Painful democracy

IMG_8545This weekend, just like two weeks before, I waited patiently for hours to vote, a right our parents fought for 25 years ago. In London tens of thousands of people, most of them calm, smiling, queued with us in the hope of a better future back home, where they still have family members, friends, businesses. I didn’t get the chance to do it though, unfortunately, after waiting for 10 hours.

When is the last time you queued for 10 hours to exercise your right?

This sad, sad moment reminded me of a story about communism that my parents and grandparents used to tell me. I was born in 87, when times were very hard. They told me that they used to go and queue to get food – eggs, milk, meat (which was a rare treat). Electricity and hot water were scarce and we used the stove to keep warm when heating was cut too. That was painful communism.

Today we don’t have to queue for food anymore, but for something else. We have to queue for the power to change a system that has driven us out of our hometowns, out of our country in search of a better future. Why would a democratic system cause its citizens so much pain, so many hours wasted for tens of thousands of people.

We switched the painful communism with painful democracy – a pain to vote, a pain to travel, to do business and to be happy. I hope this weekend is a step to put an end to this. And i hope the next MCV report will reflect the poor state of the nation and its institutions. Events like this, voting queues, should not be possible in 2014, European Union.

Along side the poor deployment from the organizers(Government), there is one more notable mention. I am ashamed that some people who call themselves patriots and Romanians disrupted the peace and quiet of Kensington and resorted to shouting, verbal violence and raised the tension in the peaceful queue. There were agitators, people that were there just to anger the others, not to vote or anything else. They are the representation on the uncivilised side of Romania and none of us should ever encourage them.

I distance myself from these agitators and disrupters and I ask you, the non-Romanian reader, to see beyond this uncivilized representation of nationalism and take a good look at us, the silent, numerous and mannered group that are part of your communities in the EU and all over the world. We are the victims of the painful democracy back home.

How can Rosia Montana help deliver on Mr. Schultz’s investment objectives for the EU

3-the-formerly-mined-cetate-pit-at-rosia-montanaEuropean Parliament President Martin Schultz, recently declared that Europe needs an investment package to overcome low growth and high unemployment. Of note, he said the following:

“We need targeted investment in areas where, in the short term, it will stimulate the economy and create jobs and, in the long term, safeguard our children’s future. We need to invest in areas and projects which will generate the greatest value added.” (Source: Europa.eu website)

The Roşia Montană mining project and other similar projects across Europe, which extract natural resources with sustainability and social responsibility as core principles, together with the highest regard for environmental standards, will create jobs and welfare for local and national communities, and could contribute to fulfilling the growth objectives put forward by Mr. Schultz.

The World Gold Council reported in October that, in 2013, fifteen of its members surveyed employed over 160,000 people and had a total expenditure of $47.3 billion, out of which 79% ($37.4 billion) was spent inside the country of operation. Of that $37 billion, 88% benefited suppliers, local people and communities and only 12% went to national budgets. Imagine a European Union that is self-sustainable and prosperous thanks to its rational use of currently available resources and a sound exploration strategy.

Read more on the Rosia Montana News website.

Ello invitations givaway

Most digitally connected people have heard of Ello by now. Ello is the social network that vows not to share your personal data for advertising gains. That’s their USP and that’s what’s drawing people in, leaving the novelty factor aside. They hope to make money from paid features and are accepting limited numbers of users due to server restrictions a.k.a. keep the network from crashing altogether (remember the fail whale?).

ElloEllo

I was fortunate enough to get an invite from my network and I’m returning the favor. I have 10 invites up for grabs for the first 10 comments posted here, on my blog, that say what they think brands could do on Ello. Please use real email addresses for the comments so I can send you the invite codes.

I’ll start: Brands could use Ello to tell stories that are somewhere between blogging and tweeting, to add image and video and provide an uninterrupted experience via the Ello timeline.

Startcelerate London – test your startup in a 2 day marathon

Last week I was talking to some of my Romanian friends in the UK and one of them introduced me to Startcelerate London, a pitch & match event that will take place at Level39 (great Canary Wharf co-working space) in the October 31 – November 1st weekend.

I said it before on my blog, Romania is one of the rising stars in tech thanks to high quality programmers, a still emerging market in terms of costs and very high Internet speeds. Thus, Romanians have decided to come to London and provide great programming and product development services to 20 eligible startups.

