change agent summer 2008 - hooked for life

THE MARKET RESEARCH MAGAZINE THAT IS DRIVING CHANGE IN GLOBAL BUSINESS – ISSUE 12 / 2008

Hooked for life?Customer loyalty: “til death do us part” or one-night stand?

The Customer

Experience Issue

THE MARKET RESEARCH MAGAZINE THAT IS DRIVING CHANGE IN GLOBAL BUSINESS – ISSUE 12 / 2008

One-night stand customers

How to turn them into loyal consumers. Or not.

Go on, admit it. Even if you’ve been married to the same spouse for 50 years, probably at one time in your life you had a one-night stand. Maybe it was in high school, or when you met the “love of your life” at the college student union after one too many beers and you spent the next morning trying to

chew your arm off as your “dreamboat” slept on it.Or maybe you’re really not that type of person. You were 18, met your

sweetheart and you knew in your heart that this was person you would spend the rest of your life with until death do you part.

So, one-night stand or lifelong partner? That was the question we posed in the online survey that led to your receiving a special cover that reflects your preferences. This issue of Change Agent looks at how to turn a “one-night stand” customer into one with lifelong loyalty to a brand or company – or not. This issue also looks at those one-night stand customers and asks: Should we turn all of them into lifelong customers or just be prepared to answer when they do call?

In this issue, Jan Hofmeyr writes that “it is human nature to be committed to one brand, but to wander from time to time,” while Larry Crosby writes about the customer using the dating/courtship/marriage analogy. Upon closer inspection, these are complementary views but with totally different slants from two pioneering thought leaders in the branding and customer experience domains.

Loyal customer or one-night stand? Read on and learn why companies today are grappling with the question and understand how they are raising their game to keep their lifelong customers happy and how they deal with the one-night stand customer who may never come back. ▲

BRENT STEWART

P.S. In case you are wondering, I hover somewhere in between. Most of the time I’m in ‘Til death do us part’ relationships with brands, but, yes, there’s the occasional one-night stand!

Loyalty and experience

GUEST EDITOR’S l NOTE

EDITORIAL TEAM ALICIA KAN Founding Editor

LINDA COLLARD Managing Editor MATTHEW DRISKILL Executive Editor

EMILIO RIVERA III Design Director

CONTRIBUTORS LEWIS BORG CARDONA JESSICA MORRIS LAWRENCE A. CROSBY REMO NOTARIANNI TIM J. DENISON CHRIS PARCENKA JAN HOFMEYR JOHN P. VIDMAR CHRIS KUCWAY FLOYD WHALEY

PUBLISHING AND BUSINESS TEAMS

ALICIA KAN Publisher [email protected]

LINDA COLLARD Managing Editor [email protected] BJORN FJELDDAHL Managing Director [email protected]

MATTHEW DRISKILL Executive Editor [email protected]

ELLIS TSANG Account Manager [email protected]

MIA SIU Circulation Manager [email protected]

Have a great idea for CHANGE I AGENT? Contact us and tell us what you’re thinking!

EDITORIAL OFFICE 21/F, East Exchange Tower 38 Leighton Road Causeway Bay, Hong Kong Tel (+852) 2892 1322 Fax (+852) 2893 0320 www.eightcustommedia.com SUBSCRIBE www.synovate.com/changeagent FEEDBACK [email protected]

Cover photos: Getty images, Emilio Rivera

CHANGE l AGENTTHE MARKET RESEARCH MAGAZINE

THAT IS DRIVING CHANGE IN GLOBAL BUSINESS

Change Agent is published by Eight Custom Media Ltd on behalf of Synovate Ltd. All rights reserved. This publication may not be sold. No part of this publication may be otherwise reproduced, adapted, performed in public or transmitted in any form by any process without the prior authorisation of Synovate Ltd. © Synovate Ltd, 2008.

The articles in Change Agent do not necessarily reflect the views of Synovate.

ISSUE 12 / 2008 CHANGE l AGENT 1

Brent Stewart is the CEO Global Business Planning for Synovate and CEO Australia and New Zealand. He is also the global head of Synovate’s global Customer Experience Practice and the Shopper and Retail Unit.

2 CHANGE l AGENT ISSUE 12 / 2008

Profiting from the one-night stand 8Why you shouldn’t worry if the customer doesn’t callCompanies spend a lot of time trying to ensure their customers stay loyal, but it is human nature to stray once in a while. We look at how companies can benefit from the customer who strays into the business.

Me, myself and I “Tailored” used to mean a bespoke suit. Today it also means getting the customer into the product.

16

CONTENTS

“Til death do us part” marketing Applying the courtship and marriage analogy to customer relations.

12

Powering up loyalty Can a customer with little or no choice in providers have a true “customer experience”?

3218That’s show business!

Interruption advertising is so old school. These days, top advertisers create their own entertainment to showcase their “cool” factor.

In modern retail, adapt or die Time is the new currency and those brands that fail to adapt will go the way of the Dodo.

22

Owning the media channel The best way to reach customers is to own the channel, not rent someone else’s.

21

How Nintendo won the videogame war Nintendo’s Wii is beating the competition by giving players, young and old alike, a new gaming experience.

36Nintendo’s blue ocean Nintendo changed the rules of the game and the industry. 39What people say, What people do Why small things matter when it comes to market research.

40

Knight rider Dude, like, know your customer, man. 28

Giving it all away Giving it away in Japan results in free – almost – market insights.

26


About our contributors

Jan Hofmeyr, Ph.D.Director of Insights for Synovate’s Brand & Communications Practice Jan Hofmeyr explains he is curious about everything in the world and can’t stop. He’s also a man with a secret talent for eating ice cream and says his best customer experience involves a hotel in Taipei. On his first visit there, he managed to leave in a rush and left behind a drawer-full of his clothes. When he returned three months later, he stayed in the same hotel, but had forgotten that he had forgotten his things. When he walked into his room, his forgotten belongings were laid out on the bed for him. The only problem now is that he has forgotten the name of the hotel. Hofmeyr lives in South Africa and doesn’t like rules – any rules.

Lawrence A. Crosby, Ph.D.Chief Loyalty Architect, Synovate Larry Crosby says he’s curious about why the Anasazi Indians disappeared from the southwestern United States around 1300 A.D., and explains that his secret talent is removing his thumb (hmmm...still checking on that one folks). His best customer experience also involves clothing, but this time it was the return of a long-lost leather jacket that was sent back by American Airlines after hanging in a pilot’s closet for a year in St. Louis in the United States. A fan of night diving in Hawaii, Crosby lives in Telluride, Colorado because “it’s just about as close to heaven on earth as you can get.” If stranded on an island, Crosby says he couldn’t live without cookies but wouldn’t miss drivers who hog the passing lane. What does he find inspiring? “Blind golfers and skiers.”

Lewis Borg-CardonaFreelance Writer Hailing from London, Lewis Borg-Cardona is curious about high places and he possesses a secret talent of fencing. His best customer experience was watching Arsenal play football while his most amazing experience was visiting the Grand Canyon in the United States. His home away from home is the west coast of Scotland. Like many men, he cannot live without women and, like many men, he can’t live with women. When he’s not being inspired by art, he hangs out with Charlie, his eight month old black Labrador retriever. Asked why he lives in London, he replies, “To quote Dr Johnson: ‘...when a man is tired of London, he is tired of life; for there is in London all that life can afford.’”

Jessica MorrisFreelance Writer Based in Hong Kong, Morris says she’s curious about “anything I don’t know already.” Her secret talent is remembering useless information which “has no point on a daily basis but is great for playing Trivial Pursuit.” Her best customer experience involves a London bookstore where the owner knows her so well that the owner would pick out titles “I never would have picked up otherwise.” Her most amazing life experience was watching the sun rise over Diamond Head in Hawaii and she lives in Hong Kong because “it’s a city full of surprises.” Her favourite place is her local foot massage parlour where “the rest of the world just fades away.” If stranded on an island, it better be stocked with Diet Coke, but she would not miss the “incessant” jackhammers of Hong Kong. Does she have a pet? “Does my boyfriend count?”

Customers in the air A little common sense goes a long way at the world’s top airlines.

48 Cultural differences Watching for clues in global medical care. 54

LEGO learns a lesson Companies that stray from their roots do so at their peril.

44 Bespoke health Skyrocketing insurance costs in the developed world and cheap air travel are benefiting the “medical concierge” business.

51


Trend agentResearch, stats and all that

Britain has turned into a promised land of the prostrate with 20% of Brits spending at least 30 hours per week on the sofa. The downside for those looking to lounge around in the island nation: “sofa bottom syndrome” – a condition that causes back pain and muscle problems. ▲

The story sofa

100is the number of times more

sensitive your lips are than the tips of your fingers. ▲

Decimal faces21st century Cinderellas might like to know that 90% of women regularly wear shoes that are too small for them. ▲

Downsize this

It takes just four weeks for a sedentary lifestyle and a diet high in fat, sugar,

and soft drinks to bring on the early stages of fatty liver disease. ▲

Facing the fats


Happy hour

Roads to ruinHarvard University studied 200 Boston children and found the impact that pollution has on verbal reasoning and visual learning. The deadly ingredient is soot in traffic fumes that, like lead, damages brain cells. It was also found in a correlative study that children being reared in choking cities have lower IQ points than those who live outside cities. ▲

is when your body’s alcohol

tolerance is at its highest.

5pm

Media junkiesAsian consumers from 8 to 24 years old are extreme multi-taskers who manage to squeeze 38 hours worth of activities into every 24-hour period. The third annual Synovate Young Asians study showed that of those 38 hours, ten hours are spent on some form of media. The biggest media junkies are in Malaysia, Thailand and Hong Kong. ▲

12is the average

number of

minutes it takes

to decide if you

want someone

as a friend. ▲

Mates by the dozen

The first product to have a bar code was a pack of

Wrigley’s gum


TREND l AGENT

31% of respondents in a Synovate survey agree with the statement “I tend to eat junk food when I am feeling down”. The most emotional eaters were found in France (57%), the US (48%) and the UK (44%). ▲

The hidden joys of junk food

From the ridiculous could be discovered the miraculous. Scientists at the University of California have pointed to innovative new ways of curtailing the effects of global warming: recruit a gang of super hairy plants. Sounds simple enough but the weird science behind it is based on making the leaves so hairy that infrared wavelengths will get bounced back into space. This is akin to the idea of wrapping a giant pair of shades around planet Earth. Scientists could fashion this fantastic foliage out of genetically modified crops or plants. Cooling Earth could be easier than we thought! Super hirsute soya has already been grown that is actually estimated to have a five percent greater cooling power. ▲

Hope could lie with super cool hairy plants

Up in smokeIn a study conducted by Synovate, 80% of respondents in 15 countries think that smoking bans in public places are okay, rejoicing the obvious public health advantages. ▲


Dead man workingShould companies make man-hours more human? This question is part of an ongoing debate about how to evaluate work – in terms of the amount of hours we put in or the quality of the work, including the life that’s doing it. Nowhere is this more important than Japan, where death by overwork is becoming hotly debated in the law courts as families hold corporations responsible for the loss of loved ones. Karoshi (death by overwork) is getting the attention it should after the wife of a Toyota employee successfully filed a complaint to the Japanese government when her husband, 30-year-old Kenichi Uchino died after doing 80 hours of work a week in 2002. The ruling has done something to highlight the issue, with 40% of applications to the government being recognised, as opposed to just four percent in the 1980s. Corporations could be close to killing karoshi. ▲

CD pits

When it comes to denim, Levi’s rules around the world. One in five respondents to a recent Synovate survey chose Levi’s as their brand of choice. The French love their Levi’s, which have achieved near mythical status and it seems, one pair is just not enough. The survey showed 31% of people own three or four pairs while 29% own from five to ten pairs. Around two-thirds of American women have kept a pair of jeans that were too small in the hope they would fit again – someday – and 45% of all respondents said that if given a choice they would wear jeans everyday. ▲

Jeans for life

ILLUSTRATION BY EMILIO RIVERA III

A British company is providing pay-per-view funeral services, which lets people pay their last respects to their dearly departed, via internet linkup direct to the crematorium. Wesley Music, a subsidiary of a company named Yaboo, was initially founded to provide music identification, search and supply service for crematoriums. They have now decided to branch out from audio to visual, charging US$150 for funerals to be webcast. The macabre move will allow mourners who would not otherwise be able to attend their loved one’s cremation, to log on to an online broadcast of the funeral, filmed by a camera set up in the crematorium chapel.

Alan Jeffrey, director of Wesley Music, said that the service would help to “connect family members across the world” who might not be able to make it back in time to see their dearly departed go up in smoke. ▲

A webcast to die for

Music downloads are on the up and they aren’t taking CDs with them. The record industry is failing to keep pace with a digital deluge that’s filling hard disks globally. Efforts to find solutions could simply compound the problem. The legalisation of music downloads could encourage the use of the Net as a place to buy music, thus contributing to the extinction of the CD. According to The Independent newspaper, 2007 marked a serious slump in album sales in the UK. The BPI, Britain’s foremost authority on album sales, states that sales fell by 10.8% in 2007. ▲

CHANGE l LOYALTY

Profiting from the one-night stand



Why you shouldn’t worry if the customer doesn’t call By Jan Hofmeyr, Ph.D.

More than 20 years ago, I developed a general theory of commitment and conversion. Although I was studying religious

commitment at the time, the theory turned out to work just as well when applied to personal relationships, political ideologies and brands. It became the basis for a marketing research approach I developed called the Conversion Model™. It is also the basis for the more complete approach to brand management that I developed for Synovate called the Brand Value Creator.

