Augmented Customer Strategy: CRM in the Digital Age 1786303728, 9781786303721

Table of contents :
Cover
Augmented Customer
Strategy:

CRM in the Digital Age
Copyright Page
Contents
Preface: Augmented Customer Strategy
1. Customer Strategies in the Face of New Technological, Social and Environmental Challenges
1.1. AI, robotization and algorithms: what are the effects on customers?
1.2. Business model renewal: what are the impacts on customers?
1.3. Accountability to customers and citizens: why and how?
1.4. Practicing open innovation with customers
1.5. Customer relationship management in the face of societal and environmental challenges
1.6. Conclusion
1.7. Acknowledgements
1.8. References
2. Brand Practices Faced with Augmented Consumers
2.1. A more complex approach to the customer to follow them wherever they go
2.1.1. Following the customer wherever they buy: from multichannel to omnichannel
2.1.2. Communicating with the customer wherever they come into contact with the company: the touchpoints
2.2. An evolution of message content
2.2.1. A constant search for a demonstration of transparency
2.2.2. Indirect speaking: the growing role of influencers
2.3. A stronger involvement of consumers in brands
2.3.1. Increasing consumer participation
2.3.2. An increasingly personalized relationship
2.3.3. A relationship based on utility and meaning through commitment
2.4. Conclusion
2.5. References
3. The Augmented Customer Relationship: the Increasing Importance of the Customer’s Role
3.1. The customer, a long-standing player in the relationship
3.1.1. The customer, from the role of beneficiary to the role of relationship producer
3.1.2. A role as a producer, a source of value for the company and the customer
3.2. The digitization, development and diversification of the customers’ roles
3.2.1. An enrichment of intra-role roles through the development of technologies in the relationship
3.2.2. An intensification and diversification of the customer’s extra roles
3.3. The consequences for the company
3.3.1. Motivating customers to play a greater role
3.3.2. Managing customer expertise
3.3.3. Rethinking the role of staff in the customer journey to create greater value
3.4. References
4. Innovation Augmented by the Customer: From Ideation to Diffusion
4.1. Introduction: the new roles and contributions of the customer
4.2. 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 companies’ innovation processes
4.2.1. Toward customer participation in innovation
4.2.2. Innovation by customers and users (user innovation): a major phenomenon?
4.2.3. Co-innovating with customers and users: three possible strategies
4.2.4. Co-innovating with companies: what do the main stakeholders think?
4.3. The role of the customer downstream of an innovation launch: the customer influences to facilitate the adoption of the innovation on the market
4.3.1. From the innovative customer to the influential customer
4.3.2. Influence marketing: a new role for the customer?
4.3.3. From OLs to e-OLs – who are they?
4.3.4. Identifying and selecting leaders and e-OLs
4.3.5. Relationship management with leaders and e-OLs
4.4. Conclusion
4.5. Acknowledgements
4.6. References
5. The Customer’s Voice: Toward New Listening Tools
5.1. Introduction: “markets are conversations”
5.2. The different forms of WOM
5.3. Steps to managing the customer’s voice over the Internet
5.3.1. Step 1: set up listening measures
5.3.2. Step 2: respond to online customers
5.4. Current and future challenges
5.4.1. Challenge 1: when the customer’s voice is manipulated (the case of deceptive reviews)
5.4.2. Challenge 2: when the internal customer – the employee – expresses himself online
5.5. Conclusion
5.6. References
6. Redesigning the Customer’s Role in a Connected World
6.1. A connected customer with multiple faces
6.1.1. The connected customer’s fragmented identity
6.1.2. Representations and performance of the connected customer
6.2. Managing the customer in their connected environment
6.2.1. Customer marketing, between secrecy and stealth
6.2.2. The dark side of the IoT
6.2.3. Toward the disappearance of the “customer” in a connected world?
6.3. Connected customers, masters of their own consumption and relationship with brands
6.3.1. Connection as a source of value creation for the individual
6.3.2. Orchestration of connected objects and organization of services around the individual
6.3.3. The individual in a connected environment: control or trust?
6.4. Conclusion
6.5. References
7. Customer Experience: Between Humanity and Robotization?
7.1. From experience to omnichannel experience
7.1.1. Rethinking the experience when it becomes omnichannel
7.1.2. From the integration of the Internet into the purchasing process to omnichannel: toward a sublimation of the customer experience?
7.1.3. Creating an unforgettable memory souvenir because of the fluidity between “touchpoints”
7.2. Management of the omnichannel system: between fluidity, continuity or disruption and jumping between “touchpoints”?
7.2.1. When the experience with a touchpoint is the continuity of an experience started elsewhere
7.2.2. The TEAV model as a theoretical basis for the analysis of omnichannel trajectories
7.2.3. The contents of the omnichannel experience approached in a holistic way
7.2.4. An experience that is exacerbated when it is experienced over several channels?
7.3. Conclusion: the place of the human being and technology to create a quality experience
7.4. References
8. Designing Your Customer Experience
8.1. Designing a new customer experience
8.1.1. Step 1: analyzing past customer experiences
8.1.2. Step 2: taking strategic prerequisites into account
8.1.3. Step 3: prioritizing and determining the place for the desired experience
8.1.4. Step 4: operationalizing the journeys that constitute the experience
8.1.5. Step 5: checking the created journeys
8.2. Designing customer journeys
8.2.1. The classic graphic tools: blueprint and contact matrix
8.2.2. Practicing design thinking by creating personas
8.2.3. Interests and limitations of graphic tools
8.3. Big data and design: the two necessary areas of expertise
8.4. References
9. Customer Relationships and Digital Technologies: What Place and Role for Sales Representatives?
9.1. A new way of selling: social selling
9.1.1. What is social selling?
9.1.2. Meeting customers on their buying journey
9.1.3. Adopting a sales approach focused on meeting needs
9.1.4. Using social media at every stage of the sale
9.1.5. Improving business performance
9.1.6. Overcoming social media challenges
9.2. The prospects of AI for the commercial sector
9.2.1. The new strategic toolbox or the augmented salesperson
9.2.2. Toward sales automation or sales without a salesperson
9.2.3. New forms of sale or the humanoid robot-seller
9.3. References
10. Engaging Reciprocity from the Complainant Customer in the Digital Age
10.1. Obtaining the complainant customer’s voice: a multifaceted challenge
10.1.1. Back to the Exit, Voice, Loyalty model
10.1.2. When the customer’s desire for discussion depends on the state of the relationship with the brand
10.2. Understanding the complainant customer’s levers of reciprocity
10.2.1. The central role of perceived justice in shaping customer satisfaction
10.2.2. The triggering of the customer’s desire for reciprocity
10.3. Differentiating the care of complainant customers
10.3.1. Globalization and taking the intercultural factor into account
10.3.2. Identifying the complainant customer’s motivations on social networks
10.3.3. The “love becomes hate” effect of the loyal customer
10.3.4. The matrix of restorative actions
10.4. Conclusion
10.5. References
11. The Firm’s Empathic Capacity: a Social Neuroscience Perspective for Managing Customer Engagement in the Digital Era
11.1. Introduction: the dilemma of digital transformation in customer relationship management
11.2. What social neuroscience tells us about empathy
11.2.1. Social neuroscience: what is it?
11.2.2. The emotional connection is essential to any social and commercial relationship
11.2.3. Empathy: the epicenter of the emotional connection
11.3. Developing firms’ empathic capacity: a two-level strategy
11.3.1. Sharing the customer’s emotional states
11.3.2. Understanding the customer’s mental states
11.3.3. How does the customer appraise their engagement with the firm?
11.4. Conclusion
11.5. References
12. Data Marketing for Customer Intimacy
12.1. Multiple customer data sources
12.2. The different customer data hubs
12.3. The difficult consolidation of customer data
12.4. The intersection of media and data to serve customer strategy
12.5. Leveraging data: market research in the era of customer data
12.6. Data marketing... tomorrow
12.7. References
13. The Dark Side of Customer Relationship Management Practices in the Data Age: Managing Resistance and Perceived Intrusion for Responsible Practices
13.1. The dark side of customer relationship management practices
13.2. Possible consumer feelings
13.2.1. A sense of pressure
13.2.2. A sense of injustice
13.2.3. A sense of loss of control
13.3. The consequences: consumers are showing signs of resistance
13.3.1. Resistance: what are we talking about?
13.3.2. Consumer resistance to the collection and use of personal data
13.4. Solutions for effective and responsible practices
13.4.1. Optimizing the execution of loyalty practices
13.4.2. Monitoring effectiveness using customer-centric metrics
13.4.3. Overseeing the implementation of “virtuous” practices
13.4.4. Restoring confidence in the collection and use of data
13.5. Acknowledgements
13.6. References
14. The Legal Basis for a Data Economy Based on Trust
14.1. Personal data at the heart of the DGMP
14.1.1. Personal data: the black gold of the 21st Century
14.1.2. Personal data and brands: the cyber-consumer chooses brands that respect confidentiality
14.2. GDPR tools to restore trust
14.2.1. Clear and explicit consent
14.2.2. Ensuring the rights of the cyber-consumer over their personal data
14.2.3. Creation of a Data Protection Officer role
14.3. The future of our personal data
14.3.1. A right of ownership over our personal data?
14.3.2. The future: toward a right to an income on our data?
14.4. Conclusion
14.5. References
15. Information Systems Security: Challenges, Vulnerabilities and Tools
15.1. Current uses reinforcing the need for security: cryptocurrency and blockchains
15.1.1. Blockchain principles
15.1.2. Blockchain applications
15.2. Protecting yourself from potential threats: safety and security
15.3. Security in companies and organizations
15.3.1. Vulnerabilities, risks and ISP
15.3.2. Deterrence, neutralization and awareness – training
15.4. The standards that govern safety: ISO/IEC 27000
15.5. Conclusion
15.6. References
16. Organizing the Augmented Customer Relationship
16.1. Introduction
16.2. Governance of customer strategy within the organization
16.2.1. The value of having a Chief Customer Officer
16.2.2. The CCO, the one man orchestra
16.3. The role of the different stakeholders in customer relationship management
16.3.1. The key role of employees
16.3.2. Other stakeholders involved
16.4. In-house contracting or outsourcing: who should implement customer relationship management?
16.4.1. Managing customer relations internally
16.4.2. Outsourcing customer relationship management
16.5. Aligning the organization around the customer strategy
16.6. References
List of Authors
Index
Other titles from iSTE in Innovation, Entrepreneurship and Management

Citation preview

Augmented Customer Strategy

Series Editor Jean-Charles Pomerol

Augmented Customer Strategy CRM in the Digital Age

Edited by

Gilles N’Goala Virginie Pez-Pérard Isabelle Prim-Allaz

First published 2019 in Great Britain and the United States by ISTE Ltd and John Wiley & 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 27-37 St George’s Road London SW19 4EU UK

John Wiley & Sons, Inc. 111 River Street Hoboken, NJ 07030 USA

www.iste.co.uk

www.wiley.com

© ISTE Ltd 2019 The rights of Gilles N’Goala, Virginie Pez-Pérard 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 . . . . Gilles N’GOALA

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1.1. AI, robotization and algorithms: what are the effects on customers? 1.2. Business model renewal: what are the impacts on customers? . . . . 1.3. Accountability to customers and citizens: why and how? . . . . . . . 1.4. Practicing open innovation with customers . . . . . . . . . . . . . . . 1.5. Customer relationship management in the face of societal and environmental challenges . . . . . . . . . . . . . . . . . . . 1.6. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7. Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.8. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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2.1. A more complex approach to the customer to follow them wherever they go . . . . . . . . . . . . . . . . . . . 2.1.1. Following the customer wherever they buy: from multichannel to omnichannel . . . . . . . . . . 2.1.2. Communicating with the customer wherever they come into contact with the company: the touchpoints . . 2.2. An evolution of message content . . . . . . . . . . . . . . . . 2.2.1. A constant search for a demonstration of transparency . 2.2.2. Indirect speaking: the growing role of influencers . . . 2.3. A stronger involvement of consumers in brands . . . . . . .

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2.3.1. Increasing consumer participation . . . . . . . 2.3.2. An increasingly personalized relationship . . 2.3.3. A relationship based on utility and meaning through commitment . . . . . . . . . . . . . . . . . . . 2.4. Conclusion . . . . . . . . . . . . . . . . . . . . . . . 2.5. References . . . . . . . . . . . . . . . . . . . . . . .

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Chapter 3. The Augmented Customer Relationship: the Increasing Importance of the Customer’s Role . . . . . . . . . . . . Sylvie LLOSA and Lionel NICOD

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3.1. The customer, a long-standing player in the relationship . 3.1.1. The customer, from the role of beneficiary to the role of relationship producer . . . . . . . . . . . . . . . 3.1.2. A role as a producer, a source of value for the company and the customer . . . . . . . . . . . . . . . . . . . . 3.2. The digitization, development and diversification of the customers’ roles . . . . . . . . . . . . . . . . . . . . . . . . 3.2.1. An enrichment of intra-role roles through the development of technologies in the relationship . . . . . . . 3.2.2. An intensification and diversification of the customer’s extra roles. . . . . . . . . . . . . . . . . . . . 3.3. The consequences for the company . . . . . . . . . . . . . . 3.3.1. Motivating customers to play a greater role . . . . . . 3.3.2. Managing customer expertise . . . . . . . . . . . . . . . 3.3.3. Rethinking the role of staff in the customer journey to create greater value . . . . . . . . . . . . 3.4. References . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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4.1. Introduction: the new roles and contributions of the customer . 4.2. 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 companies’ innovation processes. . . . . . . . . . . 4.2.1. Toward customer participation in innovation . . . . . . . . 4.2.2. Innovation by customers and users (user innovation): a major phenomenon? . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2.3. Co-innovating with customers and users: three possible strategies . . . . . . . . . . . . . . . . . . . . . . . . . 4.2.4. Co-innovating with companies: what do the main stakeholders think? . . . . . . . . . . . . . . . . .

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4.3. The role of the customer downstream of an innovation launch: the customer influences to facilitate the adoption of the innovation on the market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.1. From the innovative customer to the influential customer . . 4.3.2. Influence marketing: a new role for the customer? . . . . . . 4.3.3. From OLs to e-OLs – who are they? . . . . . . . . . . . . . . 4.3.4. Identifying and selecting leaders and e-OLs . . . . . . . . . . 4.3.5. Relationship management with leaders and e-OLs . . . . . . 4.4. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5. Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Chapter 5. The Customer’s Voice: Toward New Listening Tools . . Andreas MUNZEL, Jessie PALLUD and Daria PLOTKINA

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5.1. Introduction: “markets are conversations”. . . . . . . . . . . . 5.2. The different forms of WOM . . . . . . . . . . . . . . . . . . . 5.3. Steps to managing the customer’s voice over the Internet . . 5.3.1. Step 1: set up listening measures . . . . . . . . . . . . . . . 5.3.2. Step 2: respond to online customers . . . . . . . . . . . . . 5.4. Current and future challenges . . . . . . . . . . . . . . . . . . . 5.4.1. Challenge 1: when the customer’s voice is manipulated (the case of deceptive reviews) . . . . . . . . . . . . . . . . . . . . 5.4.2. Challenge 2: when the internal customer – the employee – expresses himself online . . . . . . . . . . . . . . 5.5. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Chapter 6. Redesigning the Customer’s Role in a Connected World . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pauline FOLCHER, Sarah MUSSOL and Gilles N’GOALA

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6.1. A connected customer with multiple faces . . . . . . . . . . . . . . 6.1.1. The connected customer’s fragmented identity . . . . . . . . . 6.1.2. Representations and performance of the connected customer . 6.2. Managing the customer in their connected environment . . . . . . 6.2.1. Customer marketing, between secrecy and stealth . . . . . . . 6.2.2. The dark side of the IoT . . . . . . . . . . . . . . . . . . . . . . . 6.2.3. Toward the disappearance of the “customer” in a connected world? . . . . . . . . . . . . . . . . . . . . . 6.3. Connected customers, masters of their own consumption and relationship with brands . . . . . . . . . . . . . . 6.3.1. Connection as a source of value creation for the individual . .

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6.3.2. Orchestration of connected objects and organization of services around the individual . . . . . . . . . . . . . 6.3.3. The individual in a connected environment: control or trust? . 6.4. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Chapter 7. The Augmented Customer Experience: Between Humanity and Robotization? . . . . . . . . . . . . . . . . . . . . . Régine VANHEEMS

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7.1. From experience to omnichannel experience . . . . . . . . . . . . . 7.1.1. Rethinking the experience when it becomes omnichannel . . . 7.1.2. From the integration of the Internet into the purchasing process to omnichannel: toward a sublimation of the customer experience? . . . . . . . . . . . 7.1.3. Creating an unforgettable memory souvenir because of the fluidity between “touchpoints” . . . . . . . . 7.2. Management of the omnichannel system: between fluidity, continuity or disruption and jumping between “touchpoints”? 7.2.1. When the experience with a touchpoint is the continuity of an experience started elsewhere . . . . . . . . . . . . . . . . . . . . 7.2.2. The TEAV model as a theoretical basis for the analysis of omnichannel trajectories . . . . . . . . . . . . . . . . . . . . . . . . . 7.2.3. The contents of the omnichannel experience approached in a holistic way . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2.4. An experience that is exacerbated when it is experienced over several channels? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3. Conclusion: the place of the human being and technology to create a quality experience . . . . . . . . . . . . . . . . . . . . . . . . . 7.4. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Chapter 8. Designing Your Customer Experience . . . . . . . . . . . . . Florence JACOB

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8.1. Designing a new customer experience . . . . . . . . . . 8.1.1. Step 1: analyzing past customer experiences . . . . 8.1.2. Step 2: taking strategic prerequisites into account. 8.1.3. Step 3: prioritizing and determining the place for the desired experience . . . . . . . . . . . . . . . . . . . 8.1.4. Step 4: operationalizing the journeys that constitute the experience . . . . . . . . . . . . . . . . . 8.1.5. Step 5: checking the created journeys . . . . . . . . 8.2. Designing customer journeys . . . . . . . . . . . . . . .

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Contents

8.2.1. The classic graphic tools: blueprint and contact matrix 8.2.2. Practicing design thinking by creating personas . . . . . 8.2.3. Interests and limitations of graphic tools . . . . . . . . . 8.3. Big data and design: the two necessary areas of expertise . 8.4. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Chapter 9. Customer Relationships and Digital Technologies: What Place and Role for Sales Representatives? . . . . . . . . . . . . . Eric JULIENNE, Maud DAMPERAT and Romain FRANCK

149

9.1. A new way of selling: social selling . . . . . . . . . . . . . . . 9.1.1. What is social selling? . . . . . . . . . . . . . . . . . . . . . 9.1.2. Meeting customers on their buying journey . . . . . . . . 9.1.3. Adopting a sales approach focused on meeting needs . . 9.1.4. Using social media at every stage of the sale. . . . . . . . 9.1.5. Improving business performance . . . . . . . . . . . . . . . 9.1.6. Overcoming social media challenges . . . . . . . . . . . . 9.2. The prospects of AI for the commercial sector . . . . . . . . . 9.2.1. The new strategic toolbox or the augmented salesperson 9.2.2. Toward sales automation or sales without a salesperson . 9.2.3. New forms of sale or the humanoid robot-seller . . . . . . 9.3. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Chapter 10. Engaging Reciprocity from the Complainant Customer in the Digital Age . . . . . . . . . . . . . . . . . . Françoise SIMON

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10.1. Obtaining the complainant customer’s voice: a multifaceted challenge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1.1. Back to the Exit, Voice, Loyalty model . . . . . . . . . . . . . . 10.1.2. When the customer’s desire for discussion depends on the state of the relationship with the brand . . . . . . . . . 10.2. Understanding the complainant customer’s levers of reciprocity . 10.2.1. The central role of perceived justice in shaping customer satisfaction . . . . . . . . . . . . . . . . . . . . . . . 10.2.2. The triggering of the customer’s desire for reciprocity . . . . . 10.3. Differentiating the care of complainant customers . . . . . . . . . . 10.3.1. Globalization and taking the intercultural factor into account . 10.3.2. Identifying the complainant customer’s motivations on social networks . . . . . . . . . . . . . . . . . . . . . . . 10.3.3. The “love becomes hate” effect of the loyal customer . . . . . 10.3.4. The matrix of restorative actions . . . . . . . . . . . . . . . . . . 10.4. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.5. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Chapter 11. The Firm’s Empathic Capacity: a Social Neuroscience Perspective for Managing Customer Engagement in the Digital Era . . . . . . . . . . . . . . . . . . . Mathieu LAJANTE 11.1. Introduction: the dilemma of digital transformation in customer relationship management . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2. What social neuroscience tells us about empathy . . . . . . . . . . 11.2.1. Social neuroscience: what is it? . . . . . . . . . . . . . . . . . . 11.2.2. The emotional connection is essential to any social and commercial relationship . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2.3. Empathy: the epicenter of the emotional connection . . . . . 11.3. Developing firms’ empathic capacity: a two-level strategy . . . . 11.3.1. Sharing the customer’s emotional states . . . . . . . . . . . . . 11.3.2. Understanding the customer’s mental states . . . . . . . . . . 11.3.3. How does the customer appraise their engagement with the firm? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Chapter 12. Data Marketing for Customer Intimacy . . . . . . . . . . . . Grégoire BOTHOREL and Virginie PEZ-PÉRARD

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12.1. Multiple customer data sources . . . . . . . . . . . . . . . . . . . 12.2. The different customer data hubs . . . . . . . . . . . . . . . . . . 12.3. The difficult consolidation of customer data . . . . . . . . . . . 12.4. The intersection of media and data to serve customer strategy . 12.5. Leveraging data: market research in the era of customer data . 12.6. Data marketing... tomorrow . . . . . . . . . . . . . . . . . . . . . 12.7. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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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, Aïda MIMOUNI CHAABANE and Virginie PEZ-PÉRARD

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13.1. The dark side of customer relationship management practices . . . . 13.2. Possible consumer feelings . . . . . . . . . . . . . . . . . . . . . . . . . 13.2.1. A sense of pressure . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.2.2. A sense of injustice . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.2.3. A sense of loss of control . . . . . . . . . . . . . . . . . . . . . . . 13.3. The consequences: consumers are showing signs of resistance . . . 13.3.1. Resistance: what are we talking about? . . . . . . . . . . . . . . . 13.3.2. Consumer resistance to the collection and use of personal data . 13.4. Solutions for effective and responsible practices . . . . . . . . . . . .