20 startups and up to 10 tech companies to pitch one another, get essential insights from renowned industry specialists and engage in a close matching process out of which investment partnerships can result. It’s not about money investments, but about direct investments of tech resources from strong established software companies into promising startups in exchange for equity.

How to participate as a STARTUP?
A technology partner can be the essential element in developing your startup, allowing you to build or scale your technology and team. Apply here be one of the 20 selected startups for pitching in front of 10 strong tech companies and get a resource investment from one of them. If your project is selected you will have to buy a ticket for the event in order to finally confirm your presence for the event. You will receive a link with the ticket information in the confirmation email.

Who are the sponsors (direct resource investment, remember?)

investors pitch

As this was not reason enough, the organizers have prepared a list of speakers to share their knowledge and inspire the participants into building the best products ever. They are:

John Spindler, Enterprise Capital
John Spindler is the CEO of Capital Enterprise and Founder of Capital List. John has several years of experience with early stage businesses both as a founder, investor and an advisor. The last few years he has focused on supporting startups in the investment process and has successfully helped startups raise finance through introductions to accelerators, angels and venture capital. John is an invaluable resource for startups looking for advice in the investment process.

Thilo Schneider, Pinset Masons
Thilo is a corporate lawyer with Pinsent Masons LLP, an international law firm specialising in the technology sector (www.pinsentmasons.com). Thilo is head of the firm’s Bootlaw (www.bootlaw.com) initiative which runs monthly events aimed at tech start-ups and his firm regularly advises emerging tech companies and their investors on corporate, IP and other legal issues.

Jaspar Roos, Future Ideas
Jaspar is a renowned authority in the field of innovation. Jaspar has been the Chief Inspiration Officer for ABN AMRO Bank for many years. Managing the innovation and venturing lab Dialogues Incubator, Jaspar has been one of the pioneers in themes as wearable technology and crowdfunding. Currently, he is entrepreneur, writer and inspirer. His main outlets are www.futureideas.eu, www.chiefhumorofficer.com, www.ventur.es and XL Family. He loves life.

Bill Morrow, Angel’s Den
Bill is CEO & Co-Founder of Angels Den, Europe and Asia’s largest angel network with an established equity crowdfunding platform. Since founding Angels Den in 2007, he has changed the rules on angel investing and led the way in making investment truly accessible to great businesses.Bill has run businesses in London, Hong Kong, Singapore, New York, Russia and Dubai. He is a popular keynote speaker who inspires his audiences with his open approach and determination to promote angel investing and crowdfunding and make business finance more accessible for all.

Josh Krysiak, Citinite
Founder of Citinite, a digital marketing startup for the nightlife sector. While completing a Law degree at UCL and the University of Hong Kong, Josh gained extensive experience in the entertainment industry, from managing stages at festivals to organising, promoting and playing at events on multiple continents. Building on this expertise, he spearheaded the development of the Citinite platform in order to fill the gap in the market for a comprehensive and targeted promotion solution.

Update #1:

Two Pitch & Match events were held already in Romania, Cluj and Bucharest, both validating the event structure, the internal team efficiency and the need for this kind of alternative founding of the market. Specific to Startcelerate’s investment process is a bespoke convertible security that simplifies the negotiation, prevents premature valuation, and covers specific risks.

Update #2:

They’ve added new sponsors and partners for the event and prolonged the application deadline until the 26th of October.

UCL Advances(the entrepreneurial wing of UCL), Level39 (the Tech Accelerator in Canary Wharf), London & Partners (representing the Mayor of London and TechCity), Pinset Masons, Thomas Eggar LLT, F6s (the biggest network of startups and investors in the world) or DotForge (a strong accelerator specialized in tech and social).

Last but not least, some useful links about Startcelerate:

Video of Startcelerate concept
Video with highlights of Bucharest event

The Pitch&Match London Event Overview presentation
The Startcelerate Concept presentation
The Executive Summary & Sponsorship packs presentation

How to use moral psychology to grow a community around your startup

A few weeks ago, Gus Ferguson sent out an email with a call for workshops for the Digital Growth Day (18th of September) at Google Campus London. On any other occasion, I would have gone forward with a regular topic like: “How to leverage social media to attract customers”, “Increase your digital footprint and generate awareness, responses and sales”, “Turn your likes, shares, tweets into real paying customers” and so on.

But no.