At its heart lies a very simple formula: in any relationship, whether with a person, product or brand, commitment will be strong as long as the person, product or brand is rated better than all others and the relationship matters. It’s as simple as that.

Marketers strive to achieve this committed state among their customers because many business benefits flow from commitment. Committed people tend to devote most of their category spending to the brand to which they’re committed. They tend to ignore competitive discounting. They pay more for the brand. And they tend to be forgiving when the brand “makes a mistake.” And so it is not surprising that researchers and marketers spend millions of dollars trying to work out how to make people committed. The benefits seem obvious. Why shouldn’t it be a worthy goal?

Well, let’s see...

Myths of commitmentMyth One: Making people more committed makes you more money

There may have been a time when we, as marketers, could hope that people would give us all of their business all the time. But that was long ago in a simpler world when switching was difficult or costly. Nowadays, switching is easy. And people do switch. This doesn’t mean that they’re uncommitted. Far from it.

On the one hand, while there are almost no “100% loyals” in any market, most people in most markets have at least one brand to which they’re committed. In my experience, the ratio is something like 70:30. In other words, up to 70% of people in most markets are committed to a brand, even if they sometimes use others.

The point is how much you profit for making more people more committed depends on how much it costs. And as in all things natural, it appears to be a game of diminishing returns. There is both a limit to how many committed customers you can

expect to have and as to how much business you can expect to get from them. Trying to push people beyond these limits does not generate a payback.

Myth Two: You make the most money from people with money

This myth is usually expressed in slightly more formal language such as: spend money on your high-value customers because they’re worth it. Now I’m not suggesting that marketers should not pay attention to high-value customers. But how much you spend and in what way should be determined by how much you expect to get. The problem with high-value individuals is that they tend to be fussy shoppers.

High-value people tend to be better educated. They tend to be self-confident, critical and demanding. And most of all, they tend to be less loyal in the first place. Why would you want to chase them?

As in all things, balance is key. Whether a customer is high-value or low-value, loyal or disloyal, customer support costs should be optimised

In any relationship, whether with a person, product or brand, commitment will be strong as long as the person, product or brand is rated better than all others and the relationship matters. It’s as simple as that.

PHOTOGRAPHS BY EMILIO RIVERA III

10 CHANGE l AGENT ISSUE 12 / 200810 CHANGE l AGENT ISSUE 12 / 2008

CHANGE l LOYALTY

Should we not be glad of the casual business we pick up from the committed customers of our competitors, even if we know they are unlikely to stay? Is there money to be made from the one- night stand?


rather than matched to value or loyalty in some uncritical, linear way.

Profiting from the one night standAnd so, while commitment is a natural state to which people aspire (it makes life simpler), some level of promiscuity is natural. We like to find the product, service, brand (or person, job, career, country) that is best for us. But we also like to have options to explore and change if necessary. Our tendency to “wander” is so entirely natural that it’s one of the main reasons social organisations invest so much effort into trying to keep people from defecting, whether they be employees of a company, members of a political party, particular religion or just some “other” organisation, a couple or whatever.

Even marketers try to tie people down. They give people loyalty cards, make them sign contracts, pester them with so-called special offers, call them on the telephone just as they’re about to sit down to an evening meal and other horrible things.

What if we simply recognised that it is human nature to be both committed to one brand or one group, but to want to wander from time to time? How would that affect our approach to marketing? Might we make more money by marketing appropriately to both those who are more loyal and those who “belong to someone else” but who have dropped in for a visit? Should we not be glad of the casual business we pick up from the committed

customers of our competitors, even if we know they are unlikely to stay? Is there money to be made from the one-night stand?

Myth Three: Eighty percent of your profits come from 20 percent of your customers

I have worked with many marketers and looked at many data sets and I’ve come to the following conclusion: In marketing the 80:20 principle is wrong, or at the very least, almost completely untested. Why do I say that? For two simple reasons. First, I’ve very seldom found a marketer, even one with a relatively well-organised database, who knew just how profitable each customer was. Second, to the extent that we can assign aggregate revenues and costs to our customers, the ratio is more like 50:20 than 80:20.

Consider what this means: At least half of your money is coming from people who are not regular customers. In fact, as far back as the late 1960s, Andrew Ehrenburg, a well-known marketing analyst, pointed out from an

The key is to recognise that they don’t need attention and they probably don’t want too much attention. They just dropped in and as long as your brand delivered a good experience, they’ll be back. Who knows when? But then, who cares?

analysis of panel data that most of any packaged goods brands’ customers, are disloyal. It’s not just a matter of “can you profit from the one-night stand?” It’s a matter of “if you can’t, then you might not even make a profit.”

Relax and make moneyIn our personal relationships we generally think twice before taking on a one-night stand, no matter how attractive. There are good reasons for this: we don’t want to hurt those we love, we don’t like to let people down, it’s not right. But brands and services aren’t people. And so we happily try “something else” even when we have “the one” that gets most of our attention.

As marketers, we should welcome the casual visitor. Ehrenburg demonstrated a long time ago that for many brands, they constitute most of the visitors. They contribute most of the revenue. And, if managed appropriately, they will be a healthy, ongoing source of profit.

The key is to recognise that they don’t need attention and they probably don’t want too much attention. They just dropped in and as long as your brand delivered a good experience, they’ll be back. Who knows when? But then, who cares? Just be ready with a welcome when they drop in again. ▲

Most of any packaged goods brands’ customers, are disloyal. It’s not just a matter of “can you profit from the one-night stand?” It’s a matter of “if you can’t, then you might not even make a profit.”

For more information, contact Jan Hofmeyr at [email protected].


CHANGE l MARKETING

Emotions loom large in customer relationshipsBy Lawrence A. Crosby, Ph.D.

“Til death do us part” marketing

The marriage analogy parallels the idea that the customer-brand bond can be arrayed along a continuum from transactions to close relationships.

and services to the needs of the individual customer. It is common for companies to

measure the relationship propensity of their customers. These measures go by a variety of names but one of the most popular is a Customer Loyalty Index (CLI). Typically, customers are asked in surveys a series of behavioural intention questions to gauge their willingness to remain a customer and more deeply engage with the brand. Their responses are indexed together in some fashion and then aggregated across a sample of customers to provide a trackable scorecard metric. Through further statistical modelling of the survey data, companies can learn what influences the relationship propensity scores. This research may reveal whether loyalty is more rationally or emotionally driven. Likewise, it is possible to tell which customer experience areas are having the most impact on the relationship.

Pushing the analogy furtherReturning to the marriage analogy, it is important to recognise the role of “alternative partners” and how this can change as the relationship progresses. At the casual dating stage, there may be many romantic options from which to choose (assuming the individual is attractive enough!). At the courtship stage, the list of candidates narrows dramatically and there is now one, heavily preferred option. If one is contemplating marriage, this is a period of intense scrutiny and evaluation to determine if the preferred option is indeed the right choice as a life

• Not every customer wants a close relationship with the company nor does the company want a close relationship with every customer. From the company’s perspective, this usually means segmenting the market and focusing on high-potential customers.

• Certain business contexts are more conducive to relationship formation, such as complex purchases involving high uncertainty and risk. B2B buying situations often fit this profile. A good B2C example is life insurance. Because policies are hard to evaluate, consumers tend to rely on a personal relationship with the agent.

• Relationships afford the company a wide variety of economic benefits such as higher share of wallet, reduced defection, enhanced cross sales, more referrals, etc.

• For the progression to take place, both the buyer and seller need to “invest” in the relationship. These investments can take many forms. For example, when a computer user invests time and effort to really learn the ins-and-outs of Microsoft’s Vista, they are less inclined to switch operating systems. The company’s investments are often in the form of customisation (made-to-order shoes) and reciprocity (airline reward programmes).

• One-to-one marketing approaches can facilitate relationship formation and maintenance. For example, Customer Relationship Management (CRM) systems allow the company to adapt sales

The dating/courtship/marriage analogy has been used for many years to describe the progression of a relationship between a customer and a brand. While academics

periodically criticise this comparison, practitioners find it a useful device for conceptualising the goals of relationship marketing.

Roughly speaking, the idea is to first capture a share of the customer’s business (dating), then to become the preferred brand (courtship), and then to become the only brand (marriage). By coaxing customers along this progression, the marketer is able to increase a customer’s lifetime value to the company.

The marriage analogy parallels the idea that the customer-brand bond can be arrayed along a continuum from transactions to close relationships. Here’s an interesting cocktail conversation: Try to think of pure commercial transactions that involve no relationship. The closest I can remember hearing was the following:

You are driving along an interstate highway and discover you need gas. You pull into an unbranded gas station, use the self-service pump, fill up with unleaded, pay by cash without exchanging a word with the attendant, and you drive away with no intention of ever returning again.

The implication is that most commercial exchanges probably involve some level of relationship. Therefore, the real continuum is probably between low-commitment exchanges (dating around) and close relationships (marriage).

Concepts of relationship marketingThe principles of relationship marketing began to be crafted around 1985. There has been a lot written about this topic since. A few of the the key concepts are:


CHANGE l MARKETING

The relationship progression model dovetails nicely with comprehensive theories of buyer behaviour with their familiar stages of problem recognition, motivated search, alternatives evaluation and choice.

partner. If the evaluation is favourable and marriage follows, a commitment is made to discard all other options and stick with the one chosen partner indefinitely (“Til Death Do Us Part”).

The relationship progression model dovetails nicely with comprehensive theories of buyer behaviour with their familiar stages of problem recognition, motivated search, alternatives evaluation and choice. Of course, consumers do not always follow those stages but are more likely to do so in contexts favourable to relationship formation.

Of course as divorce statistics indicate, marriage relationships are not always forever. At the risk of being simplistic, they may crumble from the inside and/or be pulled apart from the outside. If one or both parties’ needs are not being met in the relationship, the resulting dissatisfaction can drive the parties apart and possibly into someone else’s arms! Occasionally, one party’s chance encounter with another who is just so appealing (finally found the “love of my life”) may precipitate the end of marriage.

Again we see obvious parallels with buyer behaviour. Even without a stable of alternatives to consider, the failure of products and services to meet customers’ expectations often leads to relationship

dissatisfaction. The theories say that such dissatisfaction is likely to put the customer back in a motivated search of alternatives. The consideration set re-expands; trial behaviour may occur, resulting in a loss of share-of-wallet or eventually outright defection. An example might be a distance runner whose favourite brand of running shoes no longer has the durability the runner had come to expect. This product dissatisfaction then motivates the runner, despite having been a long-time loyalist to the incumbent brand, to shop for other brands and potentially change his/her allegiance.

The commercial analogy to the “finally found the love of my life syndrome” is when a new or unchosen brand innovates in such a significant way that it captures the customers’ attention and causes them to question their current brand choice.

So what?While the marriage model is interesting to think about in a commercial marketing context, it only has value to the extent that it improves business decision-making. The key decisions are with respect to the measurement and management of customer relationships.

Let’s start with measurement. It seems clear that when most existing or

potential customers are in the mode of “dating around”, it is imperative to have a measurement system that assesses the relative appeal of the entire consideration set. I call this the “Gravitational Pull of the Planets Model,” the idea being that the brands with the most gravitational pull (i.e. affective appeal) are going to get the largest shares of the customers’ business. So it is not possible to fully explain how customers allocate their shares without attempting to gauge all (or at least the most powerful) gravitational forces acting on the customer. Brand equity research has typically had this characteristic of assessing relative appeal. Perhaps that is why it has proven so popular over the years in multi-alternative consumer choice situations involving frequent transactions, generally low-switching barriers, and generally low risk. Examples include just about any FMCG category.

In situations where most customers want a relationship and are in the courtship or marriage stages, it is imperative to have a measurement system that is highly informative about the processes of relationship formation, maintenance and expansion. I might call this the “Centre of the Universe Model,” implying that we want to understand as much as we can about the customer’s relationship with their preferred or only brand. In this case, some metric around relationship propensity (a.k.a. loyalty or engagement) seems to be in order. Components of the metric can relate to advocacy, retention, expansion and compliance. Perhaps for these reasons, relationship measurements have proven highly popular in B2B settings, consumer financial services, limited choice markets like utilities and telecom, healthcare, and durables.

Management-wise, the marriage analogy certainly admonishes the relationship marketers to pick their customers carefully. Generally, a


CHANGE l MARKETING

The focus of relationship marketing today is the clever matching of customer expectations and experiences as a means of inducing customers to tie the knot.

For more information, contact Larry Crosby at [email protected].

customised (even mass customised) product or service is more costly to produce than a standardised one. It may not be economically feasible to make this kind of relationship investment across the entire sweep of potential customers. So segmentation is the name of the game. For example, a manufacturer of custom fitted golf clubs like Ping really needs to understand the market for these clubs in terms of skill levels, price points, channels used, etc. If a customer group really doesn’t care about individual customisation, then providing this service to them represents wasted investment.

Just as in marriage, emotions loom large in commercial relationship contexts. There are several reasons for that. Often the product or service is high in credence properties (i.e. quality can’t be easily judged in advance), so trust in the brand and its representatives becomes a critical factor. The Mayo Clinic understands this and does everything possible to build client trust and confidence.

Since relationships are by definition a two-way-street, customers (just like the company) are often required to make some level of investment in the relationship that goes beyond the price paid. They are concerned about protecting that investment and not being taken advantage of. As one example, consider the many times that you as a customer are asked to make a relationship investment in terms of the disclosure of personal information. How do you know that you can trust the brand with that information? A lot may depend on your assessment of the values of the brand and the degree to which those values overlap with your own.

