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Cover
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Augmented Customer Strategy

Series Editor Jean-Charles Pomerol


CRM in the Digital Age

Edited by

Gilles NrsquoGoala Virginie Pez-Peacuterard Isabelle Prim-Allaz

First published 2019 in Great Britain and the United States by ISTE Ltd and John Wiley amp Sons Inc

Apart from any fair dealing for the purposes of research or private study or criticism or review as permitted under the Copyright Designs and Patents Act 1988 this publication may only be reproduced stored or transmitted in any form or by any means with the prior permission in writing of the publishers or in the case of reprographic reproduction in accordance with the terms and licenses issued by the CLA Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned address

ISTE Ltd John Wiley amp Sons Inc 27-37 St Georgersquos Road 111 River Street London SW19 4EU Hoboken NJ 07030 UK USA

wwwistecouk wwwwileycom

copy ISTE Ltd 2019 The rights of Gilles NrsquoGoala Virginie Pez-Peacuterard and Isabelle Prim-Allaz to be identified as the authors of this work have been asserted by them in accordance with the Copyright Designs and Patents Act 1988

Library of Congress Control Number 2019930585 British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library ISBN 978-1-78630-372-1

Contents

Preface xiii

Chapter 1 Customer Strategies in the Face of New Technological Social and Environmental Challenges 1 Gilles NrsquoGOALA

11 AI robotization and algorithms what are the effects on customers 2 12 Business model renewal what are the impacts on customers 6 13 Accountability to customers and citizens why and how 8 14 Practicing open innovation with customers 12 15 Customer relationship management in the face of societal and environmental challenges 13 16 Conclusion 17 17 Acknowledgements 18 18 References 19

Chapter 2 Brand Practices Faced with Augmented Consumers 23 Nathalie FLECK and Laure AMBROISE

21 A more complex approach to the customer to follow them wherever they go 24

211 Following the customer wherever they buy from multichannel to omnichannel 24 212 Communicating with the customer wherever they come into contact with the company the touchpoints 25

22 An evolution of message content 27 221 A constant search for a demonstration of transparency 27 222 Indirect speaking the growing role of influencers 30

23 A stronger involvement of consumers in brands 31

vi Augmented Customer Strategy

231 Increasing consumer participation 31 232 An increasingly personalized relationship 34 233 A relationship based on utility and meaning through commitment 35

24 Conclusion 39 25 References 39

Chapter 3 The Augmented Customer Relationship the Increasing Importance of the Customerrsquos Role 41 Sylvie LLOSA and Lionel NICOD

31 The customer a long-standing player in the relationship 41 311 The customer from the role of beneficiary to the role of relationship producer 42 312 A role as a producer a source of value for the company and the customer 44

32 The digitization development and diversification of the customersrsquo roles 45

321 An enrichment of intra-role roles through the development of technologies in the relationship 46 322 An intensification and diversification of the customerrsquos extra roles 47

33 The consequences for the company 50 331 Motivating customers to play a greater role 50 332 Managing customer expertise 52 333 Rethinking the role of staff in the customer journey to create greater value 54

34 References 55

Chapter 4 Innovation Augmented by the Customer from Ideation to Diffusion 59 Thomas RUSPIL Cyrielle VELLERA and Andreas MUNZEL

41 Introduction the new roles and contributions of the customer 59 42 The role of the customer in the upstream phase of the launch of an innovation the customer as a source of new ideas at the service of companiesrsquo innovation processes 60

421 Toward customer participation in innovation 60 422 Innovation by customers and users (user innovation) a major phenomenon 62 423 Co-innovating with customers and users three possible strategies 62 424 Co-innovating with companies what do the main stakeholders think 65

Contents vii

43 The role of the customer downstream of an innovation launch the customer influences to facilitate the adoption of the innovation on the market 66

431 From the innovative customer to the influential customer 66 432 Influence marketing a new role for the customer 67 433 From OLs to e-OLs ndash who are they 68 434 Identifying and selecting leaders and e-OLs 69 435 Relationship management with leaders and e-OLs 70

44 Conclusion 71 45 Acknowledgements 72 46 References 72

Chapter 5 The Customerrsquos Voice Toward New Listening Tools 77 Andreas MUNZEL Jessie PALLUD and Daria PLOTKINA

51 Introduction ldquomarkets are conversationsrdquo 77 52 The different forms of WOM 78 53 Steps to managing the customerrsquos voice over the Internet 79

531 Step 1 set up listening measures 79 532 Step 2 respond to online customers 84

54 Current and future challenges 88 541 Challenge 1 when the customerrsquos voice is manipulated (the case of deceptive reviews) 88 542 Challenge 2 when the internal customer ndash the employee ndash expresses himself online 88


Chapter 6 Redesigning the Customerrsquos Role in a Connected World 95 Pauline FOLCHER Sarah MUSSOL and Gilles NrsquoGOALA

61 A connected customer with multiple faces 97 611 The connected customerrsquos fragmented identity 97 612 Representations and performance of the connected customer 99

62 Managing the customer in their connected environment 103 621 Customer marketing between secrecy and stealth 103 622 The dark side of the IoT 105 623 Toward the disappearance of the ldquocustomerrdquo in a connected world 106

63 Connected customers masters of their own consumption and relationship with brands 107

631 Connection as a source of value creation for the individual 108

viii Augmented Customer Strategy

632 Orchestration of connected objects and organization of services around the individual 109 633 The individual in a connected environment control or trust 111


Chapter 7 The Augmented Customer Experience Between Humanity and Robotization 117 Reacutegine VANHEEMS

71 From experience to omnichannel experience 118 711 Rethinking the experience when it becomes omnichannel 118 712 From the integration of the Internet into the purchasing process to omnichannel toward a sublimation of the customer experience 119 713 Creating an unforgettable memory souvenir because of the fluidity between ldquotouchpointsrdquo 121

