Connected Strategy: A book review by Bob Morris

Connected Strategy: Building Continuous Customer Relationships for Competitive Advantage
Nicolaj Siggelkow and Christian Terwiesch
Harvard Business School Press (2019)

How connected strategies create competitive advantages in customer relationships

Jackie Huba and Ben McConnell coauthored an invaluable book in which they explain how to create what they characterize as “customer evangelists.” Obviously that is the result of a cultivation process that begins with a connection, leads to a transaction, and then (hopefully) continues as a mutually beneficial relationship. Nicolaj Siggelkow and Christian Terwiesch assert — and I agree — that if you have have customers who cherish their relationship with you and urge others to do business with you, you have a significant — if not decisive — competitive advantage.

In this context, it is worth noting that years ago, then chairman and CEO Herb Kelleher was asked why Southwest Airlines was the most profitable airline and its cap value was greater than the cap value of its nine closest  competitors COMBINED. He replied, “We take great care of our people. Our people take great care of our customers. And our customers take great care of our shareholders.”  Having employee evangelists is another competitive advantage and probably a key to creating customer evangelists.

Siggelkow and Terwiesch provide an abundance of information, insights, and counsel that will prepare almost any organization’s leaders to recognize a customer’s need, identify a product and/or service that will fill that need, request from the client feedback that either confirms the solution or modifies it to the client’s satisfaction, and then respond appropriately, thereby strengthening the relationship with the client. In other words, collaborate with a client to fill a previously unmet need.

These are among the passages of greatest interest and value to me, also listed to suggest Siggelkow and Terwiesch’s scope of coverage. First,  three workshops that prepare readers and their organization to achieve three strategic objectives:

o Using Connectivity to Provide Superior Customer Experiences at Lower Costs (48-59)
o Building Connected Customer Relationships (121-144)
o Building Your Connected Delivery Model (217-233)

Each workshop — all by itself — is well worth the cost of the book. Here are other valuable passages:

o Three levels of connected strategies (Pages 5-15)
o The Efficiency Frontier (22-29)
o Creating Deeper Connections among Existing Parties (31-35, 126-130, and 136-141)
o Creating New Connections (35-39)
o Connected Strategy and Competitive Advantage (42-43)

o The Disruptive Potential of Connected Strategies (46-47)
o The four-step process of creating a connected strategy (50-57)
o Automatic execution of customer experiences (77-80 and 87-88)
o Learning analytics (101-115 and 134-136)
o Levels of customization (110-111 and 118-119)

o Connected Producers (148-153)
o Connected Market Makers (157-161)
o Crowd Orchestrators (161-165)
o Revenue Models: A Brief Overview (178-179)
o Innovative Business Models Don’t Necessarily Require New Technologies (213-215)

I wholly agree with Nicolaj Siggelkow and Christian Terwiesch that “it is important to resist the temptation to create connectivity just because you can and to modernize data indiscriminately just because no one is stopping us yet. Put your customer first and remember that not all customers are the same. Building trust is at the heart of a connected strategy, and that trust can be easily lost.  Trouble can ensue unless you show that the data your customer gave you creates value for him or her and is not used in undesired ways.”

One final point: Estimates vary but, on average, it costs about six times as much to gain a new client as it does to keep one you already have.  Go figure.



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