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- 16 May 2011
- Research & Ideas
What Loyalty? High-End Customers are First to Flee
Companies offering top-drawer customer service might have a nasty surprise awaiting them when a new competitor comes to town. Their best customers might be the first to defect. Research by Harvard Business School's Ryan W. Buell, Dennis Campbell, and Frances X. Frei. Key concepts include: Companies that offer high levels of customer service can't expect too much loyalty if a new competitor offers even better service. High-end businesses must avoid complacency and continue to proactively increase relative service levels when they're faced with even the potential threat of increased service competition. Even though high-end customers can be fickle, a company that sustains a superior service position in its local market can attract and retain customers who are more valuable over time. Firms rated lower in service quality are more or less immune from the high-end challenger. Closed for comment; 0 Comments.
- 02 May 2011
- Research & Ideas
Casino Payoff: Hands-Off Management Works Best
Micromanagers beware: Research of casino hosts by Harvard Business School's Dennis Campbell and Francisco de Asís Martinez-Jerez and Rice's Marc Epstein makes the case that hands-off management can work to improve employee learning and decision making. Closed for comment; 0 Comments.
- 25 Mar 2011
- Working Paper Summaries
How Do Incumbents Fare in the Face of Increased Service Competition?
Companies that compete by offering a high level of service are particularly vulnerable to lose customers—even longtime customers—when competitive entrants offer increased service levels, according to new research in the retail banking industry by Ryan W. Buell, Dennis Campbell, and Frances X. Frei, all of Harvard Business School. The good news for providers of high-touch service is that if they can sustain the service advantage over time, they could be rewarded with higher value customers. Key concepts include: Incumbents offering high quality service attract and retain customers who are disproportionately service sensitive and systematically vulnerable to competitors offering superior service. It is the high quality incumbent's most valuable customers—those with the longest tenure, most products, and highest balances—who are the most vulnerable to superior service alternatives. Conversely, when the incumbent fails to maintain a high service position within the market, its customers are vulnerable to competitors offering inferior service but lower prices. Firms that make the strategic decision not to compete on service may not need to be concerned about the entry or expansion of competitors offering superior service. A long-run implication is that incumbents that can sustain a high level of service relative to local competitors will be able to attract and retain higher value customers over time. Closed for comment; 0 Comments.
- 24 Jan 2011
- HBS Case
Terror at the Taj
Under terrorist attack, employees of the Taj Mahal Palace and Tower bravely stayed at their posts to help guests. A look at the hotel's customer-centered culture and value system. Open for comment; 0 Comments.
- 10 Jan 2011
- Research & Ideas
Is Groupon Good for Retailers?
For retailers offering deals through the wildly popular online start-up Groupon, does the one-day publicity compensate for the deep hit to profit margins? A new working paper, "To Groupon or Not to Groupon," sets out to help small businesses decide. Harvard Business School professor Benjamin G. Edelman discusses the paper's findings. Key concepts include: Discount vouchers provide price discrimination, letting merchants attract consumers who would not ordinarily patronize their business without a major price incentive. These vouchers also benefit merchants through advertising, simply by informing consumers of a merchant's existence via e-mail. For some merchants, the benefits of offering discount vouchers are sharply reduced if individual customers buy multiple vouchers. As a marketing tool, discount vouchers are likely to be most effective for businesses that are relatively unknown and have low marginal costs. Closed for comment; 0 Comments.
- 29 Nov 2010
- HBS Case
United Breaks Guitars
A new case coauthored by HBS marketing professor John Deighton and research associate Leora Kornfeld offers an object lesson in the dangers social media can bring for big, recognizable companies and their brands. From the HBS Alumni Bulletin. Open for comment; 0 Comments.
- 22 Nov 2010
- Research & Ideas
Seven Strategy Questions: A Simple Approach for Better Execution
Successful business strategy lies not in having all the right answers, but rather in asking the right questions, says Harvard Business School professor Robert Simons. In an excerpt from his book Seven Strategy Questions, Simons explains how managers can make smarter choices. Closed for comment; 0 Comments.
- 13 Sep 2010
- Research & Ideas
The Consumer Appeal of Underdog Branding
Research by HBS professor Anat Keinan and colleagues explains how and why a "brand biography" about hard luck and fierce determination can boost the power of products in industries as diverse as food and beverages, technology, airlines, and automobiles. Key concepts include: Underdog brand biographies feature two intertwined narrative threads: a seemingly disadvantaged position in the marketplace, coupled with the passion and determination to succeed. Examples of "brands" that emphasize their underdog roots include Apple, Hewlett-Packard, Oprah Winfrey; candidates in the 2008 U.S. presidential election, Nantucket Nectars, and Clif Bar. Underdog brand biographies resonate with consumers during tough economic times like those we live in. Popular stories about underdogs were prevalent during the Great Depression, too, and have been powerful around the world and throughout history. Use brand biographies carefully. Not all products and services are appropriate for underdog narratives. Closed for comment; 0 Comments.
- 05 Aug 2010
- What Do You Think?
What Is Customer Opinion Good For?
Summing Up: Are customer wishes irrelevant when creating a new product? Jim Heskett's readers say it depends on the product, on market goals, and where you are in the development cycle. (Online forum has closed; next forum opens September 2.) Closed for comment; 0 Comments.