So the careful management of corporate reputation is a critical issue. Also critical from the standpoint of trust is the clarity of the brand promise in terms of its uniqueness, personal relevance, authenticity and consistent delivery across all of

the customer experience areas. Bad things can happen when corporate ethics clash with the brand promise. Consider the case of Whole Foods CEO Jon Mackey who in 2007 was embroiled in a controversy regarding his anonymous Yahoo! internet posting. This certainly flew in the face of the Whole Foods brand promise concerning its social conscience.

The goals of relationship marketing are today being advanced through the widespread adoption of Customer Experience Management (CEM). This holistic and integrated management approach has at its core the notion of engaging customers both emotionally and behaviourally. Although originating largely in the retail and service sectors, CEM principles are being more widely applied even in FMCG (causing those marketers to rethink how far they might actually go along the relationship continuum). CEM strives, on the one hand, to create emotional hooks with customers by offering a distinctive customer experience. For example, take Cabela’s sporting goods stores which have become the Disneyland of hunting and fishing, with live fish tanks, antique

gun collections, recreated outdoor scenes and mounted game of every species. CEM also seeks to behaviourally involve customers with the brand as a means of deepening the relationship. This can span all forms of activity from participating in events, joining blogs, having memberships, serving on customer councils and participating in referral programmes.

To sum up, the marriage analogy continues to have utility for marketers to help understand how to manage closer relationships with customers, while at the same time recognising that relationship marketing is not always called for. Commercial relationships, like romantic relationships, have a big emotional dimension that revolves around the concept of trust. The focus of relationship marketing today is the clever matching of customer expectations and experiences as a means of inducing customers to tie the knot. ▲



CHANGE l CUSTOMISATION

It was an ordinary birthday for Hugo. He had counted the days and watched the numbers on his calendar steadily rise. Got ready to wake up as a seven year-old, for whom getting older meant being showered with e-cards, toys and jellybeans. It was also a day to catch up with Noddy. He was guaranteed a glimpse into the life of his favourite children’s character every year in books with glistening hardback covers that seemed so heavy his mother had to hold them as he turned the pages. This year, though, standing

among Noddy and Big Ears, with the usual threat of goblins nearby, he saw himself, and he was amazed to find they were taking him to Toy Town to become “the hero.”

This scenario reveals how customisation is blurring the line between the world of traditional products and exciting new adventures in consumer

creativity. Penwizard, a subsidiary of HarperCollins, has made it possible for parents to customise children’s

stories by actually putting their kids in the story, alongside heroes. In many cases, the kids actually become the heroes themselves.

Penwizard’s personalised Noddy books are easily identifiable from titles that include A gift for... and A Christmas gift..., as well as ...Saves Toy Town. The company is inviting consumers to fill these blank spaces with their own child’s name, thus giving him or her a pivotal role in the story,

Me, myself and ICompanies race to put the customer in the productBy Remo Notarianni

and taking on challenges that have until now only been fit for a hero. Kids can read about themselves carrying out amazing feats that make idols into sidekicks.

In addition to Penwizard, a company called Flattenme has developed a line of storybooks that can be personalised with a child’s photo. The child’s name is also incorporated into the text and illustrations. Customers simply upload their child’s photo to flattenme.com, indicate their name and gender and select a book.

Customisation is not a new concept even if personalising Noddy stories is. Finding the specifics of product perfection is something of a holy grail in the business world. Fitting products hand-in-glove with individuals as opposed to basing them around certain categories and groups that come close is the new way forward. A trip to an electronics store turns into a hunt for an appliance with the right colour, fittings and memory size, which more or less fits what the buyer has in mind.

And yes, the internet has brought consumers a little

Flattenme’s personalised story book. (left).

CHANGE l CUSTOMISATION


Eleven Forty Co., produces cuff links individually modelled on photographs of a child, a loved one or a pet. The cuff links are available in a range of precious metals. When the links are not in use, they snap together to form a miniature bust of the person depicted.

Other companies getting into customisation include DNA 11, which creates personalised art from a person’s DNA and fingerprints. For DNA art, the company sends a kit with a non-invasive method to collect DNA from a mouth swab. The company then turns that into a DNA portrait representative of a person’s life code. Another similar organisation is My DNA Fragrance, which makes individual fragrances that include a client’s DNA.

Representing the beginning

closer to that dream of turnkey technology. There has always been – even before the advent of the internet – the need, along with the want, to cut certain products like a tailored suit. The promise that customisation makes to the consumer, that a product can fit individual consumer needs right down to each and every personal preference, seems a little closer with online interactivity.

Online companies in the past ten years trying to maximise the internet’s ability to customise, have revealed how far this can be facilitated. Successful online clothes store, landsend.com, has tailored jeans and clothes items right down to specifics such as height and length. Still in the clothing line, a company in Great Britain,

and end of life, a Japanese company, Yosimiya, is selling bags of rice printed with a newborn’s photo, name and date of birth in a bag shaped to resemble a swaddled baby, while a company in Austria is offering a Requiem for You, which is a custom-made personal requiem for when you depart the world.

We have become accustomed to an online environment in which personalisation is everyday, from personalised news reels on Yahoo! to sites like Facebook, to Photoshop-ed images that we make and put online for our own entertainment. A business without at least some sort of an offer to customise may find it hard to compete in the future, or even today. ▲

DNA 11’s portrait (above left); personalised cuff link from Eleven Forty Co. (left); Yosimiya’s customised rice bag (above).

THE SAMPLE IM

AGES USED ARE FOR EDITORIAL PURPOSE ONLY AND ARE COPYRIGHTED BY THEIR RESPECTIVE COMPANIES.

Weblinks:

www.penwizard.co.uk/

www.flattenme.com/

www.dna11.com/

A business without at least some sort of an offer to customise may find it hard to compete in the future, or even today.


often called branded entertainment – to new heights and helped create an industry trend. The series of films, launched on the internet and featuring A-list actors and directors, has garnered more than 100 million views.

“The Hire was an unprecedented example of media convergence that both pushed and crossed boundaries,” says Jim McDowell, vice-president of marketing for BMW of North America. “We had no idea how successful it would be, since we were going into uncharted territory when we started the project. In the end, the project far exceeded any of our expectations.”

Interruption advertisingBranded entertainment refers to

The legendary blues singer James Brown walks down an ornate hallway mumbling at his hired driver, played by Academy Award-nominated actor Clive Owen. When the

two reach the end of the hallway and press the antiquated doorbell, they are met by the devil himself.

The sleazy, hard-boiled-egg-eating Lucifer is cast by the film’s acclaimed director, Tony Scott, in the form of something along the lines of an aging, eccentric British rock star. After a heated discussion, James Brown and the devil make a deal to race for the blues singer’s soul.

It is hard to tell that the short film, called The Hire: Beat the Devil, is actually a commercial for BMW. And

CHANGE l MEDIA CONVERGENCEIL

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that was the whole idea behind BMW’s landmark advertising campaign that featured entertainment, in the form of high-quality films, to sell its product, which was minimally featured. In essence, it’s about providing the customer an interesting experience to reinforce the brand in the absence of the acutal experience of driving the car.

The blending of entertainment and advertising is nearly as old as commercial broadcasting. Radio dramas in the 1930s had advertisements intertwined into the programs, and the soap operas of the 1950s were created to sell soap to housewives.

BMW’s groundbreaking internet film series, The Hire, brought the use of entertainment for advertising –


marketing strategies that integrate products into entertainment venues with a high degree of engagement and interactivity. Branded entertainment includes event sponsorship and marketing, product placement, and “advergaming” and “webisodes.”

“Traditional advertising is losing its impact,” according to a report from the British advertising firm, Hubbub. “It is no longer good enough to slap a consumer in the face with a TV ad or a poster and hope they’ll notice. Branded content doesn’t feel like traditional advertising to the consumer. It is positioned as part of their culture, so it is accepted into their lives.”

Not only are conventional television ads making less of an impact, say some experts, they often

are not being seen at all. Ofcom, an independent regulator for communications industries in Great Britain, said in its most recent annual report that up to 78% of adults who own digital video recorders say they always, or almost always, fast-forward through the advertisements when watching recorded programs.

The British advertising firm, Brandspanking, describes branded entertainment as “when a brand stops interrupting the programming of your life and instead becomes the programming of your life; when a brand stops shouting at you and instead starts talking to you. The combination of reduced production costs together with easier access to distribution through the internet means the old ‘interruption advertising’ model has been replaced with ‘attraction advertising’.”

Being a part of the lives of consumers – rather than an interruption – is what the U.S. office supply company OfficeMax had in mind when it launched its ElfYourself.com campaign in 2006. After two years, the website has attracted more than 120 million visitors.

ElfYourself.com allows visitors to upload photos and record a synchronised message through a toll-free phone number. The faces are then attached to an animated elf body, the voice is processed to sound elf-like and the result is dancing and talking elves that can be forwarded to family or friends, or posted on websites.

OfficeMax says the popular

elves have become a pop culture phenomenon. During the holidays, an average of 60 elves were being created every second, the company says. The website and OfficeMax’s ad message that it provides creative gift ideas were featured by USA Today, ABC World News Now, CNN American Morning, The Today Show, and CBS Early Morning.

US$22 Billion in 2007According to U.S.-based research company, PQ Media, spending on branded entertainment marketing grew to an all-time high of US$22.3 billion in 2007, nearly doubling in size over the last five years as brand marketers continued to shift budgets from traditional advertising to alternative marketing strategies. The firm found that branded entertainment represented about eight cents of every marketing services dollar spent in 2007.

The firm is projecting branded entertainment marketing to expand in 2008 to US$25.41 billion, despite slowing overall economic growth.

“Even without an economic slowdown, there are strong secular trends driving investment from traditional advertising media to alternative marketing strategies,” says Patrick Quinn, president of PQ Media. “Americans are spending more time outside their homes, online at work, communicating via wireless devices and multitasking with various media, which has created a generation of elusive consumers for brand marketers to try to reach.”

That’sshow business!Blurring the line between advertising and entertainmentBy Floyd Whaley


are all growing. Spending on event sponsorship and marketing, the largest segment of branded entertainment, rose 12.2% to US$19.18 billion in 2007, as companies invested in marketing campaigns designed to create powerful and lasting brand impressions and experiences among consumers.

Paid product placement spending grew 33.7 percent to US$2.90 billion in 2007, while spending on so-called advergaming and webisodes – the smallest branded entertainment segment – increased 34.8% to US$217 million in 2007. The growth of this segment has been fuelled by efforts among marketers to reach the elusive 18-to-34 year-old demographic, which is watching less television and spending more time on the internet playing videogames and downloading videos, the company said.

The outlook for branded entertainment marketing through 2012 is for double-digit growth overall, with spending expected to exceed $40 billion in the next five years, according to the PQ Media Branded Entertainment Marketing Forecast 2008-2012.

The coffee machine company TASSIMO is banking that branded entertainment will continue to grow and remain an effective way to reach consumers. The company just launched a series of webisodes titled Who Hired Bob?

The humorous series follows the

The ways in which these elusive consumers are being reached through entertainment are becoming more creative and diverse all the time. The Friendly’s Ice Cream online iScream Contest encouraged young consumers to express their love for ice cream by submitting photos and videos either online or by texting via their mobile phones. Other visitors judged the submissions and prizes such as iPods, cameras and computers were given out weekly.

The UNO Chicago Grill celebrated Pizza Month with a website targeting men and women, ages 25-49, which allowed users to determine their “Pizza Personality” by taking an interactive quiz that identified the toppings most appropriate to user responses.

In a new campaign launched February 2008, the Austin, Texas-based advertising firm Idea City has produced viral videos in support of Unscrew America, an effort to inform young Americans how easy it is to make the switch to energy-efficient lighting. The campaign features well-known comedians in short films involving changing light bulbs. It has a website where users can explore a sad, bizarre underworld without energy efficient lighting.

Who hired Bob?According to PQ Media, the key segments of branded entertainment

Weblinks:

www.youtube.com/watch?v=ADzTu2NM8Lg

www.youtube.com/watch?v=7L2TdCdfP-0

www.whohiredbob.com/

misadventures of Bob, the guy in the office who has appointed himself in charge of special projects that have little to do with actual work. Each episode gives viewers the chance to determine Bob’s future at the office and to submit their own stories of “Bob-like” characters in their own work places.

The TASSIMO product is integrated into the webisodes by Bob, who is a coffee fanatic. In the introductory spot he is holding a meeting of the Secret Santa group 11 months before Christmas to inform them he’s already spent the Secret Santa budget on a TASSIMO coffee machine. For the producers of the series, that brief mention is more valuable than a traditional 30-second commercial devoted to selling the product.

“Creating original, entertaining content gives TASSIMO both cultural currency and permission for further conversations with consumers,” says Joseph Frydl, director of Ogilvy Branded Content & Entertainment Group. “Purely interruptive marketing simply cannot accomplish that.” ▲

CHANGE l MEDIA CONVERGENCE


If the medium is the message, which medium do today’s hottest brands and companies choose to get their messages out? That’s the challenge

facing companies today because the number of platforms – television, print, online, radio – is proliferating with no end in sight. But is simply buying an ad on a website or a 30-second spot on TV the best use of today’s advertising dollars?

Companies that want to engage with today’s consumers will have to start turning their ads into content, according to the CEO of eMarketer, Geoff Ramsey. “Ultimately, they will need to be able to produce content that is so compelling, relevant and entertaining that consumers will seek it out and want to share it with others. The new ad model is about creating great content and finding clever ways to embed it in the fabric of communities and content platforms where consumers are hanging out and actively participating,” Ramsey wrote in a recent online article.