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13.4.1. Optimizing the execution of loyalty practices . . . . . . . 13.4.2. Monitoring effectiveness using customer-centric metrics 13.4.3. Overseeing the implementation of “virtuous” practices. . 13.4.4. Restoring confidence in the collection and use of data . . 13.5. Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . 13.6. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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14.1. Personal data at the heart of the DGMP . . . . . . . . . . . . 14.1.1. Personal data: the black gold of the 21st Century . . . . 14.1.2. Personal data and brands: the cyber-consumer chooses brands that respect confidentiality . . . . . . . . . . . . . . . . . . 14.2. GDPR tools to restore trust . . . . . . . . . . . . . . . . . . . . 14.2.1. Clear and explicit consent . . . . . . . . . . . . . . . . . . 14.2.2. Ensuring the rights of the cyber-consumer over their personal data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.2.3. Creation of a Data Protection Officer role . . . . . . . . 14.3. The future of our personal data . . . . . . . . . . . . . . . . . 14.3.1. A right of ownership over our personal data? . . . . . . 14.3.2. The future: toward a right to an income on our data? . . 14.4. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.5. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Chapter 15. Information Systems Security: Challenges, Vulnerabilities and Tools . . . . . . . . . . . . . . . . . . . . . Philippe COHARD

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15.1. Current uses reinforcing the need for security: cryptocurrency and blockchains. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.1.1. Blockchain principles. . . . . . . . . . . . . . . . . . . . . . . . . . 15.1.2. Blockchain applications . . . . . . . . . . . . . . . . . . . . . . . . 15.2. Protecting yourself from potential threats: safety and security . . . . 15.3. Security in companies and organizations . . . . . . . . . . . . . . . . . 15.3.1. Vulnerabilities, risks and ISP . . . . . . . . . . . . . . . . . . . . . 15.3.2. Deterrence, neutralization and awareness – training. . . . . . . . 15.4. The standards that govern safety: ISO/IEC 27000 . . . . . . . . . . . 15.5. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.6. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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16.1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.2. Governance of customer strategy within the organization . . . . . . . .

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16.2.1. The value of having a Chief Customer Officer . . . . 16.2.2. The CCO, the one man orchestra . . . . . . . . . . . . 16.3. The role of the different stakeholders in customer relationship management . . . . . . . . . . . . . . . . 16.3.1. The key role of employees . . . . . . . . . . . . . . . . 16.3.2. Other stakeholders involved . . . . . . . . . . . . . . . 16.4. In-house contracting or outsourcing: who should implement customer relationship management? . 16.4.1. Managing customer relations internally . . . . . . . . 16.4.2. Outsourcing customer relationship management . . . 16.5. Aligning the organization around the customer strategy . 16.6. References . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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List of Authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Preface Augmented Customer Strategy

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.

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Can we effectively consider that the customer benefits, in the same way as the company, from this “expansion”? 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, “no life” phenomenon, etc.) and one of the major tools for connecting to social networks, personal messaging as well as corporate and ecommerce 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 (18–34 years old) can consult their smartphone up to 100 times a day, once every 10 min (Institut Omnibus study for the publisher Kana Software – 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 tomorrow’s 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 “right arm” 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 https://www.arcep.fr/uploads/tx_gspublication/barometer_of_numeric-2017-infography-271117. pdf.

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– 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. – 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. – 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. – Finally, augmented because the customers themselves are assigned new roles alongside the company in the context of promotion, innovation and/or 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 Stratégie 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 “customercentric” 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. Customers’ 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), “Stratégie Clients : points de vue d’experts sur le management de la relation client”, Editions Pearson, p. 228.

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identified by a team of researchers from the Association Française du Marketing (French marketing association), Gilles N’Goala makes the link between these current topics and customer relationship management. Jérôme 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 – 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. – Chapter 3: The Augmented Customer Relationship: the Increasing Importance of the Customer’s 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. – 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 Kleer’s reflection on the co-creation approach implemented by Crédit Agricole Centre-Est bank, of which he is Deputy CEO, and from Yohann Melamed’s experience as a

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co-founder of Agorize, a company specializing in organizing open innovation challenges. – Chapter 5: The Customer’s 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. – Chapter 6: Redesigning the Customer’s Role in a Connected World To close this first part, Pauline Folcher, Sarah Mussol and Gilles N’Goala 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 products/services co-create value. Part 2: Producing Augmented Customer Experiences – Chapter 7: The Augmented Customer Experience: Between Humanity and Robotization? Régine Vanheems explains to us, in this chapter, why and how it is no longer simply a question of reducing the customer’s 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. – Chapter 8: Designing Your Customer Experience Echoing Régine Vanheems’ comments, Florence Jacob helps us define the concept of customer experience, but above all to “design” 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.

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– 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 Dampérat 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. – Chapter 10: Engaging Reciprocity from the Complainant Customer in the Digital Age Françoise 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. – Chapter 11: Firms’ 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 company’s empathetic capacity contributes to shaping a virtuous customer relationship management that creates value for both parties.

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Part 3: Toward an Augmented Organization – Chapter 12: Data Marketing for Customer Intimacy Grégoire Bothorel and Virginie Pez-Pérard 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. – 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, Aïda Mimouni and Virginie Pez-Pérard 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 and/or 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 Reniou’s reflection on the management of the deviant customer and Audrey Porte’s reflection on the interest in transparency. The authors advocate a responsible approach to restoring trust with customers. – 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. – 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

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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 organization’s employees, that need to be assessed. – 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 N’GOALA, Virginie PEZ-PÉRARD 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 Française de Marketing clearly reflect these developments and the need to produce scientific knowledge that will shed light on current developments1. In 2017–2018, Amina Béji-Bécheur, Audrey Bonnemaizon, Bérangère Brial, Jérôme Baray, Laurent Bertrandias, Madeleine Besson and Alix Poels effectively identified – based Chapter written by Gilles N’GOALA. 1 Cf. website of the association française du marketing (French marketing association): https://www.afm-marketing.com/fr/content/hot-topics-0.

Augmented Customer Strategy: CRM in the Digital Age, First Edition. Edited by Gilles N’Goala, Virginie Pez-Pérard and Isabelle Prim-Allaz. © ISTE Ltd 2019. Published by ISTE Ltd and John Wiley & Sons, Inc.

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on expert opinions (practitioners and researchers) and calls for French and European research projects – 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 (e.g. “nudge marketing”). 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 organization’s 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 “tsunami” 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. 1.1. 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: – 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

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particular, Beacon technology already makes it possible to analyze mobile phone users at the point of sale – via Bluetooth or geolocation techniques – and can send them personalized and contextualized communication in real time. – 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. – 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 – or conversational agents – 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). Jérôme Baray provides (Box 1.1) 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 https://www.usine-digitale.fr/article/amazon-pese-toujours-plus-dans-le-cloud-d-infrastructureque-microsoft-ibm-google-et-alibaba-reunis.N725454.

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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 one’s 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: “Much like ‘the cloud’, ‘big data’ and ‘machine learning’, the term ‘artificial intelligence’ has been hijacked by marketers and advertisers. A lot of what people are calling AI is actually data analytics, in other words, business as usual”. 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: – 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

Customer Strategies in the Face of New Challenges

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. – Price: various pricing software programs (Paarly, Brennus Analytics) already boast of using AI “pricing intelligence” 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 competitors’ 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. – 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 human’s own creative resources. – 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 1.1. Artificial intelligence: a marketing tool for customer relations by Jérôme Baray, Professor at the University of New Caledonia and researcher at Larje

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1.2. 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 4.5 million homes in more than 80,000 cities and will be targeting one billion users per year by 2028. Booking.com covers nearly 85,000 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 disintermediation–re-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 and/or consumption practices. This emergence of platforms has had several major consequences on customer relationship management: – 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, Booking.com has a strong position in hotel market access, selling 550,000 hotel stays per day, on average worldwide, aggregates large volumes of data and collects more than 16% commission on hosts’ revenues. This group also subjects hoteliers to rules that prevent them from competing with it (pricing, etc.). Platforms thus

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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. – 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 “disintermediated” 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 “take it all” is probably exaggerated [BEN 16], the ability of brands to influence and control their customers is, in such a context, considerably reduced. – 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 “habit of free access” 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. – New trusted third parties: platforms frequently act as trusted third parties between suppliers and their customers. For example, the customer buying on Amazon’s marketplace usually does not know the seller concerned and relies on the platform’s 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. – Unequal competitive play: as Bénavent [BEN 16] points out, platforms benefit from a “long tail effect” 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 Booking.com may offer a plethora of accommodation

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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. 1.3. 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

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(for example through the recent Règlement Général sur la Protection des Données [RGPD3], 2018), it still seems to lag behind the digital giants, the latest technological advances and the rapid transformation of practices that results from them. It is, therefore, becoming urgent to develop an ethics of digital transformation and to empower all stakeholders, including consumers. Companies face several ethical and managerial dilemmas: 1) Should the technology be made transparent? As noted by Turilli and Floridib [TUR 09, p. 105], transparency has two contradictory meanings: it can refer to forms of visibility of information and the possibility of accessing information, intentions or behaviors intentionally revealed by a disclosure process. But in the IT and information systems disciplines, transparency refers to a condition of invisibility of information, for example when an IT application or process is said to be transparent. For example, spyware (cookies, IP Tracking), used to track if customer behavior is transparent in the latter sense (invisible to users) but not in the former sense (no voluntary disclosure of information). If it is a question of improving the experience, making customer paths more fluid (information, purchasing, complaints, etc.) and facilitating access to services, the technology must indeed be invisible to users. But if the objective is to reassure customers and maintain trust, it is probably desirable to provide clear information about the collection of personal data and to explain how it is used. This question will arise particularly in the field of IoT because, unlike computers, smartphones, tablets or terminals, the consumer is generally unaware of being connected and emitting signals. Can and should we, as proposed in the RGPD, seek the informed and explicit consent of all? 2) Who is responsible for transparency? According to Portes [POR 18, p. 142], “a company will be all the more transparent if it (1) discloses information that is intelligible (clear, relevant, concise), visible (easily accessible in terms of navigation, prioritization) and contextualized (when needed), (2) provides objective information (comparable and unmanipulated), negative as well as positive customer opinions so as not to affect decision-making, and offers the possibility of obtaining feedback from other consumers (through a chat feature on its website for example), and (3) is open-minded by giving customers the freedom to chat with them on all communication channels (social networks, website, e-mail, telephone, etc.) by allowing immediate, instantaneous interactions (automatic call back, etc.) and by allowing the participation and collaboration of its community in improving its offer. Thus, according to Portes [POR 18], the company is not the only one responsible for the opacity/transparency of its technologies and practices. Consumers and citizens can be co-producers and co-creators of transparency by disseminating opinions and information on the web on a massive scale [POR 17, POR 18]. In democratic 3 General regulations on data protection.

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countries, the Internet has massively accelerated the disclosure of information and encouraged the development of more horizontal communication between companies and their customers [NGO 16]. 3) Should consumers be informed? From the user’s point of view, the technology is generally not apparent and obvious, except through the digital and mobile tools (a mobile application for example), to which they have access and over which they have some degree of control. Technology is more often “out of sight” and unaware of the sensitivity of users: they do not often see the technologies in place but also constantly leave their own digital traces or emit signals, which can be used to promote a product or develop new market and non-market services. It is, therefore, often difficult to question users about a technology that surrounds them and yet is largely unknown to them. With smart cities, for example, asymmetries of information and power will increase and user resistance mechanisms could increase, which goes against the very idea of co-creation of value and collective intelligence. On the other hand, if it were to make the smart city and its technologies visible to its users, this could have perverse effects and generate, for example, more anxiety and stress, create a climate of mistrust or make any strategy of influence counterproductive... even if it is morally desirable (promoting soft mobility, improving waste collection, etc.). Thus, as soon as it is mentioned, this invisible and insensitive technology is the source of all phantasms, illusions and irrational fears for many users. In her doctoral thesis, Portes [POR 18] shows that by being clearer about digital practices, the company runs the risk of damaging customer confidence. In terms of transparency, it is therefore necessary to determine more precisely “what must be seen”, “what to see” and “what is worth seeing”. 4) Can we “enlighten” consumers? In practice, the notion of informed consent questions the willingness and ability of consumers to understand the digital environment. First, the desire and need for access to digital services leads to an automatic and indiscriminate acceptance of the conditions of use submitted by companies. Resignation and self-interest often prevail over collective privacy considerations. Admittedly, individual (adblockers, etc.) or collective (boycotts, etc.) resistance practices are developing but remain largely in the minority at the global level. Second, not all consumers are equal in face of the digital age. Analyzing the digital divides that cross continents and countries, Ben Youssef [BEN 04] highlights in particular four levels of inequality: (1) inequalities in terms of access to equipment and infrastructure, (2) inequalities in use linked to digital literacy gaps, (3) inequalities in efficiency and performance and (4) inequalities in learning capacities in this digital environment. Affirming that the consumer can be enlightened is thus more of a stylistic exercise than a real pragmatism. Without effective pedagogy adapted to the most vulnerable, digital transformation can only accentuate social gaps.

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5) Should we communicate on digital technologies and marketing? Communicating on science and digital innovation is now becoming a perilous exercise in which everyone is confronted with radical and ideological opposition. The example of the connected electricity meter (Linky in France) shows how widespread mistrust has become and how it affects the methods for accepting and adopting innovations, even though some research shows rather positive effects on energy consumption [SCH 17]. While some, struck by the digital divide, aspire to be more connected, others alternate between attraction and repulsion for technology and those who carry it (industrialists and digital giants in particular). This ambivalence of people toward technologies requires more consultation with users, an understanding of their concerns and reticence and a better control of crisis communication in the face of collective actions brought by highly organized and determined groups. This mistrust is coupled with a sometimes difficult relationship with digital marketing practices. By mobilizing more local, social and mobile technologies, practices are increasingly hidden (covert marketing practices or stealth marketing), since it is not always possible for users, customers, citizens, etc., to determine the source, credibility and intentionality of the communications and influences they receive [SPR 08]. Generally speaking, in a context where the media universe is very competitive and saturated with information, these communication tactics refer to practices similar to “guerrilla” ones, such as buzz marketing, product placement, writing false opinions, etc., whose objective is to reach targets through hidden and indirect means. With the increasing possibilities of tracking and locating customers, these practices will expand (growth hacking, for example), which raises real managerial and ethical questions [XU 11]. Digital transparency is only one aspect of the transparency that some people want. The demand for transparency also concerns the prices and costs of products, the origin of supplies (supply chain management, made in) and the internal operations of organizations (social responsibility) [NGO 15]. In other words, the challenge is to establish a new social contract between companies and citizens and to seek consensus in a climate of renewed trust. For Bertini and Gourville [BER 12], the challenge is to share value with customers better, to think about long-term relationships rather than short-term transactions, to be proactive and flexible with customers, to promote transparency and to manage equity in the markets. Thus, we could return to the ethical and legal foundations of relational marketing: equality between partners, respect for promises, the morality of duty and aspirations, equity, trust, a sense of responsibility and the commitment of multiple partners in relational exchanges [MAC 78, GUN 93].

