Blog Post #5: Course Reflection

One concept that I was able to learn more about as a result of this course and group was project is rapid prototyping. I have had a New Product Development course here at McCombs, but never had the opportunity to take part in a rapid prototyping session. So just being able to help form insights from our interviews into a product or service concept was a worthwhile exercise. It was helpful to have Jeff from upstream come in before our rapid prototyping session to help set the guidelines for how our team should approach the exercise. Of key importance, was his insights on just putting our heads together to get a rough product or service concept developed, not to try and attempt a full scale design. It was helpful to view his own examples of how products had evolved from rapid prototyping to finished solutions.

Another concept that I was able to better grasp was that of developing a persona of the customer and directing research and product ideas to the persona's characteristics. My wife is an Account Director at an advertising agency, so I have some understanding of how creative is directed towards a target, but I never got a sense for how it could be applied to product development. I think that when teams come together to develop a new product or service, having a persona makes sense because it not only gives the group a target to think about but it makes the process more fun. We developed the persona of Sam and Buck - the single, affluent dog owner (not Matt M). Sticking to this, enabled us to direct our effort around "what would Sam and Buck" want or need from our service offering? I think it's a great discipline to use; to have a segmentation, but personalization strategy.

I say more in the final project, but I don't have much to complain about here. I think the reason is that I just had a great group to work with, especially Kelly, who LOVES dogs and so that made rallying around her passion really easy. Maybe that's it - a key takeaway: maybe it takes someone's passion to create a great project? I guess if you put your full self into something like product development, your creativity really comes out. This course is really part entrepreneur! Early on, we did have some trouble getting started, finding meeting times, and subjects to interview. Also, we struggled with developing a good list of interview questions to use. But once we had that, things really flowed nicely to the end concept. But I think these are concerns with any group project - especially in business school - and the class meeting time really helped.

Yes, I enjoyed working with my team to develop the Royal Gardens Dog Lovers Apartment Complex. Although we had a very diverse background (2 MPAs, 2 MBAs), I think the diversity in thought contributed greatly to our ideas. I never felt like we ran into a wall with idea generation - we could just get together and drum up the next course of action fairly easily. Also, beyond idea generation, we had a resident expert in dog-walking, which was an immense help, a realist-type accountant, and two creative MBAs (as creative as MBAs can be). Honestly, I really had fun with this project because it allowed us to go the full cycle with research to prototype but also to be creative and visual with it. Also, the entire project wasn't too structured, so I never felt like our group "had to fit the mold." I really enjoyed being creative and thinking outside of the box. My team was very enthusiastic about the solution we developed - which made it feel less like a project and more like an endeavor.

Thank you for the course and thank you for the project!

Wal-Mart's Data Deluge

The retail giant Wal-Mart - with customer traffic of 100 million shoppers per week - has been collecting customer data through check out scanners for years. The company paid $4b for data infrastructure in 1991 and goes to great lengths to keep its data secret from suppliers and competitors. This customer and product data is segmented by store geography and is used to model tests to improve operational efficiency and product availability. Wal-Mart currently holds twice the data of the entire internet and gives the company an advantage in tailoring product availability to the right customer at the right time.

Based on this article and my knowledge of Wal-Mart's shopping experience, these data collection efforts are helping Wal-Mart make products available at the right time and help with supplier relationships but there isn't anything radical with these practices that is giving the company a competitive advantage. All businesses should aim to better understand their customers in order to make strategic decisions like new stores, product availability, and the offering of new products. The reason is that other retailers such as Macy's or Target are just as able to study their customer's buying habits, store performance, and inventory availability just as easily. Most retailers offer data collection efforts through loyalty programs and credit cards. It is up to them how much they are storing and analyzing this information to make business decision. I think that Target has a very similar effort to Wal-Mart's because of what Wal-Mart has been doing. The only true advantage that Wal - Mart has it that it doesn't share the scanner information with Nielsen or IRI, which makes it difficult for specific Target stores to better price match against Wal-Mart. Wal-Mart also collects data on more transactions than anyone else because it receives the most customer traffic. Additionally, it is important for any business to meet the needs of its customer base but I find it disturbing that Wal-Mart is looking to profit from unfortunate natural disasters like the gulf hurricanes. This is how their pop tart and beer response to Hurricane Frances was spun.

There are privacy concerns with what Wal-Mart is able to collect and I hope that steps have been taken to prevent personal data such as social security numbers, credit scores, mortgage balances, and driver's license numbers from being compromised. This article was not specific on how Wal-Mart might be using these pieces of information to offer new services, however this may be unknown. The fact that these pieces of information are available to Wal-Mart and the potential for abuse does disturb me. However, if I were to buy anything from a retailer with a credit card, then I surmise that they would collect this information as well. The key question is whether my household is receiving more credit card offers in the mail due to my shopping habits. This I am not sure of. Overall, I believe it is the moral responsibility of every business leader at Wal-Mart to not abuse the company's comprehensive data collection efforts.

