Thank you to everyone who attend this year’s CTS Symposium! Save the date for next year’s symposium: October 25 – October 27, 2017. We hope to see you next year!
The commercialization of innovations is the lifeblood for most organizations. However, bringing new products successfully to market can be a complex and difficult challenge, especially if your company operates in a business-to-business (B2B) environment. The sales force is often the dominant sales channel, and it can be a potential bottleneck in the route to market of innovations. That is why it is especially important for B2B firms to direct and guide their sales forces for successful innovation selling.
This task can prove quite difficult, especially since many sales reps have a low initial motivation for innovation selling. This is mainly due to three major reasons:
In our recent article “Motivating Sales Reps for Innovation Selling in Different Cultures” in the Journal of Marketing, we report results on how firms can enhance reps’ innovation commercialization in a broad international context. Specifically, to examine this issue, we collected data from 406 sales reps from an international B2B supplier. These salespeople represent 38 countries on four continents. Consequently, this investigation delivers one of the most far-reaching international studies in sales research.
The study’s results demonstrate that firms should employ specific steering instruments in order to motivate their sales reps for innovation selling. Most importantly however, we find that these sales force steering instruments should closely correspond with reps’ cultural imprint in terms of Hofstede’s four dimensions: power distance, individualism, uncertainty avoidance, and long-term orientation (you may want to take a glimpse at https://geert-hofstede.com/ for more detailed information on Hofstede’s research on cultures).
For instance, we find that the total effect on financial innovation performance surges by more than 350% when firms apply variable compensation for innovation-sales results in highly individualistic (vs. less individualistic) cultures. Moreover, we demonstrate that innovation performance may increases by more than 300% when supervisor appreciation for innovation-sales results is applied in cultures with high power distance (vs. low power distance). Strikingly, we find that the average variation of all steering instruments’ effects across high versus low values for each cultural dimension is greater than 100%. These large percentage numbers illustrate the huge leverage of intercultural sales force steering regarding innovation commercialization.
In the following table we display an overview of our main findings. You might want to challenge your own company’s steering approach: Do your steering instruments actually match with the cultural environment they are applied in?
To enhance your firms’ innovation commercialization through intercultural sales force steering, we recommend three specific actions. Implementing these recommendations may help your company to exploit these large potentials:
Many companies around the globe today harmonize their sales force steering in the course of globalization as, for example, when implementing one-size-fits-all approaches derived from corporate strategy. However, this study’s results lead us to warn you against overly meshing sales force steering across countries. Instead, we recommend looking carefully at the markets and cultures you operate in and focus on the most effective steering instruments per cultural context. In doing so, you will be able to most efficiently and effectively motivate your sales reps for innovation selling and see a strong performance. For instance, think about flexible steering approaches and heterogeneous incentive plans that have globally standardized elements but also allow for adaptation to cultural peculiarities.
Does the following sound familiar to you? Your firm has many autonomous units that are involved in sales force steering challenges. For instance, there is the compensation division that takes care of financial incentive plans, while the benefits division is responsible for non-monetary incentives. Then, there is global HR that schedules on-the-job trainings and finally the sales supervisors, who make use of on-the-job instruments to motivate their salespeople. However, in contrast to this fragmented common practice, we strongly recommend orchestrating these different sales force steering approaches to systematically align and make use of the entire range of steering instruments. We briefly outline in the figure below how such an integrated intercultural sales force steering approach could look like.
Finally, we recommend segmenting sales reps according to their cultural imprint in order to specifically tailor sales force steering instruments to enhance innovation commercialization. Specifically, you might classify the sales force in terms of power distance, individualism, uncertainty avoidance, and long-term orientation. To motivate innovation selling by sales reps from cultures with high power distance (e.g., Brazil, China, India), we recommend to focus on steering measures that involve close interaction with the direct supervisor, such as supervisor appreciation for innovation-sales results. In contrast, for sales reps from individualistic cultures (e.g., Netherlands, United Kingdom, United States), we recommend a focus on steering measures that reward or foster individual attainments, such as education for innovation selling or variable compensation for innovation-sales results. For sales reps from cultures with high long-term orientation (e.g., Slovakia, South Korea, Taiwan) as well as for sales reps from uncertainty-avoidant cultures (e.g., Belgium, Portugal, Romania), we advise focusing on supervisor appreciation for innovation-sales results.
For more detailed information and in-depth discussion of our study please refer to the original article published in the Journal of Marketing: http://dx.doi.org/10.1509/jm.14.0398
Sebastian Hohenberg and Christian Homburg (2016) Motivating Sales Reps for Innovation Selling in Different Cultures. Journal of Marketing: March 2016, Vol. 80, No. 2, pp. 101-120.
