The Five Forces of CEM

Why Companies Must Operate With Clear Knowledge of the Customer’s Emotions and Values

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1. The Customer

‣ How do I define value?

‣ Cheaper? Better? More options?

‣ How do I define values?

‣ Privacy? Social and family values? Respect for authority? Independence?

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2. Networks of Data

‣ What information about a company or its services can I find:

‣ On my cell phone?

‣ On the Internet?

‣ In guides and reviews?

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3. Networks of Opinion

‣ Word of mouth has a significant impact on company performance

‣ You must create memorable experiences that delight the customer

‣ But these experiences must also reinforce your most authentic brand values

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‣ Defined by a (self-reported) propensity to recommend

‣ NPS subtracts the percent of customer extremely likely to recommend (90 percent or greater agreement) from the percent of customers scoring 60 percent or lower agreement

‣ “Promoters” - “Detractors”

Net Promoter Score

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Net Promoter Score

Source: Marsden, Samson, Upton, The London School of Economics, Advocacy Drives Growth, September 2005

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4. Company’s Character

‣ Does it make promises it can keep?

‣ Are they relevant promises? Important to the brand?

‣ How should marketers and operations directors work together to improve promise-keeping?

‣ Does the company live its values?

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5. Experience

‣ Of all the forces, one’s direct experience with a company is the most powerful

‣ Must reinforce the best of the other forces (products, services, character, value/values, word-of-mouth, etc.)

‣ Must focus on being branded, memorable and “tellable”

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Wal-Mart in Germany

‣ Read the Case Study

‣ Discuss the five forces as they affected Wal-Mart’s position in Germany

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The 5 Forces of CEM

‣ Values: What to measure

‣ Many frameworks

‣ Each is multidimensional

‣ Not all dimensions apply in all cultures

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The 5 Forces of CEM

‣ For example, the CONSUMER STYLES INDEX (Sproles & Kendall) has eight dimensions (factors)

PERFECTIONISM CONSCIOUSNESS BRAND CONSCIOUSNESS

NOVELTY AND FASHION CONSCIOUSNESS

RECREATIONAL AND HEDONISTIC SHOPPING CONSCIOUSNESS

PRICE AND VALUE CONSCIOUSNESS

IMPULSIVE AND CARELESS

CONFUSED BY OVERCHOICE HABITUAL AND BRAND LOYAL

Sproles & Kendall, CONSUMER STYLES INDEX

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The 5 Forces of CEM

“The original U.S. eight-factor model could not be confirmed completely, but support [in German culture] was found for six factors: Brand Consciousness, Perfectionism, Recreational/Hedonism, Confused by Overchoice, Impulsiveness, and Novelty-Fashion Consciousness.

Variety Seeking was novel to Germany and replaced brand loyalty and price-value consciousness factors found in previous countries.”

German Consumer Decision-Making StylesAuthors:  Gianfranco Walsh, Vincent-Wayne Mitchell, and Thorsten Hennig-Thurau

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Hierarchies of Values

IndividIndividualismualism

PowerPowerDistanDistan

cece

UncertaiUncertaintynty

AvoidancAvoidancee

Long-term Long-term OrientatioOrientatio

nn

ProfessiProfessionalismonalism

UnifoUniformityrmity

ConserConservatismvatism

SecreSecrecycy

JapanJapan Low(46)

High

High High Low Hig

h High High

Hong Hong KongKong

Low(68)

High

Low High High High High Low

SingaporSingaporee

Low(20)

High

Low High High High High Low

MalaysiaMalaysia Low High

Low High High High High Low

AustraliaAustralia High(90)

Low

Low Low High Low Low Low

Effect of cultural environment on earnings manipulation: A Five Asia-Pacific Country Analysis, Guan, Liming et al, The multinational business review, Volume 13, Number 2

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What Would You Do?

‣ Knowing about consumer buying styles, how would you have advised Wal-Mart’s team as they planned their entry into Germany?

‣ Knowing about hierarchy of values, how does Germany differ from Australia?

‣ Apply to your company.

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What Would You Do?

‣ What are your brand values?

‣ What are your promises?

‣ How can you better keep those promises?

‣ In a branded way?

‣ In a memorable way?

‣ To create measurable emotional impact?