While mainstream media brands remain relevant, more and more companies see custom media, or custom publishing, as the wave of their

marketing future. A 2006 survey by the Custom Publishing Council in the United States showed:

• Seven in ten chief marketing officers believe that custom publications would have a positive effect on people’s attitudes, leaving them feeling more favourable toward the sponsoring company.

• Almost 80% of the marketing officers believe people receiving custom publications will be more likely to buy from the company again.

• Nearly nine in ten cite using web content and websites in their marketing plans.

• More than two-thirds use custom print newsletters and e-newsletters.

• Marketing officers also see growth ahead for such things as blogs, podcasts, webcasts and other similar content.

• More than 40% of the marketing officers reported pulling money away from traditional media toward custom media in the last year.

• About 79% of the chief marketing officers believe that custom media should be an integral part of the marketing mix for any business and 78% agreed custom media represents the future of marketing.

“While top marketing executives unquestionably believe in the power of custom publishing, they do have concerns,” according to Michael Horgan, the editorial director of Penton Custom Media. In a recent article published on the website, www.b2bmarketing.com, Horgan said 90% of the chief marketing officers polled in the survey said they would use custom media more if there were a way to measure return on investment. “These statistics illustrate the importance of ROI measurability and cost in determining which, if any, custom media tools today’s top marketers will use,” Horgan said.

Three forces have arisen to drive the growth of custom media, according to Don Schultz, the author of Integrated Marketing Communications. Custom publishing is an industry that in 2006 was valued at US$4.4 billion, but is expected to grow to US$7.5 billion by 2011. Schultz says technology, branding, and globalisation converged in the 1990s and pushed organisations toward the integration of multiple business strategies, which included marketing communications.

“The integration of marketing activities around the singular focus of the brand became mandatory in many organisations and at the same time dramatically changed the traditional approaches to advertising and marketing.” Schultz said. “Marketing communications has moved away from the traditional approach that labels it a ‘creative process’ to one that is now viewed as ‘an asset the firm owns.’”

As mentioned above, the media and advertising landscape has changed forever and now consumers have a choice of literally thousands of platforms, according to King Fish Media, a U.S.-based custom publisher. “It is the consumer that is in control of the media channels. To get the best results from marketing messages, companies need to own their own channel and not rent it from someone else.” ▲

Owning the media channel

CHANGE l CUSTOM MEDIAPHOTOGRAPH BY EM

ILIO RIVERA III

More and more companies see custom media or custom publishing, as the wave of their marketing future.


shoppers themselves are changing rapidly and continually, and retailers must respond in their store layouts and operations if they are to keep winning customers. Some of the old pillars of wisdom with which great businesses were built may not be as appropriate in today’s world as they once were.

Pillar one: Customers who spend longest in stores buy more.Time is the new money; we never have enough of it to go around. The key requisite of a shop visit is that it is good use of time. For seven year-old Isobel and her mother, 50 minutes spent in a Build-A-Bear shop, fully engaged in creating her own toy is both enjoyable and a highly

In modern retail, adapt or dieCHANGE l RETAIL

battleground that counts the most.When you stop to think about

it, retailers face a daunting challenge: developing and maintaining an environment in which groups of shoppers have different needs and look for different types of experience. The same environment that teenagers – hunting in packs, excited about the prospect of finding a jewel in Aladdin’s cave – find “cool,” is not going to appeal to a 30-something father of two, looking to grab-and-go, all in the bat of an eyelid. When setting up shop, the retailer has to follow the marketing principles of knowing its target audience and concentrating on satisfying their needs.

Across the globe, lifestyles and

What makes a retailer great? What separates the best from the rest? Case studies may throw up a host of answers, but the

simple truth is that great retailers give their customers great experiences.

A retailer whose shoppers are indifferent about their circumnavigation of the store is like a Ferrari with a dead battery or a dog without its master; they’re simply not going to go anywhere. Much is spoken about the growing importance of “clicks” over “bricks,” but in reality internet sales only account for four percent of retail sales in Great Britain, so in-store selling is still the

Consumers of the 21st century think and act differentlyBy Dr. Tim J. Denison


acceptable use of their time. The same duration spent plodding up and down supermarket aisles filling the trolley with the week’s groceries may not tick all the same boxes for them.

Food retailers understand that positioning key staples at disparate anchor points throughout the store will lengthen the shopping experience, but they also know that doing so maximises the number of product lines exposed to shoppers and will prompt impulse purchases. Is this good retailing sense or being disrespectful of the shopper’s scarce time?

On many occasions nowadays most people want fast, efficient in-store experiences. They don’t want to spend 20 seconds grabbing a newspaper and then having to spend three minutes in line to pay for it. Men and now women too prefer not to waste time trying on clothes in the fitting room before

they buy. They like to do so in the comfort of their own home, safe in the knowledge that the retailer will refund in full if the customer is not happy with the garment.

Increasingly in this fast-moving world, it is the retailers who respect their customers’ time who are most rewarded by shoppers.

Pillar two: Customers want to shop in stores that stock the largest ranges.On a recent trip to Whole Food’s first store in Great Britain, on High Street Kensington, London, I counted 27 varieties of tomato. Some would say that I was spoiled for choice. In fact, it overwhelmed me. I found it taxing to decide which one to buy. Feast for the eye, it may have been, but not for my brain. Not only that, it took all the spare time I had and robbed me of shopping the rest of the store. What’s

more, I bought the variety that I usually get anyway because it’s my favourite.

Invariably the best experiences are those in which you find what you want. They normally arise in stores that have the best range, not necessarily the biggest. In the past when product ranges were smaller, having an exhaustive range certainly had its value. Nowadays though, in this age of brand proliferation, the best retailers edit the available ranges to offer a selection of genuine choice. This helps simplify and speed up our in-store decision-making, provides clarity out of chaos and leads to a more enjoyable shopping experience.

Pillar three: Customers shop with their eyes.Visual merchandising has always been a fundamental part of good retailing practice and remains so today. But

In modern retail, adapt or dieConsumers of the 21st century think and act differentlyBy Dr. Tim J. Denison

PHOTO-ILLUSTRATIONS BY EMILIO RIVERA III


shoppers have three other senses, which retailers have largely ignored previously. They traded on visual seduction and dissemination of information and the shopper dutifully complied.

The well-travelled, savvy consumer of the 21st century thinks and acts differently. We’re more aware that perfectly shaped and coloured nectarines that have been shipped halfway around the world may look the part, but disappoint the palate. Less perfect-looking, local fare from the nearby farm might prove a tastier option and have consumed fewer carbon miles. The answer, of course, for which we thank the French, is to try before you buy – then you will know. While taste testing is becoming

more common and acceptable in British supermarkets, this is not possible when goods are housed in impregnable packaging, designed to protect the produce rather than promote a full sensory experience.

Elsewhere in retail, making goods more accessible before buying and designing in-store areas to try out and test them are highly welcomed by shoppers. The day has disappeared thankfully when you had to decide which camera to buy by looking through the glass of the display cabinet and reading the supporting brand literature beside it. Retailers readily accept that product interaction engages us, helps us make a more informed decision and leads to a more fulfilling

and rewarding experience. They also realise that we often prep online, learning the technical details or simply seeing product pictures. So the in-store experience has to offer a lot more than before. Retailers are devising innovative ways to showcase their products and wed shoppers with their wares, transforming previously bland experiences into memorable ones.

Pillar four: Pile it high, sell it cheapTesco, the famous British retailer, had a famous strategy of “pile it high, sell it cheap”, which served the retailer well in the past, but has been truly buried in the bin. If it hadn’t done so, it wouldn’t be Britain’s most successful retailer today. Understanding and respecting the fact that shoppers have grown in stature and sophistication, wanting far more than simply low prices, have been a key measure in its progress. Adding value wherever it can is its modern approach and something that it is hopeful will be just as popular in the United States. Tesco plans to open 200 stores there by

CHANGE l RETAIL

Across the globe, lifestyles and shoppers themselves are changing rapidly and continually and retailers must respond in their store layouts and operations if they are to keep winning customers.


February 2009, trading under the name of Fresh & Easy. Not only does this course of action please its millions of customers and prevent commoditisation, but it helps maintain its differentiation, now such a contributing factor in market leadership.

Good service is not a given in European retailing, it is part of the retailer’s value-added “toolkit”. While acknowledging that product is a lead star in the show, people always buy from people. They can make all the difference between a good and a great experience. Focusing on service excellence rather than selling is the linchpin behind the success of the British department store, John Lewis, and the reason why it is rooted to the spot as Britain’s favourite retailer, in much the same way as Nordstrom is in the United States. Recently, the product

knowledge, general helpfulness, politeness and “can do” attitude of John Lewis’s store staff in the carpet department not only won them my order, but doubled the amount I was considering and prepared to spend. This is not an isolated incident, neither for the company or me, and it is what makes the shopping experience so rewarding.

The explosion in product complexity, our lack of techno-confidence, the little amount of time we have to spend shopping all mean that the service component has far more resonance with us. We don’t want to make bad, ill-informed purchases because they’re expensive. The deployment and rapid popularity of the Geek Squad in Best Buy across the United States and the development of

TechGuys in PC World stores in Great Britain are just two examples of retail services that have hit the mark and made a real impact on their businesses.

These are four areas in which retailers are challenging old practices that were successful in their day. All are geared at improving the shopping experience. After more than a decade of strong growth, new challenges lie ahead. Retailers will need to be on their mettle to survive and prosper in the economic downturn. It is a testing ground that not all have visited before. They will need to be in a position to take seriously and respond quickly to changes in consumer attitude and tastes, finding new ways of heightening the customer experience. As Darwin observed: “It is not the strongest of the species that survives, nor the most intelligent, but the ones most responsive to change.” ▲

It is not the strongest of the species that survives, nor the most intelligent, but the ones most responsive to change.

For more information, contact Dr. Tim J. Denison at [email protected].

CHANGE l TRYVERTISING


The old adage, “the best things in life are free,” could be proven right at Sample Lab, a trendy store in Tokyo’s Harajuku

district, which has made a name for itself by being a place where money can’t buy a thing.

Sample Lab showcases a wide range of goods, from night cream to green tea and bath salts, and has seen, since it opened in June 2007, tens of thousands of shoppers looking for an experience rarely offered by Japan’s colossal, often pricey, department stores.

The difference is that customers don’t have to pay for anything. They simply grab products from shelves without paying a single yen. Products on offer include underwear, sake, honey, marshmallows and cigarettes.

Established by Japanese market

research and leaflet distribution company Melposnet Co., Sample Lab sounds like a bizarre shopper’s paradise that doesn’t make economic sense. But with no cash tills or shop assistants, it looks more like a product design gallery than a shop, and that, along with a noticeable lack of price tags, provides clues as to what it’s about.

The store stands on the third floor of Tokyo’s Iceberg building. It was set up to acquire feedback about products, and companies have also used this as a chance to advertise their brands. Customers simply need to fill in questionnaires about the products they take away and use.

“The rate of response to the questionnaires is high, and their content is good. It is effective for gathering information,” an official of Nissin Food

Products Co., which advertises in the Sample Lab, told Kyodo Daily News.

But Sample Lab isn’t fully funded by the companies taking part. There’s an annual membership fee of 1,000 yen along with a 300-yen registration fee that gives consumers an access code to enter the building. One of the requirements is that members be 16 years of age, and Sample Lab gives shoppers a quota: seven daily grab sessions with five items per grab.

The novelty of grabbing products without paying for them naturally gives shoppers a unique customer experience by leaving them with a sense that they are actually being given a gift. This resonates with the Japanese custom of omake, or giving, which is an important part of business conduct. ▲

Giving it all awayGrab-and-go research in Japan By Remo Notarianni

PHOTO-ILLUSTRATION BY EMILIO RIVERA III

Are your customer relationships for everor just one day?

Are your customer relationships here today and gone tomorrow? You can enjoy longer, more meaningful and more profitable relationships by managing the interaction between your company and customers. All you need is Synovate’s Experience Management suite – tried and tested research solutions that include ExM Customer, a 360˚ tool for identifying which “drivers” of the customer experience most affect profitability, and the dynamic ExM Tracker for monitoring day-to-day customer contact performance in real-time.

Learn more by going to www.synovate.com/experienceit.

CHANGE l KNOW THE MARKET


As the most vocal champion of snowboarding

as a sport, Jake Burton Carpenter has proven

that being one of your own customers can be an

essential ingredient in the success of your brand.

By Jessica Morris

“The Burton experience is about riders talking to

riders,” says Bryan Johnston, vice-president of

marketing. The idea is that the best way to know

your market, to be aware of the subtle changes in

it, is to spend a lot of time deep within its network.

Who would have thought

that the secret to

running a successful

business was to know

whether your customer

was an airdog, a handy

dandy or a grommet? Jack Burton

Carpenter, that’s who.

By evolving a child’s toy called

the Snurfer into a multi-million dollar

business, Carpenter has managed to ride

the half-pipe all the way to becoming

the founder of a US$2.4 billion industry

that he now dominates. But if Carpenter

understands the needs of the world’s

young riders so well, it’s

not because he

has superhuman trend prediction skills;

it’s because he is a rider himself.

At 54 years of age, Carpenter might

not be considered so young anymore in a

market where anyone past the age of 25

is considered un-cool. But without him,

the market might not have existed at all.

Indeed, snowboarding is a way of life for

Carpenter and he has found the golden

path to any successful business model:

he has melded his passion with his work.

Realising that it is

not about the

money but about the sport – and those

that take part in it – is w

hat ultimately

delivered the goods for Burton.