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1.4. Practicing open innovation with customers Innovation is the cornerstone of progress and economic development. It is also one of the most risky steps for a company. The failure rate of new products and services is still high (70–80%, according to TNS Sofres) and most managers complain about their low return on investment. There are multiple forms of innovation that involve products/services, organizational processes or even organizational forms (collaborative platforms, for example). Some are aimed at improving operational efficiency and meeting current needs (operational innovation) while others are projected into the future and allow the company to prepare for it (exploration innovation). What is the customer’s place in this field of innovation? Open and collaborative innovation is developing rapidly and involves heterogeneous actors with complementary skills (large companies, start-ups, laboratories, universities, etc.). Since the work of von Hippel et al., the integration of the customer, user and citizen, into the innovation loop has become a prerequisite and a condition for success. It is important to listen to customers before and after the launch of innovations [HAM 13]. In the ideation phase in particular, two methods are frequently used to co-create value with users: “design thinking” applies design methods to stimulate team creativity, while “crowdsourcing” leads to crowd solicitation, usually via online platforms (Agorize, eYeka, etc.), in the context of calls for R&D or communication projects [HEM 16]. The traditional approach to innovation considered the customer as a target for innovation, whose main role was to accept, adopt and then disseminate innovation through “viral” methods of influence and imitation until the market was saturated. At the time, everyone doubted the customer’s ability and willingness to think innovatively and to break with the technologies and consumer habits of the past. But in an era of co-creation of value, the customer potentially becomes a resource with skills, creativity and expertise that must be exploited in all its aspects. Thomke and von Hippel [THO 02] point out that innovations developed by customers – mainly lead users – are more commercially attractive than those of companies. Innovation then ceases to be the exclusive domain of the company and its Research and Development department to become a collective, a partnership or collaborative project, in direct contact with the needs and expectations of the market. However, the assignment of an extraordinary co-innovative role to the customer – or even to the crowd – raises many questions. First, customers do not have the same qualities and are not all equal in terms of co-creating value. Some can even become co-destructors of value, for example through opportunistic or sabotage behavior (under-participation, bad influence on the group, fraud and recuperation of ideas on

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their own account, etc.) [PLÉ 10]. Second, it must be said that innovation requires both talent and ideas, but also the energy, time and effort that most customers do not want to give to the company. Crowdsourcing is often a call in a vacuum to which only a handful of creative people or interested parties seriously respond (key users or competitors, for example). Paradoxically, the objective of developing a community of co-innovators leads to the implementation of rewards (financial benefits, self-esteem, etc.) and thus to the selection of those who are not the most innovative and creative. Finally, the assignment of an extra role to the customer, i.e. beyond their function as a buyer, transforms them into a partial employee, an implicit collaborator of the company. After the co-creation of value stage comes the question of its distribution between customers and the company, and also the potential inequities that can result from this. So what is the right reward for an innovation? What is the value of a good idea? Opening up innovation to customers is therefore not self-evident. HemonnetGoujot et al. [HEM 16] show, in particular, that crowdsourcing generates a large number of ideas and makes it possible to understand market trends, but requires a large amount of time and financial investment without any guarantee of reaching feasible solutions. In comparison, design thinking provides a relevant analytical framework to understand uses but provides fewer ideas and does not always provide feasible and operational solutions. In other words, the very interest in using customers, users and citizens to think about innovation must be balanced. The use of customers, upstream of the development of innovation (ideation), can only be a complement to the processes underway in organizations. Observing and listening to customers, downstream of the launch of new products/services, is also an essential step that should be facilitated by the massive collection and processing of usage data (particularly for communicating objects). Innovation can then be collaborative, open and permanent. 1.5. Customer relationship management in the face of societal and environmental challenges The four previous hot topics could generate a real tsunami in marketing according to the authors of the study [BÉJ 18]. The last five represent more fundamental trends that question marketing, markets and brands in their societal and environmental dimension: the role of marketing in the evolution toward a society of well-being, the social construction of markets, the place and legitimacy of marketing in the company, the role of brands in society and new modes of influence and persuasion. Like marketing as a whole, customer relationship management must

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provide an answer to the societal and environmental challenges that await us. Which ones? 1) Contributing to the happiness and well-being of customers Customer relationship management gives priority to the achievement of numerous qualitative (perceived quality, satisfaction, attitudinal loyalty) and quantitative performance indicators (acquisition, retention or recommendation rates, customer share, profitability, customer lifetime value) [KAT 16]. However, the impact on quality of life, subjective well-being or life satisfaction has not generated any real interest among researchers and practitioners in CRM. Subjective, “physical, mental and social” well-being is more legitimately sought in non-profit sectors, such as health, education, and social services, than in the business sector. However, in line with transformative consumer research [MIC 06] and transformative service research [AND 13], customer relationship management practices can be discussed in terms of their impacts on individuals’ life satisfaction and emotional states, either positive (happiness, feelings of vitality and energy) or negative (sadness, depression, etc.) [LIC 17]. In the special issue “Marketing et bien-être” in the French journal Décisions Marketing, edited by Gurviez and Sirieix in 2017 [GUR 17], multiple studies highlight how consumption, depending on the product category and context, can be associated with well-being [ABB 17]. For example, in banks, every decision taken throughout the customer journey (credit refusal, payment incident, imposition of online procedures, etc.) can potentially have major consequences on the well-being of individuals. Each bank must then manage, in a specific and proportionate way, these heterogeneous customers who differ greatly in terms of access to services, literacy (especially digital), social situation, health and joie de vivre. The effects of customer relationship management practices on individual wellbeing have been largely underestimated by researchers and practitioners (see [PEZ 17] for one exception). This is even truer for those dealing with collective, societal and/or environmental well-being [BAH 16]. However, by regularly stimulating consumption, to what extent do customer relationship management practices lead to waste and contravene the issues of frugality and sustainability? By frequently promoting brand commitment, do customer strategies not overshadow other forms of commitment to politics, associations or major causes (childcare, fight against hunger, social inclusion, etc.)? These questions remain unanswered. 2) Supporting the most vulnerable customers For Baker, Gentry and Rittenburg [GEN 05, p. 134] vulnerability is a state of powerlessness generated by an imbalance in market interactions or by the

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consumption of products or marketing messages. This powerlessness occurs when the consumer loses control in favor of dependence on external factors (e.g. marketers) to maintain fair trade in the marketplace. According to Schultz and Holbrook [SCH 09], two types of vulnerability can be distinguished: – Economic vulnerability related to the difficulty of accessing resources, funds, capacities and skills to achieve objectives. Customer relationship management leads, for example, to the development of offers and services that are differentiated according to each customer’s potential financial value. Of course, the value of customers does not depend only on their financial capabilities (you can be modest and spend everything on the same supplier). However, their potential varies widely and discriminatory – even stigmatizing – practices can develop. Discrimination can be caused by prices, offers, number of contacts, contact mode (physical or virtual), etc. The boundary between differentiation and discrimination then becomes tenuous. – A cultural vulnerability related to a lack of knowledge of the risks and benefits associated with consumer choices. In a context of an aging population in Western countries, the question arises in particular of adapting to a senior population which, although financially interesting (silver economy), does not always have the same cognitive and learning capacities as those of the youngest generation. For example, the “digital first” business logic, requiring first contact online, can pose insurmountable problems for the senior population. Similarly, the influential techniques used online (e-mails, text messages, ad banners, etc.) can lead to unintentional or reckless acts. With the rise of digital technology, customers present another form of vulnerability related to the risks of inappropriate use of their personal data, violation and dissemination of these data following computer attacks (“data breaches”), or even identity theft by hackers or criminals [MAR 17]. These new forms of vulnerability double those of economic or cultural origin. This can lead to a sense of invasion of privacy and greater distrust of the organizations that are supposed to protect and support them. In companies, the management of customer heterogeneity is based even more on criteria of financial potential than on criteria of vulnerability or subjective wellbeing. However, the involvement of some companies in societal and citizen programs is tending to increase. For example, La Poste group is stepping up its civic initiatives and is working to support elderly and isolated populations by offering them appropriate services (the “veiller sur mes parents” scheme, meaning watch over my parents). Research also contributes to transforming practices and ways of thinking. The challenge now is to include more social support in relationship programs so that they contribute to individual and collective well-being.

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3) Respecting customers’ personal lives The massive collection of data and the multiplication of contact channels are leading to an increasing intrusion into the individual’s private sphere. For example, social media and networks as well as communities are increasingly being invested in by brands that have made it a predominantly commercial space. Originally, however, they were only networks of friendship, professional networking, private forums, communities of enthusiasts or places of exchange between individuals. New markets have been built in areas that they have not previously understood (meetings, family, friendship, etc.) and this generates new configurations between suppliers, demand and offers [BUS 17]. For example, smart city projects can potentially transform our cities into huge markets where every resident, student, tourist and entrepreneur will be a potential target to be addressed through a multitude of communication channels (tablet, smartphone, information points, television, etc.). In Tel Aviv, for example, the Digitel service allows each resident, from the age of 13, to have a digital profile, to be permanently geolocated, to report problems in the city, to receive promotional messages and service offers, etc. [PRE 18]. In general, market values transform everything into supply and demand and deeply penetrate all aspects of our lives: relations with public services, education, health, law, culture, work, etc. In particular, with the uberization of the economy, the boundary between work and consumption is becoming increasingly blurred and every user of a service can temporarily become a producer (e.g. BlaBlaCar or Airbnb). In such a context, commercialism tends to succeed managerialism, which established as a principle the effective and efficient management of organizations (ministries, museums, schools, etc.). In the health sector, for example, methods of managing patient relations, within the health structure or remotely (e-health), are tending to become more widespread. In addition to developing a brand policy, patient care path management has become a priority, both to improve the quality of care and management and to better monitor and control each patient (databases, remote contacts, etc.) [MIF 16]. Customer relationship management practices certainly have a bright side in that they promote service quality and value creation, making customer journeys more fluid, listening to and managing the customer’s voice, etc. But they also potentially have a dark side (intrusion, discrimination, influence, social control, etc.) that should be curbed if they were to take place in such major non-market contexts as health, politics, education, public services, etc. 4) Preserving the free will of customers With the rise of digital technology, brands are increasing their presence with their targets and can individualize and contextualize their communication. Most customers can be contacted anywhere, anytime and on any device (smartphone, tablet, computer, etc.). For example, one of the fundamental aims of omnichannel

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management is to build bridges between the physical and virtual worlds and thus to extend customer tracking to physical places (shops, restaurants, holiday centers, etc.). The potential for influence, both on consumption choices and more generally on lifestyles, has never been so high. In addition, we are witnessing an increase in the power of nudge marketing influence techniques, the aim of which is to have a direct impact on behavior without the individual always being fully aware of it. In their four-P model, Chance et al. [AMP 14] emphasize how much a company can manipulate the context of choice (possibilities: assortment, quantity, bundles), the choice process (process: accessibility, order, defaults), the way the offer is presented (persuasion: vividness, comparisons, moments of truth) and the individual’s intentions (person: goals, habits, precommitment). To what extent do these practices still guarantee respect for the individual’s free will? Could the customer still make choices, act and think, without any determinism external to their will? Admittedly, discourses about the customers’ assumption of power and the now uncontrollable nature of brand communication are flourishing. Nevertheless, brands are increasingly mastering this digital world and customers are constantly being encouraged to commit themselves to them, to produce content (user generated content/videos) and to share their opinions. Instead of emancipating customers, digital technology can instead subjugate them, i.e. transform them into the subject of the brand, or reify them, i.e. transform them into an anonymous and impersonal object, into a simple pseudonym or identification number. In the first case, we may ask ourselves whether it would be appropriate to reduce the customer to a brand fan, a dedicated employee or an ambitious ambassador. Is it legitimately desirable for an individual to define their own identity – especially digital – through their relationship with brands? In the second case, contrary to the very principles of relational marketing (personalization, empathy, listening, etc.), the customer becomes a simple “user” whose traces must be identified throughout their physical or digital journey. The exchange is no longer relational or even sometimes transactional (purchase/sale). The challenge is to obtain a “click”, a “view”, a “share”, a “like”, a “comment”, etc. As Busca [BUS 17] shows in his analysis of community management practices, the achievement of these quantitative objectives is often decoupled from brand strategy and customer strategy. Even if measuring instruments are widely distributed, actual consumer support for brands is rarely achieved. 1.6. Conclusion The purpose of this chapter is to discuss the future of customer relationship management in a context where robotization and automation are progressing, where

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the social demand for transparency is increasing, where collaborative and permanent innovation has become a condition for economic survival, where platforms increasingly dominate access to markets and information and where social and environmental challenges are increasing (cultural and economic disparities, infringement of individual freedoms, etc.). These developments are already underway, but research and practice in relationship management have not yet fully addressed them. In particular, there is an urgent need to develop reading grids and theories that will help to better understand this changing world and allow for a renewal of customer strategies. These reflections concern researchers, practitioners and students alike, who will have to master new knowledge and skills to invent new customer strategies. The rise of AI, the automation of many tasks and the increased use of data scientists will require a rethinking on training and education. In particular, more time should be given to activities and skills that robots and data specialists cannot achieve. Imagination, creativity and innovation could become key values, as could mastery of the interfaces proposed by digital players. Other businesses should also develop in line with the technological, social and environmental developments that we have highlighted. For example, companies may need an ethicist who is not limited to verifying the compliance of practices with the law on personal data (data office). They would provide clear rules and strategies – such as transparency – to better reconcile business performance with respect for customers. Another example is that a customer relationship manager could investigate the consequences of their actions and estimate their positive (satisfaction, well-being, etc.) and negative (frustrations, overconsumption, environmental impact, etc.) externalities. An annual reporting would make it possible to draw up a balance sheet and see how much the company has been able to improve the overall management of its customers. In other words, customer relationship management must now move beyond the logic of optimizing customer processes (acquisition, satisfaction, retention, enhancement) to explore new avenues that will allow it to reinvent itself. 1.7. Acknowledgements The authors would like to thank Jérôme Baray from the Larje Laboratory at the University of New Caledonia for his contribution to this chapter.

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1.8. References [ABB 17] ABBES I., TOUIL S., “Formes du bien-être et expériences de consommation: une application au secteur touristique”, Décisions Marketing, vol. 87, pp. 81–98, 2017. [ACQ 18] ACQUATELLA F., FERNANDEZ V., HOUY T., “Quelles dynamiques stratégiques pour les plateformes digitales? Proposition d’un cadre d’analyse à partir du cas Coursera”, i3 Working Papers Series, 18-SES-02, 2018. [AND 12] ANDERSON L., OSTROM A.L., CORUS C. et al., “Transformative service research: an agenda for the future”, Journal of Business Research, vol. 66, no. 8, pp. 1203–1210, 2012. [BAH 16] BAHL S., MILNE G.R., ROSS S.M. et al., “Mindfulness: its transformative potential for consumer, societal, and environmental well-being”, Journal of Public Policy & Marketing, vol. 35, no. 2, pp. 198–210, 2016. [BAK 05] BAKER S.M., GENTRY J., RITTENBURG T., “Building understanding of the domain of consumer vulnerability”, Journal of Macromarketing, vol. 25, no. 2, pp. 128–139, 2005. [BÉJ 18] BÉJI-BÉCHEUR A., BONNEMAIZON A., BRIAL B. et al., Hot Topics Marketing, 2018, available at https://www.afm-marketing.org/. [BEN 04] BEN YOUSSEF A., “Les quatre dimensions de la fracture numérique”, Réseaux, vol. 2004/5, nos. 127–128, pp. 181–209, 2004. [BEN 16] BENAVENT C., Plateformes – Sites collaboratifs, marketplaces, réseaux sociaux... Comment ils influencent nos choix, FYP éditions, Paris, 2016. [BER 12] BERTINI M., GOURVILLE J.T., “Pricing to create shared value”, Harvard Business Review, vol. 90, no. 6, 2012. [BUS 17] BUSCA L., Le façonnement des marchés par les pratiques marketing routinières: une application au Social Media Management, PhD Thesis, Toulouse 1 University Capitole, 2017. [CHA 14] CHANCE Z., GORLIN M., DHAR R., “Why choosing healthy foods is hard, and how to help: presenting the 4Ps framework for behavior change”, Customer Needs and Solutions, vol. 1, pp. 253–262, 2014. [GUN 93] GUNDLACH G.T., MURPHY P.E., “Ethical and legal foundations of relational marketing exchanges”, Journal of Marketing, vol. 57, no. 4, pp. 35–46, 1993. [GUR 17] GURVIEZ P., SIRIEIX L., “Marketing et bien-être: un objectif complexe”, Décisions Marketing, vol. 87, pp. 5–14, 2017. [HEM 16] HEMONNET-GOUJOT A., FABBRI J., MANCEAU D., “Crowdsourcing vs design thinking: une étude comparative de deux démarches d’innovation externe dans la phase d’idéation”, Décisions Marketing, vol. 83, no. 3, pp. 123–139, 2016. [KAT 16] KATSIKEAS C.S., MORGAN N.A., LEONIDOU L.C. et al., “Assessing performance outcomes in marketing”, Journal of Marketing, vol. 80, no. 2, pp. 1–20, 2016.

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[KOW 17] KOWALEWSKI D., MCLAUGHLIN J., HILL A.J., “Blockchain will transform customer loyalty programs”, Harvard Business Review, March 14, 2017. [LAM 16] LAMBRECHT M., “L’économie des plateformes collaboratives”, Courrier hebdomadaire du CRISP, vol. 2016/26, no. 2311–2312, pp. 5–80, 2016. [LIC 17] LICHTLE M.C., PLICHON V., “L’effet de la satisfaction à l’égard du produit sur la satisfaction dans la vie: le rôle de variables modératrices”, Décisions Marketing, vol. 87, pp. 39–55, 2017. [MAC 78] MACNEIL I.R., “Contracts: adjustment of long-term economic relations under classical, neoclassical and relational contract law”, Northwestern Law Review, vol. 12, pp. 854–901, 1978. [MAR 17] MARTIN K.D., BORAH A., PALMATIER R, “Data privacy: effects on customer and firm performance”, Journal of Marketing, vol. 81, pp. 36–58, 2017. [MIC 06] MICK D.G., “Meaning and mattering through transformative consumer research,” in PECHMANN C., PRICE L. (eds), Advances in Consumer Research, vol. 33, Association for Consumer Research, Provo, UT, p. 1–4, 2006. [MIF 16] MIFSUD M., S’approprier le service pour co-créer de la valeur: une étude dans le secteur de la santé, Thesis, University of Montpellier, 2016. [NGO 10] N’GOALA G., “Discovering the dark side of service relationships… or why longlasting and exclusive relationships are self-destructing ”, Recherche et Applications en Marketing, English edition, vol. 25, no. 1, pp. 3–31, 2010. [NGO 15] N’GOALA G., “Opportunism, transparency, manipulation, deception and exploitation of customers’ vulnerabilities in CRM”, in NGUYEN B., SIMKIN L., CANHOTO A.I. (eds), The Dark Side of CRM: Customers, Relationships and Management, Routledge, London, 2015. [NGO 16] N’GOALA G., “Edito: le marketing dans un monde connecté, un monde de paradoxes…”, Décisions Marketing, vol. 84, pp. 5–18, 2016. [NGU 11] NGUYEN B., “The dark side of CRM”, Marketing Review, vol. 11, no. 2, pp. 137– 149, 2011. [NIC 17] NICOT A.M., “Le modèle économique des plateformes: économie collaborative ou réorganisation des chaînes de valeur?”, Revue des conditions du travail, Publications du réseau ANACT-ARACT, 2017. [PEZ 17] PEZ V., BUTORI R., MIMOUNI-CHAABANE A., “The dark side of the pressure exerted by loyalty programs on consumers: practical and ethical issues”, Recherche et applications en marketing, English edition, vol. 32, no. 3, pp. 76–89, 2017. [PLÉ 10] PLÉ L., CÁCERES R., “Not always co-creation: introducing interactional codestruction of value in service-dominant logic”, Journal of Services Marketing, vol. 24, no. 6, pp. 430–437, 2010.

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[POR 17] PORTES A., CASES A.S., N’GOALA G., “Vers une définition de la transparence perçue de la relation client sur les canaux digitaux”, Management & Avenir, vol. 2017/4, no. 94, pp. 105–129, 2017. [POR 18] PORTES A., La transparence numérique: rôle du client et conséquences sur la relation à la marque, PhD Thesis, University of Montpellier, March 30, 2018. [PRE 18] PRESS G., “6 lessons from Tel-Aviv for successful digital transformation of smart cities”, Forbes, March 22, 2018, available at https://www.forbes.com/sites/ gilpress/2018/03/22/6-lessons-from-tel-aviv-for-successful-digital-transformation-of-smartcities/#6f876f205330. [ROC 03] ROCHET J.C., TIROLE J., “Platform competition in two-sided markets”, Journal of the European Economic Association, vol. 1, no. 4, pp. 990–1029, 2003. [SCH 17] SCHLEICH J., FAURE C., KLOBASA M., “Persistence of the effects of providing feedback alongside smart metering devices on household electricity demand”, Energy Policy, vol. 107, pp. 225–233, 2017. [SHU 09] SHULTZ C.J., HOLBROOK M.B., “The paradoxical relationships between marketing and vulnerability”, Journal of Public Policy & Marketing, vol. 28, no. 1, pp. 124–127, 2009. [SPR 08] SPROTT D.E., “The policy, consumer, and ethical dimensions of covert marketing: an introduction to the special section”, Journal of Public Policy & Marketing, vol. 27, no. 1 pp. 4–6, 2008. [THO 02] THOMKE S., VON HIPPEL E., “Customers as innovators: a new way to create value”, Harvard Business Review, vol. 80, no. 4, 2002. [TUR 09] TURILLI M., FLORIDI L., “The ethics of information transparency”, Ethics and Information Technology, vol. 11, no. 2, pp. 105–112, 2009. [VER 13] VERNETTE, E., HAMDI-KIDAR, L., “Co-creation with consumers: who has the competence and wants to cooperate?”, International Journal of Market Research, vol. 55, no. 4, pp. 539, 2013. [XU 11] XU H., XIN R.L., CARROLL J.M. et al., “The personalization privacy paradox: an exploratory study of decision making process for location-aware marketing”, Decision Support Systems, vol. 51, pp. 42–52, 2011.

2 Brand Practices Faced with Augmented Consumers

A large number of current studies, reflections and analyses present the emergence of the Internet and digital technology as the third or fourth industrial revolution, or at least as a “historic event in progress” that profoundly modifies communication and relations between individuals, as well as the way of producing and consuming1. It cannot be denied that the Internet has changed our society and the role of individuals, particularly in relation to companies and brands. On the one hand, the behavior of the multiconnected consumer has never been tracked, observed and dissected so much, and behind the advent of big data lies the fear of an omniscient, intrusive and potentially dangerous Big Brother. On the other hand, the Internet and the tools related to digital development give consumers a new and incomparable power: they search for (and find more and more easily) information about products, brands and companies, seek the opinions of their peers and express their own opinions to them, exchange, trade, compare, evaluate, etc., and all this in near real time. This access to information and this ability to interact both with companies and brands as well as with other consumers and all kinds of influencers has greatly changed the rules of a game that has potentially become a little more transparent for consumers. Companies have, of course, adapted to the situation, have captured the interest of these new tools and practices and are using them to manage their relationships with consumers, which is still crucial to their sustainability.