This time I had just finished reading The Righteous Mind, a book by Jonathan Haidt, where he uses moral psychology to show how politicians can become more appealing to their constituents, but at the same time lays the ground for an interesting paradigm that can be used in consumer marketing (both for corporations and startups). That’s how I ended up emailing the topic of:

How moral psychology and digital marketing can accelerate your customer acquisition – a talk about messaging and leveraging the inner moral structures to strengthen and grow the community around a start-up

Digital-Growth-Day-Agenda-banner

I’m not going to spoil the workshop itself by revealing it on my blog, but I can tell you this. If you subscribe here (it’s FREE) and be selected as one of the 12 participants, you’ll get to see me:

  • talk about myself for a bit 🙂
  •  giving you a test on the moral foundations
  • talking about ideology and creating groups around your startups and products
  • focusing more on community and on the outside than on the founder(s) and team(s)
  • showcasing some of the more successful messages and decode their moral substance

All that and a bag of M&Ms for the most relevant contribution of them all. So join me next Thursday, looking forward to it.

Update:

And here’s the presentation that I used to make my point:

Digital Innovation Meetup Summary @ Google Campus

10387893_671776802916594_1790564367_nI like to publish a summary of my observations and learning after the digital events I attend, even if the event ended a week ago, but it’s vacation season (still!), so bear with me. This one will make no exception, but in addition to my own notes, I used James Ashcroft‘s ones since I was late for the first presentation, getting there just when the Q&A started. Anyway, we had a 3 speaker event with hugely different styles and topics that we could learn from.

The first presentation, the one from Lief Bode Nielsen, Senior eCommerce Specialist at LEGO, is the one that I missed. But here are James’s notes.

· Innovation is critical to the sustained success of LEGO – 60% of toys we sell each year did not exist the year before – and digital innovation is one of the four pillars on which our continued success is built.
· The success of the LEGO movie and the company’s video games past and present is well known but we are also integrating digital into the physical. An excellent recent example is Lego Fusion. We’ve done away with instruction books, you begin by downloading an app and, in the Town Master version for example, you are the mayor charged with building a town. The premise isn’t so different from, say, Sim City, but here you design and build each building using physical bricks. You then take a picture of the building and your creation gets digitised into the game!
· LEGO is also leveraging Augmented Reality in flagship stores. Children bring a box of LEGO up to a screen and it animates the bricks to show the kids what the product will look like once put together.
· LEGO has been using Optimal Sort (http://www.optimalworkshop.com/optimalsort.htm?gclid=CLvKm_rQocACFfMZtAodvnUA3A) to get consumers to help them better organise content online in a bid to realise next generation e-commerce.
· Since 2008 LEGO has been engaging consumers to crowdsource new ideas for its products.

And here are my thoughts from the Q&A: It’s always good to hear that a retail giant acknowledges that the industry has changed and they are adapting and moving forward with branded games (something that I had been an ambassador of since 2010) and e-commerce. It’s a mixture between brick and mortar and online, but the experience of getting into a toy store is still un-match-able. Just wait for more augmented reality innovations and practical use of currently available technologies. But back to Lego. Their site is viewed as the flagship store and they keep rejuvenating their products with Evergreens and in and outs to keep the lines fresh – some years they have pirates, others not, on one hand, while on the other, there are some product lines that stay there for years.

An inside info: they were poached of their VP Marketing, so not even a stellar company such as Lego is safe from such practices. Keep your best people happy.

Next up and with a totally different approach, we had the chance to listen to Michael Abrey-Bugg, Commercial Relationship Manager at Age UK. His presentation was PowerPoint-less, but his examples and experience were very interesting to take in. They (AGE UK) provide services for elder, it’s a charity. However, they raise money through selling products and services to 1.2 mil. shoppers via 440 shops, B2B and online. He talked about installing smart meters to elderly people. Now that was a challenge! They used direct marketing in partnership with EON, sending out messages to 500,000 customers, with a 30% response rate and ended up installing 4,000 meters (a free service offered by EON through AGE UK).

People took to the benefits of smart meters like removing the need for workers to visit their homes to take meter readings and the price certainty achieved by removing estimated bills. He said that smart meters would also facilitate remote switching, allowing customers to have gas/electricity supplied by EON in the morning and British Gas in the evening, for example, or whichever combination gets consumers the best rate.

Besides the transparency and convenience, their studies showed that 8/10 liked the smart energy displays, but even though the contracts said that customers own the data and that then gets transferred to energy companies, there were still major concerns about personal data privacy – some saying that it would be easy for a hacker to tap in and see if they are on vacation or not.

One of my main aha-moments: There is an opportunity for an electricity and gas real-time bidding and switching marketplace.