- 26 Jul 2010
- Research & Ideas
Yes, You Can Raise Prices in a Downturn
If you and your customers understand the value represented in your pricing, you can—and should—charge more for delivering more. An interview on "performance pricing" with researchers Frank Cespedes, Benson P. Shapiro, and Elliot Ross. Key concepts include: Pricing builds or destroys value faster than almost any business action. Performance pricing seeks to maximize both the customer benefit and the selling company's profitability. The idea is to create more space between the value provided to customers and your cost. Performance pricers make attractive returns in almost every business—at least over the full business cycle. Closed for comment; 0 Comments.
- 16 Feb 2010
- Research & Ideas
The Outside-In Approach to Customer Service
Ranjay Gulati, an expert on leadership, strategy, and organizational issues in firms, describes how companies can evolve through four levels to become more customer-centric. Plus: Book excerpt from Reorganize for Resilience: Putting Customers at the Center of Your Business. Open for comment; 0 Comments.
- 18 Nov 2009
- HBS Case
Customer Feedback Not on elBulli’s Menu
The world is beating a path to Chef Ferran Adrià's door at elBulli, but why? In professor Michael Norton's course, students learn about marketing from a business owner who says he doesn't care whether or not customers like his product. Closed for comment; 0 Comments.
- 10 Nov 2008
- What Do You Think?
How Much Can You Ask of Your Customers?
Think of IKEA and eBay. Some popular companies make it easy for customers to become "volunteers" in the organization's success, says HBS professor Jim Heskett. Is there a downside? Or will customer-fueled strategies provide competitive advantage in the future? Online forum now closed. Closed for comment; 0 Comments.
- 29 Oct 2008
- Research & Ideas
The Next Marketing Challenge: Selling to ’Simplifiers’
The mass consumption of the 1990s is fast fading in the rearview mirror. Now a growing number of people want to declutter their lives and invest in experiences rather than things. What's a marketer to do, asks professor John Quelch. Key concepts include: As the world economy slumps, one consumer segment will grow faster than ever: The Simplifiers. Simplifiers present a challenge to marketers. These are well-off people who value quality over quantity and who do not buy proportionately more goods as their net worth increases. Dining out, foreign travel, and learning a new sport will all prove more resilient than expected in the face of recession. Closed for comment; 0 Comments.
- 01 Oct 2008
- Research & Ideas
How Much Time Should CEOs Devote to Customers?
Every corporate mission statement pays lip service to respecting customer needs, but actual customer expertise is typically a mile wide and an inch deep, says Harvard Business School professor John Quelch. Here's why every CEO should spend at least 10 percent of his or her time thinking about, talking to, and steering the organization to the customer. Closed for comment; 0 Comments.
- 16 Jun 2008
- Research & Ideas
Seven Tips for Managing Price Increases
Consumers get hit with the price-increase hammer every time they drive past a gas station. John Quelch offers tips on how marketers can cope with inflation and consumer sticker shock. Closed for comment; 0 Comments.
- 21 Apr 2008
- Research & Ideas
The New Math of Customer Relationships
Harvard Business School professor emeritus James L. Heskett has spent much of his career exploring how satisfied employees and customers can drive lifelong profit. Heskett and his colleagues will soon introduce a new concept into the business management literature: customer and employee "owners." Key concepts include: Service profit chain concepts are global, subject only to local cultural practices. Businesses are experimenting with the idea of creating "owners" out of both customers and employees, who create the highest lifetime value to the organization. During times of economic stress, relationships between customer and employee satisfaction, loyalty, and productivity become more critical. Closed for comment; 0 Comments.
- 31 Mar 2008
- HBS Case
JetBlue’s Valentine’s Day Crisis
It was the Valentine's Day from hell for JetBlue employees and more than 130,000 customers. Under bad weather, JetBlue fliers were trapped on the runway at JFK for hours, many ultimately delayed by days. How did the airline make it right with customers and learn from its mistakes? A discussion with Harvard Business School professor Robert S. Huckman. Key concepts include: JetBlue's dependence on a reservations system that relied on a dispersed workforce and the Web broke down when thousands of passengers needed to rebook at once. A crisis forces an organization to evaluate its operating processes rapidly and decide where it needs to create greater formalization or structure. Closed for comment; 0 Comments.
- 03 Mar 2008
- Research & Ideas
Marketing Your Way Through a Recession
In a recession, consumers become value oriented, distributors are concerned about cash, and employees worry about their jobs. But a downturn is no time to stop spending on marketing. The key, says professor John Quelch, is to understand how the needs of your customers and partners change, and adapt your strategies to the new reality. Key concepts include: Brands that increase advertising during a downturn can improve market share and return on investment. Early-buy allowances, extended financing, and generous return policies motivate distributors to stock your full product line. In tough times, price cuts attract more consumer support than promotions. CEOs must spend more time with customers and employees. Closed for comment; 0 Comments.
Empathy: The Brand Equity of Retail
Retailers can offer great product selection and value, but those who lack empathy for their customers are at risk of losing them, says professor Ananth Raman. Closed for comment; 0 Comments.