Chapter written by Nathalie FLECK and Laure AMBROISE. 1 “The Internet is the third industrial revolution (interview with historian François Caron)”, L’Express, available at https://www.weforum.org/fr/agenda/2017/10/la-quatrieme-revolutionindustrielle-ce-qu-elle-implique-et-comment-y-faire-face/.

Augmented Customer Strategy: CRM in the Digital Age, First Edition. Edited by Gilles N’Goala, Virginie Pez-Pérard and Isabelle Prim-Allaz. © ISTE Ltd 2019. Published by ISTE Ltd and John Wiley & Sons, Inc.

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This chapter proposes to present how brand practices have changed in the face of the “augmented consumer”. The first section shows that reaching consumers in today’s context is different since it involves following the consumers wherever they are, and capturing their multiple touchpoints and their sharing of information with companies and brands. A second section deals with the transformation of the content of messages toward more transparency and speaking out about brands outside the company. Finally, a third section focuses on the evolution of the relationship between the company (and its brands) and consumers toward a more meaningful and concrete participation of consumers in the company, a more personalized relationship and an ever-increasing requirement in terms of the utility and meaning of this relationship. 2.1. A more complex approach to the customer to follow them wherever they go The Internet makes following the so-called “consumer 4.0” more complicated since the web is both a new distribution and communication channel. It thus multiplies the number of transactional and relational touchpoints and encourages brands to set up new distribution and communication methods and to review their integration into a coherent global system. 2.1.1. Following the customer wherever they buy: from multichannel to omnichannel Consumers’ trajectories are increasingly complex: for a given purchase, they easily mix the real and virtual worlds throughout their journey. For example, they can search for information online and then go to a physical store (offline) to see the product in real life and make their purchase (ROPO phenomenon – Research Online, Purchase Offline). They can also find and try products in shops (showrooming principle) and then buy them on the Internet by looking for the best possible offer because of price comparison websites. Thus, the emergence of new digital technologies allows companies and their brands to offer multiple access points to their customers and, more generally, to consumers seeking information. As a result, brand sites are increasingly interactive and new digital tools are offering current or potential customers new ways to learn, interact with the company or buy, beyond the traditional points of sale. Thus, many companies have developed a multichannel offer, offering Internet access to their products and/or services on a model almost identical to the traditional physical distribution channel. This is particularly the case for companies in the banking and insurance sectors.

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While multichannel has long been perceived as placing the digital circuit of websites in competition with the physical circuit of stores, companies have now understood that it is in their interest to rely more on the complementarity of these circuits. The challenge for them is now to move from a vision of multichannel silos – where each channel would be managed and optimized in isolation – to an omnichannel proposal: the objective is to offer a coherent and global offer with a transversal vision of distribution channels, and to play on the synergies between channels to create visibility and traffic from one to the other, and ultimately, to foster the attractiveness for the company and its brands. Levis Strauss has thus modified its strategy regarding its various distribution channels on several occasions. At the beginning of Internet sales, it only offered a very limited number of items online in order to not compete with the official shops. Then, in July 2003, it launched Signature, a specific brand for the mass retail market. This new offer at Wal-Mart in the United States and Carrefour in France was supposed to boost sales. However, after only 3 years, the experiment was stopped abruptly: sales did not take off and the impact on the brand’s image was catastrophic. Since then, the company has once again focused on its expertise and the value of its brand by offering more than 150 jean items adapted to all styles and morphologies. This very broad offer allows it to reaffirm its status as a benchmark in the denim market and to supply all these distribution channels. 2.1.2. Communicating with the customer wherever they come into contact with the company: the touchpoints Companies have long considered that they inform consumers about their brands through their media communication and direct contacts at points of sale. The digitalization of society – and in particular of communication – has drastically changed this pattern. A first step involved taking into account more broadly all the opportunities for interaction with customers and potential customers as possible touchpoints, each providing information about the brand and participating in the construction of its image. Indeed, while this type of information always passes through the traditional media (advertising, advertorials, etc.), other communication tools have significantly developed outside the media (in particular, direct marketing) and the multiple ways for consumers to be in contact with a company are now taken into account, whether it is physical meeting points (stores or agencies, corner shops, ephemeral stores, exhibitions and trade shows, etc.), dedicated telephone lines (toll-free numbers,

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after-sales services, etc.) or the website, for example. It is essential for companies to consider all these points of contact and ensure consistency of discourse throughout the customer journey to optimize brand image management. This consistency is at the heart of unified customer management at Disneyland Paris2, for example, where the brand’s objective is to support potential and current customers throughout their journey by avoiding irrelevant and repetitive messages, which bring unnecessary or even negative marketing pressure to the brand. Thus, because of the data management platform, people who have already booked a stay are removed from prospecting emailing campaigns and are no longer oversolicited by new e-mails. Capping, a technique that involves limiting the amount of exposure an individual has to the same message, is used as much as possible to reduce the irritating nature of repetitions. In addition, the CRM and Media teams are working to reduce the repetition of messages to customers and prospects using mobile phones, tablets and computers. The second step is to take into account the transformation of society and the almost systematic use of other sources of information by consumers on the Internet. In addition to the information resources set up by the company, they obtain more information from sources that are not controlled by the company, such as forums, social networks and blogs. Advertisements, store vendors or brand sites are competing with all types of influencers and bloggers on YouTube, Instagram and Snapchat, for example. Brand communication is invading virtual space beyond the control of companies. A company that wants to collect an overview of its brand exchanges with consumers can no longer limit itself to the information it delivers and the exchanges it controls (through traditional media, email exchanges, websites, telephone services and face-to-face physical sales outlets), but must identify and take into account all the direct or indirect touchpoints it shares with consumers. This is why social listening studies (which study the flow of reviews and all kinds of comments about the brand on social networks) have grown exponentially in recent years. This is also the reason why brands today work and cooperate with influencers to ensure as much as possible that the discourse they miss remains positive.

2 “L’AI au service de la marque augmentée”, interview with Stéphanie Sabourin, Director of Europe Media & Alliances, Disneyland Paris, pp. 15–16, in “Future of Experiences. Comment Data, Intelligence artificielle et design (re)façonnent l’expérience client?”, Oracle and AFRC White Paper, 2017.

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2.2. An evolution of message content The term “marketing 4.0” reflects the current trend of consumer appropriation of digital communication media. This horizontal, very fast and massively shared communication between consumers allows them to escape the brand’s traditional channels of persuasion [RIO 18] and to seek a certain form of neutrality and objectivity from their peers. To win or maintain the trust of their customers and still be listened to and heard, companies and their brands have a strong interest, on the one hand, in being more transparent and, on the other hand, in relying on influential and credible consumers in their community to get their messages across. 2.2.1. A constant search for a demonstration of transparency Hyperconnected and aware of brand information in near-real time, consumers have gained power over brands as they are potentially whistleblowers. This power deters any company from defrauding or hiding its mistakes. In addition, the current reflections of the economic, political and global world of society on corporate social responsibility encourage companies to set an example in terms of respect for individuals and the environment. The positive will of companies to be aware of their responsibilities, linked to the risk of a negative viral campaign against them if they do not comply, pushes them toward a desire for transparency with consumers, which is expressed through communication such as concrete actions of openness. Thus, to prove that they have nothing to hide, brands are opening their doors more and more frequently, literally and figuratively. For Blédina, a leading brand of infant nutrition, trust is crucial, as parents are committed to their children’s health. The brand is, therefore, increasing its demonstrations of transparency toward consumers to give them every possible assurance in terms of product quality. This demonstration involves open-door operations and numerous procedures staged on the brand’s website. For the past 7 years, the “Witness parents” operation has consisted of offering volunteer parents a visit to a Blédina factory (Brive-laGaillarde in 2017) and meeting with the brand’s partner farmers. This operation reported on the site under the title “What if we told each other everything?”3 and allows Blédina to recall the strict procedures allowing it to guarantee an irreproachable level of quality. The visit to suppliers’ orchards gave rise to a sidebar entitled “Our agricultural practices”, which highlights the selection of farmers, the Blédina specifications provided to them and the monitoring of production. The

3 https://www.bledina.com/parents-temoins/.

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cooking workshop orgganized with a Blédina cheef is presented in the “Ourr recipes” sidebar, which discussses the impoortance of balance in recipe developmennt. In the “Fabricaation & Contrrol” sidebar, the factory visit v made it possible p to reeview the quality teests carried ouut during the manufacture m of o small jars. In thhe same vein,, Blédina is offering o a serries of films on its websitte and on YouTube (for exampple, “The odyyssey of baby y food jars” posted p on YouTube in p for both b raw mateerials and Februaryy 2018) to shhow the entiree production process finished products.

Figure 2.1. Open days s at LVMH

Whille the number of “open days” d is increeasing (as shoown by “Les journées particulières” (speciall days) organiized by LVMH H since 2011,, which providde access to produuct manufacturring workshopps and promo ote their artisaanal character4, or “Les Portes Ouvertes O de la Bananeraie” at Michel and d Augustin, which w offer tasstings and testings of new reciipes every fiirst Thursday y of the monnth), another form of transpareency is to givve the companny’s employeees a voice. Em mployees are pperceived

4 https://w www.lvmh.fr/aactualites-docum ments/actualitees/lancement-de-la-quatrieme-editiondes-journnees-particulierres/.

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as more credible in talking about what is happening in their company, compared to both executives and celebrities, who are frequent spokespersons for brands in advertising. In the eyes of consumers, CEOs are interested in brand results and are potentially biased in their discourse; as for celebrities, they are paid by brands to say good things about them without necessarily knowing them or even using them [FLE 14]. Since then, brands from all sectors have been showcasing their employees, particularly in the services sector (SFR, McDonald's, SNCF, Houra.fr, Uber). The fact that brands let their employees speak for themselves allows consumers to identify themselves in a way that is linked to the horizontality of the relationship. Indeed, while managers and celebrities are perceived as superior, or not belonging to the same world as the average consumer, employees share real life experiences with consumers and are therefore perceived as more accessible and credible. This new form of endorsement thus brings greater transparency and proximity to brands.

Figure 2.2. Employee involvement in Uber's communication

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2.2.2. Indirect speaking: the growing role of influencers The Internet and social networks and other exchange platforms that have emerged have marked the advent of a new source of communication about the brand: influencers, bloggers, instigators and YouTubers; they are characterized by their audience (number of followers) and often their expertise in a specific area of competence (beauty, sport, fashion, travel, etc.). While traditional advertising is perceived by consumers as intrusive and not very credible, they are informed by blogs, forums and social networks and are perceived as more credible because they are independent of brands. The influencers who provide their comments have such a direct and indirect audience that they have the ability to be trend-setters and have acquired a form of quasi-normative power through social networks. As Nicolas Riou notes [RIO 16, p.16], “the digital world and its new uses shape the individual, their beliefs and their value systems. Digital culture influences the perception of what is desirable and what is less desirable, and structures the desire to buy, well in advance”. Faced with these two combined phenomena of questioning brand advertising discourse and the takeover of the digital world, it is becoming essential for brands to use influencers to convey their messages effectively. When working with an influencer, brands face a trade-off between the breadth of diffusion (maximizing the number of followers) and influencer expertise. We can thus distinguish the top influencers (more than 100,000 subscribers) from the microinfluencers (less than 10,000 subscribers). More than just the number of followers, influencers’ performance depends on their ability to engage with their community, measured by the number of likes, comments and sharing of the post concerned. Loyalty and dedication prove that the community is not passive. It also makes it possible to put aside the “ghost” followers that would have actually been bought by influencers, a practice recently questioned by brands5. For an influencer to effectively convey a brand’s message, it is essential that he or she be credible, and in particular, that he or she be perceived as sincere and authentic and not paid by the brand to say good things about it. In 2016, Scott Disick, the American reality TV star, posted a message on Instagram for a sports food supplement brand... forgetting to remove the part of the sentence that was intended for him (“at 4 pm, write the message below”). The exposure of this commercial practice caused a catastrophic negative buzz for both the brand and the influencer.

5 http://www.thedrum.com/news/2018/06/17/unilevers-keith-weed-calls-urgent-action-tackleinfluencer-fraud.

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Figure 2.3. When influencers get caught out at their own game

2.3. A stronger involvement of consumers in brands The Internet and the digital tools that were later developed have enabled brands to develop their exchanges with consumers. These exchanges have always existed, but their amplitude has increased and their nature has been transformed. In general, in addition to traditional studies prior to launches, brands are increasingly involving consumers in their product and brand development processes. Two phenomena have thus emerged in recent years: crowdsourcing or participatory production where consumers are called upon to intervene in order to initiate ideas (or insights) or to evaluate and validate the different phases of project development; and crowdfunding or participatory financing, where consumers help projects to come into being by participating financially in raising funds needed to start the project. 2.3.1. Increasing consumer participation Globally, brands are increasingly integrating consumers throughout the process of developing new products or (re)positioning their brands. 2.3.1.1. New forms of hybrid studies New types of hybrid online studies have emerged that combine qualitative and quantitative methodologies, thus benefiting from the quality and depth of exchanges of the former as well as the large amounts of respondents from the latter. These studies offer the opportunity to test concepts or even product prototypes previously

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sent to the respondents’ homes. They can take the form of individual exchanges (between the brand and each individual separately) or group exchanges (forums where consumers interact with each other) in written form (e-mail exchanges or messages posted on forums, possibly with photos) or oral form (group meetings organized on the Internet). The hybrid status of the Internet, both a communication and distribution channel, also allows some companies to test or even refine their offer directly while selling it. Thus, the Asphalte company solicits consumers to design its products and delivers the content of feedback on its website before offering consumers the opportunity to preorder their product. For example, in July 2018, it could be read on their website6: “We started by asking you what was wrong with your chinos so far and for once you all agree; 2770 of you told us that (1) the color faded too quickly; (2) they loosened and came out of shape; (3) the crotch tore; (4) too wide at the bottom. We took all this into account to make you the aptly named Strapping Chino ‘strong chino’”. 2.3.1.2. Co-creation and crowdsourcing Brands also benefit from easier access to genuine exchanges with consumers to integrate them into the concept development phases (ideation, creation of the product concept, packaging, etc.) and the development of products or services (brand choice, advertising catch line, video creation, etc.). Thus, speaking of cocreation and consumer co-producers is common today, the latter becoming a stakeholder in the launch of the new products or services (see Chapter 9). Lego, for example, places co-creation at the heart of its innovation policy by offering its customers of all ages the opportunity to create their own product on the Lego Ideas7 website. Beyond a sufficient number of votes in favor, the product is launched on the market. Similarly, the Rebrick platform is managed as a collaboration between the brand and its adult fans. Out of 12 million videos on Lego, only 3 million are made by the brand.

6 https://asphalte-paris.com/products/le-chino-costaud. 7 Stéphane Knapp, Lego: “La co-création est au cœur de notre politique d’innovation”, 21 May 2015, Maud Vincent, emarketing.fr, available at http://www.e-marketing.fr/Thematique/agences1089/Breves/Stephane-Knapp-Lego-creation-est-coeur-notre-politique-innovation-254993.htm# XTEU5krKFox1cO2x.97.

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Figure 2.4.. Lego's ideatiion platform8

2.3.1.3. Participatory ry financing or o crowdfund ding Particcipatory finanncing (or croowdfunding) is another way w of integrrating the consumeer, this time downstream of the projecct. The princciple for the company (usually start-ups) is to finance a project witthout going through t bankks but by addressinng the crowd of consumerss directly. In return, r the person making a donation can receeive a copy of the productt (presales priinciple, somettimes with a discount) and/or bonuses, see thheir name apppear as a dono or, receive staakes in the com mpany in the form m of shares (equity ( crowddfunding), etcc. Brands geenerally use pplatforms dedicated to participatory financingg, such as Ulu ule, My Major Company, IIndiegogo Starter. or KickS The Wado W brand, which w offers “fair-trade “ sneeakers”, is beiing launched aaccording 9 to this prrinciple . It offfers its shoess at a discoun nted price com mpared to the pprice that will be recommendedd in store. Thhe project is therefore baccked by a fuundraising campaiggn financed by b presales annd associated d with a fair trade and suustainable developm ment approach. For a conttribution of €10, € Wado wiill plant two trees, for 8 https://iideas.lego.com//#all. 9 https://w www.kickstarteer.com/projects//wado/wado-su ustainable-sneakkers-inspired-byy-the-80s/ descriptioon.

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€59, the customer will have a pairr of sneakers, a Wado bag and two treees will be planted, then the ratte decreases according to the number of pairs of sneakers ordered. Launched in March 2018 with a fundraaising target of o €11,000, thhe project had raiseed €363,761 with w 3,379 conntributors by July J 1, 2018.

Figure 2.5. Launchin ng new brands s thanks to con nsumers

2.3.1.4. The consum mer’s committment to the brand Evenn further downnstream, anotther form of participation p i involves usinng fans as brand am mbassadors orr even missionnaries [VOC 17]. 1 Thus, from m September 19, 2018, the HonddaNextDoor100 program willl offer to test new car moddels directly w with a fan of the brrand based onn the idea thaat “Who betteer to talk aboout it than a ffan of the brand?”. This campaaign is in reesponse to th he “Dacia Oppen Doors” ccampaign launchedd in 2016, whhere the brandd proposed to put interestedd customers iin contact with Daccia owners to give them a trial. t Digital in nterfaces are then t used by bbrands as facilitatoors to connect and animate the t consumer community. 2.3.2. An A increasin ngly persona alized relatio onship The implementatio i on of gigantic databases (big g data), combinning sociodem mographic and behaavioral data linnked to the knnowledge thatt the companyy accumulates about its 10 https:///hondanews.eu//fr/fr/cars/mediaa/pressreleases/1 114668/honda-reeinvente-les-essais-clientsgrace-a-sees-fans.

Brand Practices Faced with Augmented Consumers

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customers throughout the relationship, allows brands to set up communication and offers that are increasingly adapted to consumer profiles. When in 2012, Nestlé launched BabyNes, a child nutrition system consisting of a connected machine and a range of milk capsules, with a variety of nutritional elements, the brand launched a fully personalized service program11. In addition to the touchpoints made available to parents to communicate daily if they wish (e-mails, telephone line, chat, physical sales points, etc.), the brand calls parents 10 days after the purchase and then 2 months later to ensure that the system is being used correctly. The services offered are themselves entirely personalized since they make it possible to prepare the bottles according to the child’s needs, to record in a logbook the composition of these bottles and the evolution of the child’s growth, to share these data with the paediatrician, to manage the parents’ stock of capsules and to facilitate replenishment orders, etc. There is even an application that allows you to prepare bottles remotely using a smartphone. In addition, consumers also have the opportunity to express themselves about their relationship with the brand (call centers, chatbots, e-mails, points of sale, aftersales service, etc.) but also on social networks. Their relationship with the brand therefore becomes visible, as a result, to a potentially much larger number of people than in the case of word of mouth or only face-to-face communication. This personalization of the desired relationship and the fact that it is publicly assumed by the individual enables it to be analyzed in light of brand identification concepts [FOU 98], commitment [BEN 03] and even performativity [BÔ 13]. The individual plays a role in society through the brands they visibly consume and which construct their identity: thus, the individual practices them publicly, shares their values, the ritualistic gestures that accompany them, adhering to their vision of the world, etc. From then on, the consumer engages in a real performance inspired by brands, in the sense of a theatrical performance. 2.3.3. A relationship based on utility and meaning through commitment Brands do not escape the quest for meaning that characterizes and shapes today’s society. Thus, they tend to bring more value to their offer, either by strengthening the overall consumer benefit associated with the said offer, in particular through

11 “L’expérience client en profonde mutation”, interview with Isabelle Simal, Customer Service Manager of BabyNes (Nestlé Group), pp. 17–18, in “Future of Experiences. Comment Data, Intelligence artificlle et design (re)façonnent l’expérience client?”, Oracle and AFRC White Paper, 2017.