“I started the business as a get-

rich-quick scheme,” Carpenter says,

“but very soon I had even less money

than when I started.”

Part of the problem was that

originally, the Snurfer, upon which

Burton’s boards were based, were

marketed as toys, not sports equipment.

“I realised that if I

was ever going

to succeed, it would be by educating

people about the sport first,” Carpenter

explains. “If I looked out for the sport,

then it would look out for me.”

True to his word, he gave everything

he had to publicising this sport th

at had

just a small number of adoptees, most

of whom were being turned away from

resorts who didn’t want any “shredders”

on their slopes. Carpenter even taught

himself German and moved to Austria

for a time to infiltrate the snowboarding

community there and find out what

riders really wanted and needed.

This drive to understand his market

so that ultimately it understo

od him was

what made Burton the lea

der in boarding

products today. T

he key to Carpenter’s

success is th

at he knows to whom he is

talking. That’s why on at le

ast 100 days of

the year you’ll find him ripping down the

mountains, not only testing the products,


©2007 BURTON SNOW

BOARDS


At 54 years of age, Carpenter might not be considered so young anymore in a market where anyone past the age of 25 is considered un-cool. But without him, the market might not have existed at all.

“I have always loved snow. Snow represented no school, and that was a super-positive thing,” Burton said. “When I was seven, my father and mother took us up to Vermont to go skiing, and I really took to it.”

Since that day, Carpenter has never stopped messing around with boards in one shape or another. After a childhood of sliding down small hills in his backyard on a homemade plank of wood, Burton went to work for Victor Niederhoffer, who ran a successful hedge fund that sold privately owned companies to big corporations. But however lucrative it was, the job didn’t leave him satisfied. His passion lay elsewhere.

So, in 1977, with some money from his grandmother’s inheritance and zero woodworking skills, Carpenter bought a sabre saw and started making board prototypes. For the first few years, the business was a complete failure and Carpenter was in serious debt. But then, travelling from ski shop to ski shop in his pick-up truck, he decided to demonstrate how the board worked. Once people saw him on the board, the business started to take off.

Since then, Jake Burton Carpenter’s perseverance has led him to develop the world’s leading boarding brand. Before Carpenter, riders didn’t know how to get resorts to allow them on their slopes, let alone where to go to get a board that answered their dreams. Now, thanks to just one man’s determination, there are almost more riders than skiers tearing down the mountain. It’s not for nothing that Carpenter is widely recognised as the patron saint of snowboarding. ▲

CHANGE l KNOW THE MARKETPH

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2007

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The mention of the word Burton on any slope around the world is usually followed by whispers of awe or respectful nods of admiration. That’s because Jake Burton Carpenter (above), although not officially the inventor of the snowboard, is credited with the invention of the sport as it is known today.

Born in 1954, Carpenter grew up on Long Island, New York.

to anyone who asks – it’s not just about the experts, but the beginners, too. This is democratic retail at its finest, where everyone can come and feel like they can have a try at becoming a great rider.

And if you liked that, you’ll love thisCarpenter doesn’t only take care of his customers. His staff is part of the “family” that is, in turn, his customer base, so they get free passes and shifts are juggled so that everyone gets a chance to ride. Management has flexible hours too so that they have time to fit in a few slopes before work, and if it snows over two feet in 24 hours, the company closes for snowboarding time.

Then there’s the Learn to Ride programme, which makes Burton the only brand to provide beginners

with specific equipment and teaching methods. Or Go Snowboarding, which allows customers to get free lessons and lift ticket packages, transferable to family and friends. Oh, and what about Burton Studios on Apple iTunes, where you can watch movies of your favourite riders in action? Perhaps you need some tips on the best slopes near you? Call the Rider Services hotline, where a seasoned expert will guide you.

The list goes on. Whether Jake Burton Carpenter invented the snowboard as we know it or not, one thing is certain – there is no end to his ideas and efforts to make the sport fun and universal. The shredders have a real champion behind them, and as long as he continues to understand their lifestyle, we won’t be seeing the back of Burton anytime soon. ▲


but getting in touch with his market as well as gathering vital feedback and reactions from the people on the ground.

Speaking the customer’s language“The Burton experience is about riders talking to riders,” says Bryan Johnston, vice president of marketing. The idea is that the best way to know your market, to be aware of the subtle changes in it, is to spend a lot of time deep within its network. As a result, not only does Burton make those in the know feel like they are part of a community, but Burton is intimate with every aspect of the marketplace and knows where to go for inspiration.

In fact, the riders aren’t just at the end of the production line, they originate it too. Every new season, Team Burton comes to a round table to develop product ideas and make sure they get them right by taking them out for a spin, all the while talking to the guys on the slopes and staying plugged in with the latest trends. This is called “the process” and ensures that Burton gets its feedback directly from the pros.

The retail experience itself is also thought through to perfectly answer customers’ needs. So when the fifth retail flagship store opened last November in Osaka, Japan, it wasn’t just a random location choice. Osaka is close to a wide range of mountains and therefore a perfect location for riders to head to after they have bought their kit.

Inside the store, as with every other Burton flagship, everything has been carefully considered. First there’s the Cold Room, which simulates winter conditions to try on clothes. Then there’s the rider’s lounge, with TVs and learning materials to get ideas from. This then leads to a giant walk-in closet which alternates its themes by rider, giving you an insight into what the pros would have at home in their own wardrobe.

Each board can also be customised and all members of staff are riders themselves, on hand to give out tips or just share stories of their favourite slope to shred. And that advice is readily given

Understanding his customers’ lifestyles has taken Jake Burton Carpenter from a cupboard in Vermont to the head of the world’s leading boarding retailer. It has also allowed the Burton brand to expand into other areas and extend its approach to include every single aspect of the riders’ needs and desires. And the way this was achieved? By getting down and dirty with the users themselves.

Using expert riders to test and slowly fine-tune its products, today Burton has almost become synonymous with snowboards themselves. This complete understanding of what the customer wants has also allowed Burton to expand to create R.E.D. protective gear, Anon sunglasses and goggles, Gravis footwear and Analog clothing.

As an example of how Burton brands understand what their customers want, one of Analog’s propositions is to move away from the traditional baggy clothes associated with snowboarders. One of its first products, an orange jumpsuit, was met by resistance within the company, but now it is one of the brand’s most popular items. Somehow predicting what the customer wanted and then testing it out on the slopes proved to be more than successful, it just makes sense.

Realising that the boarding lifestyle extends way beyond the mountains, Burton also created Channel Islands surfboards and recently bought DNA distribution, which includes Alien workshop, Reflex and Habitat skateboards. But what really hits the mark are all of the peripheral propositions that the rider can enjoy when becoming a Burton customer.

There’s the Learn to Ride program, present in many resorts for riders to develop their skills or learn from scratch. This stroke of genius not only ensures Burton’s presence on the slopes, but it also makes it the only brand to provide beginners with specific equipment and teaching methods. Then there’s the Go Snowboarding package, which offers customers free lessons and lift tickets, transferable to family and friends.

Finally, with the expansion of the brand to Burton Studios on Apple iTunes, customers can enjoy movies of their favourite riders out and about.

From being product people to turning into professional producers, now that Burton has infiltrated its customers’ lives so fully, there really is no limit to what it can offer. And that, in turn, means that it will be always be able to count on the loyalty of its customers. ▲


CHANGE l UTILITIES

a customer’s predisposition to select a business entity as their preferred provider and their tendency to resist competitors’ persuasive attempts because the selected business entity is perceived as the best choice alternative.

However, again, for many utility customers, the notion of having a preferred provider and resisting competitors’ attempts does not make sense in today’s environment.

Perhaps a better or more relevant way for utilities to approach the definition of customer loyalty is to further expand how they think about loyalty. Consider the following definition: Customer loyalty is a behavioural disposition on the part of the customer to respond favourably toward the brand and company

utility industry, all customers would automatically be considered loyal. As such, measuring customer loyalty would appear to be unnecessary.

Nonetheless, it was just ten years ago that deregulation of the power industry seemed imminent in the US. This means it is possible that customers will have a choice of providers in the future. One could attempt to simulate a situation where customers will have a choice and speculate on whether they would continue using their current provider. However, this can prove faulty, since the thought of having a choice is too hypothetical or far-fetched for many current utility customers.

Another slightly expanded definition of customer loyalty to consider is this: Customer loyalty is

In today’s competitive world, the measurement and modelling of customer loyalty has become a valuable management tool for companies to better ensure that they remain competitive and

maintain, or better yet expand, their current customer relationships.

However, measuring customer loyalty in an industry where many customers don’t have a choice of providers doesn’t make sense. Or does it? The answer depends on how you define “customer loyalty.”

Some equate customer loyalty with basic customer retention. If a customer continues to do business with a company, that customer is, by definition, considered to be loyal. If this definition were applied to many companies in the

Powering up loyaltyUtility customers often don’t have a choice

By Chris Parcenka


consistently and across situations. It is the willingness to engage in a variety of behaviours that serve to maintain and deepen the relationship between a brand and its customers.

So what does it mean to respond favourably to a company? At a basic level, this can mean choosing to remain a customer. As previously mentioned however, this is essentially a non-issue for many utility companies. It then becomes necessary to think beyond just customer retention. One needs to consider other ways in which customers can respond favourably toward a company.

Other favourable responses or behaviours can be classified into one of three categories that reflect the concept of customer loyalty:

• Expansion• Compliance or Influence• Advocacy

Expansion is the extent to which a customer is likely to increase the level of business he or she is doing with a company. For a company in a competitive industry, this could mean expanding the depth of products or services purchased from the company. It could also mean purchasing or subscribing to new products or services, perhaps from a different product line or business unit. This would be expanding the scope of products or services purchased from the company.

For an electric utility customer, doing more of the same, such as increasing electrical usage, may not

be a relevant expansion behaviour. However, the relationship between an electric utility customer and the provider can be expanded in other ways that benefit the utility company. Specific examples of potential expansion behaviour in the electric utility industry include:

• Signing up for programmes that help the customer reduce or manage their energy consumption

• Using the utility as consultant when selecting energy products and services from a third party

• Paying a premium price

Compliance or Influence is the extent to which a customer is likely to comply with company requests or be

It is the willingness to engage in a variety of behaviours that serve to maintain and deepen the relationship between a brand and its customers.


influenced by the company in a way that benefits the company. Specific examples of potential compliance or influence behaviours that utility customers might exhibit include:

• Seeking the utility’s advice or expertise on an energy-related issue

• Voluntarily cutting back on electricity usage if the utility advised the customer to do so

• Accepting the utility’s energy advice or referrals to energy contractors or equipment

• Being influenced by the utility’s opinion regarding energy-management advice, equipment, or technologies

• Providing personal information that enables the utility to better serve the customer

• Paying bills online• Paying attention to advertising

Advocacy is the extent to which a customer is willing to speak favourably about a company to friends, colleagues, or others. Advocacy also includes a customer’s willingness to actively support that company on issues and matters that are important to the company.

Creating customer advocates can be especially important for a company in a regulated industry. In the absence of customer advocates, or worse, in a situation where customers speak

unfavourably about a company or actively work to support issues that are counter to those the company supports, companies can suffer a variety of negative consequences like increased business costs, lawsuits, fines and construction delays. For an electric utility, specific examples of potential advocacy behaviour include:

• Recommending that other customers specifically locate in the geographic area that is serviced by that utility

• Supporting the utility’s positions or actions on energy-related public issues, including the environment

• Supporting the utility’s position on the location and construction of facilities

• Providing testimonials about positive experiences with the utility

To best determine how loyalty should be defined for a given company, the company needs to identify favourable or desired customer behaviours that will benefit the company in some meaningful way. When identifying these desired customer behaviours, customer segment differences should be taken into account and reflected in how the behaviours are measured. The following questions should be considered in identifying the relevant expansion, compliance, and advocacy behaviours:

• What does the company want from its relationship with customers?

• How would this benefit the company, in both monetary and non-monetary ways?

• What can customers do to support the company’s mission?

• What can customers do to help the company better serve them?

• What can customers do to minimise the company’s cost of doing business with them?

• How does the company define an ideal customer? What do they do or not do? How do their actions

CHANGE l UTILITIES

The higher the level of goodwill is, the more motivated the customer will be to exhibit expansion, compliance, and advocacy behaviours, even when things may not be perfect.


specifically benefit the company?• What does the company consider

to be a “less than ideal” customer? What sets these customers apart from ideal customers? How do their actions impact the company?

For the researcher responsible for measuring customer loyalty, these questions can best be addressed using internal qualitative research with a mixture of cross-functional company representatives. This could be accomplished via one-on-one interviews and/or roundtable discussions. The above questions help the company to think beyond traditional customer loyalty or customer retention. The desired behaviours could include behaviours that some customers already exhibit today. Behaviours could also include what companies would ideally like their customers to demonstrate.

After the loyal behaviours are defined and measured among customers, it is important to statistically verify that they reflect customer loyalty. Periodically, it is also important to revisit how loyalty is being defined for a company. When re-examining each measure of loyalty, the following questions should be raised:

• Is the meaning of the loyalty measure clear?

• Is this behaviour relevant in today’s environment? Can customers do this immediately? If not, how likely is it that this behaviour will become relevant in the near future?

• How important is this behaviour for the company, and how does it benefit the company?

• What is missing from the list?