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Christian Homburg is Director of the Institute for Market-Oriented Management (IMU) at the University of Mannheim (Germany). His special subjects are sales management, customer relationship management, and market-oriented management. Dr. Homburg has published numerous books and articles at the national as well as the international level. Today, he is member of the editorial boards of 6 scientific journals in the United States and Germany. Furthermore, since April 2011, he operates as the first German area editor for the Journal of Marketing. Prior to his academic career, Dr. Homburg was director of marketing, controlling and strategic planning in an industrial company that operates globally. In addition to his academic position, he is chairman of the scientific advisory committee of Homburg & Partner, an international management consultancy.
Sebastian Hohenberg is Assistant Professor at the Marketing Department of the University of Mannheim (Germany). He also works as a freelance consultant at Homburg & Partner, an international consultancy agency. During his research and consultancy projects, Dr. Hohenberg focuses on topics in the areas of sales management and innovation management.
This post was originally published in 2014.
Brands are created by companies, but it’s the end customer who ultimately determines what the brand means to them. So, how do customers come to truly understand a brand and what it stands for?
Service brands are experienced on a personal level, with employees engaging customers during one-to-one social encounters, but many firms fail to include employee-customer interactions in their brand strategies. Because human-delivered services are performances and can vary from employee to employee, firms can find it difficult to create coherent experiences that drive home their brand imagery in a consistent manner from customer to customer.
For several years, I was part of a research team at Arizona State University that explored what brand managers can do to overcome this challenge. Through a series of consumer behavior experiments and a large-scale critical incident study that included dozens of service industries, we tested how customer brand experiences can be made more consistent through the behavior of frontline service employees. That is, we examined how service firms can recruit and train employees to internalize brand imagery in order to authentically bring the brand to life with customers in what we call “branded service encounters.” Continue reading
“Customer success” is a term bantered about in boardrooms and breakrooms in different ways. It has been perceived as a business model, a company-wide priority, an organization, a profession, or a technology.[1]
Research for my recent study, “Customer Success: Managing the Customer Experience for Loyalty and Profit,” [2] confirmed this disparity—the definitions given regarding customer success and customer success management were as varied as Mexican chilies at Santa Fe’s Saturday farmers’ market.
Customer success is a strategy and a philosophy. It is a way of approaching how you interact with your customers and your marketplace. But an important understanding is that customer success is personal. Just as kids in a candy store might prefer different treats, each customer may value certain outcomes more highly than others at a given point in time, and hence, customer success varies from person to person. So I prefer a concrete, actionable definition.
Customer success is a customer state of mind in which a specific customer (let’s call her a key player) feels that she has achieved her desires (business outcomes and personal wins) while undergoing brilliant customer experiences. Here are definitions of the three requirements of customer success:
Figure 1: Brilliant Customer Experiences Enable Customer Success
For those of you serious about delivering success, I recommend using the Brilliant Customer Success Performance Chain as a guide, as Figure 2 shows. It is a robust model applicable to almost all organizations for planning, building, implementing, monitoring, diagnosing, and enhancing customer success results. I will start our discussion on the far right side of the chain and work backward.
Figure 2: Brilliant Customer Success Performance Chain
Business Results
This is your reward for doing customer success right. Selfishly, your desired outcome as the supplier is business results. Yes, there can be a multitude of preferable outcomes, but for most organizations, there are two vital business results that trump all others: new streams of profitable growth to fund the future of the business, and brand dominance based on a reputation superior to your rivals’.
Customer Impact
Customer loyalty drives business results. Loads of research over the last several years show that the loyalty of your customers is a prime driver of the business results discussed above and outlined in Figure 3. There is a direct relationship. Loyal customers buy more and more, again and again, rarely quibbling over price.[4]
Figure 3: Customer Impact Drives Supplier Business Results
Emotionally, loyal customers tout your attributes far and wide and gladly provide testimonials to woo your prospects for you. Loyal customers are the crown jewels of your resources and should be guarded as a miser would a strongbox. If we embrace the eminent management consultant Peter Drucker’s declaration in Management: Tasks, Responsibilities, Practices that the purpose of a business is to get and grow customers, customer loyalty is the secret sauce of the recipe.[5]
Customer success drives customer loyalty. As discussed, to earn that loyalty, you must deliver customer success as each key player in the customer account defines it.