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digital appplications annd connected objects, or by y defending values or causees valued by their consumers. 2.3.3.1. The necesssary utility of the brand The brand b must bee useful sincee its positionin ng is based onn a benefit byy which it allows thhe consumer to t solve a problem. The waay it solves thhis problem alllows it to establishh a point of differentiation and a bring add ded value to its customers [T TAL 18]. This appproach is therrefore quite old. o On the otther hand, new digital techhnologies make it possible to make m it visiblee and accessib ble, to stage it i and to acceelerate its effectiveeness. In thhis spirit, maany brands offer o applicatiions on smarrtphones or ttablets to optimizee the use of thheir products.. The entirety y of content on these appliccations is guided by b the desiree to be usefuul to consum mers. The Weeber applicatiion12, for example, offers tips on o how to usee the barbecuee (such as thee best ways too light it), recipes, a shopping lisst that appearss on the phonee or tablet if you y click on thhe chosen recipe annd combines all the necesssary ingredieents if you seelect several rrecipes, a stopwatcch to monitor cooking time,, etc. Becaause of the emergence of new tech hnologies annd connected objects, consumeers can benefitt from new seervices offered d by brands suuch as the posssibility of trying onn a garment virtually in thhe fitting room. A true revvolution. This is what Prada haas set up in New N York: innteractive mirrrors in the shhop’s fitting rooms to virtuallyy try on the outfits13.

Figure e 2.6. Applications enhance e consumer be enefit14 12 https:///www.weber.coom/US/en/app-landing-page/w weber-31516.htm ml. 13 https:///marketingetsociologie.wordppress.com/2013//11/13/la-digitaalisation-des-maarques/. 14 https:///www.weber.coom/US/en/app-landing-page/w weber-31516.htm ml.

Brand Practices Faced with Augmented Consumers

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Figure 2.7. Brands’ new digital services

Through their websites, applications and other digital tools, companies also target non-consumers of the brand. In this respect, they go beyond a simple service oriented relationship. They are specialists in the field who seek to provide quality content, genuine and selfless support, and significant added value. The Nike Run Club is full of tips for achieving better running (training programs, breathing, nutrition, etc.), offers runners the opportunity to connect with a club or each other, offers them an application that gives them personalized coaching and finally helps them in choosing their running shoes. The commercial aspect, tinged with technical advice, only appears discreetly on the site. Similarly, the Skip brand offers a whole section on its website dedicated to washing advice according to the types of fabrics and stains. The brand’s utility, therefore, depends on providing information that is relevant to the consumer without being intrusive: according to the inbound marketing principle, the brand places this information on its website without imposing it: it is up to the consumers to go to the website when they are looking for an answer to a question or a solution to a problem. This makes a big difference compared to advertising, which is imposed by the brand and suffered by the consumer. 2.3.3.2. The engaged brand While it is not new for brands to participate in the construction of individuals’ identities and to allow them to express themselves, social networks increase the visibility of consumers’ statements about their brands. As a result, individuals expect brands to defend values and engage from a societal perspective. Supporting a brand then makes it possible to get involved in concrete actions, in accordance with its values and beliefs. Finally, by committing to causes, ideas or values, brands help

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consumers to commit themselves. An ADN article published on June 29, 201815 reports on a recent study (“Teens’ views on social activism and cause marketing and why it matters for brands”) conducted on 2,000 adolescents in the United States. Young people, in particular, expect brands to share their convictions and 72% of them feel that they are not sufficiently devoted. According to the study, “68% of them believe that it is the responsibility of companies to solve major societal problems. Two-thirds of them say they pay more attention to the communication campaigns of an engaged company. 62% of these young people also say they are more likely to buy products from a particular brand that discusses its commitments. Generation Z’s expectations are high and the disappointment is even higher. Only 28% of respondents think that a brand’s positive impact is sufficient. This generation that is growing up in a world of fake news and greenwashing does not want to believe in just anything and is looking for authenticity first and foremost. Only 44% believe in a brand’s actions if they are promoted in advertisements”.

Figure 2.8. Brands’ websites supporting their engagement16

While some brands base their positioning on defending values, such as the Ben & Jerry ice cream brand, which is highly committed to the climate and environmental protection, or to societal issues such as marriage equality for example, others are striving to implement actions on a daily basis. In a press release, Monoprix, for example, “made the choice to permanently remove grade 3 eggs from its shelves as of April 11, 2016”17. The company no longer wishes to sell eggs from caged hens and thus demonstrates its commitment to animal welfare.

15 http://www.ladn.eu/nouveaux-usages/etude-marketing/generation-z-72-trouvent-que-les-marquesne-sont-pas-suffisamment-engagees/. 16 https://www.benjerry.fr. 17 https://entreprise.monoprix.fr/espace-presse/communiques/oeufs-de-poules-elevees-cage-cestfini-chez-monoprix/.

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2.4. Conclusion The challenge for brands today is no longer simply to propose an offer adapted to consumers’ needs and expectations, but rather to create a global value of the consumer experience with the brand. Thus, with the explosion of social networks, branded content has become as important as the products sold; customers are no longer there to buy but to share content with their favorite brands. Brand management has, therefore, been largely transformed by enriching the brand’s product and service, offering a close and personalized relationship with its customers. Today’s brands must, therefore, play the intimacy card to seduce. The objective is therefore to create a commitment of consumers toward brands, in particular by establishing a unique relationship with them, allowing them to appropriate the company’s value offer but also by inviting them to be actors in organizations and by integrating them into value creation processes. 2.5. References [BEN 03] BENDAPUDI N., LEONE R.P., “Psychological implications of customer participation in co-production”, Journal of Marketing, vol. 67, no. 1, pp. 14–28, 2003. [BÔ 13] BÔ D., LELLOUCHE R., Brand culture, développer le potentiel culturel des marques, Dunod, Paris, France, 2013. [COV 17] COVA B., “La vie sociale des marques”, EMS, Caen, France. 2017. [FLE 14] FLECK N., MICHEL G., ZEITOUN V., “Brand personification through the use of spokespeople: an exploratory study of ordinary employees, CEOs, and celebrities featured in advertising”, Psychology & Marketing, vol. 31, no. 1, pp. 84–92, 2014. [FOU 98] FOURNIER S., “Consumers and their brands: developing relationship theory in consumer research”, Journal of Consumer Research, vol. 24, no. 4, pp. 343–373, 1998. [RIO 16] RIOU N., Le consommateur digital, Editions Eyrolles, Paris, France 2016. [TAL 18] TALBOT P., “Brand utility breaks through”, Forbes, available at: https://www. forbes.com/sites/paultalbot/2018/06/23/brand-utility-breaks-through/#2e2dc6f3e541, 2018.

3 The Augmented Customer Relationship: the Increasing Importance of the Customer’s Role

The digitalization of the economy has been accompanied by a transformation and intensification of the customer’s role in terms of their relationship with the company. Once a simple buyer of products and considered only as the passive beneficiary of the interaction with the company, the customer has evolved into a proactive player, a source of competitive advantage for firms. Customers now scan their products in store, modify their plane tickets on the app, participate in product innovations by providing their opinions and deciphering video games by offering complete guides on Internet forums, etc. Companies have encouraged this movement by developing self-service technologies without, however, identifying all the issues related to this increase in customer power. What are the benefits and risks of this increased customer involvement? How does one motivate and train customers to take on these new roles? What place is there for staff in these customer paths? 3.1. The customer, a long-standing player in the relationship The customer has always been an actor in the relationship. From a product and transactional marketing perspective, they have been considered simply as a consumer who bought a product. The company’s role was to maximize its sales on a simple transaction. The development of service marketing and relational

Chapter written by Sylvie LLOSA and Lionel NICOD.

Augmented Customer Strategy: CRM in the Digital Age, First Edition. Edited by Gilles N’Goala, Virginie Pez-Pérard and Isabelle Prim-Allaz. © ISTE Ltd 2019. Published by ISTE Ltd and John Wiley & Sons, Inc.

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logic has led to a review of this position. The customer has become a partner in the production of the service experience with whom a long-term relationship must be considered. 3.1.1. The customer, from the role of beneficiary to the role of relationship producer At the end of the 1970s, within the academic world of marketing, many researchers such as Berry, Lovelock, Chase, Eiglier, Langeard and Shostack claimed the emergence of a new disciplinary field: service marketing in which the customer relationship would be different from that existing in product marketing. In terms of service, beyond being the beneficiary of the transaction, the customer is also one of the contributors who makes it possible to produce it. The “customer resource” is essential for this production. This customer contribution arises from the inability to separate production from the consumption of services [ZEI 85]: “While products are first produced, then sold and finally consumed, services are often first sold, then always produced and consumed simultaneously. Thus, the consumer must be present in the production of most services”. For example, for a plane journey, the customer is present during the production of the service and contributes to its creation by performing tasks that are their responsibility: buying their ticket, arriving on time, ensuring compliance with security instructions, presenting their identity card at the boarding gate, etc. This type of work done by the customer is called participation. The theory of servuction [ISG 87] explains that for a service to be produced, the presence of three factors is required: the customer and the physical support (necessary material means) which are always present and indispensable, the staff in contact which can sometimes be substituted by a direct relationship between the customer and the physical support. Using the example of an airplane journey, the service requires coordinated actions from the contact employee (hostess/steward), the customer (sitting in their seat, putting their bag in the luggage compartment) and the presence of the physical support (plane) to be produced correctly. Registration can be done via a terminal (direct customer interaction/ physical support) or via a hostess/steward (customer interaction/contact employee, physical support). The business–customer relationship is no longer a simple supplier–user relationship, but a relationship of co-creation of experience and relationship. The customer is then considered as a temporary employee of the company whose work, also called participation, can be characterized in two ways: by its intensity and its content. The intensity of participation covers the customer’s degree of involvement in the process. This involvement can be cognitive, emotional and/or physical. Always

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present, it can be weak (only the customer’s presence is required in order to benefit from a massage) and gradually become strong when the customer co-creates the service, as in the case of a sports coaching program. Participation can also be characterized by its content based on role theory [SOL 85]. It is then defined as the role that the customer must or can play during the production of services. These roles played by the customer are organized into two main families: the intra role and the extra role. The intra-role is what the customer must do for the service to be performed, such as checking in for a flight, ordering in a restaurant, orienting themselves and serving themselves from the shelves of a store, etc. Without the performance of this role, the service cannot be produced. This intra-role is defined through service scripts. It generally consists of either providing information or making efforts. These can be of different kinds: cognitive, physical or psychological. When flying, the minimal role of the customer, which is to travel through the airport with their luggage, can quickly become physically and cognitively challenging for some customers. Unlike the intra-role, the extra role covers activities that are not mandatory for the service production, but that the customer can possibly perform within the framework of the latter. They are part of the customer’s civic behavior. There are three such customer citizenship behaviors [BET 97]. First, the customer can promote the brand by generating positive word of mouth about it, word of mouth now greatly facilitated by social networks. Second, the consumer can cooperate with other people involved in the service process. They can cooperate with contact employees showing courtesy, mastering their roles as customers and sometimes taking their place. For example, on a train, a customer can substitute themselves for the controller by asking another customer to turn off their mobile phone. The customer allows the social norm to be respected [CAM 13]. The customer can also cooperate with other customers “by playing the role of helping other customers” by being a source of information [CAM 13]. Third, the customer can act as an organizational consultant by helping to improve service quality. “Customer complaints and suggestions can lead to the resolution of certain problems in service” [BET 97]. The response to the many and varied satisfaction questionnaires is another example of this role as a “performance feedback provider”. On this issue, how long will the customer accept performing this role without reward? Intensity and content approaches are two complementary approaches to the customer’s role summarized in Table 3.1.

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Intensity of participation Low

Moderate

High

Providing information Intra roles

Making cognitive efforts Making emotional efforts Making physical efforts Promoting the brand

Extra roles

Cooperating with employees Helping other customers Improving quality Table 3.1. Characteristics of the customer’s role

3.1.2. A role as a producer, a source of value for the company and the customer Since the customer must participate to produce the service and since their activity is at the heart of the customer relationship, it is legitimate to ask whether the company should promote or restrict this participation. Most authors such as Prahalad and Ramaswamy [PRA 00] consider this participation as a source of competitive advantage because it creates benefits for the company as well as for the customer and intensifies the relationship between the actors. The first benefit of participation for a company is the savings it generates. As early as 1979, Lovelock and Young demonstrated [LOV 79] that it is possible to improve the company’s productivity by increasing customer participation. Thus, some of the tasks usually assigned to the contact employee can be transferred to the customer. Some activity sectors, such as mass distribution through self-service, base their business model on this participation. For example, companies like IKEA have focused on this task shifting from the beginning. Thus, the customer must demonstrate a high degree of autonomy during the visit to the store and assume delivery and assembly of the furniture. The savings then benefit the Swedish giant, which pays part of them to the consumer through lower prices. In recent years, there has been an explosion in self-service technologies and consequently in the autonomous choices offered to customers. The second benefit is greater customer satisfaction. When the customer participates and recognizes their role, they have clearer expectations about the service meeting and are able to better coordinate with the contact employees to

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achieve the benefits they are seeking [BIT 97]. As a result, they achieve higher levels of satisfaction. Participation improves customer relations through a higher level of customer engagement with the company. This commitment can be of two types: calculated or affective [GUS 05]. Calculated commitment is a commitment based on economic reasoning related to the benefits of the service or the costs of major changes. When a customer participates, they develop a command of the tasks that are their responsibility. Learning new processes or performing the same actions again among competitors becomes a barrier to leaving the relationship. This phenomenon is wellknown in the banking and insurance sectors. Some companies even propose to carry out the steps of changing service providers on behalf of the customer in order to be able to win them over, like ING Direct’s “Switching Service”. Affective commitment is defined as “a warmer or more emotional engagement, a factor that develops through a degree of reciprocity or personal involvement that the customer has with the company, resulting in a higher level of trust and overall commitment” [GUS 05]. Affective commitment is thus based on sharing values, developing social links and trust. By participating in the service, the customer gradually integrates the role he or she must play, a social network and a set of values specific to the organization [GOU 06]. He or she becomes socialized with the service provider. This organizational socialization increases the trust placed in the company and consequently the emotional engagement [MOR 94, BEN 97]. Although customer participation is a source of productivity, satisfaction and commitment, it also generates uncertainty in the company’s organization [BAT 02]. Indeed, its positive influence is conditioned by two elements developed in the third section of this chapter: the customer must master their role and they must be motivated to accomplish the tasks assigned to them. Otherwise, the workload perceived by employees increases [HSI 05], and participation becomes a source of dissatisfaction, of avoidance to customer competition, even to deviant behavior or behavior contrary to the company’s interests. 3.2. The digitization, development and diversification of the customers’ roles The technological developments of recent years1 and the service provided to the economy have led to an increase in customer power in customer relations. This 1 Servitization is a process that transforms the activities of a company or economy from a product orientation to a service orientation. Companies are offering and promoting more and more services, sometimes substituting them for products, and customers are asking for more

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empowerment is based on two main trends. First, the customer’s existing roles are enriched and intensified. Then, the customer is assigned new roles: by being a source of financing (crowdfunding), by proposing ideas (crowdsourcing) or by being a source of physical capital for the company. 3.2.1. An enrichment of intra-role roles through the development of technologies in the relationship The digitization of the economy has led to an intensification of the customer’s intra-roles. The introduction of technology into customer relations, through selfservice technologies, has increased the consumer’s tasks. Self-service technology (SST) is a process of technology–customer interaction that replaces personal interaction in contact with customers [CUR 05]. The first examples date back to the 1980s when ATMs (or automatic teller machines) were introduced in banks: the employee–customer counter interaction was replaced by a customer-banknote dispenser interaction. In the 2000s, the development of smartphones, the Internet and electronic terminals made these processes widespread. For example, a customer books their plane tickets on the company’s website, makes a bank transfer using a mobile application and uses scanners in stores. SSTs are a source of saving for the company; they thus reduce their payroll and material costs. They are successfully accepted when the customer finds it interesting to use them. It is possible to do your shopping at 2 am (time slot), from your couch (comfort), from pre-established shopping lists (time saving) with products delivered to your home (convenience), etc. Digitization has thus enriched customer relations through a denser content of intra-roles, particularly in hedonic products/services. Many museums, for example, offer customers the opportunity to experience their visit in a different way. In the Historium in Bruges, Belgium, the customers walk through the streets of the city in medieval times using a virtual reality headset. Similarly, in the video game industry, the success of Pokémon Go in the summer of 2016 showed how digitization and augmented reality could superimpose reality and virtual reality. The customer’s role therefore becomes more active. Intra-roles have also been modified by the customer’s increased skills. Until the advent of the Internet, customer relations were marked by an asymmetry of information between the company and the customer. The company had a better understanding of the market and a better knowledge of its products and services than the consumer. The Internet and the immediate access provided by smartphones are services. As a result, customers are buying less and less CDs or music, but are subscribing to streaming platforms.

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reshuffling the cards. Customers are able to become experts more than the contact employees. For example, in stores they sometimes know the products better than the staff. In the field of tourism, they are able to easily combine their experience by themselves by mobilizing different resources (airlines, car rental companies, hotels, etc.) without the need for a travel agency. Finally, at the beginning of the 2000s, with players such as Airbnb and Uber, a new type of exchange began to emerge: the exchange of services between individuals via an Internet platform that acts as a trusted third party in a triangular relationship, a triad that Nguyen and Llosa [NGU 18] propose to call “collaborative services”. Collaborative services are part of a larger (and unclear) phenomenon, called the sharing economy, or sometimes collaborative consumption. Based on a C2B2C model, this new consumption pattern is based in particular on the ability of Internet platforms to connect individual service providers almost instantly with other individual service consumers. Collaborative services thus combine service-specific characteristics (the need for the customer resource to build the service, heterogeneity, uncertainty) with other aspects specific to them, namely the interdependence and interchangeability between two of the triad’s actors: consumers and service providers. 3.2.2. An intensification and diversification of the customer’s extra roles While digitization has revolutionized the customer’s mandatory roles, it has also profoundly changed the extra roles. These roles were previously part of the customer’s customer citizenship behaviors, customers who spontaneously chose to help another customer, collaborate with employees or communicate positively about the brand. As part of a 4.0 relationship, companies have implemented real strategies to intensify and systematize these roles based on the multiplication of interactions with and between customers. Companies develop a communication strategy based on positive word of mouth through social media and Internet communities. Their objectives are quantitative and qualitative. First of all, they are looking for the massification of positive reviews. Thus, in the tourism sector, some assessment sites such as TripAdvisor have become major challenges for the economic profitability of players. Furthermore, they want to bring forth apostles of the brand whose role is to promote and defend it. In this sense, Microsoft grants certain expert customers most valuable professional (MVP) status. The acronym MVP, traditionally used in sports (most valuable player), refers to a technical leader who shares their technical expertise of the brand’s products without being a Microsoft employee. These business strategies are of course risky, as more powerful customers can generate negative word of mouth, castigate the brand and weaken it.

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This communication role then intersects with two other extra roles: helping other customers and cooperating with employees. Relationship 4.0 is marked by new interactions between customers, especially through social networks and online communities. Coupled with the above-mentioned increase in skills, communities have structured themselves around expert customers who advise and help more novice customers. In case of need (difficulties in using a product, failure, search for ideas, etc.), the reflex of customers is now to Google it, and no longer necessarily to come into direct contact with the brand. This behavior also means greater cooperation with employees. Customers collaborate to create resources and ideas. The customer is first and foremost a source of innovative ideas. Crowdsourcing design [ALL 18] aims to integrate the customer into the company’s creative process. While this strategy is not new, it has intensified and is being “refreshed” with digitization. Unilever, for example, provides consumers with a website, Unilever Foundry, to interact with customers. Platforms such as eYeka specialize in connecting large groups (Procter & Gamble, Nestlé or Citröen) with customers. Companies offer new products and consumers react by submitting ideas to improve design. Digitization has also increased their role as a source of product/service improvement. Performance tracking has become systematic. Henceforth, when software unexpectedly closes, the customer is offered to upload the information log that will be analyzed by the publisher in order to make it more stable. In stores, rapid satisfaction assessments at the checkout or on terminals with three or four smileys are generalized. The omnipresence of information systems, therefore, increases the possibilities for customer feedback. This feedback now extends to competitive intelligence: the consumer collects information about competing products and services through applications. Some passionate customers even spend their free time improving and developing Wase’s courses. The following box shows how Blizzard, with its game Hearthstone, has developed a strategy to use digitization to intensify the customer’s extra roles. The customer becomes a demiurge thanks to experience Hearthstone is an online card game developed by Blizzard2 since 2012 that generates several hundred million euros per year. It allows players to create their own deck (pack of

2 https://www.lesechos.fr/tech-medias/hightech/030967067472-blizzard-rejoue-son-atouthearthstone-sur-mobile-2135200.php.