72 Management of the omnichannel system between fluidity continuity or disruption and jumping between ldquotouchpointsrdquo 122

721 When the experience with a touchpoint is the continuity of an experience started elsewhere 122 722 The TEAV model as a theoretical basis for the analysis of omnichannel trajectories 125 723 The contents of the omnichannel experience approached in a holistic way 126 724 An experience that is exacerbated when it is experienced over several channels 128

73 Conclusion the place of the human being and technology to create a quality experience 129 74 References 131

Chapter 8 Designing Your Customer Experience 133 Florence JACOB

81 Designing a new customer experience 135 811 Step 1 analyzing past customer experiences 135 812 Step 2 taking strategic prerequisites into account 136 813 Step 3 prioritizing and determining the place for the desired experience 136 814 Step 4 operationalizing the journeys that constitute the experience 138 815 Step 5 checking the created journeys 139

82 Designing customer journeys 140

Contents ix

821 The classic graphic tools blueprint and contact matrix 140 822 Practicing design thinking by creating personas 141 823 Interests and limitations of graphic tools 143

83 Big data and design the two necessary areas of expertise 144 84 References 145

Chapter 9 Customer Relationships and Digital Technologies What Place and Role for Sales Representatives 149 Eric JULIENNE Maud DAMPERAT and Romain FRANCK

91 A new way of selling social selling 150 911 What is social selling 150 912 Meeting customers on their buying journey 151 913 Adopting a sales approach focused on meeting needs 151 914 Using social media at every stage of the sale 153 915 Improving business performance 154 916 Overcoming social media challenges 155

92 The prospects of AI for the commercial sector 157 921 The new strategic toolbox or the augmented salesperson 158 922 Toward sales automation or sales without a salesperson 162 923 New forms of sale or the humanoid robot-seller 163

93 References 164

Chapter 10 Engaging Reciprocity from the Complainant Customer in the Digital Age 167 Franccediloise SIMON

101 Obtaining the complainant customerrsquos voice a multifaceted challenge 167

1011 Back to the Exit Voice Loyalty model 168 1012 When the customerrsquos desire for discussion depends on the state of the relationship with the brand 169

102 Understanding the complainant customerrsquos levers of reciprocity 171 1021 The central role of perceived justice in shaping customer satisfaction 171 1022 The triggering of the customerrsquos desire for reciprocity 172

103 Differentiating the care of complainant customers 175 1031 Globalization and taking the intercultural factor into account 175 1032 Identifying the complainant customerrsquos motivations on social networks 176 1033 The ldquolove becomes haterdquo effect of the loyal customer 176 1034 The matrix of restorative actions 177


x Augmented Customer Strategy

Chapter 11 The Firmrsquos Empathic Capacity a Social Neuroscience Perspective for Managing Customer Engagement in the Digital Era 183 Mathieu LAJANTE

111 Introduction the dilemma of digital transformation in customer relationship management 183 112 What social neuroscience tells us about empathy 185

1121 Social neuroscience what is it 185 1122 The emotional connection is essential to any social and commercial relationship 186 1123 Empathy the epicenter of the emotional connection 187

113 Developing firmsrsquo empathic capacity a two-level strategy 191 1131 Sharing the customerrsquos emotional states 191 1132 Understanding the customerrsquos mental states 194 1133 How does the customer appraise their engagement with the firm 197

Chapter 12 Data Marketing for Customer Intimacy 203 Greacutegoire BOTHOREL and Virginie PEZ-PEacuteRARD

121 Multiple customer data sources 206 122 The different customer data hubs 207 123 The difficult consolidation of customer data 209 124 The intersection of media and data to serve customer strategy 210 125 Leveraging data market research in the era of customer data 215 126 Data marketing tomorrow 217 127 References 218

Chapter 13 The Dark Side of Customer Relationship Management Practices in the Data Age Managing Resistance and Perceived Intrusion for Responsible Practices 219 Caroline LANCELOT-MILTGEN Aiumlda MIMOUNI CHAABANE and Virginie PEZ-PEacuteRARD

131 The dark side of customer relationship management practices 220 132 Possible consumer feelings 221

1321 A sense of pressure 221 1322 A sense of injustice 222 1323 A sense of loss of control 223

133 The consequences consumers are showing signs of resistance 224 1331 Resistance what are we talking about 224 1332 Consumer resistance to the collection and use of personal data 227

134 Solutions for effective and responsible practices 230

Contents xi

1341 Optimizing the execution of loyalty practices 231 1342 Monitoring effectiveness using customer-centric metrics 231 1343 Overseeing the implementation of ldquovirtuousrdquo practices 232 1344 Restoring confidence in the collection and use of data 233

135 Acknowledgements 237 136 References 237

Chapter 14 The Legal Basis for a Data Economy Based on Trust 241 Isabelle LANDREAU

141 Personal data at the heart of the DGMP 242 1411 Personal data the black gold of the 21st Century 242 1412 Personal data and brands the cyber-consumer chooses brands that respect confidentiality 243

142 GDPR tools to restore trust 243 1421 Clear and explicit consent 243 1422 Ensuring the rights of the cyber-consumer over their personal data 244 1423 Creation of a Data Protection Officer role 245

143 The future of our personal data 245 1431 A right of ownership over our personal data 245 1432 The future toward a right to an income on our data 249


Chapter 15 Information Systems Security Challenges Vulnerabilities and Tools 257 Philippe COHARD