Brilliant customer experiences enable customer success. The promise of customer success requires brilliant customer experiences. Like the catalyst in a chemical reaction, a brilliant customer experience releases the full potential of a supplier-customer relationship. Customer experience is shaped at every touchpoint—every encounter or contact the customer has with your organization.
Brilliant employee performances drive brilliant customer experiences. The more closely your people give the customer what they need, want, and expect at each step in the decision-making process, the more powerful the moment of truth, and the more likely the customer will invite you to participate in the next decision step. Figure 4 shows the progress from touchpoint management to business results.
Figure 4: Touchpoint Management Effects on Business Results
Capable and loyal employees are required to deliver brilliant employee performances. Your frontline personnel must have the capabilities needed to interact with the customer the right way at the right time.
Figure 5 shows how performance systems provide the information and tools required to help your capable and loyal employees in their moments of truth.
Figure 5: How Performance Systems Affect Business Results
Leadership drives the bus in creating a culture of success and in building and implementing a compelling blueprint to guide implementation, as shown in Figure 6. As we all know, if the big dogs don’t get off the porch, the pack doesn’t hunt.
Figure 6: How Leadership Can Build a Culture of Success
Customer success is much more than the latest marketing mantra…it is a strategy, a philosophy, a way of doing business. It can make your customer more successful, your company more successful, and hopefully, you will be more successful. Act like the big dog you are and lead the customer success pack!
Note: This article was adapted from Alex’s new book Brilliant Customer Success: Managing the Customer Experience for Profitable Growth and Brand Dominance, due to be released in November 2016.
[1] “An Executive Primer to Customer Success Management.” April 2014. Thought Leadership Paper. Forrester.
[2] Alexander, James A., EdD. 2016. Customer Success: Managing the Customer Experience for Loyalty and Profit. Alexander Consulting and Service Strategies Corporation.
[3] Alexander, James A., EdD. January 26, 2015. “Brilliant CX: The 7 Things Your Customers Want, Expect, and Deserve.” LinkedIn Blog.
[4] Mehta, Nick. October 18, 2015. “The 5 Kinds of Customer Success.” Gainsight, Venturebeat.
[5] Drucker, Peter F., 1974. Management: Tasks, Responsibilities, Practices. New York: Harper & Row.
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Join the Center for Services Leadership at Compete Through Services Symposium on October 27th, 2016, to hear James “Alex” Alexander, Alexander Consulting, speak on Customer Success Management: The Marvelous Opportunity to Grow Your Services Business.
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James “Alex” Alexander is founder of Alexander Consulting, a management consultancy that helps product companies build brilliant services. Contact him at 239-671-0740, alex@alexanderstrategists.com or visit www.brilliantcustomersuccess.com for information and valuable resources to speed your journey to brilliant customer success.
Check out my new book!
MANAGING THE CUSTOMER EXPERIENCE FOR PROFITABLE GROWTH AND BRAND DOMINANCE
by James “Alex” Alexander
In early September, I traveled with friends along the Dalmatian coast, enjoying the sunshine and lingering over cappuccinos late into the night. One evening at dinner, I couldn’t help but remark about the wonderful service at the restaurant. While it was the end of the busy tourist season, our waiter was amazingly attentive. He made it easy for us to order the right amount and variety of fish for the table, tailoring the offering to meet individual preferences. I suggested to my friend that I was surprised that although he knew he’d never see us again, he delivered exceptional service. A native, she told me that the customer was an integral part of the dining experience. For the business, ensuring customer satisfaction was as important as ensuring the quality of the food.
So how can companies everywhere deliver effortless, memorable experiences for its customers? How can they ensure that the service they deliver lives up to its brand promise?
It’s simple. The best companies deliver straightforward, reliable experiences that meet real needs. People want to interact with companies where doing business is personalized, easy and hassle free. Consider Starbucks, where you get a consistent experience and your morning jo customized for you no matter what city you are located in. Or Nordstrom, where you can link directly from Pinterest to their store to order the latest products that catch your eye.
Delivering an effortless experience begins with listening to your customers. It’s important to take the time to look at your business through the lens of your customers. This involves setting up multiple listening posts to capture different viewpoints. Most importantly, you need a robust system to capture and categorize that feedback in a manner in which your organization can easily act on it. At Verizon, we have a social media team that monitors posts across a wide variety of sites. The data they collect is analyzed using Clarabridge, a data analytics platform, that lets practitioners quickly identify trends.
Once you understand what matters to your customers, leveraging tools like Six Sigma makes it easy to effectively eliminate pain points. The goal of your process reengineering effort should be to create a simple and intuitive process for your customer. To coin an old phrase, “eliminate the small print”. If you have to explain the offer, it probably isn’t pain free.