Last one to present was Max Kreijn, Digital Strategist at Open Activation. Open Activation is a digital innovation methodology that helps large enterprises to successfully embrace and disrupt digital like a technology start-up. It’s like the business model canvas, but for corporations. He’s giving away a whitepaper on his website, called 7 Key findings (check the spam folder). The findings themselves are not head turners, but the cases behind them are worth reading – Car2Go, SemCo, Aribnb vs. Hilton, Runkeeper, Instagram and Coca Cola. Max would welcome approaches from people interested in piloting Open Activation, so he was trying out a sales pitch in front of us. Sorry to say that he still needs to work on that, as I was not really impressed. The whitepaper however is a good read.

That’s pretty much what I managed to take away from the event. The internet of things is being adopted by elderly people, too, retail is more and more synonymous with digital and e-commerce and corporations need to turn into start-ups to grow.

Land Rover UK underperformed with its #CanAndWill campaign

A friend of mine sent me the I can and I will integrated campaign signed by Land Rover UK. Wonderful concept, great video and script execution, but I felt it could have done more on the media exposure side of things. I mean, just look at those videos (new tab, don’t worry), they have huge viral potential if people identify with them.

capture

(screencap from www.canandwill.co.uk)

But in order to do that, people need to see them – on Youtube, in special media projects, through ads and get traction.

Just look at these views numbers:

  1. Land Rover: Can and Will – 182,000 views
  2. Can and Will: Mike Goody – 174,000 views
  3. Carl Hester: A winning performer – 6,100 views
  4. Can and Will: Richard E. Grant – Relentless – 1,700 views
  5. Can and Will: Ellie Simmonds’ spirit of defiance – 1,800 views
  6. Can and Will: Beth Moses – 1,200 views
  7. Can and Will: Gwyn Haslock – 11,700 views
  8. Bude Pool: The resilience of community – 1,100 views
  9. Bear Grylls Can and Will reach the summit – 2,900 views

Total: 382, 500 views for a UK digital video campaign

It’s like they only invested in the first two ads and left the rest up to the internet to decide. I wonder how much they invested in the production of the latter and how much they actually put up for media buying. If you invest in high quality inspirational videos, you might as well promote them to reach at least 1-2 million views, otherwise you have little or no digital impact with them.

Sure, they’re great TV ads, but they could be so much more. All it takes is a bit more strategy. In the mean time, let’s keep an eye out for the Invictus Games, 10-14 September, where Land Rover will be an official sponsor.

The European Communication Monitor 2014 in out and confirms that Digital is king in Europe

ecm2014Like we needed confirmation for that.

2777 professionals in the 42 countries made this study possible. It contains key results from the largest survey on strategic communication, corporate communications, communication management and public relations worldwide.

I went through all of the material and selected the best stuff.

They made this cool video about the results (see below). The only thing that’s missing from it are some numbers to take away after viewing or to facilitate the no-sound play that you might experience in an open-space office or a noisy environment. Simple UX tweaking.

But back to the important stuff:

  • We’re stressed – 73% of communication professionals feel pressure is mounting on them
  • 67.6% feel the obligation to be online 24/7 and available
  • more than 80% of communications professionals do overtime, with men working more than women
  • just 36.3% think that their work life balance is alright, that’s more than 5% lower than in 2010
  • 22.5% earn less than 30,000 EUR per year, with consultancies and agencies leading the crappy salary list
  • no surprise that 78% rely on networking, 71% on education and another 71% on employer shifting to get better jobs
  • the preferred media for networking is E-mail, with 38.1% share, followed by Social Media and Face to face, with 27% and 23%
  • 45% agree that the biggest challenge is to link communications activities with business strategies
  • 86% consider digital channels to be the most relevant for strategic communications, followed closely by face-to-face
  • but 40% do not plan to use mobile for strategic communication
  • Print media still has a 76.3% relevance in the instrument list, which is higher than TV and radio!
  • Social media gets only 63.2% relevance score and 6th place in the list, with mobile just in the 8th spot
  • companies that have an excellent communications function have a VP or Head of member of the board or reporting directly to the CEO

Social media communications suggestions for the stakeholders:

  • Information on events or crises that affect customers, so monitoring is key (70%)
  • CSR efforts (66%)
  • Current product and service information – so stop the non-commercial nonsense about social media posts. Of course people want to hear about your products.