Wal-Mart's data collection and technology efforts has effects beyond the company's customer base; Wal-Mart's suppliers are impacted as well. In order to improve inventory efficiency, the company uses RFID technology to keep track of inventory pallets. However, it does this by forcing its customers to invest in the RFID technology in order to continue to do business with the retail giant. With this technology they are able to become aware of supply outages up to the minute and relay this information back to suppliers for fulfillment. It can also notify suppliers of missed shipments or errors in delivery to get these problems corrected quickly. All of this contributes to the customer experience because items are in stock when needed - however, I don't think this is a radically different practices than other retailers. Wal-Mart is also gaining more power over its suppliers due to this information because it shares only what is needed for the supplier. The retail giant is moving towards scan based trading, where the inventory sold at Wal-Mart stores is owned by the manufacturer until it is sold - reducing the massive amount of inventory that Wal-Mart now holds on its books. This would be a massive change, putting Wal-Mart in a similar position to Ebay - another company that serves as that marketplace for goods but doesn't own the actual items being sold.

Paper Topic: What makes a successful customer experience with online services?

Research Topic:

In today's world, the way in which users are interacting with information and with each other is changing rapidly. People are connecting to the internet with a host of new devices and are accessing content or information in new ways. Over the years since internet has emerged in the early 1990s, people have now developed online lives, where routine daily tasks involve the internet. Yet through this change, some exemplars have emerged in the realm of 'online services' which provide that unique customer experience that users seek and keep them coming back, despite a host of competitors and little to no switching costs. In the social media realm, there is Facebook which has clearly dominated over competitors such as MySpace. Online gaming is led by Zynga, the maker of FarmVille despite PlayFish and Pogo and many other online game sites. When most people of online music, they turn to Pandora rather than offerings from Last.fm and Slacker Radio. And online information and community sites such as Wikipedia, Blogger, and LinkedIn are ruling over content mills, Typepad and Wordpress, and Bebo.

Key Questions:

What makes these key offerings work and why are they sticky? Is there something that explains their success? How is the user experience managed? How is the user experience designed, and are there key elements of each leading offering that are common among 'winning' platforms? How do they overlap: for example, Zynga and other online gaming companies use Facebook as a platform. What is the customer experience of each - relating to the customer experience framework we have studied in class? How are customers acquired? How are they managed? How are users retained? Have these online services been able to create higher switching costs than that of other less popular offerings? How much do these companies understand of their user base that is allowing them to target other customers and develop other appealing offerings? What are the broader implications of our growing connection to online services and what could the future hold? For instance, will it be a winner-take-all market for each type of offering or will multiple offerings co-exist?

My Interest in this Topic:

I am intrigued with how much our lives are being conducted online and how rapidly this phenomena is changing in today's world. As someone who remembers the late 1990's internet bubble and crash, it seems there is some element of what is going on today that parallels that period. However, there is likely much that is different and it is possible we are not going through internet bubble cycle 2.0 at this point. I hope to understand why or why not this may be occurring and what has changed since that time. This topic is also personally relevant to me because I hope to find a job at one of the leading online service providers. I think that by conducting the research for this paper that I will learn a great deal about the industry and the strategy behind the engaging customer experience that has been created by each company.

As I think about my interest in this topic and my future career, I consider that if I were required to write an MBA dissertation, that this would be my topic.

Resources:

My research resources include learning from one of the leading experts in online marketing today, Seth Godin, through his book and ongoing personal blog. I also will analyze the corporate blogs of today's leading companies in this realm, Google, Facebook, and Pandora. Additionally, I will look at leading tech site articles devoted to the topic, such as the CNN Tech article listed below.

Seth Godin, Tribes, 2008

Seth Godin's Glog

CNN Tech, Why the no-fun 'FarmVille' is so popular, Sept. 28, 2010

Pandora Corporate Blog

Google 10 Things Corporate Philosophy

Facebook Corporate Blog

Customer Experience: Amazon for Textbooks

As a graduate school student, each semester brings a large textbook purchase, sometimes upwards of $300. The cost can be daunting, although the textbooks are required for each course. Fortunately, there are options, and the number of options is growing. Students such as myself today can purchase from the Co-Op, rent textbooks from Chegg.com, or purchase from Abebooks.com or Amazon or even Barnes and Noble.

This past semester, I had to purchase two books for my Invisible Global Marketing course, the subject being business in emerging markets. These are not textbooks, but two books co-authored by the professor of the course. Being the cost-conscious student, I first comparison-shopped for these two books at the locations discussed previously. After a store visit to the Co-Op and a few website visits, I determined that these two books were cheapest when purchased from Amazon. I started an order for them at Amazon and added them each to my cart. When I began the checkout process, I realized that Amazon carried one, and could ship to me directly, but the other book was listed by a private seller on Amazon. I first thought this could be a problem, because there could be two transactions, but Amazon handled both purchases in one check out - the book at Amazon, and it handled the other with the private seller. Amazon's book was new, but for the other at the private seller, Amazon indicated what condition the book was in: New, Used, Like-New, Or Very Good condition, and the price differed for each variation. Additionally, for each one, I was given an estimated ship date, and length of time for delivery based on the shipping method I chose. I soon found out that both books would arrive at my house within a day of each other, although in separate shipments. I felt delighted that I could save about $15 off these two books versus other avenues such as the Co-Op, so I went ahead and placed an order. When each arrived about 5 days later, each arrived with a receipt from Amazon and the other seller and the Amazon book came with a return shipping label. Each was in the condition described in the listing.