Structured, data centric decision making is not only a powerful way to drive problem solving, it also helps align your stakeholders. Verizon found that it was easier to align its leaders when data formed the basis for the conversation.
Finally, successful businesses need alignment throughout their organizations. If the customer service organization isn’t prepared for the latest product offer, it can’t provide the training necessary for a successful launch. If the sales organization isn’t aware of what the marketing team is putting out into the market, it isn’t going to present a consistent message. So, in short, align your brand message internally before you take it external.
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Join the Center for Services Leadership at Compete Through Services Symposium on October 26th, 2016, to hear Carol Fink, Director of Executive Relations at Verizon, speak on Branding Your Customer Experience.
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Carol Fink is Director of Executive Relations at Verizon. In her current role, she has responsibility for voice of the customer analytics and process improvements across Verizon’s major businesses. She holds a bachelor’s degree from the University of Michigan and a Master’s degree in Business from the University of South Florida. She is a certified six sigma black belt, a certified work out planner and a “Playing to Win” strategy facilitator. She leverages voice of the customer, employee engagement and six sigma principles to improve the customer experience. Carol is based in Basking Ridge, NJ at Verizon’s corporate headquarters. She is a member of the CXPA.
We invite you to join us for 2016 Compete Through Service Symposium on October 26-28th, in Scottsdale, AZ!
This year the Symposium will emphasize three themes:
Day 1 will focus on insightful and dynamic presentations on Branding Your Customer Experience. Our speakers will share best in class strategies that ensure that the critical touchpoints on the customer experience journey support and align with the organization’s brand promise. We will also explore what Branding Customer Experience means in B2C and B2B context. You will further dive into the topic by participating in our engaging and highly interactive breakout sessions in the afternoon of Day 2:
Breakout A: Authentically Branded Service Experiences
In today’s competitive marketplace, more and more companies are seeking to engage with customers by creating authentic and memorable experiences for them. In this session we will look at the critical role of frontline contact employees in creating memorable service experiences that are consistent with the brand’s positioning. We will share research on employee authenticity and branded service encounters and their impact on customer satisfaction and loyalty intentions. Through an applied exercise, you will examine what authentically branded service might mean for your company and how you can effectively link your employees and your brand image to create positive outcomes for customers.
Breakout B: Environment and Behavior: The Power of a Branded Customer Experience
Touch-points placed on a timeline can create a great branded service experience, but in order to carry that brand story from touch-point to touch-point, each of those moments has to be dense, using every tool at our disposal to make that happen. This talk will focus on the ways that physical space influences behavior, the ways that architectural elements predict movement, the ways that physical and digital information access can influence decision making and finally in the way those all of those things can contribute to a great branded service experience. I will share research, insights, and case studies that will give participants tools and understanding that will expand their thinking about great service design.
To learn more about Compete Through Service Symposium and to register, visit CSL website.
We look forward to seeing you at the Symposium!
Institute for the Study of Business Markets (ISBM) of PennState Smeal College of Business held its biannual academic conference “Advances in Business-to-Business Marketing” in August 2016 in Atlanta, Georgia. Center for Services Leadership (CSL) was invited to to lead a session on Leveraging Big Data & Analytics for Service Innovation and Growth: Promising Research Avenues Grounded in Managerial Practice with managers and academics to discuss managerial challenges and identify promising research avenues.
The session was led by Wolfgang Ulaga, CSL’s Co-Executive Director and AT&T Professor of Services Leadership at W. P. Carey School of Business, ASU. In his presentation he discussed some of the pressing issues identified by CSL’s member companies who are collaborating with Center for Services Leadership in a Community of Practice on Big Data and Analytics.
Center for Services Leadership was joined in the conversation by Georgia State University’s Center for Business and Industrial Marketing and PennState University’s Institute for the Study of Business Markets. The session included a diverse panel of experts who offered business and academic perspectives on the topic. The panelists included:
Over the next months we will be sharing the highlights from this session and will update you on the work that Center for Services Leadership will be doing in partnership with its member companies in the area of Leveraging Big Data & Analytics for Service Innovation and Growth. Make sure to follow our blog to receive these updates.
Also, don’t miss session Monetizing Data and Analytics for Service Innovation and Growth: Commercial Challenges and Best Practices with Dr. Wolfgang Ulaga and Ed Petrozelli, CSL Board Member, President and CEO of The INSIGHT Group. This session will take place on Thursday, October 27th, 2016, at Compete Through Service Symposium in Scottsdale, Arizona. Visit our website to learn more and to register. We hope to see you there!