Once customer loyalty has been defined in a way that is meaningful for the company and statistically valid, it is necessary to understand the customer experiences, interactions,

perceptions, and attitudes that drive customer loyalty. For example, maintaining and nurturing a reservoir of goodwill is critical in helping to ensure that customers are motivated to behave in a favourable manner, now and in the future. Measuring the extent to which a company has an emotional connection to or bond with the customer is key to assessing the level of goodwill that exists between the customer and company. The higher the level of goodwill is, the more motivated the customer will be to exhibit expansion, compliance, and advocacy behaviours, even when things may not be perfect (such as during a power outage).

In sum, loyal behaviour in the utility industry may not be as evident as it is in a more competitive environment. Measuring customer loyalty in a generally non-competitive industry requires one to think about loyalty in non-

traditional ways. Customer loyalty is an intangible asset that has positive consequences or outcomes associated with it no matter what the industry. Properly measuring loyalty among utility customers requires thoughtful probing to thoroughly identify the range of expansion, compliance, and advocacy behaviours that will ultimately benefit the company in meaningful ways, and foster happier and more loyal customers. ▲

Customer loyalty is an intangible asset that has positive consequences or outcomes associated with it no matter what the industry.

For more information, contact Chris Parcenka at [email protected].


CHANGE l VIDEO GAMES

The name Wii, pronounced “we”, was chosen because the last two letters resemble two people standing side-by-side playing a game. But this could easily signify the double-pronged blow that Nintendo has dealt to rivals Sony and Microsoft.

The Wii has not won the war alone. The Nintendo DS, a handheld device originally launched in 2004, edged out rivals like Sony’s PSP handheld game device at the beginning of 2008. Inter-operability with the Wii and a set of compatible game titles leveraged sales for the portable DS, helping it to gain traction. The double whammy delivered by the Wii and the Nintendo DS proved that Nintendo was doing something right.

Impressive sales, which have led

While Sony’s Playstation 2 and Microsoft’s Xbox 360 locked horns, beefing up graphics and processing power to compete, Nintendo suffered losses with its GameCube console. Things changed in 2007 when industry researchers announced Nintendo’s Wii had overtaken the Xbox 360 to be the world’s leading game console, a position it had not held in 17 years.

Suddenly it was as if the world was looking at a whole new ball game. And that’s exactly what the Wii offers. Actions made standing up using a wireless handheld device that detects movement are mirrored by figures on the display. The bat-like interactive tool enables users to play games like golf, tennis and basketball, as well as popular adventure games like Zelda.

Nintendo, the Japanese videogame maker, has bounced back from the digital doldrums with its groundbreaking Wii videogame console and

the pocket-sized Nintendo DS. Both consoles raked in soaring revenues without the top-notch graphics or processing power of machines made by rival companies.

Nintendo created gaming characters like Super Mario Bros and Donkey Kong that became icons of a generation. But just a few years ago, the videogame pioneer was in danger of being consigned to the history books as it struggled to keep pace in a US$10 billion business dominated by Sony and Microsoft.

How Nintendo won the videogame warFocusing on the experience and getting butts off couchesBy Remo Notarianni


to supply shortages, are evident from the diverse age range of customers. The Wii and the DS are not only appealing to game-happy teenagers and kids, but are also causing grannies to put down knitting needles and pick up game wands.

While gaming companies were agonising over how to create a new generation of high-powered processors and hyper-realistic graphics, Nintendo created cross-platform entertainment that bridged the generation gap.

The Wii has tapped into a universal customer experience by resonating with the family. It is not confined to teenagers and kids. Family members are playing it together. It is also luring more female enthusiasts.

“You can see retirees playing both

The success of both the Wii and the DS has made Kyoto-based Nintendo the third biggest company in Japan in terms of market capitalisation. Its re-emergence has not been easy but it has managed to do it with a shift in perspective.

THE SAMPLE IM

AGES USED ARE FOR EDITORIAL PURPOSE ONLY AND ARE COPYRIGHTED BY©NINTENDO ENTERTAINM

ENT SYSTEM

CHANGE l VIDEO GAMES


the Wii and the DS,” Reggie Fils-Aimee, president of Nintendo America said recently.

The success of both the Wii and the DS has made Kyoto-based Nintendo the third biggest company in Japan in terms of market capitalisation. Its re-emergence has not been easy but it has managed to do it with a shift in perspective.

Credit has been given to Nintendo’s president, Satoru Iwata, who came on board as the company was facing losses brought on by the GameCube. Instead of trying to enhance the software, Iwata decided to focus on the players’ experiences and designed a console that got people away from desks and off sofas, interacting with each other as well as the machine.

Iwata recently asserted that the Wii has created a “paradigm shift.” The console brought a new class of gamer into the fold, offering a conceptual experience never before seen in the home video game industry.

The Wii has carved out a new niche for itself by stepping out of

traditional gaming conventions into a world of its own, according to Simon Cox, vice-president of content at the Ziff Davis Media game group.

“The bottom-line on the Wii, in my opinion, is that it’s in a class of its own as a toy almost, rather than a traditional console,” said Cox. “It sells hardware like you wouldn’t believe, but software sales aren’t as strong as for the Xbox 360.”

The Wii offers an alternative experience to the world of pixel

absorption. The emphasis on non-sedentary entertainment that keeps players on their feet has been a vital component. With Wii Fit, a series of exercise games that work with an add-on hardware device called the Balance Board, Nintendo is keeping enthusiasts out of their seats. People can practise yoga, and do sit ups.

Perhaps it is this emphasis on exercise that has made it appealing to older gamers, which is something more socially rewarding than spending long hours in front of a monitor.

“We started with the idea that we wanted to come up with a unique game interface,” Nintendo game developer Shigeru Miyamoto said last year. “The consensus was that power isn’t everything for a console. Too many powerful consoles can’t coexist. It’s like having only ferocious dinosaurs. They might fight and hasten their own extinction.” ▲

The consensus was that power isn’t everything for a console. Too many powerful consoles can’t coexist. It’s like having only ferocious dinosaurs. They might fight and hasten their own extinction.

©NINTENDO ENTERTAINM

ENT SYSTEM

CHANGE l VIDEO GAMESCARICATURE BY EM

ILIO RIVERA III

new ‘Mii’ feature that allows people to put their own identity in the game so that you see yourself on the screen.

“Because of that identity involvement it will attract people to play the game with other people,” Shair adds. “It’s the kind of interaction that people want.”

What Shair’s research also showed was that the Wii helped bring in new customers. For really the first time in the market, a game console was attracting young girls, who until the Wii’s introduction, were not a key market. Whole families, Shair says, including

grandparents, were now spending more time together and bonding as they played together.

“The biggest change is that now people are coming together instead of someone playing by themselves. With the Wii,” Shair says, “this is not in isolation where you become antisocial. Now you want to spend time with other people.” ▲

Nintendo’s blue oceanIf you can’t beat ’em, change the gameBy Matt Driskill

When Brendan Shair, Synovate’s executive director for Greater China, was searching for a topic for a paper he had to

present in 2007, he chose to compare and contrast different research methodologies. To highlight the pros and cons of focus groups, online surveys, and other types of research, he chose to use the Wii, the hot and then-new gaming console that had just been released by Nintendo.

What he learned about different methodologies may not surprise practitioners of the art and science of research, but what they learned about the Wii, and the consumers who use the console, was revelatory.

“As a byproduct we did learn quite a bit,” Shair says. “A year ago it was something very new and everyone talking about the game consoles. The Wii sales numbers were beating the other two competitors (Microsoft’s X-box and Sony’s PS2). We got the feeling that they were doing quite well.”

What Nintendo did with the Wii was “redefine the game console category,” Shair says. “They basically changed the environment and now they’re winning in the new landscape.”

Shair likens this to a “Blue Ocean Strategy,” wherein the aim is not to outperform the competition in the current market, or red ocean, but to create an entirely new market space, or blue ocean, and render the competition irrelevant.

“The competition before was always about the high-tech quality of the console, the graphics, those things that really only attract young males to gaming,” Shair says. “The Wii redefined the category by giving people a new game experience. They allowed their users to use their whole bodies instead of just remembering which button does what. They also designed a


The Wii redefined the category by giving

people a new game experience. They

allowed their users to use their whole bodies instead of

just remembering which button

does what.

For more information, contact Brendan Shair at [email protected].


CHANGE l BEHAVIOUR


Social scientists have struggled for generations with the issue of what people say versus what people do. If we as researchers cannot trust

what people tell us, how can we predict what will happen with the products and services we research? Trying to comprehend that understanding and prediction are not the same thing makes many of us uncomfortable because we have been taught that understanding is the key element of prediction and it is, but it is not the same thing.

When I was a child and got sick, my mother would prepare remedies that had been passed down from generation to generation. There was a particular order, almost a ritual that she followed in preparing the medicines. She had no idea why a particular remedy worked, but she knew that if she prepared the medicine in the way she had been taught, the medicine would work. She had no understanding of the underlying

biochemistry, but she was able to prepare something that would help. She had prediction with no understanding.

When I took my first course in research methodology, I encountered a different example of prediction without understanding. A small town in Minnesota was experiencing an interesting pattern. Alcohol sales there were highly correlated with the amounts the local churches received in their Sunday offering baskets. The first hypothesis for this was based on guilt. People got paid on Fridays, drank on Saturdays and came to church on Sundays with a guilty conscience and a hangover. But social scientists examining the problem discovered that most of those living it up on Saturday, the drinkers, didn’t go to church. So what was going on?

There was a latent variable driving both phenomena. When times were good, income would increase and some people chose to spend it on alcohol, while others chose to donate more to their local church. Alcohol sales and church offerings are highly correlated.

You don’t have to know about the underlying latent variable to predict what is going on.

So we have prediction with misunderstanding. How often in life does this happen? Many, many times.

Can we have understanding without prediction? Well yes. When mainframe computers became commercially available in the 1950s, one of the first applications they were used for was processing information on weather patterns. The hope was that we could process enough information to predict natural disasters days, perhaps weeks, ahead of time. But as history has shown, that kind of forecasting is almost impossible. From 1960 to 2008, we have been able to move to a 14-minute warning period for a tornado for example. The factors that impact the development of natural disasters are so many and involved in such subtle relationships that modelling them with any precision to allow for more warning escapes us.

Human thought and behaviour too are complex. There are many reasons why what we do looks to be inconsistent with what we say. First, there are issues of recall. Recall is problematic and far from perfect and gets worse the farther back in time we go. Think about something that happened yesterday. You can probably

PHOTO-ILLUSTRATIONS BY RED

If we tried to process all the information that hits our five senses, we would suffer information overload. The human mind condenses information, processes what’s important and dumps the rest.

The impact of small deviationsBy John P. Vidmar, Ph.D.

What people say, What people do


CHANGE l BEHAVIOUR

Context is critical to determine what is important and what you will recall at a later point in time.


describe the event accurately, perhaps even the exact time it occurred. Now think about a similar event that occurred a year ago. How much can you recall and how accurate is your recollection about that event?

Recall is also impacted by salience – how important a certain event was in your life. If we tried to process all the information that hits our five senses, we would suffer information overload. The human mind condenses information, processes what’s important and dumps the rest.

Think about walking down the street. Do you study the sidewalk? Do you notice the colour of the cement? Do you know about how many steps you take in between the expansion joints in the cement? The distance between the expansion joints in the sidewalk is a fact that you encounter, but quickly throw away. It is irrelevant and not salient to the problem of getting from where you are to where you need to be. Context is critical to determine what is important and what you will recall at a later point in time.

Another interesting factor about communication is that it is interactive. Kind of obvious isn’t it? But think about it. The first problem with human oral communication is that it is imperfect. What a person says and what a person hears can be two different things. From our early years we are taught that words have definitions and these definitions provide an aura of precision. But language is built on a base set of words that are not precise. Select a word, look up its definition and then look up the definitions of the words in the first definition. Keep doing this and

somewhere around the fifth level of the exercise you will start seeing some of the words used in the very first definition. Language is not as precise as we think.

The second interesting characteristic of communication is that people impact each other when they communicate. That seems obvious, but it also has serious research implications. Since the 1960s, the National Science Foundation has supported a programme in the United States called the National Election Studies. At first these were surveys carried out before and after national elections using the same panel of people. As the research progressed, more money was added and the people recruited to be on the panel were interviewed as early as the primaries.

As this research progressed through the years, the final results were very close to the distribution of the final vote. However, the proportion of respondents who said that they voted was significantly higher than what was experienced in the general population. For years, social scientists assumed that respondents at the post-election survey were lying about actually voting. It is socially acceptable to do your civic duty so respondents were supposedly trying to face save with the interviewers.

Someone got the bright idea to sample the respondents and spend the time and effort to search public voting records to determine if the respondents voted. To everyone’s surprise, they discovered that people had not been lying. They did vote. The fact that these people were repeatedly interviewed about a national elections heightened their interest in the elections. Some

of these people who had not paid attention to the elections were now sensitised to it because of the interview experience. This forced us to face the fact that when we talk to people, we impact them. We cause them to think about what we talked about and we modify their attitudes and subsequently change their behaviours.

The implications for survey research and especially for panel designs with no cross-sectional control groups are obvious. When we interview people, we affect their attitudes and behaviour and the respondents will be different because of this interchange.

The anthropologist Margaret Mead pointed a whole generation of social scientists in the direction of analysing context. Context is what we have to deal with when we develop questionnaires to query respondents. A questionnaire by definition is a closed system. No one would argue that we account for every factor that impacts a person’s decision to do something. We limit what we ask in order not to burden the respondent and gain acceptance. The interview is a closed system. It helps us to understand the relationships between variables, but it closes off from other factors that alone, seem small, but can in an open-system context cause a serious deviation in behaviour. Mathematicians even have a name for this phenomenon: They call it the impact of small deviations.