151 Current uses reinforcing the need for security cryptocurrency and blockchains 258

1511 Blockchain principles 258 1512 Blockchain applications 259

152 Protecting yourself from potential threats safety and security 261 153 Security in companies and organizations 262

1531 Vulnerabilities risks and ISP 262 1532 Deterrence neutralization and awareness ndash training 263

154 The standards that govern safety ISOIEC 27000 265 155 Conclusion 268 156 References 269

Chapter 16 Organizing the Augmented Customer Relationship 271 Isabelle PRIM-ALLAZ and Pierre VOLLE

161 Introduction 271 162 Governance of customer strategy within the organization 272

xii Augmented Customer Strategy

1621 The value of having a Chief Customer Officer 272 1622 The CCO the one man orchestra 273

163 The role of the different stakeholders in customer relationship management 274

1631 The key role of employees 274 1632 Other stakeholders involved 278

164 In-house contracting or outsourcing who should implement customer relationship management 282

1641 Managing customer relations internally 282 1642 Outsourcing customer relationship management 283

165 Aligning the organization around the customer strategy 285 166 References 285

List of Authors 289

Index 293

Preface


This book is not a science fiction novel but comes close to it The extended and augmented human being already exists Each year is punctuated by new scientific advances in the fields of robotics computing cognitive sciences etc which make it possible to imagine a world marked by virtual or augmented realities by the expansion of all kinds of networks and digital media by the development of new humanoid robots (exoskeletons for example) by the diffusion of the Internet of Things (IoT) by the improvement of artificial intelligence (AI) solutions by the exploitation of drones etc Every human being whether a doctor manager customer or political decision-maker can potentially benefit from new technologies and can have their cognitive (information processing) sensory or physical capacities considerably increased This transformation of the world is already here but we are only seeing the beginning

Each of us is within ourselves the bearer of this imagination conveyed by literature cinema or the media where humans make technology an ally an addition and a partner in our daily lives rather than a substitute However the fear of seeing humans imitated and then supplanted by robots persists and regularly raises debates within companies (employment growth professions training) and society as a whole (respect for privacy individual freedom etc) The expansion of the robot questions in mirror form the role of the human being in our society and in the field of customer relations that of the consumer the citizen and the user in relation to the tools and machines that surround them Alternating between strategies currently underway in organizations and a forward-looking dimension that makes it possible to imagine multiple scenarios for the future this book highlights how much the digital transformation impacts and will impact customer relationship management but also the customers themselves

xiv Augmented Customer Strategy

Can we effectively consider that the customer benefits in the same way as the company from this ldquoexpansionrdquo Is the individual augmented or are they alienated by the machines and technological tools that linger around their daily lives on the lookout for the slightest opportunity to solicit them Digital technology has totally invaded our daily lives as consumers customers citizens voters etc The digital barometer published each year1 shows that this movement toward the greater connection of populations is not only inevitable but will also increase over time In France for example nearly three-fourths of the population already own a smartphone more than 80 a computer and nearly 50 a tablet In the space of a few years the smartphone has become the object of multiple addictions (hyperconnection infobesity ldquono liferdquo phenomenon etc) and one of the major tools for connecting to social networks personal messaging as well as corporate and e-commerce sites Many French people today cannot do without the Internet for 3 days or their mobile phone for more than 1 h They eat and sleep next to their smartphones play read and watch videos when they get bored and struggle to disconnect from their work messages when they are on vacation They can spend nearly 100 days a year reading their e-mails and the youngest (18ndash34 years old) can consult their smartphone up to 100 times a day once every 10 min (Institut Omnibus study for the publisher Kana Software ndash 2014) Thus even if this phenomenon of hyperconnection does not affect all French people in the same way according to age level of education and social status in particular it nevertheless increases significantly each year and changes diametrically the way in which firms can reach their customers

Against this backdrop writing about tomorrowrsquos customer relations is a risky project given the rapid pace of change and the changing environment For marketing professionals the last few years have been marked by a significant evolution in their profession as a result of this incredible acceleration of technologies These have considerably changed company practices but also those of customers AI now established as the ldquoright armrdquo of any self-respecting marketer and the explosion of precise and abundant personal data held on customers is already shaping a new landscape for companies and their customers Customers for their part make extensive use of the multitude channels and tools available to them as well as the wealth of information they have at their disposal to design their own customer journeys What if the common point of all these scientific and technological advances was that they made it possible to develop augmented customer strategies

1 httpswwwarcepfruploadstx_gspublicationbarometer_of_numeric-2017-infography-271117 pdf

Preface xv

ndash Augmented because the technological tools (applications robots chatbots

beacons RFID technologies) brought about by the digital revolution today represent tremendous opportunities that offer customers ever simpler more fluid rich and connected experiences

ndash Augmented because the data now available on customers allow increasingly personalized and accurate actions as close as possible to customer expectations and at a lower cost

ndash Augmented because the digital transformation of companies allows ever precise evaluations of the effectiveness of marketing actions thus allowing a better trade-off between different relational investments

ndash Finally augmented because the customers themselves are assigned new roles alongside the company in the context of promotion innovation andor branding activities which can depending on the approaches be similar to customer empowerment (cognitive influential and sanctioning skills)

It is in this context that we have sought to reflect on the customer relationship what it has become and what it will be tomorrow This collective work shows to what extent customer relations in the age of digital transformation is a fertile ground for many paradoxes that have inspired the great French-speaking experts in the field experts who have been asked to contribute to this book This book proposes to extend the reference works on customer relationship management in particular the book Strateacutegie Clients edited by Professor Pierre Volle in 20122 by providing a resolutely forward-looking vision of the discipline The latest advances in marketing research which provides empirical validations of the importance of ldquocustomer-centricrdquo approaches and gives high priority to societal and environmental concerns are integrated In addition to the rational effectiveness of marketing actions it is the customer as a citizen and in their daily environment who will be discussed Customersrsquo well-being is now invoked rightly or wrongly as a compelling reason to guide the hands of marketers