Fun facts

  • Aged 60+ professionals prefer e-mail over social media (62% vs just 10%) for networking activities
  • LinkedIn is the undisputed leader in networking all-round (except in Russia, where it was beaten by Facebook!), with Twitter up next in Western Europe and Facebook in Eastern and Southern Europe
  • Organizational leadership is also viewed differently across the continent, with Western Europe valuing trust over innovation and quality and Eastern Europe valuing quality above all else.
  • But trust is the most relevant key issue in Eastern Europe, while the West focuses on linking business and communication strategic initiatives
  • Romania has the lowest satisfaction rating of all European countries, while Norway has the lowest ratings for people who consider internships relevant.

If you want to go trough the whole study, here’s the embedded slide deck.

Credits go to the team behind this huge research material:

European Public Relations Education and Research Association (EUPRERA), the European Association of Communication Directors (EACD) and Communication Director Magazine, supported by Ketchum. Privacy is fully respected.

Research Team
Ansgar Zerfass, Prof. Dr., University of Leipzig (GE) & BI Norwegian Business School (NO)- Lead Researcher
Ralph Tench, Prof. Ph.D., Leeds Metropolitan University (UK)
Piet Verhoeven, Dr., University of Amsterdam (NL)
Dejan Vercic, Prof. Ph.D., University of Ljubljana (SI)
Angeles Moreno, Prof. Ph.D., University Rey Juan Carlos, Madrid (ES)

Advisory Board
Emanuele Invernizzi, Prof. Dr., IULM University, Milan (IT)
Valerie Carayol, Prof. Dr., University of Bordeaux 3 (FR)
Jesper Falkheimer, Prof. Dr., Lund University (SE)
Finn Frandsen, Prof., Aarhus University (DK)
Oyvind Ihlen, Prof. Dr., University of Oslo (NO)
Waldemar Rydzak, Ass. Prof. Dr., Poznan University of Economics (PL)

Digital emotions processing & a new start-up program by Paypal

We struggle to better ourselves, to understand more how emotions, personality traits and other characteristics influence the way we shop, do business and interact. It’s not only useful to better understand our own reactions, but also for companies that rely on predicting a positive or negative behavior based on past experiences, likes, dislikes and attitudes towards certain events or political doctrines.

Some go to the extent to which they manipulate what their users see, as Facebook did in January 2012 (paywall), while others have other, less intrusive approaches. The less intrusive approach is, of course, much preferred and it can rule out any government investigations, as in the case of Facebook, due to consent issues. But let’s go back to the three examples that I’ve seen at the Minibar Meetup last week.

Digital emotions processing

It’s somehow ironic how a lifeless, emotionless computer can be taught to read and process our emotions. Some may argue that this is the sure path to androids and to robots taking over the world, manipulating our thoughts and forcing us to make decisions in their favor. I have a less apocalyptic view of the fact and these three companies, their business models and their customers confirm my judgement.

So there’s VisualDNA, who combines psychological testing with big data analysis. For ordinary people, this means that they help them understand themselves better. For businesses, they contribute to a better understanding of customer behavior. Their main revenue stream comes from selling data and, what I found to be the most interesting, a new way of calculating credit risk by examining the psychological profile. Mastercard has already paid for this product and they made no effort to hide that in their presentation.

And there’s Position Dial, a site that helps you explore where you stand on the issues you care about – and matches you with politicians and brands who act in line with your position. They also show you the different sides of every story: left, right and beyond, to help you make your own mind up fast. They have no revenue stream right now, but seem to be built on social stereotypes and labels and might be useful for political & social awareness campaigns. Their presentation was rather dull, but the product is interesting if you give it a second thought.

The last ones were the worst, if you take just their presentation into consideration. Crowd Emotion was the most interesting product showcased that evening. They use video technology to detect emotions via the facial expression captured from people all over the world. This can be culturally challenging, but they are expanding the comparison base to make the software even more accurate. They make money by selling video hours processed by their platform and have a huge applicability potential in customer service, interactive POS advertising, customer satisfaction, but also in clinical conditions – psychologist and psychiatrists can better analyze patient data and share results with their peers.

The world will become more creepily predictable once these type of businesses become the norm in advertising, market research, healthcare and so on.

Paypal’s new startup program

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They were the sponsors of the entire Minibar Meetup, so they held their presentation first. The Blueprint Program that they have in place for startups can mainly be accessed through accelerators, but they also allow direct applications for select companies. You would think that just by providing free transactions up to 50k would be enough, but no. They went a step further and added customer service support and mentoring with their development teams as an extra benefit to the entire scheme.

