantitative methods does reduce the importance of single customer interactions, the work is balanced enough not to exclude that approach. Neither have Wayland and Cole asked us to throw out the baby with the bathwater. Their arguemet for balancing demand side strategy with supply side should be required reading for anyone in the planning cycle.

This book attempts to persuade the reader that businesses are best managed by customer portfolio management, a method consisting of three general parts: (a) mathematical modelling and computation of "customer value" (b) segmenting customers in "value groups" (c) optimize revenue by focusing on the "value groups" offering highest revenues

The authors' calculation of value does not include the indirect results of the customer's patronage. Will their buying habits influence others, such as their children, to remain loyal to the brand? Will their recommendations influence others to buy? This whole chain of reasoning appears absent from the text -- a puzzling omission since the importance of referrals as a positive influence in affecting sales has been known for eons.

Similarly, the authors are strangely absent with regards to providng value and quality across all products and services, not just those offering the most attractive "customer value". It should be remembered that today's carpenter, may be tomorrow's subcontractor and then may be a future home builder. By selecting and focusing only on select groups, the company's performance may be viewed by such a customer as inconsistent or spotty. Indeed, such a customer may very well ask themselves, "Will I be in the next group slighted because I'm viewed as 'low value'?" (NOTE: This is not to say that differing services can be provided to different types, levels or classes of customers. On the contrary, to fail to offer this would be foolish. Companies can, however, offer customers the *choice*, and not pre-ordain their fates, esp. when such a fate is dictated by such an abstraction.)

Relying on a highy volatile measure such as "customer value" is inherently very, very risky and one wonders if the recurrent churning of those calculations would, in fact, yield meaningful results in a fast-paced business environment.

No doubt these guys are experts in their field, but their process of reducing customer relationships to mathematical equations does not work for me. Reading this book was laborious.

Even after having slogged through the whole book, I'm not sure that their point was anything more than "If a customer pays you more than it costs you to acquire and keep him, it's a good deal".

In the arena of CRM there are many more reader-friendly experiences out there.

In a very detailed and technical style, the authors present a model for understanding the value of a firm's customer portfolio. In a similar style, they offer a strategic marketing model for maximizing customer value entitled "the Value Compass."

Although the Value Compass concept includes useful ideas on risk and reward sharing customer relationships and on adding value within the context of a supply chain, I did not find the model particularly intuitive and struggled to put the pieces together. Those looking for a simple and more compelling introduction to similar concepts would be better to read Driving Customer Equity by Rust et. al..

The book does have a relatively high concentration of case examples when compared to other texts in this area of study.

The book was part of the compulsary literature used for a relationship marketing course at my university, so I had to read it, but if I had the choice, I probably wouldn't have read it. The book provides some useful insights, but I believe the first two chapters cover the whole book. The rest consists of numerous boring case examples, which don't clarify that much. And I didn't like the authors' use of mathematics, or is that just me? I think the field of relationship marketing could be presented in a more interesting way than that. In their words, for me as a customer, the costs were higher than the value I got back for it in the end (but I don't know my mark for the exam yet :). I don't think they'll keep me as their customer.

Authors present many useful insights but presented these in a very academic and boring manner. Their various models may prove very helpful in analysis. Case presentations however leave much to be desired. They do not help make the point of the computations clear.