Throughout the 16 chapters of this book some 30 researchers discuss the main issues that drive customer relationship management professionals students as well as the marketing scientific community

Chapter 1 is an introduction that provides an overview of the projects to be carried out in order to adapt customer relationship management to new technological social and environmental challenges Indeed based on the hot topics

2 Pierre Volle (2012) ldquoStrateacutegie Clients points de vue drsquoexperts sur le management de la relation clientrdquo Editions Pearson p 228

xvi Augmented Customer Strategy

identified by a team of researchers from the Association Franccedilaise du Marketing (French marketing association) Gilles NrsquoGoala makes the link between these current topics and customer relationship management Jeacuterocircme Baray also offers us a focus on the challenges of AI

To meet these new challenges this book is then structured into three parts that allow our readers (1) to better understand the customer in the digital age the augmented customer (2) to produce augmented customer experiences and (3) to help rethink the organization of customer relations ultimately benefiting an augmented organization

Part 1 Understanding the Augmented Customer

ndash Chapter 2 Brand Practices when Faced with Augmented Consumers

This chapter written by Nathalie Fleck and Laure Ambroise provides a better understanding of who the customer is in this new digital environment In response to this new consumer the authors question the opportunity and necessity for brands to change their practices

ndash Chapter 3 The Augmented Customer Relationship the Increasing Importance of the Customerrsquos Role

In this chapter Sylvie Llosa and Lionel Nicod show how the customer has become a proactive actor a source of competitive advantage for companies while this customer was in the past considered a simple purchaser of products and as the passive beneficiary of the interaction with the company This customer has become more powerful and is now taking on new roles

ndash Chapter 4 Innovation Augmented by the Customer from Ideation to Diffusion

Among the roles taken on by the customer Thomas Ruspil Cyrielle Vellera and Andreas Munzel propose in this chapter a perspective of two new roles for customers upstream and downstream of the launch of a new product or service and its commercialization the customer becomes a co-innovator when they participate in the processes of developing new ideas and designing new products or services and can then facilitate the dissemination of this product or service by becoming a co-marketer who promotes the offer This chapter is enriched by Patrick Kleerrsquos reflection on the co-creation approach implemented by Creacutedit Agricole Centre-Est bank of which he is Deputy CEO and from Yohann Melamedrsquos experience as a

Preface xvii

co-founder of Agorize a company specializing in organizing open innovation challenges

ndash Chapter 5 The Customerrsquos Voice Toward New Listening Tools

Beyond the new roles identified in Chapters 3 and 4 Andreas Munzel Jessie Pallud and Daria Plotkina raise here the question of the nature of the conversation between the company and its customers and its management Listening to the customer who now has the opportunity to be heard instantly and broadly requires companies to be more responsive and to set up genuine social listening

ndash Chapter 6 Redesigning the Customerrsquos Role in a Connected World

To close this first part Pauline Folcher Sarah Mussol and Gilles NrsquoGoala ask in Chapter 6 what it means to manage customers in an increasingly connected world The authors describe three major changes the new faces of customers sometimes users sometimes buyers influencers collaborators citizens etc which must be managed as a whole new forms of marketing between invisibility and speed of execution and the challenges of taking into account the global experience of customers whose various productsservices co-create value

Part 2 Producing Augmented Customer Experiences

ndash Chapter 7 The Augmented Customer Experience Between Humanity and Robotization

Reacutegine Vanheems explains to us in this chapter why and how it is no longer simply a question of reducing the customerrsquos efforts or satisfying them at each touchpoint but that it is necessary to rethink the entire process which has sometimes become too complex The goal is to construct a pleasant rewarding and memorable omnichannel experience and digital tools can assist with this However the author notes the need for consistency between all touchpoints in order to ensure a satisfactory experience

ndash Chapter 8 Designing Your Customer Experience

Echoing Reacutegine Vanheemsrsquo comments Florence Jacob helps us define the concept of customer experience but above all to ldquodesignrdquo successful customer experiences This chapter thus makes it possible to position the concept of experience and to understand its importance both from a strategic and an operational point of view

xviii Augmented Customer Strategy

ndash Chapter 9 Customer Relationships and Digital Technologies What Place and Role for Sales Representatives

The customer experience and B2B relationships are also strongly impacted by the advent of digital technology In this chapter Eric Julienne Maud Dampeacuterat and Romain Franck question the place and role of the seller in the era of social media and artificial intelligence The authors question (1) the development of social selling which is already well underway and is profoundly disrupting the relationship between sales people and their customers and (2) the development of AI and its prospects in terms of customer relationship management AI has announced a profound change in the world of work and a fortiori in the commercial profession The authors propose three prospective scenarios oriented toward future technologies and which may exist concurrently in the medium to long term (1) the augmented seller (2) the sale without a seller and (3) humanoid robot sellers

ndash Chapter 10 Engaging Reciprocity from the Complainant Customer in the Digital Age

Franccediloise Simon in this chapter proposes to focus on a specific and potentially crucial aspect of the customer experience the complaint The author shows that in a connected and globalized world customer complaint management is at the heart of the new challenges facing brands By offering dissatisfied customers new spaces to express themselves Internet ecosystems tend to divert them from a direct dialogue with brands with the risk of deteriorating their e-reputation Based on this observation the author helps us to better understand how to manage complaints and shows the key role of reciprocity

ndash Chapter 11 Firmsrsquo Emphatic Capacity a Social Neuroscience Perspective for Managing Customer Engagement in the Digital Era

To conclude this second part of the book Mathieu Lajante relies on one of the paradoxes of digital transformation relating to the need to forge a strong bond with customers while trying to rationalize and make their experiences smoother with the help of chatbots and other AI that potentially lead to a loss of physical connection with the customer and an absence of perception of emotions which would be spontaneously felt by the user In light of the latest research in neuroscience this chapter highlights that the companyrsquos empathetic capacity contributes to shaping a virtuous customer relationship management that creates value for both parties