One of the famous observations that came from the simplification of chaos theory was that a butterfly flapping its wings over North America impacts the weather in Europe. That is what makes weather patterns so difficult to predict. We can understand general patterns and how one factor impacts another yet once we get into the real world, we can’t control all the little things that accumulate and have a major impact on what are observing. ▲

We can understand general patterns and how one factor impacts another yet once we get into the real world, we can’t control all the little things that accumulate and have a major impact on what we are observing.

For more information, contact John P. Vidmar at [email protected].

LEGO learns a lessonIconic brand returns to its roots to recapture lost customers By Lewis Borg Cardona

CHANGE l RETURN TO BASICS


A March 2008 poll from publishers Random House has revealed that 55% of British parents surveyed believe childhood is now “over by 11”, a fact bemoaned

by former children’s laureate, Dame Jacqueline Wilson. It is also a problem for iconic brands like Denmark’s LEGO, the world’s sixth largest manufacturer of toys in terms of sales.

With a company ethos rooted in learning through play (LEGO comes from the amalgamation of Danish words leg godt, meaning play well), if the child in all of us is growing up too soon, where does that leave a traditional toy retailer? Judging from past results, the answer certainly used to be “worried.”

By 2004 the LEGO Group had to take radical new steps to tackle its most serious financial crisis to date. General economic pressure on consumer demand combined with a squeeze on the toy market specifically driven by consumer electronics caused a decline in sales of traditional toys. In addition, the majority of competitors were sourcing their products in low-

cost countries like China. The overall effect was intense price competition with pressure on profit margins, all in a declining market. The net loss for the LEGO Group was 1.93 billion Danish krone, or US$394.56 million, compared to a 935-million krone loss in 2003.

Two years ago the company began a restructuring process to shed 1,200 jobs and move production from their traditional Danish and American bases to plants in the Czech Republic and Mexico. Part of the action plan involved selling off the LEGOLAND parks, while the company returned to its classic core products and brand values. While embracing the reality of globalisation, a refocused company strategy aimed to create a sustainable business by differentiating the LEGO brand and placing the emphasis on a truly creative product. The company also said in its 2006 annual report that it wanted to become “exceptionally close to the users.”

That same year LEGO’s then Director Global Innovation & Marketing, Flemming Ostergaard, presented the building blocks of this new strategy at

the European Market Research Event via a presentation titled “Leveraging Ethnography and Anthropological Research to Innovate.” Or, as Ostergaard, now Marketing Director of the LEGO concept lab in Billund, put it: “If you want to know how a lion hunts, don’t go to the zoo, go to the jungle.”

In a world where consumer experience is key, LEGO found itself out of touch, according to Ostergaard.

“Being a major toy company, we had the sentiment that we certainly understood our consumers, the children of the world. But I guess what we also found out, with the financial difficulties that we’ve been through, was that maybe we didn’t understand our consumers as well as we thought we did.”

The answer was to re-interpret the needs of kids via a variety of research techniques, including the novel use of ethnography.

“This idea of actually being out with kids is something completely different,” Ostergaard said. “Just being in their rooms, hanging out with them on their turf and on their terms certainly gave some new insights.”

The subjects were the core customers.“People of the age of seven to nine

in some of our major markets, being Germany and the U.S., we tried to be as close to them as we possibly could. It was more a matter of observing than

In a world where consumer experience is key, LEGO found itself out of touch.

LEGO learns a lesson


anything else,” Ostergaard said.The results of this detailed study

were to deliver an insight into some of the core values crucial to the company’s future success, in essence, to sharpen the delivery of the product. Ostergaard is convinced in the process.

“I certainly can say that we are a lot more on the ball, we are a lot more relevant with the products that we come up with,” he said. “It seems like they are also more appealing to kids than perhaps [our products] might have done just five years ago.”

The research produced some surprising results, especially in terms of a refreshing glimpse into 21st century childhood.

“In terms of the ethnographic research that we did, we certainly had a lot of ‘Aha!’ moments, especially moments around privacy,” Ostergaard said. “It seems like kids of today are extremely scheduled, they lead very scheduled lives. Mum knows everything that’s going on. They rarely have a moment when they can just be themselves, when they can breathe. That certainly was an eye opener to us.”

Such insights allowed LEGO to work on a six-pillar approach to turn their customers’ core values into patterns, or “innovation vectors” as Ostergaard puts it.

“One of the innovation vectors

PHOTOGRAPHS BY BY EMILIO RIVERA III

that we came up with was simply one that talks about this,” he said. “Kids need oxygen, kids need privacy, they need to have room where they are on their own and they can do what is relevant to them, and even though it’s something that mum and dad might not always understand, and sometimes might not even like, that’s just a part of understanding the world and growing up.”

So the need for privacy became an issue to address, Ostergaard said. “That’s a need that we haven’t seen before with the kids. How do we actually go about innovating products that can fulfil that need?”

Meanwhile LEGO has also been keen to involve those of us who never grew up and are known as AFOLs, or Adult Fans Of LEGO. Globally united by website communities, these are the individuals who have made the company’s more technology driven products, such as the NXT MindStorm robots, massively successful. Here, consumer-led innovation has been key, with the company recruiting lead customers to co-design the new product and then allowing post-launch forums to extend its functionality via software releases including modifications and extensions contributed by AFOLs.

The ultimate customer experience, Ostergaard knows, is that his company’s future growth is intrinsically linked to its classic design past.

“LEGO is a fantastic tool for creativity and as simple as it is – and that’s probably the genius of it – it’s what we still need to stay with for years to come. How we apply that in various technology toys, time will tell,” he said. ▲


LEGO is a fantastic tool for creativity and as simple as it is – and that’s probably the genius of it – it’s what we still need to stay with for years to come.

CHANGE l RETURN TO BASICS

CHANGE l AIRLINES


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Whether or not customer service is something you can legislate, the question of why some carriers are excellent when it comes to customer service and others abysmal is one that continually arises By Chris Kucway


In December 2006, Kate Hanni was stranded aboard an American Airlines plane that sat on the tarmac in Austin, Texas for nine hours. She and her fellow passengers were denied

food, water and access to functioning washrooms. The airline wouldn’t allow passengers to deplane. What’s worse is that the problem was entirely avoidable: it was due to a mechanical problem with the aircraft.

Yet unlike many passengers who simply got mad, Kate Hanni decided to get even. The real estate agent wasn’t going to take it any more and out of this chaos came a coalition of airline passengers that now numbers 21,000. It’s gone so far as to lobby for a bill of passenger rights, at least in the United States.

While what separates the good airlines from the bad is obvious, at least on paper, there’s a growing trend today of passengers standing up for themselves. Hanni, for one, says that airline passengers have become too complacent in accepting small payoffs when bumped off a flight or delayed for preventable reasons.

“The airlines are doing everything they can right now to convince you that a two-hour delay is normal.” Airline passengers, she says, need to be more proactive when travel plans go awry.

As a consumer advocate, Hanni says she does not see herself as a thorn in the side of the airlines. In fact, just the opposite.

“Our movement,” she says, “to improve the dignity and quality of life that a customer has during a flight should be a benefit to them (the airlines) overall and it will help their business in the long run.”

When customer service deteriorates to a large degree, Hanni says, the question then starts revolving around

safety issues. This was what prompted her involvement: the frail, the elderly, and the young were all very much at risk. Eventually, all airline passengers suffer in such extreme situations. Beyond that are problems within the industry itself that affect in-flight staff. Everything from mergers to pay cuts to dwindling pensions all play on the minds of cabin crew and their attitude can reflect this.

Any air traveller with enough mileage has his or her own horror stories when it comes to airline customer service. Whether or not customer service is something you can legislate – of course, the airlines say it is not – the question of why some carriers are excellent when it comes to customer service and others abysmal is one that continually arises.

Take an airline that guarantees the automatic lowest fares, live digital satellite in-flight television programming, premium food and the ability to vote online for the best parts of your trip. Sounds too good to be true? Well, please excuse the play on words, you’re right, it didn’t fly.

Those were among the many promises made by Song, a low-fare spin-off of Delta Airlines, in January 2003. The carrier was described as “revolutionary” and “groundbreaking” when it was launched, yet by the end of April 2006, it was grounded. There’s no one reason why it failed and in fact, its parent, Delta, had filed for bankruptcy protection in September 2005.

The latest Zagat Survey of airlines reveals few surprises. While Asian-based airlines continue to score high marks among passengers, American carriers most often appear in the lower half of the tables. Since 1990, when Zagat began its airline surveys, only Continental and Southwest in the United States have improved their standings. An example of

an Asian carrier that gets it right is Japan’s Starflyer, which entered the skies in 2006. It flies A320 Airbus aircraft with 30 seats removed from the standard configuration of 170 seats. That means a substantial increase in seat pitch, adding to passenger comfort. Internet connections and personal video screens are found in every seat, while the middle seat folds into a table when unoccupied.

Overall, both in premium and economy service, Asian-based carriers took nine of the top ten places in the 2007 survey. Only Virgin Atlantic – tied for second in the premium category and tied for sixth when it comes to economy – is not based in the region.

In both instances, Singapore Airlines came out top of the table. Singapore Airlines is commended in the highest of terms. “Reminiscent of the golden age of flying” is the underlying theme. Passengers prefer its up-to-date aircraft, well-trained crews and good food. But how does the airline accomplish this?

Aside from studiously reviewing its operations, even SIA cannot pinpoint one reason.

“Over the years, the airline has introduced campaigns focused on promoting customer service,” says SIA spokesman Moses Ku. “The objective is to strengthen the value of service among staff, as well as to identify problem areas and introduce procedures to enhance service performance.”

Virgin Atlantic, the odd one out geographically, is spoken of in similar terms. Passengers speak of being pampered like a rock star.

“With fierce competition in Asia, Asian airlines are definitely proactive when it comes to capturing their share of the market,” says Angelina Wong, Virgin Atlantic’s marketing manager in Hong Kong. She adds that the idea of customer service is strong in the region to begin

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CHANGE l AIRLINES

Once airlines realise the potential of newly empowered customers, Shankman says, he is convinced that they will be able to improve their services, retain and gain customers, and improve the bottom line.

with, which is why more than half of the front-line staff that Virgin employs is fluent in the local language and customs.

Chaotic terminals or boarding procedures, uneven on-board service that is usually better on international flights, different aircraft within a single fleet that result in varying levels of comfort, and food that is best not to eat are the main passenger concerns when it comes to airline travel.

So it’s no great surprise that modern terminals and aircraft, pleasant staff, and decent food all contribute positively to customer service. Nor is it a shock to see airlines that can afford to constantly reinvest in their product topping the tables. But what about the rest? How can they improve their customer service?

Staff training is one area where every airline starts.

“Virgin Atlantic always believes in investing in its people first,” says Wong. “If staff are happy with their jobs, they will be able to deliver better service.”

Feedback from the same staff is also

vital and costs little – both Singapore Airlines and Virgin Atlantic are well known for this – as does rewarding employees for their good work.

As in other areas of international commerce, innovative thinking goes a long way in the airline business. It’s one thing to call your business revolutionary, but it’s more important to actually be so.

Passenger bonding has taken on a new look in the United States, thanks to marketing whiz Peter Shankman. He started a group called Trip Life, where airline passengers can network. It might be as simple as recommendations for a good Japanese restaurant in Chicago, but also extends to meeting new business contacts and even finding seatmates with similar interests on the same flight.

For his part, Shankman calls it a “customer-driven revolution.”

“Consumers are empowered today like never before, with websites, blogs and ‘insta-feedback’ on virtually everything. Our members are more proactive than ever about, not only their networking opportunities, but how they

choose to travel as well.”Once airlines, or any large company

for that matter, realises the potential of newly empowered customers, Shankman says, he is convinced that they will be able to improve their services, retain and gain customers, and improve the bottom line.

In Singapore, Ku points out that one area often overlooked is uniformity throughout the world. At Singapore Airlines, each station follows the same service guidelines, much as the actual aircraft are physically the same, in an effort to create consistency and more easily handle any problems when they arise.

Finally, and almost in spite of seat comfort, smiling flight attendants or a decent meal, the belief that the customer always comes first has never been more important. Airline passengers tend to not notice everything going to plan, and instead are most vocal when travel plans go awry.

Singapore Airlines’ Ku advises airline passengers familiarise themselves with the latest rules and regulations in order to be properly prepared for any problems when flying.

It’s an obvious point, but one that airline passenger advocate Kate Hanni has taken to heart. The fact that she was named one of the most influential people in the travel industry last December, along with Richard Branson and Al Gore, speaks volumes. ▲

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CHANGE l HEALTHCARE


GRAPHICS BY EMILIO RIVERA III

Bespoke healthAs more people choose to head overseas for medical procedures, is this the dawn of the patient as consumer?

Medical tourism is far from a new phenomenon. In the 18th century, taking to the rejuvenating spa waters of Bath in Great Britain or Spa in Belgium

was a popular pastime among the upper classes, but as far back as medieval times such waters attracted countless visitors, all hoping to be revitalized by their curative properties. Elsewhere in the world, hot springs like those at Kusatsu and Yamanka in Japan have been renowned for centuries for their healing powers, as have those on New Zealand’s North Island.

Fast-forward 300 years and many are making more than a well-intentioned journey to soak away their aches and pains. Faced with spiralling health insurance costs and ever-growing waiting lists for even the most straightforward of operations, many consumers in the West are taking the matter of health into their own hands.

Patients are exercising their rights as consumers and taking advantage of the lower costs of health care elsewhere in the world, where procedures are a fraction of what they would pay at home. It’s not just a handful of people making the journey either: the Bumrungrad hospital in Thailand, for example, attracts over 400,000 international visitors every year, and India has officially designated health care as an export.