So if you think your startup might benefit from it, here are the eligibility criteria:

  • IT&C company with a focus of e/m-offline-commerce
  • privately held
  • have a Paypal account and have not breached ToS
  • you have not applied before

A customer who calls you every day is less profitable than one who pays on time and never calls you

coins-163517_640Managing customer profitability

As business models and contexts have evolved, companies have had to shift their view from ”by all means” customer retention to a new type of approach to customer relationship strategies: divestment. This was considered unacceptable in the past, due to customer acquisition cost and the race for market share. However, due to a different approach to segmentation and the technologies that aid customer value return tracking, divesting has become viable when the strategy is to focus on the right kind of customers.

Divesting is appropriate when a customer or a group of customers generates more cost than the value the company extracts from the relationship, deeming the entire business contract unprofitable. The downside, of course, is loss of market share (to competitors), reputation and distrust among remaining customers (sensing the potential of being divested next), if the process is not done in a correct way. What’s more, a smaller customer base means that the financial risk increases, due to the smaller spread base, if the company radically divests. Companies must also not overlook the legal and ethical implications of divestment, depending on the customer relationship and on the type of commercial contract they have in place at the time of the divestment.

Even with the many risks of divestment, as described above, a company must consider divestment if a specific customer segment is either unprofitable to begin with or if it has a significantly lower profitability, compared to the rest of the customer base. A shift it business strategy or a capacity constrain could also be the basis of a divestment strategy. What’s more, the company must also consider the morale of the employees directly involved with the divestable customer segment, as they become less motivated if their work does not produce the desired profitability, potentially affecting bonuses or promotion opportunities.

In order to correctly implement such a divesting strategy, the company must take certain steps in order to precisely determine the customer segment that requires a rebalance in the commercial relationship. The first step should be a thorough reassessment of the current customer and their financial potential (future spending, potential for growth). Then, the company must try to educate the unprofitable customers, manage expectations in order to restore the equilibrium. Of course, this is easier for B2B businesses than in B2C cases, as the volume difference requires different approaches and their inherent costs (human capital, communication budgets etc.). The next step is actually renegotiating the entire value proposition, in an effort to balance the value invested vs. customer value return. Once renegotiation has been attempted and failed, another approach would be to migrate the current unprofitable customer segment to other partners, providers or channels, retaining a portion of the value and keeping the customer in the business ecosystem, but with a reconfiguration of the service level. If this also fails, then the only option left is to divest, but in a way that minimizes negative fallout, through appropriate personal communication.

The direct effect of the internet and the entire technological revolution is that customers are becoming more informed, active and connected. This is a fact to be considered when devising the marketing philosophy of the company.
Companies must now migrate from the traditional, product-manager, approach, where marketing was a one-way, impersonal process and the segmentation, pricing, promotion and mass media communication needs was activated a posteriori. The new approach is a customer-manager one, focusing on multi-way communication and long term relationships, through direct interaction, data collection and analysis and solution tailoring in order to maximize the value extracted from every customer relationship.

This new approach requires the company to rethink its organizational structure, transforming the marketing department into the customer department, where a customer centric Chief Customer Officer constantly seeks to find out the real wants and needs of the customer. He is accountable for customer profitability via the CLV (customer lifetime value), customer equity and customer equity share metrics, reports directly to the CEO, pushes marketing leaders to interact with customers as often as they need and provides a framework for free information flow throughout the organization to facilitate data interpretation.

Managerial implications

But what are the general implications and potential improvements or spinoffs of the customer divesting strategy as an approach to maximize customer equity share and overall profitability?

In the effort to grow one’s business, some managers overlook the segmentation profitability analysis and tend to compare their success in respect to the overall customer pool and the company’s profitability as a whole, blocking potential boosts in profitability by focusing on just the high value customers. If this high value approach is not possible in the early stages of business development, managers must take into consideration the deployment of a flexible, fluid customer business relationship, in order to have the leverage needed to increase value as the relationship strengthens.

They should be able to monetize more service components according to load (charge the high maintenance customers more) and offer premiums to customers who are less cost intensive (never call and pay on time). This means that companies must allow a consultancy approach to business, rather than just a product/service delivery, diversifying revenue streams. This type of mixed approach also diminishes the risk of expectations misalignment, as customers know from the beginning what they get for what they pay (one time – product, periodic or on demand – post-sales services), influencing pricing policies company-wide.