Preface xix

Part 3 Toward an Augmented Organization

ndash Chapter 12 Data Marketing for Customer Intimacy

Greacutegoire Bothorel and Virginie Pez-Peacuterard show in this chapter that we are witnessing the development of service offers that put technology and associated data at the service of a totally (and perfectly) personalized offer By using a variety of customer data sources (home media touchpoints cars etc) data marketing transforms the customer approach and makes it possible to be present where the customer consumes content at the right time and with an adapted offer

ndash Chapter 13 The Dark Side of Customer Relationship Management Practices in the Data Age Managing Resistance and Perceived Intrusion for Responsible Practices

Caroline Lancelot-Miltgen Aiumlda Mimouni and Virginie Pez-Peacuterard highlight the paradoxes of customer relations and help us to understand the dark side of customer relationship management in order to build more responsible practices On the one hand the customer is often encouraged to develop their average shopping basket andor frequency of purchases through promotional offers or reward mechanisms and can therefore make unnecessary or too expensive purchases in relation to their budget In addition an exclusive relationship a favored objective of loyalty shown would deprive the customer of their freedom and lock them into an often unbalanced commercial relationship How can we not fall into these traps This chapter is enriched by Fanny Renioursquos reflection on the management of the deviant customer and Audrey Portersquos reflection on the interest in transparency The authors advocate a responsible approach to restoring trust with customers

ndash Chapter 14 The Legal Basis for a Data Economy Based on Trust

Marketing practices based on customer data and the resulting privacy and data protection issues have led the legislator to take up the issue In this chapter Isabelle Landreau deciphers the legal context relating to personal data by presenting the European Union General Data Protection Regulation (GDPR) and proposing prospective reflections

ndash Chapter 15 Information Systems Security Challenges Vulnerabilities and Tools

The GDPR refers companies to a set of responsibilities including information system security In this chapter Philippe Cohard points out that in a context where customer data already represent today and tomorrow even more so the basic

xx Augmented Customer Strategy

foundation of customer strategies it is more than ever in the interest of companies to organize their information systems in such a way as to be able to store and use them correctly while complying with the jurisdiction in force In this regard management faces several threats particularly those related to the organizationrsquos employees that need to be assessed

ndash Chapter 16 Organizing the Augmented Customer Relationship

To conclude this part and the book Isabelle Prim-Allaz and Pierre Volle raise in a more global way the question of the structure of the augmented customer relationship and the role of the various stakeholders The authors start from the observation that the implementation of a strategy and the structure that goes with it is necessarily a source of paradoxical tensions This chapter proposes to answer in part the management of these paradoxes by first asking the question of the governance of customer strategy within organizations and then in a second step by questioning the role of the various stakeholders The question of the internalization versus the outsourcing of customer relations is also raised Finally as a conclusion the authors discuss the interest in thinking about a coherent implementation of customer strategy through configuration theory

Gilles NrsquoGOALA Virginie PEZ-PEacuteRARD and Isabelle PRIM-ALLAZ

February 2019

1

Customer Strategies in the Face of New Technological Social

and Environmental Challenges

The marketing practiced and taught today is light years away from that which was practiced and taught in the 1980s In a few decades the discipline has been transformed to provide consumers with a new role integrating the latest technological advances and possessing a new place in society The transition from an industrial to a postindustrial era has in particular underlined the importance of services and the intangible knowledge and information techniques and technology the environment and individual well-being globalization and a new organization of work (platforms uberization etc) It thus becomes impossible to talk about marketing without mentioning digital tools big data Service Dominant Logic perspective artificial intelligence (AI) economy of platforms open innovation GAFAM (Google Apple Facebook Amazon Microsoft) NATU (Netflix Airbnb Tesla Uber) and BATX (Baidu Alibaba Tencent Xiaomi in China) Everyone must constantly reinvent themselves to be in direct contact with changes in society the economy technologies and managerial practices

The hot topics identified by a team of researchers from the Association Franccedilaise de Marketing clearly reflect these developments and the need to produce scientific knowledge that will shed light on current developments1 In 2017ndash2018 Amina Beacuteji-Beacutecheur Audrey Bonnemaizon Beacuterangegravere Brial Jeacuterocircme Baray Laurent Bertrandias Madeleine Besson and Alix Poels effectively identified ndash based

Chapter written by Gilles NrsquoGOALA 1 Cf website of the association franccedilaise du marketing (French marketing association) httpswwwafm-marketingcomfrcontenthot-topics-0

Augmented Customer Strategy CRM in the Digital Age First Edition Edited by Gilles NrsquoGoala Virginie Pez-Peacuterard and Isabelle Prim-Allaz copy ISTE Ltd 2019 Published by ISTE Ltd and John Wiley amp Sons Inc

2 Augmented Customer Strategy

on expert opinions (practitioners and researchers) and calls for French and European research projects ndash what the urgent and obvious subjects to be investigated in the next few years were (1) the impact of AI robotization and algorithms (big data) on marketing practice (2) the renewal of business models (platforms blockchain) (3) the responsibility or accountability of marketing (4) open innovation (5) the role of marketing in the evolution toward a welfare society (6) the construction of markets (7) the place and legitimacy of marketing in companies (identity skills etc) (8) the role of brands in society and (9) new ways of influencing and persuading (eg ldquonudge marketingrdquo)

Without going back to the many facets of marketing we will address these issues in the context of customer strategies implemented in organizations By customer strategy Volle and Delecolle [VOL 12 p 13] mean the organizationrsquos implicit or explicit response to the various strategic issues of customer relationship management and relating to (1) the degree of customer orientation (2) the targets of the relational strategy (customers employees and other stakeholders) (3) relational priorities (customer acquisition retention engagement) (4) the focus on customer experience and (5) the deployment of relational processes and tools (loyalty programs CRM solutions online communities etc)