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30 cards) from a set of more than 1,000 different3 ones to compete against other players online. These cards are inspired by the World of Warcraft universe and represent characters, weapons and spells. The company offers players the opportunity to combine them in order to create synergies between them. If Blizzard was responsible for creating the cards, it is up to the players to imagine the effective combinations. The company therefore provides gambling potential and customers must take advantage of it. This trend is a major one in the video game industry: the biggest successes of recent years are based either on open worlds like GTA (a world in which the player has great freedom) or sandboxes like Minecraft in which the player creates their own world. Publishers, therefore, position the customer as the demiurge of the experience they live and no longer as a simple user who used to play a series of levels of games as in the first games of the 1980s or 1990s. This strategy leads to developing a greater attachment to the game and to bringing users together as a community. The customer as a source of reference for other customers As players model the experience as they see fit, they are deemed more as experts than the game designers themselves. They then take on a dual role: they train other customers and contribute to improving Hearthstone’s quality. Indeed, the community has created several reference sites whose activity involves explaining to players how to create their deck of cards4 and optimize their chances of winning. Similarly, the community is a source of information for balancing card effects and detecting game dysfunctions (glitches). The company therefore partially delegates these tasks to the customer and adjusts certain community sites or players by giving them specific prerogatives. Using these expert customers and the community as a vehicle for communication These prerogatives are essentially related to communication. It is the customers recognized as experts or the community’s reference sites that are in charge of relaying the information to the rest of the players. Each year, Blizzard launches three extensions to the game and develops a teasing strategy for each of them. This strategy consists of revealing each card one by one according to a specific schedule. Each of these revelations is made via an expert player or a community reference site. This technique allows them to give a special status to a certain player or site and to maintain community dynamics. Box 3.1. Hearthstone or the example of a strategy based on the customer’s role

These collaborative processes have also led to the emergence of a new extra role in the 4.0 relationship. The customer has also become a source of capital for the company: this capital can be financial or physical. Financially, consumers are

3 http://www.lemonde.fr/pixels/article/2017/12/08/jeu-video-plus-de-1-000-cartes-plus-tardhearthstone-poursuit-son-chemin_5226538_4408996.html. 4 http://www.hearthstone-decks.com/.

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involved upstream of the production of the product or service. Companies traditionally used business angels or banks to finance innovative projects. Digitization now offers new opportunities for fundraising: platforms like Kickstarter bring together creators and customers who are willing to invest. Each project is proposed for financing by Internet users for a given duration and a financial amount to be reached. When the sum is reached, the production of the product or service can begin. This financing system follows a different logic than that of banks and business angels. Unlike these financing organizations, whose motivation is based on short- or medium-term profitability, customers choose to provide capital if the project corresponds to their tastes, expectations or values. Thus, Amanda Palmer managed to raise more than a million dollars to finance her musical project solely on the willingness of fans to see her album produced. Concerning physical capital, the customer is at the heart of new business models. Whether it is Uber, Airbnb or BlaBlaCar, these companies base their activity on connecting a customer with a need with a customer with physical capital to be developed. 3.3. The consequences for the company For the customer’s increase in power to be a source of benefit for the various actors, it presupposes that the customer is motivated and trained to assume their different roles [MIL 83, MIL 86]. Similarly, the customer journey must be reconsidered by incorporating these changes. 3.3.1. Motivating customers to play a greater role Customer motivation is first and foremost a matter of a rational assessment of the roles offered to customers. It is the result of a comparison between the benefits and costs generated by the task performed. The customer therefore simultaneously answers the double question: what does this role that I take on provide me with? What resources should I deploy? From this comparison comes a motivation, or not, to perform a task in the context of customer relations. The company can offer many benefits to motivate the customer to perform their tasks. These benefits have always existed for the most part in traditional services and have been amplified by digitization. The first of these is time saving and most SST research highlights time saving as an essential motivating factor [DAB 96, MEU 00, DAB 03, CUR 07]. The growth of websites selling and booking services on the Internet such as MyRenault.fr is partly based on this benefit. The second benefit is based on a sense of control and independence. Eiglier and Langeard

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[EIG 87, pp. 42–43] state that “the customer wants to feel that they have control over the situation”. For example, the use of scanners in stores is partly motivated by the possibility of controlling the amount of purchase at any time. When the customer performs a number of tasks, he or she can also save money. The development of online banking is based on this benefit: as the customer carries out a large number of autonomous operations over the Internet, operational costs are reduced and reflected in prices for consumers. As part of the 4.0 relationship, the customer may seek greater availability of the service or product. By performing their tasks independently, they can order products outside store opening hours, for example. Finally, the search for fun can motivate the customer to perform the tasks for which he or she is responsible [DAB 96]. The use of tablets to enrich content in museums is an example of this type of benefit. The fulfillment of roles also represents a cost for the customer. To accomplish these roles, the customer can make a variety of efforts: physical, cognitive and emotional. Relationship 4.0 is marked by a development of cognitive and emotional efforts. Cognitive efforts are based on an understanding of the customer’s role. The augmentation of SSTs and the remodeling of customer paths by incorporating digital channels (application, website) make processes very complex for customers [LAR 17]. Similarly, emotional efforts, linked to the risks generated by digitization, have increased. These perceived risks are of three kinds: financial, psychological and performance. The financial risk arises when the customer is worried about ordering over the Internet for fear that their order will not reach them or that their credit card will be hacked. Psychological risk is the fear of not knowing how to use the technology or of making the wrong choices. Performance risk is based on the fear that the process will not achieve the expected result. These three risks require the customer to mobilize psychological resources to overcome anxiety. They are all the more present as digitization has led to a decrease in interactions with contact employees. The customer then compares the perceived benefits and costs of performing these roles. This comparison then depends on the customer’s profile and the characteristics of the service. Depending on his or her skills, personality and past experiences, the gains and losses associated with participation will be perceived differently. A customer skilled with technology, being proactive and having a positive history with the brand, will more easily perceive time saving in the use of an interactive kiosk than someone else. Similarly, product/service characteristics such as reliability and clarity of role can change the perception of benefits and costs. To want to play an increased role, the customer must perceive that their actions will lead to the expected benefits and understand the role they must play.

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Figure 3.1. Managerial drivers to motivate the customer to play a greater role

In addition to this method of rational motivation, there is a more emotional process, especially with regard to extra roles. Extra roles can be the result of a rational approach as previously described but also of a feeling of reciprocity. If the company creates a strong relationship with the customer and makes him/her adhere to its values, he/she will tend to develop a willingness to reciprocate, manifested by positive word of mouth or stronger participation in innovation processes, for example. Crowdfunding, an example previously mentioned, also works according to this method. 3.3.2. Managing customer expertise The strategy of companies to make the customer more active in customer relations is not limited to the presence of a visible benefit. The tasks required of the customer are increasingly complex [LAR 17]. Firms must, therefore, deploy strategies to manage customer expertise. These are based on two axes: the development of customer skills and the management of expert customers.

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Companies must train the customer in his or her role in the 4.0 relationship. Of course, it is necessary to take into account the capacities, what the customer can do. Whether physically disabled or with mental health issues, illiterate or not, fluent in the local language, there are many difficulties for the customer to participate effectively. For example, the United Nations predicts that by 2075 the world population will have more seniors (+65 years old) than young people (less than 15 years old). The aging of the population requires that customer participation be reviewed to make it simpler, more user-friendly and adapted to the abilities of this growing population (sight, hearing, slower physical and cognitive activity, increased emotionality), regardless of familiarity with the technology. Customer paths, interfaces and physical support in general must be reinvented and adapted. The consumer must, therefore, understand and learn the tasks he or she must or can perform in the customer journey. These training actions can be described by their content, means and timing. The content can be cognitive (simply explaining their role to the customer) and/or emotional (reassuring, valuing and encouraging the customer). Companies tend to limit training to a simple explanation of tasks. However, the customer needs to be reassured and must anticipate a positive experience. The addition of a few words of encouragement and valuation significantly improves customer participation [NIC 18]. The means used to train the customer can be diverse: material (guide, application, film, etc.) or human as well as contact employees. Companies like Leroy Merlin, who use “Welcomers” at the store entrance to explain their role to customers, achieve higher levels of satisfaction [NIC 18]. The timing of the customer’s training is also an important feature to analyze. Until now, in the absence of a clear strategy or legal obligation, companies have generally focused on reactive training, i.e. when the customer is lost on the tasks they have to perform in the context of customer relations [NIC 17]. The latter then approached the employees (counter, call center, chatbox, etc.) to understand their given role. This vision is evolving and companies are developing more proactive strategies. For example, companies provide tools on their websites or applications so that customers can understand their role upstream, like in IKEA which offers the customer a “how to shop” guide. This web page explains to the customer the different stages of their visit and some points of the process (the color of labels, sales aids, etc.). This allows the customer to understand, even before encountering any difficulties, the tasks he or she must perform. This increase in skills is also reflected in the emergence of experts that the company must manage and these experts must be both valued and monitored. Valuation is based on a special status and various relational benefits. For example, on forums, they are identifiable by a specific name and are invited by the brand to special events. Their contributions are valued and highlighted and they benefit from

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preview information. However, these expert consumers are also problematic for companies. Some versions of video games have been failures because they were developed for the community of experts whose expectations were no longer in line with those of the mass of players. There are also false experts, giving bad advice. Similarly, interactions between customers can sometimes be problematic. Other networked video games see some customers verbally assault others. Some games fall under the power (the lead) of radical machos who insult any woman who wants to play, to the great despair of the gambling company that sees its volume of female players (half of humanity) decimated. 3.3.3. Rethinking the role of staff in the customer journey to create greater value The increasing importance of the customer in customer relations leads to a rethinking of their journey and in particular the role of contact employees. Indeed, the generalization of SST processes and the rise in customer skills raise the question of the role of contact employees in the process. Some professions feel threatened as a result: in supermarkets, cashiers fear the development of automatic cash registers. For example, at Auchan, a French supermarket, nearly 2,000 jobs would be in jeopardy5. The success of the experiments at Amazon Go6 with the installation of “just walk out” portals could lead to the total disappearance of this profession in the long term. While the presence of staff is reduced, the importance of human interaction remains paramount to creating a sustainable customer relationship. The question then arises as to when in the service process tasks should be delegated to the customer and when employees should be present. To do this, companies must analyze the customer journey and the different steps in terms of value. When does the presence of an employee bring real added value? Two proposals are made here: human presence remains desirable when the task is complex and stressful for the customer, because they have the perception that the solicitation to participate is higher than their current abilities. It is also complex when it involves tasks that are perceived as risky that should be supported by staff. This can of course be supported by technology but not completely replaced. Therefore, the customer’s great moments of distress regarding an interaction with a robot, a defective technology or a technology unable to respond to a particular problem, also require the use of staff. The contact employees then find it 5 https://www.francetvinfo.fr/economie/emploi/chomage/developpement-des-caisses-automatiquesa-auchan-2000-postes-de-caissieres-menaces-selon-la-cfdt_2015002.html. 6 https://www.lsa-conso.fr/le-magasin-sans-caisse-amazon-go-s-ouvre-au-public,278202.

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best to troubleshoot and find a solution. There are, therefore, key moments to be detected in the customer journey where the human being takes on its full meaning. For example, when everything is going well, nothing looks more like a mobile phone operator than another operator. On the other hand, when there is a problem (theft, error, malfunction, etc.), it is a unique opportunity for an operator to show their superiority over competitors, and this often requires competent human contact. In other words, consumer 4.0 is changing the role of contact employees: from that of a service provider to all, they become an expert in complex situation management, a savior/handyman, a “MacGyver” of the service. The way in which the service is delivered and therefore the role of the customer is nowadays strongly impacted by new technologies. However, we are only at the beginning. Managing your environment by talking or looking and by interacting with robots, means that service interactions will be profoundly renewed, transformed for the better (and sometimes for the worse) etc. Let us be clear-headed but positive. This future can be a source of great customer experiences, as long as some fundamentals remain present. The new participations proposed to the customer must be imagined with a permanent question in mind: what is the interest for the customer? What is the benefit of adopting this new process? Then, it is necessary to train the customer in these new roles and to take into account their capacity. Finally, everyone in our opinion must remain in their place. For example, a robot, even if it delivers messages of encouragement, even if it has humorous comebacks, must physically look like a robot and not like a human, thus limiting ambiguity and mistrust. Situations where interactions are embarrassing for the customer with regard to a human (not finding a department in the store, certain hygiene care in the hospital, etc.) may benefit from being carried out by robots without judgment, while in situations requiring real sharing or personalized moral support, the human seems to us much superior when he or she wishes. The magic moments or critical moments of an experience are to be identified and it is here that competent staff can make the real difference. 3.4. References [ALL 18] ALLEN B.J., CHANDRASEKARAN D., BASUROY S., “Design crowdsourcing: the impact on new product performance of sourcing design solutions from the ‘crowd’”, Journal of Marketing, vol. 82, no. 2, pp. 106–123, 2018. [BAT 02] BATESON J.E.G., “Are your customers good enough for your service business?”, Academy of Management Executive, vol. 16, no. 4, pp. 110–120, 2002. [BET 97] BETTENCOURT L., “Customer voluntary performance: customers as partners in service delivery”, Journal of Retailing, no. 73, no. 3, pp. 383–406, 1997.

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[BIT 97] BITNER M.J., FARANDA W.T., HUBBERT A.R. et al., “Customer contributions and roles in service delivery”, International Journal of Service Industry Management, vol. 8, no. 3, pp. 193–205, 1997. [BIT 02] BITNER M.J., BROWN S.W., MEUTER M.L., “Technology infusion in service encounters”, Journal of the Academy of Marketing Science, vol. 28, no. 1, pp. 138–149, 2002. [CAM 13] CAMELIS C., DANO F., GOUDARZI K. et al., “Les rôles des ‘co-clients’ et leurs mécanismes d’influence sur la satisfaction globale durant une expérience de service”, Recherche et Applications en Marketing, vol. 28, no. 1, pp. 46–69, 2013. [CUR 05] CURRAN J.M., MEUTER M.L., “Self-service technology adoption: comparing three technologies”, Journal of Services Marketing, vol. 19, no. 2, pp. 103–113, 2005. [CUR 07] CURRAN J.M., MEUTER M.L., “Encouraging existing customers to switch to selfservice technologies: put a little fun in their lives”, The Journal of Marketing Theory and Practice, vol. 15, no. 4, pp. 283–298, 2007. [DAB 96] DABHOLKAR P.A., “Consumer evaluations of new technology-based self-service options: an investigation of alternative models of service quality”, International Journal of Research in Marketing, vol. 13, no. 1, pp. 29–56, 1996. [DAB 03] DABHOLKAR P.A., BOBBITT L.M., LEE E.-J., “Understanding consumer motivation and behavior related to self-scanning in retailing: implications for strategy and research on technology-based self-service”, International Journal of Service Industry Management, vol. 14, no. 1, pp. 59–95, 2003. [EIG 87] EIGLIER P., LANGEARD E., Servuction, le marketing des services, McGraw Hill, Paris, 1987. [GOU 06] GOUDARZI K., EIGLIER P., “La socialisation organisationnelle du client dans les entreprises de service: concept et dimensions”, Recherche et Applications en Marketing, vol. 21, no. 3, pp. 65–90, 2006. [GUS 05] GUSTAFSSON A., JOHNSON M.D., ROOS I., “The effects of customer satisfaction, relationship commitment, dimensions, and triggers on customer retention”, Journal of Marketing, vol. 69, pp. 210–218, 2005. [HSI 05] HSIEH A.-T., YEN C.-H., “The effect of customer participation on service providers’ job stress”, The Service Industries Journal, vol. 25, no. 7, pp. 891–905, 2005. [LAR 17] LARIVIÈRE B., BOWEN D., ANDREASSEN T.W. et al., “‘Service Encounter 2.0’: an investigation into the roles of technology, employees and customers”, Journal of Business Research, vol. 79, pp. 238–246, 2017. [LOV 79] LOVELOCK C.H., YOUNG R.F., “Look to consumers to increase productivity”, Harvard Business Review, vol. 57, pp. 168–179, 1979. [MIL 83] MILLS P.K., CHASE R.B., MARGULIES N., “Motivating the client/employee system as a service production strategy”, Academy of Management Review, vol. 8, no. 2, pp. 301–310, 1983.

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[MIL 86] MILLS P.K., MORRIS J.H., “Clients as ‘partial’ employees of service organizations: role development in client participation”, The Academy of Management Review, vol. 11, no. 4, pp. 726–735, 1986. [MOR 94] MORGAN R.M., HUNT S.D., “The commitment-trust theory of relationship marketing”, Journal of Marketing, vol. 58, no. 3, pp. 20–38, 1994. [NIC 17] NICOD L., LLOSA S., “Before or during visit, what is the best moment to train customers to their roles? A study of the influence of customer training on purchase amount and trust”, Frontiers conference, New York, 2017. [NIC 18] NICOD L., LLOSA S., “How should customers be trained in their role as coproducers? The influence of training and its characteristics on the benefits of coproduction”, Recherche et Applications en Marketing, English Edition, vol. 33, no. 4, pp. 50–77, 2018. [NGU 18] NGUYEN S., LLOSA S., “On the difficulty to define the sharing economy and collaborative consumption – literature review and proposing a different approach with the introduction of ‘collaborative services’” Working Paper Aix Marseille University, University of Toulon, CERGAM, IAE Aix, 2018. [PRA 00] PRAHALAD C.K., RAMASWAMY V., “Co-opting customer competence”, Harvard Business Review, vol. 78, no. 1, pp. 79–90, 2000. [SOL 85] SOLOMON M.R.M., SURPRENANT C., CZEPIEL J.A. et al., “A role theory perspective on dyadic interactions: the service encounter”, Journal of Marketing, vol. 49, no. 1, pp. 99–111, 1985. [ZEI 85] ZEITHAML V.A., PARASURAMAN A., BERRY L.L., “Problems and strategies in services marketing”, Journal of Marketing, vol. 49, no. 2, pp. 33–46, 1985.

4 Innovation Augmented by the Customer: From Ideation to Diffusion

4.1. Introduction: the new roles and contributions of the customer “When Thumbelina uses a computer or a laptop, they both require the body of a driver in activity voltage, not that of a passive and relaxing passenger: demand and not supply”. Michel Serres [SER 12, pp. 40–41], our translation. Today, companies are beginning to assign a more active role to customers throughout the value creation process – a trend that is currently amplified by the possibilities of new information and communication technologies. In his book Thumbelina, Serres [SER 12] proposes the emergence of a new human being, who now requires playing the role of the driver and not the passenger. This image, between driver and passenger, seems relevant in a world in which customers participate in all stages and sequences of a firm’s value creation processes. Beyond their simple role as a buyer or a repetitive buyer – so much hoped for in the mantras of behavioral loyalty of the 1990s [REI 96] – customers’ potential contributions are much broader than their monetary and financial contributions [KUM 10a]. Customer relationships affect all stages of the value creation process. In this chapter, we propose a perspective on two new roles for customers upstream and downstream of the launch and the marketing of a new product or service [VER 13]: the customer becomes a co-innovator when they participate in the processes of emerging ideas and designing new products or services (section 4.2) and can then facilitate the Chapter written by Thomas RUSPIL, Cyrielle VELLERA and Andreas MUNZEL.

Augmented Customer Strategy: CRM in the Digital Age, First Edition. Edited by Gilles N’Goala, Virginie Pez-Pérard and Isabelle Prim-Allaz. © ISTE Ltd 2019. Published by ISTE Ltd and John Wiley & Sons, Inc.

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dissemination of this product or service by becoming a co-marketer who – through communication to peers – promotes the offer (section 4.3) [MEY 10]. Figure 4.1 shows the customer’s upstream and downstream co-creation efforts. Launch / commercialization of innovation Upstream Co-creation

Downstream Co-creation

SECTION 4.2

SECTION 4.3

The consumer/user’s contributions to the firm (creation)

The consumer/user’s contributions to the market (influence)

Concerns and challenges 1. Understanding consumers’ new roles and behaviors in upstream co-creation. 2. Managerial implications for upstream co-creation.