With the cost of flights to anywhere in the world enticingly low, boarding a plane for a health treatment is an all-too-tempting prospect for many. What’s more, agencies specialising in international medical travel, sometimes

known as health travel planners or medical concierge agencies, are a growing part of the medical travel industry and work with hospitals, airlines, hotels and recovery retreats abroad to offer patients top-notch service at affordable rates. One such organisation is South Africa-based Surgeon and Safari, which promises “privacy in paradise, with the time to heal away from public scrutiny.”

The founder of the company, Lorraine Melvill, happily forwarded client emails to Change Agent. One recent customer, Miek, proclaims, “Thank you for your care and cheerfulness. I have had two wonderful weeks to remember and an updated

CHANGE l HEALTHCARE


face in the process. My husband was very impressed. He had been convinced that I would look bruised and would want to hide for another couple of weeks, or need after-care.”

Melvill said that many clients use them more than once.

“Twenty percent of our business comes from repeat clients. If you offer any medical client a good service with attention to detail and a good level of after-care they will come back,” Melvill said.

One of the most prominent medical concierge companies in the United States is Chicago-based MedRetreat. Their website aims to put the customer at ease and contains detailed information on the procedures they offer and the destinations in which the company operates.

Managing Director Patrick Marsek says, “We’re very patient-centric. When our clients are overseas, they are assigned a Destination Programme Manager who understands American culture and will hold their hand through every step of the procedure.”

Indeed, as Josef Woodman, author of Patients Beyond Borders, points out: “Many hospitals meet patients at the

airport, and supply them with in-country cellphones, transportation from their hotel, special cuisines, interpreters and the like.”

Much more than a referral service, MedRetreat takes care of every aspect of the medical tourism experience, from tracking down the right surgeon to finding suitable post-procedure accommodation. MedRetreat is so confident it can please clients that it even offers a money-back guarantee as well as a 100% refund on deposits.

“We want to help customers make that leap of faith, so they can think ‘if worse comes to the worst, I can always go back home.’” It’s an approach that’s paid off, Marsek says. “Our patients are usually so happy with the standard of treatment they received and our efforts to ensure that they are operated on by the very best surgeons that we have plenty of referrals, plus many second and third time medical tourists, particularly on the cosmetic side.”

Their most popular procedures are “face and neck lifts, rhinoplasty and liposuction,” although he reveals that more serious treatments such as hip resurfacing are becoming increasingly

popular. “As medical tourism becomes more mainstream, people are realising it can be safe to have complex procedures carried out overseas.”

Because MedRetreat does not charge clients for their services - the company receives a discount from its hospital partners who also pay them for their services - Marsek explains that it does not make sense for clients to cut out the middleman and go straight to the doctors themselves.

“Why should they when we’ve travelled the world to find the best doctors and hospitals?” he asks. Surgeon and Safari’s Melvill adds, “There will always be some people who will want to go straight to the doctor and we can’t really do anything about that. But they will not get the personalised service and after-care which is what you need when you’re out of your comfort zone away from home.”

Another well-established medical concierge company is California-based Planet Hospital. President Rudy Rupak is keen to emphasise just how detail- oriented the company is when it comes to customer care. “If a patient has a nut allergy, for example, we would

Faced with spiralling health insurance costs and ever-growing waiting lists for even the most straightforward of operations, many consumers in the West are taking the matter of health into their own hands.


probably recommend that they don’t travel to Thailand, where a lot of the food is either cooked in, or contains nuts.” As for repeat clients, Rupak claims they have many, particularly for cosmetic operations. “Actually, we have to dissuade some clients from having so many procedures - the human body can only take so much,” he admits. Perhaps unsurprisingly given such a responsible attitude, customer satisfaction levels are high. “Over 97% of our feedback is positive,” adds Rupak.

Many of those who have opted for treatment overseas are evangelistic about the care they received, with some claiming they were treated like celebrities. It’s a far cry from over-stuffed waiting rooms tended by overworked, stressed-out doctors and nurses, and such a positive experience

will obviously ensure that the concierge service and hospital staff form a close bond with the customer. Depending on the treatment chosen, there are different levels of customer loyalty. “Dental and cosmetic patients tend to return to same clinics and countries for ongoing care, building relationships with in-country doctors,” says Woodman. “Cardiac, orthopedic, IVF and so on tend to be one-offs, and repeat business isn’t common, unless for complications, which are rare,” he explains.

As consumers thumb glossy hospital brochures taking in images

customer always being right does not – or at least should not – apply.

How, after all, can a patient possibly know what medical treatment is right for them? As Woodman points out, “Medical tourism horror stories often involve complications, which usually occur when the patient did not follow physician’s orders, or was careless in follow-up.”

Indeed, not every medical tourist has been happy with the treatment he/she received, and there are some (although not a considerable) amount of stories detailing botched operations and poor health care. Prospective patients also must consider that, if complications arise, they may have to make an inconvenient and expensive return journey – but at least some procedures such as dental work are guaranteed. If things go badly wrong, then seeking justice through the courts isn’t usually an option.

As Woodman asserts in his book,

of deluxe hospital suites and smiling doctors, it’s understandable that some may feel they’re booking a holiday, not a procedure. But purchasing healthcare is obviously not the same as buying any other service, and the same market rules cannot be applied.

As Jill Quadagno, author of One Nation Uninsured: Why the U.S. Has No National Health Insurance, asserts, “The fact that there is an expert intermediary between the product (healthcare services) and the consumer (the patient) makes it difficult to apply the logic of the market.”

As some medical tourism critics note, the industry over-commercialises medicine, giving patients a sense of entitlement, and a mindset more of a consumer than a patient. But when it comes to healthcare, that old adage about the

“the intricacies of working with foreign statutes, legal systems and counsel make such an action impractical.”

Despite the disadvantages, the industry continues to expand at a rapid rate. Woodman says that some health insurers in the United States now cover cross-border travel, an initiative that will only serve to develop the medical tourism industry, as well as consumer benefits in this area. “Blue Cross Blue Shield and Healthnet of California both offer this service now. Plus there’s a vast increase in the number of JCI-accredited hospitals - more than 130 - a figure that is expected to double by 2010. That’s providing huge choice for quality-conscious healthcare consumers,” Woodman adds.

As the medical concierge industry continues to grow, the focus on

increasingly personalised customer service looks set to increase as concierge services battle it out for business, enticing prospective patients with extra benefits.

How do the medical concierges plan to stay on top of their game?

“By continuing to offer a reputable service that is not quantity-driven at all,” says Melvill, while Planet Hospital and MedRetreat both reveal plans to work more closely with insurance companies in the future, as well as maintaining their high levels of customer service. ▲

CHANGE l HEALTH AND CULTURE

Cultural differences


Once seen as a life-saving intervention that was a public health responsibility, an increasingly vocal minority of parents are raising concerns with vaccinations – some actually home-schooling their children to avoid the mandatory vaccination requirements of public school. Media hype and public opinion have been stirring up the idea that increases in rates of autism may be linked to increased use of vaccination. Most medical professionals think the increase in autism is based on having re-defined what is labelled in that disease category. A child 25 years ago might have never been diagnosed with a medical condition – just presumed to be badly behaved. Now they may be placed on the autism spectrum.

Source: Laura Quinn, Synovate Healthcare

A home health nurse received an angry call from a Mexican-American woman after visiting her house the day before. Her infant had been crying and feverish the next morning and the woman recalled the nurse had remarked the child was adorable. The nurse’s compliment and the fact that she had not touched the child, led her to conclude that the nurse had given him the evil eye. In Mexican culture, babies are considered weak and very susceptible to the power of an envious glance. A simple compliment without touching the child can bring on the evil eye. Touching the person while complimenting him or her neutralises the power of the evil eye. Not all Mexicans adhere to this belief, so it is important to pay close attention to non-verbal clues from the mother.

Source: www.culturediversity.org/hisp.htm

A Hispanic woman had to sign an informed consent form for a hysterectomy. The patient spoke no English and the hospital staff relied on her bilingual son to serve as the interpreter. When the son explained the procedure to the mother, he appeared to be translating accurately and indicating the proper body parts. His mother signed the consent form willingly. The next day when she learned that her uterus had been removed and she could no longer bear children, she became angry and threatened to sue the hospital. Because it is inappropriate for a Hispanic male to discuss her private parts with his mother, the embarrassed son had explained that a tumor would be removed from her abdomen and pointed to the general area. The woman became quite angry and upset because a Hispanic woman’s status is derived in large part from the number of children she produces. Even speaking the same language is not always sufficient.

Source: www.culturediversity.org/hisp.htm

Most of the work of traditional healers in Africa concerns protecting clients from possible afflictions. Because most afflictions are believed to come from destabilising forces, protection against them involves warding off the negative forces of witchcraft and maintaining equilibrium with other people, the spirits, and the ancestors (recently departed family members). Thus, protection includes propitiation for real or possible offences that are wittingly or unwittingly incurred against others. Performing ceremonial acts, using medicines against disequilibrium, or wearing totemic objects, such as wristbands for infants, may provide protection it is believed.

Source: www.annals.org/cgi/content/full/128/12_Part_1/1029


In research published by the Chinese news agency Xinhua in May 2005, 12% of doctors claimed to smoke in front of their patients. Further findings from the Xinhua report showed that while 95% of doctors knew of the link between lung cancer and smoking, only 60% knew that it was linked to tuberculosis, 50% that it was a major cause of emphysema and only 75% that it was a risk factor in coronary heart disease. With respect to smoking cessation aids, fewer than 50% of doctors were aware they existed while 97% of doctors never spoke with their “smoking patients” about the need to quit.

Source: China Daily, 17 March 2005

Some serious diseases like cancer and HIV are no longer a death sentence.Because of improvements in screening, people are diagnosed earlier and because of improvements in therapy options, they often stand an excellent chance of either being cured or having excellent survival opportunities. Organisations like the Susan G. Koman Breast Foundation focus on the positives and helping survivors to move on with their lives. In the case of HIV, it’s possibly even more profound. A disease that was unknown in the 1970s dominated the 1980s as an always fatal disease. “Safe Sex” was the mantra of the mid to late 1980s. In the 1990s and this century people know think of HIV as a chronic disease. There is even concern about a return to unsafe sexual practices because of a new generation that does not fear the consequences.

Source: Laura Quinn, Synovate Healthcare

A 27-year-old Arab man refused to allow a male lab technician to enter his wife’s room to draw blood. She had just given birth. The staff finally convinced the husband of the need, he reluctantly allowed the technician in the room. However, he took the precaution of making sure his wife was completely covered. Only her arm stuck out from beneath the covers. For Arab families, honour is one of the highest values. Since family honour is dependent on female purity, extreme modesty and sexual segregation must be maintained at all times. Male nurses should not be assigned to female Muslim patients. In many parts of the world, female purity and modesty are major values.

Source: www.culturediversity.org/mide.htm

Traditional healers may use the divining bones as diagnostic tools in conjunction with the interview questions. The divining bones are collected during the traditional healer’s training period as gifts from patients or as objects obtained as part of rigorous training. Each item represents an important aspect of a patient’s life (for example, man, woman, children in the immediate family, extended family members, happiness, bad luck, or ancestral spirits). Some healers have different bones for men and women. For example, items signifying war and money were used for men, and items signifying childbirth and children were used for women.

Source: www.annals.highwire.org/cgi/content/abstract/128/12_Part_1/1029

MAP BY EM

ILIO RIVERA III


LITERARY l AGENT

The Brand Who Cried Wolf

Super CrunchersWhy thinking-by-numbers is the new way to be smart

AUTHOR: Ian AyresIN SUM: Super Crunching is not a substitute for intuition,

but a complement. This new way to be smart will not relegate humans to the trash heap of history. The future belongs to those who can comfortably inhabit both worlds.

REVIEW: Super Crunchers is yet another in an increasing line of popular books that brings higher-level research to ordinary people. It has a “popular science” feel to it, which some readers may find irritating. But one needs to read through the style and focus on the message. And that message is that, in many areas, giving the job of decision making to computers results in better decisions, sometimes decisions that involve issues of life and death.

As the author puts it, “it’s best to have the man and machine in dialogue with each other, but when the two disagree, it’s usually better to give the ultimate decision to the statistical prediction.”

But when the decisions are turned over to the machines, what’s left for people to do? Ayers suggests

AUTHOR: Scott DemingIN SUM: When your company makes a pledge to satisfy customers,

it is the difference between making a promise and keeping your word that counts

REVIEW: Beyond the logo, colour scheme, tagline, website, and jingle that gets your company noticed, it is easy to forget that you’ve made promises. No matter how convincing the blurb might be, companies that make promises they can’t deliver create word-of-mouth misery for themselves that can lead to irrecoverable reputations. Keeping that word, however, could be all a company needs to outpace rivals, attract new customers, and create brand loyalty.

The Brand Who Cried Wolf looks at eight ways to keep customers coming back. These include being careful about what your company promises, not pretending to be

Deliver on your company’s promise and create customers for life

something it is not, realising that perspective is everything and remembering that your brand is probably not as great as you think it is. This book comes close to describing the ultimate customer experience. ▲

AS AN AGENT OF CHANGE:

two things: First, let the people write the recipes that order the computerised decision making, and this is not a trivial task; and second, learn how to harness the fantastic powers of computers to enhance the quality of life. This doesn’t only involve knowing how to tap into the world of computer-generated information. It also involves knowing how to judge the outcomes. ▲

AS AN AGENT OF CHANGE:

change agent summer 2008 - hooked for life

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