We will see how much customer relationship management must be renewed to meet these new challenges In particular we will focus on the first four topics mentioned above which according to the authors represent a true ldquotsunamirdquo in marketing thinking and practice The other five focus on marketing brands and markets and communication in their societal and environmental dimension We will discuss them in the last section

11 AI robotization and algorithms what are the effects on customers

If there is one area already impacted by AI robotization and algorithms it is the customer relationship The possibilities for collecting storing and exploiting data are increasing almost exponentially

ndash CRM (Customer relationship management) has long integrated customer data from transactional systems (orders etc) loyalty programs satisfaction surveys and call centers The development of digital marketing has therefore provided a more complete view of online customer journeys (opening clicks conversion opinions etc) The Internet of Things (IoT) will further increase the volume of data collected inform us about the real uses of products in private environments (cars homes cities) and provide a link between the real world and the virtual world In retail in

Customer Strategies in the Face of New Challenges 3

particular Beacon technology already makes it possible to analyze mobile phone users at the point of sale ndash via Bluetooth or geolocation techniques ndash and can send them personalized and contextualized communication in real time

ndash The development of remote IT servers (IaaS for Infrastructure as a Service PaaS for Platform as a Service SaaS for Software as a Service) mainly the cloud has made it possible to considerably reduce the cost of storing customer data and to benefit from unparalleled2 computing power The cloud market is growing at an annual rate of nearly 50 and in this market Amazon Web Services had a nearly 34 market share in 2018 which is as much as its four pursuers combined Microsoft IBM Google and Alibaba

ndash Data accumulation makes it possible to consider the implementation of AI within companies Digital and IT players have invested heavily in this field Google with DeepMind Amazon with Alexa Apple with Siri IBM with Watson Salesforce with Einstein Tesla with Tesla Vision etc AI allows you to solve problems and perform complex tasks especially in the field of customer relations Several concrete applications are becoming available to a larger number of companies (1) chatbots ndash or conversational agents ndash make it possible to automate responses to the simplest requests for information and complaints (2) predictive analysis makes it possible to predict future customer behavior such as customer defection and to plan for corrective actions (appointment scheduling service recovery etc) (3) the personalization of content (advertising email SMS etc) is increasing according to customer profiles and their online and offline experience (4) facial recognition can help identify customers online or at the point of sale for example (5) improving the user experience for example through tasks performed independently (autonomous vehicles for example)

Jeacuterocircme Baray provides (Box 11) an overview of the uses of AI in marketing and customer relationship management

Uses of AI in customer relations Until recently we were talking about data analysis multidimensional statistics data mining operational research and expert systems but how would AI differ from these techniques What will be the consequences for marketing practice and the future of customer relations

The expression AI was proposed in 1956 by mathematician and science fiction writer John McCarthy at the Dartmouth conference in the United States although the original mathematical and computer model of the biological neuron was designed by Warren McCulloch and Walter Pitts in 1943 Many scientists have tried to clarify the meaning and

2 httpswwwusine-digitalefrarticleamazon-pese-toujours-plus-dans-le-cloud-d-infrastructure- que-microsoft-ibm-google-et-alibaba-reunisN725454


scope of AI for some it is defined by its works and corresponds to the ability of a computer or robot to perform tasks usually performed by an intelligent being The AI would recognize itself in a machine simply because it is intelligent Thus AI would recursively define itself as the ouroboros that bites its own tail For others AI is defined by its tools A distinction is usually made between weak artificial intelligence which tends to develop increasingly autonomous digital systems because of engineering sciences for example in the form of algorithms capable of solving complex problems The computer program thus simulates human intelligence Software capable of playing chess is part of this category Strong artificial intelligence or artificial cognition would have both a true intelligent behavior with understanding onersquos own reasoning while experiencing true feelings and self-awareness These autonomous systems such as humanoid robots would be able to communicate with each other and with their environment and develop strategies The notion of artificial consciousness is the subject of profound metaphysical and philosophical discussions

Weak AI would be the one with the most immediate applications in terms of marketing and customer relations and can take nine forms of implementation expert systems knowledge representation knowledge management automatic natural language processing formal calculation human reasoning simulation problem solving pattern recognition and learning There is a certain buzz in the media about AI while researchers in psychology psychiatrists neurologists and philosophers do not even agree on the very old notion of intelligence The writer Om Malik a specialist in new technologies noted in an article in the New Yorker newspaper ldquoMuch like lsquothe cloudrsquo lsquobig datarsquo and lsquomachine learningrsquo the term lsquoartificial intelligencersquo has been hijacked by marketers and advertisers A lot of what people are calling AI is actually data analytics in other words business as usualrdquo How can marketing and customer relations mobilize AI tools

The question within marketing departments will soon no longer be only to access consumer data but to develop new super tools capable of processing this mega data (big data) aggregated with all competitors in the business sectors and centralized to be available to each of them Only companies that have developed AI coupled with human intelligence and are able to process these continuous flows of data on consumers their purchases their profiles all gathered in huge data warehouses or distributed in clusters on different web servers (nosql architecture) will be likely to win the game by adopting the best strategies and game tactics