1. Understanding consumers’ new roles and behaviors in downstream co-creation. 2. Managerial implications for downstream co-creation.

Figure 4.1. Upstream and downstream co-creation in a context of commercialization of an innovation (own illustration according to the explanations of Vernette and Hamdi-Kidar [VER 13])

The customer’s contributions – beyond the financial aspect as a buyer – thus include informational aspects, in the form of ideas for innovative solutions, suggestions in the development and design of new products and proposals for improvements to existing solutions, and communication and thus the acquisition of new customers through word of mouth in particular (see Chapter 5). 4.2. 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 companies’ innovation processes 4.2.1. Toward customer participation in innovation In order to insatiably maximize their innovation potential, more and more companies are seeking and producing ideas outside their own borders (open innovation paradigm in the Chesbrough sense [CHE 03]). Innovation is taking shape and is now part of a collaborative, participatory and bottom-up approach. In this

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respect and beyond the singular service-oriented approach, companies strongly support customers and users in their innovation efforts. Indeed, the contemporary customer or user has left their traditional postures of a simple passive recipient to become an active and collaborative protagonist of their own consumer experiences as well as a productive source of actions that create value and meaning [VOC 08]. Co-creation refers to considering customers as active participants in the organization’s work or treating customers as “partial employees” [LEN 00]. Through the academic literature and concrete experiences, mainly virtual and digitized, it appears that it is more customers and users, rather than firms, who are at the origin of the authorship of new products and offers in various fields [BAL 06, LIL 02, RAM 10, SHA 00, VON 86]. This perspective of co-innovation, which drives business transformation, underlines the desire and cooperative and productive role of customers and users in the service of innovation and the processes of defining new offers. Having become more active, more participatory, more resistant, more activist, more fun, more social and more community oriented [VOC 02], “post-modern” customers/users have transformed themselves, gained power (consumer empowerment trend) and become more entrepreneurial in terms of their relations with companies [VOC 08]. We are thus witnessing a deliberate and conscious convergence of roles upstream of innovation processes (phases of development of new products before their market launch), thus changing the relationship between the two players. For a long time, the industrial sector and a few customers and users with widely demonstrated creative skills remained the focus, such as lead users1 [LIL 02, VON 86], creative consumers2 [BER 07] and emerging nature consumers3 [HOF 10]; the co-innovation phenomenon tends to spread to the context of consumer products and to all customers/users (the crowd). This cross-pollination is manifested, in particular, by the creation of online brand communities and the emergence of intermediation and crowdsourcing platforms involving a large pool of individuals.

1 Lead users “face needs that will be general in a marketplace – but face them months or years before the bulk of that marketplace encounters them, and lead users are positioned to benefit significantly by obtaining a solution to those needs” [VON 86]. Lead users have two main characteristics [LIL 02]: (1) they express precursor needs not yet satisfied by the current offer; (2) to meet such unmet needs and for which no satisfactory solution yet exists on the market, they take the initiative to find and develop a solution for themselves through an invention, a solution emblematic of the market’s future needs. 2 Creative consumers are defined as “customers who adapt, modify, or transform a proprietary offering” [BER 07]. 3 Emerging nature consumers are creative individuals with a “unique capability to imagine or envision how concepts might be developed so that they will be successful in the mainstream marketplace” [HOF 10].

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4.2.2. Innovation by customers and users (user innovation): a major phenomenon? The phenomenon of user innovation refers to innovations developed by end users rather than manufacturers [DE 16]. The motorized suitcase that carries passengers, the mountain bike or the very first dishwasher are just a few examples. Through an in-depth review of the literature and real managerial practices, Shah and Tripsas [SHA 16] report several main findings: (1) many significant and commercially attractive innovations come from users; (2) a significant proportion of users innovate; (3) users innovate in a wide variety of markets and in many industries and disciplines; and (4) the content of innovations by users differs from that of internal manufacturers and designers in terms of originality and adaptability to market needs. For example, 60% of innovations in the field of sports equipment [SHA 00] come from the market and more precisely from users. In a similar vein, Hienerth et al. [HIE 14] have shown that kayak users develop innovations at a cost three times lower than those from manufacturers. Several national empirical studies highlight the importance of this phenomenon in the current economic landscape. For example, 4.6% of respondents in France (representative sample of the French population) say they have already created a new product [VER 13]. A similar magnitude is observed in other Western countries, highlighting the extent of the phenomenon: 5.2% in the United States, 3.7% in Japan, 5.4% in Finland [DE 15, VON 11], 6.1% in the United Kingdom [VON 12], 5.6% in Canada [DE 13], 6.2% in the Netherlands [DE 11] and even 7.3% in Sweden [BEN 15]. It thus appears that users play an active and profitable role in the creation of innovations. Section 4.2.3 presents the forms of co-innovation and strategies available to companies to involve customers and users in their innovation processes. 4.2.3. Co-innovating with customers and users: three possible strategies Co-innovation strategies with customers and users, mainly digitized and virtual, can take three dominant forms: – Co-innovation may be a partial strategy of the company and therefore only a subactivity of its overall activity. For example, to address the erosion of its customer base due to increased competition and to resurrect the customer experience, Starbucks launched the digital platform mystarbucksidea.com in 2008 to encourage its customers’ participation in the brand’s remodeling, by proposing ideas and voting for those of the community [RAM 10]. In 1 year, the platform registered 65,000

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ideas and 658,000 votes. The brand has adopted an average of more than 25 ideas per year since the creation of this space, similar to the popular “splash stick”4, a proposal from a Japanese customer... In a similar vein, in France, Crédit Agricole has set up a virtual suggestion box to encourage its customers to participate in imagining the banking relationship of tomorrow. The initiative is detailed in Box 4.1: In May 2017, Crédit Agricole Centre-Est, a regional cooperative bank, launched, in partnership with the Research Chair on Mutualism and Cooperation at the University of Lyon 3, an Idea Box co-innovation competition with all its members and customers to give free rein to everyone’s ideas in order to imagine the banking relationship of tomorrow via a virtual platform developed specifically for this purpose, allowing participants to post their ideas and then to vote for the preselected ideas. This theme aroused a lot of interest since 570 ideas were submitted in 3 weeks (following the sending of 274,000 e-mails to customers, including 122,000 to members). Fifteen ideas were selected by a panel of 10 people, managers of the company and those with jobs related to customer relations (marketing, customer quality, sales, etc.). A score from 1 to 10 was assigned based on personal preferences. Then these fifteen ideas were submitted for voting by customers and managers of Crédit Agricole Centre-Est over a two-week period. Nearly 1,300 votes were counted on the platform and the idea that received the most votes from customers in July was that of Mr. Frantz Colson, a customer of the Lyon Ainay branch. But what is it that this idea alone received nearly 250 votes? Currently, for a number of operations, you have to go to THEIR agency. It would be more practical if the majority of operations and customer needs could be carried out in all Crédit Agricole Centre-Est branches! In view of the enthusiasm expressed by customers and employees for this idea, Crédit Agricole Centre-Est’s teams were mobilized from the start of the academic year to implement this improvement. In March 2018, after having raised all technical and administrative issues (the subject of compliance and traceability of operations is a major one in our business as trusted third parties), customers are now served everywhere, by everyone and for everything: this has become a reality throughout the Crédit Agricole Centre-Est territory. In concrete terms, each branch in the network becomes the branch for all the Regional Bank’s customers. There is now no need to go to THEIR specific branch to get a cashier’s check drawn up, make a currency order, to meet an advisor to discuss a project, to process a complaint... A simplification also for the work of employees who often expressed concerns about what was possible or not when a customer from another branch came to the reception desk. This new approach also allows customers to be guided through the bank’s digital spaces, which can allow them to gain even more autonomy for simple operations. And by exception, when an operation cannot be carried out in another branch for physical reasons (funds or currencies are withdrawn only where they are ordered) or for security reasons (setting up a permanent external transfer of a large amount), a tutorial automatically appears to guide the advisor. 4 A stem allowing customers to both stir coffee and plug the lid to avoid coffee splashes when on the move.

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Co-constructing solutions with our customers and employees allows us to be even more in a position of continuous improvement. And this must lead to concrete and rapid implementation. Mr. Colson received the sum of 1,200 euros as compensation and his idea is currently being implemented. Box 4.1. “Imagining the banking relationship of tomorrow”: The idea box, Crédit Agricole Centre-Est’s co-creation approach, by Patrick KLEER, CEO Crédit Agricole Centre-Est

– The company’s global strategy can be based entirely on co-innovation with customers and users, as is the case with Threadless, a T-shirt creation platform where anyone can propose design and visual ideas of any kind, thus multiplying graphic works and styles and renewing its collections continuously. After submission to community votes for a fixed period of time, the most popular designs (four to six T-shirts per week) are sent into production, put up for sale and financially rewarded [OGA 06]. – Co-innovation with customers can be subcontracted through the emergence of intermediation providers and crowdsourcing and open innovation platforms specialized in co-innovation call management, serving as a link between a sponsoring company wishing to solve a given problem (brand) and a community of individuals with potential solutions. The Agorize platform is an example (see Box 4.2). Founded in 2011, Agorize is a French startup specializing in organizing open innovation challenges and online hackathons. Its core business is to connect companies with the right communities of innovators through an online platform. These challenges can be addressed internally to all the company’s employees or externally to Agorize’s communities of innovators, mainly students, startups and developers. In 2018, the Agorize community represented 5 million innovators in 185 countries: 3 million students, 1 million developers, 300,000 startups and 800,000 employees. This plurality of profiles allows companies to ensure added value according to their objectives and the degree of achievement of the desired deliverables (creativity, technicality, project feasibility, digital transformation, etc.). Agorize is thus positioning itself as the missing link between innovators who want to be noticed by bringing value to companies and organizations looking for talent to support their digital transformation and innovative ideas. The organization of an innovation competition for companies is becoming a strategic tool. It makes it possible to respond to various challenges, particularly in terms of participatory innovation, by identifying tomorrow’s technologies, as well as new products and uses, and collaborative marketing, by co-creating marketing campaigns with consumers in order to gather ingenious ideas and insights directly from the target audience. There are more than 200 themes: from industry to banks, the media and the retail sector. In 2017, Agorize organized 118 transactions with customers such as Accor, BNP

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Paribas, Décathlon, Deutsche Telekom, Total, Valéo and Vinci. For example, the ADP Group has launched its Play Your Airport challenge with 2,000 students, startups, employees and travellers to reflect on the airport of the future. The process of a call for projects challenge generally takes place in three stages: (1) an ideation stage where participants form multidisciplinary teams propose a concept in response to the theme. This phase is followed by a selection stage by a committee; (2) an expansion stage where the selected participants are mentored by experts from the company sponsoring the challenge. We move from the concept to the preliminary project; (3) a final phase where projects are presented to a decision-making committee or jury. Registration to the challenges is free for participants and is rewarded (in case the proposals are selected) by several types of prizes: incubation, recruitment, financial or high-tech gadget bonuses or trips depending on the challenge and the advertiser. In conclusion, for a brand or organization, Agorize brings “committed innovation”: innovation because projects resulting from co-creation bring operational value; committed in terms of the personal involvement of participants around a “learning by doing” methodology. Box 4.2. Agorize by Yohann Melamed (Co-founder & Head of Operations)

But what do customers and users think of these practices? This is the purpose of section 4.2.4. 4.2.4. Co-innovating with companies: what do the main stakeholders think? According to a survey conducted by Vellera and Hamdi-Kidar in 20175 among a sample of 500 people representative of the French population, 31% of subjects were familiar with the principles of co-creation/co-innovation and 10% said they had already participated in such practices jointly with a company. According to the same survey, 40% of subjects reported that they had already adapted or modified an existing product for personal use (or that of a relative) and 19.8% had created a product from scratch outside any main professional activity. Moreover, according to the same survey, companies that develop new products are perceived as more innovative (88%), more credible (69%) and closer to their customers (92%). Respondents consider that they (as customers) are legitimate to co-create with companies (89%) and that they are as competent as company employees to innovate (69.8%). In addition, the products resulting from this collaboration are considered to be more in line with their needs (92%), more 5 https://www.lsa-conso.fr/co-creation-le-oui-mais-des-consommateurs-etude,262867.

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practical (78%) and more attractive (86%). In addition, French consumers have a generally favorable attitude toward co-creation approaches (more than 85%), which they consider to be a real innovation approach (90%), legitimate for small companies or startups (around 90%). According to the same survey, 91% of subjects perceive co-innovation as a means of expressing customers’ creativity (91%) and not as a means of exploiting the customer and the user, by theft or scam. Indeed, only a quarter of respondents express reluctance to this approach and only 10% consider co-innovation to be scam. More than three-quarters of the surveyed customers considered that the co-created idea, from an intellectual property perspective, should belong to both parties (companies and customers), half opting for royalty-based remuneration (46%) (like Lego via its Lego Ideas co-creation platform, which paid up to 1% of the profits generated), one-third for a fixed monetary consideration (33%) and one-tenth for consideration in the form of gifts or prizes. Only 2% of the surveyed subjects consider it unnecessary to reward customers involved in such actions. Ultimately, customers and users are an interesting source of new ideas for companies. Many of them co-innovate with their current or potential customers and users by involving them in idea generation sequences, creativity sessions, concept tests, etc., via collaborative platforms, forums for proposing new ideas or improving existing products, inventive activity crowdsourcing practices, etc. The positions of customers and users are constantly changing and transforming. Henceforth, their roles multiply and diversify and sometimes go beyond the ideation and creation of new products. Indeed, customers and users can, in some cases, move from playing a role as innovators to a role as entrepreneurs and business creators (user entrepreneurship phenomenon) [SHA 16] or take on the role of community brands developers [FÜL 16]. In addition, innovation by customers/users does not only concern new products but can also extend to the creation and development of new services [OLI 16], new techniques and innovative practices [HIE 16]. Finally, customers/users play an important role in the diffusion of innovations. This is the subject of section 4.3. 4.3. The role of the customer downstream of an innovation launch: the customer influences to facilitate the adoption of the innovation on the market 4.3.1. From the innovative customer to the influential customer Social media represents both environments for expressing opinion and for seeking information and advice for customers. Aware of this, brands develop what is often labeled as viral marketing strategies.

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Viral marketing is based on mechanisms related to word of mouth by customers who take over and share messages that are favorable to the company and that are initially and deliberately sent by the company [VAN 10a]. Among existing viral marketing strategies, the use of influential customers, regularly referred to as “influencers” or “opinion leaders” (OLs), is a particularly widespread practice. Like press relations with journalists, we then speak of “influencer relations”. The launch in May 2018 of InsidEars, Disneyland Paris’ European digital ambassador program, is an interesting illustration of this: “Your enthusiasm and your content have a huge influence on our guests’ decision to come and visit us”6. That is how Catherine Powell, CEO of the Euro Disney Group, addressed the participants directly at a ceremony that brought together influencers to launch the program. The latter is part of a clear strategy: to develop and maintain privileged relationships with individuals active in social media, specialized in information on amusement parks (or even exclusively on Disneyland Paris) and identified as important relays of opinion on this theme. This type of viral marketing strategy, coupled with the use of influencers, is encouraged by the development of social media: is influence marketing a new role for the customer? 4.3.2. Influence marketing: a new role for the customer? Influence marketing is not in itself a new role for the customer. Indeed, the existence of individuals with a greater influence than others was mentioned as early as the middle of the 20th Century through the concept of an OL (opinion leader). In particular, these OLs are designated as playing an influential role in the dissemination of innovations [IYE 11, ROG 03, VAN 11]. OLs exert their influence in their close circle of friends, “at the level of ordinary relationships” [KAT 55], that is, within their social networks (offline), whether they are friendly, family, neighborhood or professionally oriented. This influence is exerted in particular through word of mouth [RIC 88]. With the development of social media, researchers and marketing practitioners have directly transposed the concept of traditional (offline) OL into the online context (e-opinion leaders [e-OLs]). However, the roles of e-OL and OL are not completely identical. Indeed, e-OLs not only influence their close entourage, but a 6 https://www.youtube.com/watch?v=9siookL3lP0.

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potentially much larger audience, particularly on so-called interest media and social networks (e.g. Twitter), in contrast with so-called friendship social media such as Facebook [COU 13]. This wide reach of e-OL messages is also due to the structure of Internet social networks and due to certain properties of word of mouth in terms of speed, scale and scope of dissemination (see Chapter 5). In both contexts (offline and online), some authors simply present and define OLs through their influential roles. However, marketing influence is not limited to OLs: experts, prescribers or celebrities can be marketing influencers. This approach to defining OLs is, therefore, not sufficient to describe and identify OLs [VER 09]. 4.3.3. From OLs to e-OLs – who are they? The literature proposes several approaches to defining OLs by highlighting some of their characteristics. Among the latter, monomorphism is a particularly important feature because it delimits the role of influence of OLs to a product category (or several categories of related products) or field of interest [GOL 03, ROG 83] for which they have expertise [GRE 00, JAC 81, VER 04a] or for which their surroundings grant them this expertise [BER 12, ELI 97]. This expertise is explained by a sustained interest and involvement in the product category [RIC, 88] as well as a higher appetite for media-provided specialized information [VER 14]. OLs not only possess this expertise in a specialized field (for which they are OLs), they also promote it by communicating. The way they communicate makes it possible to characterize these OLs, since they influence their contacts through frequent exchanges, marked by the transmission of a large amount of information [BEN 94] about this field of specialization. Second, OLs have social characteristics. They have a strong propensity to participate in social activities [ROG 03, WEI 94] and occupy privileged positions within their networks. In a sociometric vision, a network analysis approach that focuses on the connectivity of individuals and how they are interconnected, three main categories of individuals are identified [HIN 11]: (1) fringes that are on the fringes of the network and poorly connected to other members (few links); (2) hubs that occupy a central place in the network and are strongly connected (large number of links) and (3) bridges are also individuals considered to be relatively central because they link several subparts of the network that would not be interconnected without them. Hubs and Bridges are considered OLs [BUR 99]. Despite the multiplicity of OL characteristics highlighted, the literature generally approaches OLs from the perspective of one or the other approach (e.g., the OL’s

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“source of advice” or the OL’s hub) to identify them. However, this raises questions about the unidimensionality of the concept of OL and therefore that of e-OL. From a multicriteria perspective, Ruspil et al. [RUS 16] define e-OLs in the specific context of Internet social networks as a source perceived as an expert, which selects and publishes valuable (interesting and useful) content for their contacts and whom seeks to develop their social capital, i.e. to be listened to and followed by a large number of people with whom they can interact. This approach, therefore, aggregates three types of characteristics: expertise in the product category (or field of interest), communicative characteristics (selection of interesting and useful content) and social characteristics (accumulation of social capital). 4.3.4. Identifying and selecting leaders and e-OLs In the offline context, several identification methods exist to identify OLs. Among them, three are particularly widespread but only converge moderately among them [IYE 11]: self-assessment, sociometry and observation [NEJ 14]. These methods have also been transposed into the digital context to identify e-OLs: – Self-assessment is a method based on measurement scales on which respondents assess their own OL status by indicating their level of agreement or disagreement with statements offered. These scales are based on different approaches to defining OL and e-OL (see section 4.3.3). Despite the proximity of these concepts (OL and e-OL), there are adapted and recommended measurement scales for each of them [RUS 16]. – Another approach to identifying OL is based on its sociometric definition. It is then a question of finding the hubs and/or bridges that are considered to be OLs (see section 4.3.3). To do this, it is necessary to be able to calculate sociometric indicators (number of incoming and outgoing links, for example) and/or centrality. It is possible to rely on sociometric indicators directly provided by the platforms, such as on Twitter. On this Internet social network, two sociometric indicators are present on its members’ profiles: the number of subscribers (“followers”: number of incoming links) and the number of subscriptions (“following”: number of outgoing coming links). Vignolles et al. [VIG 16] propose to mobilize these indicators to identify e-OLs on Twitter by calculating the ratio number of subscribers/number of subscriptions for each individual. Those with a ratio greater than 2 are considered e-OLs. In some cases, and for networks with accessible data, it is possible to extract a large amount of data via appropriate programs and to visualize the network via network analysis software (such as NodeXL, see Chapter 5). In both cases (ratio of profile indicators or network analysis approaches by software), and because of the specialization of OLs, it is necessary to complete the sociometric approach with an

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analysis of the accounts in order to verify that the identified OLs are related to the themes and products of the viral marketing campaign. – Finally, with regard to observation, it is facilitated by the public nature of the exchanges. Automated methods have been developed to identify influential individuals on Internet social networks, including so-called influence measures. The Klout index was an emblematic example [LYN 17] but its recent closure (May 25, 2018) highlights the difficulty of such tools to establish themselves on a long-term basis despite their potential as facilitators in the identification of e-OLs. Once they have acquired a high level of social capital, and a status of near celebrity on Internet social networks, brands use OLs and e-OLs beyond their initial field of specialization. These practices are reminiscent of endorsement advertising by celebrities [KAP 16], regularly used by marketing and may call into question the effectiveness of OL influence mechanisms based on trust and credibility in relation to the initial area of expertise. 4.3.5. Relationship management with leaders and e-OLs Influential relationships represent a set of managerial practices, some of which are controversial. This is particularly the case when influencers are paid for their publications but do not post it until it is discovered by their followers7. In addition, this type of practice can be perceived as a form of disguised and therefore illegal advertising in some cases8. In France, the French professional advertising regulation authority (Autorité de Régulation Professionnelle de la Publicité (ARPP9) proposes the adoption of good practices of transparency and loyalty toward the public: if e-OLs publish as part of a commercial collaboration with a brand with reciprocal commitments (e.g. in exchange for remuneration), this collaboration must be displayed explicitly and instantly. In this perspective, some hashtags (#ad or #sponso) are not perceived as sufficiently transparent and it is recommended to use terms such as “in partnership with...” or “sponsored by...”. In the United States, the Federal Trade Commission (FTC) proposes similar guidelines. Despite these rules, extrinsic motivations (remuneration, gifts, etc.) are particularly attractive for OLs [SHI 14].