Despite securing these books, I was forced to drop the class a week into the semester because of a scheduling conflict with a required course. I decided to return the books but I felt that this could be a problem. Would I be double-hit for shipping charges? Would Amazon and the other seller accept the return? Would any of the books be damaged or lost in the mail? The return at Amazon proved to be super easy. I didn't have to call or email anyone, I just simply indicated on my web check out form from my order that I was returning them. The return form sent me a return label for the other book. I put both in the mail and received a confirmation about a week later that both were received and a return credit issued, including the shipping charges for the return. Looking back on this entire transaction with Amazon, the whole experience seemed relatively painless; both finding, shipping, contacting Amazon afterwards, and returning the books. From my perspective, these are the important elements of my exchange with Amazon:

Ease in locating items
Low pricing and shipping costs versus other alternatives
Felt the shipping time was good relative to the cost
Ability to purchase from a variety of sellers, not just Amazon
Ability to quickly communicate with Amazon regarding the return (simple web page handled return)
Effortless return process, simple label priting at home, although I still had to go to the Post Office to mail the package
Fair credit for exchange policy

Why was this so? Analyzing the entire customer experience with elements of the Experiential Marketing Framework explains this.

There are five elements to this framework:

Sense: appealing to the senses, and used to differentiate the company or motivate customers.

Feel: appeals to to customers inner feels and emotions, with the objective to create affective experiences.

Think: appeals to the intellect. This engages the customer with creative problem solving experiences.

Act: enriches customers' lives by showing them alternative ways of doing things.

Relate: contains some of the above aspects but expands to customers feeling of an ideal self, other people, or cultures.

From my perspective, my Amazon experience touched on the Feeling, Thinking and Relational aspects of the Experiential Marketing Framework. These three categories encompass much of what I value from the exchange with Amazon. The competitive pricing and shipping costs and times all relate to my inner feeling regarding saving on expenses and how that just feels good for a consumer, especially with a web transaction - where cost and shipping are the main differentiators - the same items can be found at many sources. My ability to engage in one transaction with multiple sellers through Amazon, the ease of communication regarding the return and the effortless return process definitely falls into the Thinking category, as these aspects are all ways that Amazon showed me a creative way of completing a tast. (Amazon handled the sale for me with the other vendor, coordinated shipping, included a return label, and made it easy to print the other). Lastly, considering how I feel about the entire experience includes comparing this experience to previous dealing with Amazon, also comparing to other sellers, and comparing to what I feel is an ideal fair transaction. These three elements stem from the Relational aspect of the Experiential Marketing Framework.

My Persona: The Asipring, Soon-To-Be Graduate

In order to develop incredible products, marketers must step outside the bounds of traditional market segmentation into a new realm of personas. A persona is a collection of personal beliefs, characteristics, goals, and opinions about a group of customers beyond simple demographics, behaviors, or psychographics. Below is the persona I've created for myself in the form of the Cohorts examples, which includes major elements of the Empathy Map discussed in the course:

Personality:

"People say I'm a creative, free-thinker, apt to try that next experience."
"I hope that we can buy a house in the next five years."
"Not an empty nest for long: we're saving for that eventual baby."
"Success to me is spending quality time with my wife, kids, and work - in that order."
"People in America spend and eat too much. I try not to emulate this!"
"Selective social bug: Quality over quantity counts with friends."
"Starting and running a business is a life goal for me."
"I love technology that makes life easier; coolness is less of a factor that functionality though."
"I'm a member of a wine club and enjoy wine tasting with my wife."
"Eating organically is a goal, but we don't have the $$$ to do it 100% of the time."
"Staying physically active is a bug for me."

Demographics:

34
Male
Married
Graduate education
Apartment living situation
Business Professional
$90,000 annual income
No credit cards

Lifestyle:

Audio / Video:

2 Laptops at home
Addicted to Netflix
Still use that turntable to play records, although MP3s rule
I have a good digital camera but should have taken a photography class!

Sports and Fitness:

Skiing
Golf
Tennis
Gym rat: I love a good workout

Connoisseur:

Wine tasting
Travel - usually local, it's all we can afford right now
Art shows, checking out a new exhibit at the museum
We eat out selectively, but mostly enjoy cooking at home
European soccer

Outdoors and Home Life:

Hiking
Camping
Looking foward to having a dog around the house