AI covering the many data analysis techniques has already significantly changed the way the four components of marketing mix are approached particularly in the context of digital marketing

ndash The product AI has made life easier for online consumers for many years by submitting specific product or service proposals in seconds on the web based on their profile Thus customers can both obtain an offer exactly designed as per their desires and the company has the image of a service that responds well to the expectations of its customers The company gains an undeniable competitive edge by successfully offering


the right product to the right people where competitors are unable to align an adequate offer and thus miss out on sales AI is not a technology of the future but it is current and will continue to develop particularly with the IoT Connected objects that were once considered gadgets are becoming more accessible Following thermostats and light bulbs we are seeing fridges toothbrushes augmented reality glasses bottle openers sofas mattresses contact lenses forks interactive mirrors umbrellas and even connected condoms Distributors will be able to know in real time the contents of the refrigerator and propose to supply it at the right time from individual stock management On the other hand 3D printers interacting with AI will be able to revolutionize manufacturing methods that are close to custom-made whether it is producing everyday objects clothing or even homes because of a giant printing robot

ndash Price various pricing software programs (Paarly Brennus Analytics) already boast of using AI ldquopricing intelligencerdquo to adjust prices in real time in different sectors of activity such as e-commerce shops retail chains industrial groups food processing energy telecoms tour operators and insurance companies They monitor competitorsrsquo prices on the net for hundreds of thousands or millions of references by analyzing trends and developments promotions new products joint products joint brands level of competition on brands and product ranges inventory levels stockouts and replenishment Smart pricing uses machine learning and competitive intelligence to practice intelligent and adapted pricing Some researchers point out that price algorithms could naturally seek tacit agreements on pricing between competitors and therefore call for regulations in the form of audits or liability rules that could also lead to new marketing-related professions such as ethicists

ndash Promotion the detailed knowledge of consumers through the study of their behavior already makes it possible to refine media choices and advertising messages as part of promotional campaigns On the Internet advertising such as dynamic banners (dynamic creative optimization) can appear at the right place and at the right time by adapting the target audience and their expectations because of an Internet user tracking system (cookies IP tracking) and predictive marketing using AI to anticipate purchasing needs Apart from the optimization of Internet campaigns the AI used in promotional campaigns still appears to be in its infancy as it uses many of the humanrsquos own creative resources

ndash Distribution and customer relationship management chat rooms are set up on the web or in the form of telephone support by large companies and some SMEs to advise on the choice of products or services in order to relieve call center congestion and limit costs They are therefore used to automate repetitive tasks with low added value to advise the customer in the context of after-sales service or to direct them toward certain products services or brands As the consumer still feels the need for human contact in particular situations these intelligent conversational agents are unlikely to mark the end of call centers

Box 11 Artificial intelligence a marketing tool for customer relations by Jeacuterocircme Baray Professor at the University of New Caledonia and researcher at Larje


12 Business model renewal what are the impacts on customers

The rapid emergence of a platform economy is now disrupting operation for many industries For example in tourism Airbnb manages 45 million homes in more than 80000 cities and will be targeting one billion users per year by 2028 Bookingcom covers nearly 85000 destinations and more than 2 million hotels and accommodations worldwide The rise of the Internet had initially enabled tourism professionals to do without traditional agencies and they address their customers and prospects directly Then in a second phase new players including online travel agencies and peer-to-peer collaborative platforms aggregated information and offers captured traffic on search engines and positioned themselves as key intermediaries Even if this phenomenon is not new we are witnessing an accelerated phenomenon of disintermediationndashre-intermediation in many sectors [LAM 16]

Different types of platforms have emerged from digital transformation [NIC 17] SEO platforms and search engines (Google Yahoo etc) social networks (Facebook Instagram Twitter) dematerialized audiovisual directories (Spotify Deezer Netflix) communications applications (Skype Whatsapp) video sharing platforms (YouTube) payment systems (PayPal) marketplaces (Amazon FNAC etc) or crowdsourcing platforms (eYeka etc) and crowdfunding (Ulule etc) More recently collaborative platforms (BlaBlaCar Le bon coin Airbnb eBay etc) have also undergone unprecedented development and have enabled exchanges and transactions between peers (peer-to-peer) to be encouraged As we can see from the previous examples platforms have become essential and have disrupted all industries (communication publishing cinema travel commerce finance etc) and purchasing andor consumption practices

This emergence of platforms has had several major consequences on customer relationship management

ndash Value chain reorganization customer relationship management has generally aimed to establish a direct relationship sometimes one-to-one often without intermediaries between suppliers and their customers In recent years a process of re-intermediation has been underway Platforms have frequently interspersed themselves as major and unavoidable players in data access and the implementation of a communication strategy Platform operators have succeeded in capturing part of the value chain at the expense of traditional intermediaries [ACQ 18] For example Bookingcom has a strong position in hotel market access selling 550000 hotel stays per day on average worldwide aggregates large volumes of data and collects more than 16 commission on hostsrsquo revenues This group also subjects hoteliers to rules that prevent them from competing with it (pricing etc) Platforms thus


constitute new screens between customers and their suppliers They potentially exploit information asymmetries and limit themselves to providing access to their online interfaces for managing customer acquisition and retention campaigns

ndash New forms of domination with the development of platforms many fear the development of monopolistic effects and the emergence of new forms of domination (the case of GAFAs is the best example) The fear of many companies (media banks insurance companies energy companies etc) is that they will be ldquodisintermediatedrdquo by new operators who will be placed between them and their customers and this will prevail because of their ability to access and process customer information Even if the fear of a situation where a single platform operator would ldquotake it allrdquo is probably exaggerated [BEN 16] the ability of brands to influence and control their customers is in such a context considerably reduced

ndash Free for users the platform economy is based on the search for network externalities [ROC 03] in two-sided markets in particular the more suppliers there are the more demand there is and vice versa The challenge for platforms is therefore to reach a critical number of users by all possible means and in particular through free access to services (Google for example) The digital world is thus gradually spreading a ldquohabit of free accessrdquo that is not well-suited to the business models used by many companies How can the price of an online service such as a game be effectively legitimized when all other entertainment experiences are free While everyone is trying to find other sources of funding (online advertising freemium technology etc) for many players the emergence of platforms coincides with a destruction of value and a devaluation of their services

ndash New trusted third parties platforms frequently act as trusted third parties between suppliers and their customers For example the customer buying on Amazonrsquos marketplace usually does not know the seller concerned and relies on the platformrsquos reputation Trust is also generated through the establishment of customer reviews that enhance the credibility and reputation of the various vendors While many experts see this as a sign of increasing customer empowerment everyone can also see a growing role for platforms in market access and information literacy For example it is easier to find an evaluation of thousands of sellers on the Amazon marketplace than to access a rating of the Amazon website by its own users Consequently on platforms it is more a question of the reputation or e-reputation of the seller and brand than of emotional enduring and reciprocal trust [NGO 10] Trust here takes a more impersonal and transactional form

ndash Unequal competitive play as Beacutenavent [BEN 16] points out platforms benefit from a ldquolong tail effectrdquo and can afford to offer a considerable variety and diversity of offers While a hotelier will seek to optimize their occupancy rates throughout their hotel chain Airbnb or Bookingcom may offer a plethora of accommodation


offers some of which may be very little used Indeed overall sales of catalog background products can represent a significant sum of the turnover Then the challenge of the platforms is to develop a science of matching to match the multitude of requests with the multitude of offers offered in terms of prices for example This power in terms of data collection aggregation storage and processing (especially via AI) is still the preserve of large companies or digital platforms

Thus the emergence of a platform economy is changing the way customer relationships can be managed The very idea of a continuous direct and individualized relationship with a customer is being challenged Exchanges are becoming more and more indirect and transactional and customer acquisition and loyalty campaigns are carried out via interfaces where the brand only has limited control The data are massively controlled by platforms which benefit considerably from it Blockchain now proposes to decentralize data storage and management and to limit the possibilities of control and influence of the major digital players It is also a possible avenue for managing multipartner loyalty programs [KOW 17] The future will tell if this will result in a more fair distribution of value

13 Accountability to customers and citizens why and how

The digital transformation of our cities and lives brings many technological innovations (IoT big data omnichannels etc) that increase tenfold the possibilities of data collection exploitation and use in a multitude of fields (trade consumption mobility security energy savings etc) and lead to the development of a host of services for all citizens (search engines online administrative procedures remote purchasing bank account management news monitoring etc) Their success is such that no company consumer citizen or organization can reasonably do without smartphones computers tablets and permanent access to the Internet applications social networks etc These technological advances are undeniably promising and their success is no coincidence But this digital transformation also raises certain risks and can (1) create new information asymmetries between companies and their customers (2) infringe on privacy and personal data (cybersecurity exploitation and disclosure etc) (3) pave the way for new forms of opportunism (pursuit of personal interests at the expense of those of users) (4) facilitate the exploitation of the most vulnerable especially those who do not master this environment (low digital literacy) (5) create new unfair situations (inequalities discrimination) and (6) generate in return a crisis of trust and extremely negative behaviors (disloyalty revenge vandalism aggressiveness boycotts consumer group activism and resistance etc) [NGU 11 NGOA 15] While French law seeks to limit these risks





Edited by








Contents

Preface xiii
















34 References 55




Contents vii

























Contents ix






93 References 164



















Contents xi























List of Authors 289

Index 293

Preface








Preface xv




















Preface xvii


















Preface xix















February 2019

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Edited by








Contents

Preface xiii
















34 References 55




Contents vii

























Contents ix






93 References 164



















Contents xi























List of Authors 289

Index 293

Preface








Preface xv




















Preface xvii


















Preface xix















February 2019

1

























































Contents

Preface xiii
















34 References 55




Contents vii

























Contents ix






93 References 164



















Contents xi























List of Authors 289

Index 293

Preface








Preface xv




















Preface xvii


















Preface xix















February 2019

1



















































Contents

Preface xiii
















34 References 55




Contents vii

























Contents ix






93 References 164



















Contents xi























List of Authors 289

Index 293

Preface








Preface xv




















Preface xvii


















Preface xix















February 2019

1



























































34 References 55




Contents vii

























Contents ix






93 References 164



















Contents xi























List of Authors 289

Index 293

Preface








Preface xv




















Preface xvii


















Preface xix















February 2019

1



















































Contents vii

























Contents ix






93 References 164



















Contents xi























List of Authors 289

Index 293

Preface








Preface xv




















Preface xvii


















Preface xix















February 2019

1






























































Contents ix






93 References 164



















Contents xi























List of Authors 289

Index 293

Preface








Preface xv




















Preface xvii


















Preface xix















February 2019

1



















































Contents ix






93 References 164



















Contents xi























List of Authors 289

Index 293

Preface








Preface xv




















Preface xvii


















Preface xix















February 2019

1































































Contents xi























List of Authors 289

Index 293

Preface








Preface xv




















Preface xvii


















Preface xix















February 2019

1



















































Contents xi























List of Authors 289

Index 293

Preface








Preface xv




















Preface xvii


















Preface xix















February 2019

1


























































List of Authors 289

Index 293

Preface








Preface xv




















Preface xvii


















Preface xix















February 2019

1



















































Preface








Preface xv




















Preface xvii


















Preface xix















February 2019

1























































Preface xv




















Preface xvii


















Preface xix















February 2019

1



















































Preface xv




















Preface xvii


















Preface xix















February 2019

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Preface xvii


















Preface xix















February 2019

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Preface xvii


















Preface xix















February 2019

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Preface xix















February 2019

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Thumbnails · 2019. 7. 20. · hee prte esge sabitroli..... sst 62 4.2.4. Co-innovating with companies: wh atdo the mna siaktehdo tselrnhki? ..... 65 . Contents vii 4.3. The role