7 https://www.lemonde.fr/m-mode-business-of-fashion/article/2018/03/30/des-influenceursdavantage-payes-par-les-marques_527847575_4497393.html. 8 https://business.lesechos.fr/directions-marketing/communication/publicite/0301189819484marketing-d-influence-transparence-obligatoire-318088.php. 9 https://www.arpp.org/actualite/relations-influenceurs-marques/; https://www.arpp.org/nousconsulter/regles/regles-de-deontologie/communication-publicitaire-digitale/#toc_1_3.

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Beyond the regulatory and ethical framework, it is also necessary to consider the impact of the use of this type of extrinsic motivation on the effectiveness of viral marketing strategies [TRU 09]. OLs’ contacts trust those OLs because of the quality of their advice and because they are perceived as disinterested and impartial [COR 71, HER 91, VER 14]. In particular, OLs are not perceived as commercial sources [LI 11, ROG 62, TSA 05]. Moreover, the use of extrinsic motivations could neutralize the perception of OLs as a source of trusted advice and therefore ultimately influence. To avoid this type of negative externality, it is also possible to use intrinsic motivations to help, for example, OLs and e-OLs maintain their status (e.g. for e-OLs, any element that maintains or develops their expertise and/or ability to publish content that is interesting and useful for their contacts; see definition of e-OL, section 4.3.3). 4.4. Conclusion Reducing the role of the customer in value creation to that of a simple buyer is an approach that largely omits and neglects the potential for the latter’s contributions to the company’s success. Focusing on its direct monetary and financial contributions (through purchasing and, thus, paying the price to obtain or use a product or service) can result in both an under and an overevaluation of the customer’s contributions [KUM 10a]: the (co-)creation of value by customers in the form of value of the customer’s commitment (or participation) in upstream and downstream processes must, therefore, include any type of behavior toward a brand or firm [KUM 10a, VAN 10b]. In a series of studies, Kumar et al. [KUM 10b] examined customer contributions through customer lifetime value (including financial contribution through customer purchases) and customer referral value (including the acquisition of new customers through customer influence because of word of mouth). Their results are interesting: it is not the customers who spend the most with the company that bring the greatest value, but other groups of customers – sometimes spending much less – but who contribute more to the company’s success through communication and the acquisition of new customers by word of mouth. Marketing and customer relationship management should nowadays largely go beyond a one-dimensional focus on the customer’s contribution through their role as a buyer and encompass all forms of customer contributions from their new roles in upstream and downstream co-creation. This chapter has, thus, endeavored to propose a clear and explicit argument of the importance, strategic issues and explicit implications for managers and practitioners of two new key roles for the customer, that of co-innovator and that of co-marketer.

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4.5. Acknowledgements The authors would like to thank Patrick Kleer, Deputy General Director at Crédit Agricole Centre-est, and Yohann Melamed, Co-founder and Director of Operations at Agorize, for their contributions to this chapter. 4.6. References [BAL 06] BALDWIN C., HIENERTH C., VON HIPPEL E., “How user innovations become commercial products: a theoretical investigation and case study”, Research Policy, vol. 9, pp. 1291–1313, 2006. [BEN 94] BEN MILED H., LE LOUARN P., “Comparative analysis of two opinion leadership scales: validity and interpretation”, Recherche et Applications en Marketing, RAM English Edition, vol. 4, pp. 23–51, 1994. [BEN 15] BENGTSSON L., Konsument Innovation I Sverige, Vinnova, Stockholm, 2015. [BER 07] BERTHON P.R., PITT L.F., MCCARTHY I. et al., “When customers get clever: managerial approaches to dealing with creative consumers”, Business Horizons, vol. 1, pp. 39–47, 2007. [BER 12] BERTRANDIAS L., VERNETTE É., “What is interpersonal communication worth? Interpersonal calibration of knowledge and selection of recommendation sources”, Recherche et Applications en Marketing, RAM English Edition, vol. 1, pp. 33–56, 2012. [BUR 99] BURT R.S., “The social capital of opinion leaders”, Annals of the American Academy of Political and Social Science, vol. 566, pp. 37–54, 1999. [CHE 03] CHESBROUGH H.W., Open Innovation: the New Imperative for Creating and Profiting from Technology, Harvard Business School Press, Boston, 2003. [COR 71] COREY L.G., “People who claim to be opinion leaders: identifying their characteristics by self-report”, Journal of Marketing, vol. 4, pp. 48–53, 1971. [COU 13] COUTANT A., STENGER T., “Médias sociaux: clarification et cartographie pour une approche sociotechnique”, Décisions Marketing, vol. 70, pp. 107–117, 2013. [COV 02] COVA B., CARRÈRE V., “Les communautés de passionnés de marque: opportunité ou menace sur le Net?”, Revue française du marketing, vol. 189/190, pp. 119–130, 2002. [COV 08] COVA B., “Consumer made: quand le consommateur devient producteur”, Décisions Marketing, vol. 50, pp. 19–27, 2008. [DE 11] DE JONG J.P., “Perceived competition and innovative intentions in Dutch small and medium-sized enterprises”, International Journal of Innovation Management, vol. 4, pp. 687–707, 2011.

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[VER 13] VERNETTE É., HAMDI-KIDAR L., “Co-creation with consumers: who has the competence and wants to cooperate?”, International Journal of Market Research, vol. 4, pp. 2–20, 2013. [VER 14] VERNETTE É., FLORES L., “Communiquer avec les leaders d’opinion en marketing: comment et dans quels médias ?”, Decisions Marketing, vol. 35, pp. 23–37, 2014. [VIG 16] VIGNOLLES A., GALAN J-P., MUNZEL A., “Twitter opinion leaders: identification and dynamics”, 45th Annual Conference of the European Marketing Academy (EMAC), Oslo, Norway, May 2016. [VON 86] VON HIPPEL E., “Lead users: a source of novel product concepts”, Management Science, vol. 7, pp. 791–805, 1986. [VON 11] VON HIPPEL E., OGAWA S., DE JONG J., “The age of the consumer-innovator”, MIT Sloan Management Review, vol. 1, pp. 27–35, 2011. [VON 12] VON HIPPEL E., DE JONG J.P., FLOWERS S., “Comparing business and household sector innovation in consumer products: findings from a representative study in the United Kingdom”, Management Science, vol. 9, pp. 1669–1681, 2012. [WEI 94] WEIMANN G., Influentials, the People Who Influence People, State University of New York Press, Albany, 1994.

5 The Customer’s Voice: Toward New Listening Tools

5.1. Introduction: “markets are conversations” In 1999, American researchers Levine, Locke, Searls and Weinberger published the Cluetrain Manifesto, a manifesto of 95 theses on the relationship between companies and their customers in the digital age [LEV 11]. The first thesis – “Markets are conversations” – is central to their manifesto and underscores the role of interaction and communication in economic exchanges. The researchers also explain that to adopt the right tone, marketing communication must include listening to customers and consumers. Almost 20 years later, the emergence of new technologies such as social media, social networks and opinion websites has strengthened the reach of the customer’s voice, which can now be expressed through many channels. Systematic listening to the customer’s voice online (social listening), interacting with Internet users and analyzing their conversations is an important approach to managing customer relations in the digital age [MEY 12]. As in the case of the construction, DIY and gardening brand, Leroy Merlin1, the analysis and the collection of online opinions became strategic for internal use (improving products and services through the analysis of opinions) and external use (displaying opinions to improve the e-commerce site’s conversion rate).

Chapter written by Andreas MUNZEL, Jessie PALLUD and Daria PLOTKINA. 1 Zante, P. (28/11/2016): Leroy-Merlin, “Les avis des clients deviennent des outils de transformation de l‘entreprise”, Petit Web: https://www.petitweb.fr/entreprise/chez-leroymerlin-les-avis-des-clients-deviennent-des-outils-de-transformation-de-lentreprise/.

Augmented Customer Strategy: CRM in the Digital Age, First Edition. Edited by Gilles N’Goala, Virginie Pez-Pérard and Isabelle Prim-Allaz. © ISTE Ltd 2019. Published by ISTE Ltd and John Wiley & Sons, Inc.

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This evolution represents a new challenge for companies that must adapt to these new places of exchange by modifying their listening tools in order to capture, analyze and respond to customer comments. Moreover, platforms managed by brands to control conversations and discussions about them are increasingly being challenged by online platforms, managed by third parties, that collect and disseminate consumer opinions [SCH 15, VAN 12]. In this chapter, we first present the amplification of the customer’s voice on the Internet, which is often examined in the literature with the theme of electronic word of mouth (WOM, section 5.2). Then, we will examine two key steps in the implementation and management of new listening tools (section 5.3). We end this chapter with a discussion of deceptive reviews produced and published by companies (section 5.4.1) as a major challenge. Finally, we stress the importance of extending the listening system to all the company stakeholders, and, in particular, to company employees (section 5.4.2). 5.2. The different forms of WOM WOM is defined as “interactive and informal communication between individuals, who are (or are at least perceived to be) not pursuing a commercial interest by this communication, about a commercially related target object (product, service, brand, seller) either in person or via any other communication method” [MUN 13, p. 23]. While offline, WOM is ephemeral because of its oral nature and manifests itself between people who generally know each other. Online WOM tends to persist and take place between people with or without a prior knowledge link. In addition, electronic WOM (eWOM) can take several forms: it can be text (e.g. via opinion sites such as TripAdvisor or Yelp), images (e.g. images posted on Instagram or Snapchat) or videos (e.g. videos on YouTube) published on online platforms (opinion sites or social media) [MUN 13]. eWOM is therefore more sustainable than traditional WOM due to its textual, visual or audiovisual form. The speed of diffusion of this content as well as its multiple forms, therefore, increases the scope and geographical reach of Internet users’ voices. eWOM also represents a new channel for brands to interact with their customers [SCH 15, VAN 12], which encourages a growing number of companies to be present on social media, which is still very popular with consumers [MUN 18]. Indeed, consumer empowerment is manifested by a shift from private branded platforms to social media. eWOM has consequences, as shown by the many examples of companies facing a crisis due to negative reviews. As an example, “United Breaks Guitars” is a song written by Dave Carroll in 2009

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following the damage to his guitar during a trip with United Airlines and an unsatisfactory handling of his claim. A week after it was posted on YouTube, the song’s video received more than 2.5 million views. The case of Amy’s Baking Company also relates to the mismanagement of a negative opinion on Yelp, which led to the restaurant’s appearance on the American show Kitchen Nightmares. These two examples demonstrate the importance of listening to your customers and managing online content, whether positive or negative. 5.3. Steps to managing the customer’s voice over the Internet 5.3.1. Step 1: set up listening measures One of the first difficulties related to the management of the customer’s voice online is to successfully set up systematic listening measures. After going through a social media image crisis in 2010 about the use of palm oil in its chocolate bars, the Nestlé Group set up the Digital Acceleration Team, a team dedicated to listening to customer conversations on social media. The content captured and analyzed comes from platforms such as Facebook, YouTube, Twitter and LinkedIn, and represents nearly 50 million sources in 17 different languages [LOR 13]. Unlike more traditional marketing measures for obtaining customer opinions, such as surveys and interviews, listening to online conversations provides access to spontaneous messages in real time and at a lower cost [TIR 14]. Tirunillai and Tellis [TIR 14] analyzed nearly 350,000 Internet users’ opinions in five business sectors to identify the criteria that a brand should take into account to measure the quality of an opinion, its importance and its ability to support decision-making. Systematic data analysis is complex because textual data are presented in an unstructured form, which requires, for example, the elimination of characters or words unknown in the target language and which have no informational value. The systematic listening to the customer’s voice online must therefore be based on a set of criteria: 1) Location: the interpretation and analysis of conversations must be contextualized because each platform has its own standards and formats. 2) Valence: listening measures should allow for sentiment analysis, which consists of identifying emotional markers and the valence of adjectives to categorize positive and negative conversations. 3) Volume: it is also important to analyze the frequency and intensity of conversations about the brand or product.

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4) Content: the systematic analysis of conversations should eventually make it possible to identify the different themes, attributes and characteristics of the brands and/or product mentioned in the message. In their study, Tirunillai and Tellis [TIR 14] proposed the use of the Herfindahl index of concentration to analyze online conversations. This index represents an average concentration of quality dimensions among all Internet users’ conversations analyzed for the brand. For example, if the quality of a smartphone, represented by the durability of the battery, is the dimension most often mentioned by Internet users and other quality dimensions (i.e. design, reactivity) are mentioned only very rarely, then the index makes it possible to identify this concentration on a single quality criterion. Tirunillai and Tellis’ research highlights the difficulty of analyzing massive and unstructured data and emphasizes the need for upstream work to be able to exploit them. However, the big data phenomenon has encouraged companies to invest more resources in developing their data processing and systematic analytical skills. The data scientist profession, or being an expert in big data analysis, represents a rare skill that is highly sought after by companies [DAV 12]. Nowadays, automated data analysis can also be done by using statistical approaches with “a vast set of tools for understanding data” [JAM 13]. Tools such as those offered by Monkeylearn (https://monkeylearn.com) allow systematic text analysis based on machine learning. Other customer listening measures are also deployed in marketing departments to monitor and measure their online reputation, including social monitoring software (e.g. Hootsuite, Buffer, Buzzsumo, Linkfluence). These tools have become more accessible in recent years, both in terms of ergonomics and price, which has accelerated their adoption within companies. Their functionalities include the ability to build indicators related to Internet user engagement and the impact of digital marketing campaigns, the ability to detect trends in conversations, identify influencers or detractors and create user or community profiles. In order to better understand the relationships and interdependencies between online customer conversations, social network analysis is another methodological approach to visualize communications in the form of networks, nodes and links between more or less influential Internet users. Figure 5.1 illustrates a social network analysis applied to the Volkswagen scandal, following the manipulation of polluting emission values of its cars. Via the NodeXL tool for Microsoft Excel [SMI 10], tweets using the #VWGate hashtag were exported and analyzed using a classification approach. The graphical visualization of Twitter communications as networks shows that a large number of users mentioned the hashtag #VWGate, but

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these tw weets elicited very v few reacctions such as retweets for example (theese are all the pointts in the lowerr right-hand corner c of Figurre 5.1). This figure f also shoows more or less im mportant grouupings (to the left of Figuree 5.1) with a few f main actoors whose tweets have been wideely used by otther users. In the case of #V VWGate, thesse include the official accounts of o the major naational and intternational meedia.

Figure e 5.1. Visualizzation of Twitte er interactions s related to the e polluting emissions scandal at VW (#VWg gate) via socia al network ana alysis (NodeXL L software for Microsoft ersion of this figure, f see ww ww.iste.co.uk/n ngoala/augme ented.zip Excel). For a color ve

Smithh et al. [SMI 14] propose a typology of six s possible tyypes of social networks (see Figuure 5.2). The first f type of social s networkk, the polarizeed crowd, connsists of two large and dense grroups with maany interactioons, but conneections betweeen the two grroups are almost non-existent. n T This type of network often n manifests ittself in discusssions on highly coontroversial toopics and ofteen involves po olitical discusssions. The seccond type, the tightt crowd, is similar to the polarized p crow wd, but the subgroups s aree strongly linked annd interact with w each otheer through inttermediaries or o connectorss who act as bridgges. Brand clusters, the thhird type, aree very frequeently observeed among companiies that have implemented a marketing strategy basedd on social m media: the network is therefore not very deense and preesents a large number off isolated

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individuals. Due to the notoriety of large companies, many Internet users express themselves by mentioning the brand, but these users are only rarely connected to other people mentioning the same brand. In the configuration of community groups, medium-sized subgroups tend to emerge and interact with each other. The broadcast network successfully illustrates the case of Volkswagen Gate: several groups exist, but form a star network with a central actor in the middle (the hub) – which very often corresponds to the mainstream media or a major influencer – and users who repeat (or retweet) messages from the central hub (the spokes). Users thus serve as an audience and very often have few interactions with each other. In the case of a support network, relationships are bidirectional. This is the case for companies, particularly in the service sector, that have a strong online presence and use social media to listen to and answer customers’ questions and complaints. Box 5.1 presents the value of using social media, and in particular the microblogging Twitter site, as an after-sales service tool in the banking sector. 1 Polarized crowd

3 Brand clusters

5 Broadcast network

2 Tight crowd

4 Community clusters

6 Support network

Figure 5.2. The six types of social networks (own illustration adapted from Smith et al. [SMI 35])

To illustrate the value of social network analysis as a listening tool in customer relationship management, we extracted Twitter interactions from four banks’ service accounts: INGDirect (@INGdirect_en), LCL (@LCL_SAV), BNP Paribas (@BNPParibas_SAV) and Société Générale (@SG_etvous). The public handling of complaints through social media such as Twitter presents the risk of spreading and amplifying stories of customers’ negative experiences. The desire to contain exchanges is therefore an essential requirement for brands. This desire is often expressed by an

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invitation from the brand’s after-sales service account to continue the exchange of direct or private messages, thus moving from a public and potentially multilateral mode of communication to a private and bilateral mode of communication [EIN 15]. 1

2

3

4

Figure 5.3. The example of support networks in the banking sector

In the case of the first banking institution, INGDirect (Figure 5.3, frame 1), we can observe a support network with interactions that take place only between the bank’s aftersales account and its users. The bank was able to avoid a viral effect of complaints from Twitter users because there was no interaction between customers. The structure of the network differs in the case of LCL (Figure 5.3, frame 2). Users tended to confuse the two LCL accounts – the official account (LCL) and the SAV account (LCL_SAV) – with some users even repeating their initial tweet to LCL to mention the SAV account in order to get an answer. This confusion and the need to send a second tweet can be risky for a brand that will have to respond twice to its customers’ complaints, which risks annoying or frustrating them. We note that the conversation is still limited to bilateral interactions between users and the bank’s two accounts. The situation was more complicated for BNP Paribas (Figure 5.3, frame 3). Indeed, the company’s after-sales service account could not contain the complaint message sent by a customer, which was then repeated many times by other Twitter users. This user, who complained in particular about a delayed closure of his bank account, had more than 13,000 Twitter subscribers at the time of the analysis and thus had a fairly large audience. His role as an influencer was particularly identifiable by a much smaller number of subscriptions (725), which gave him a high subscriber/ subscription ratio of 18.9. This ratio is used as an indicator to measure the influence potential of a Twitter user [VIG 16]. In order to avoid a potential amplification of unfavorable messages, it is therefore important to react quickly. The subscriber/ subscription ratio can also be used as an indicator to prioritize the need for responsiveness

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on the part of a company. Finally, the strategy implemented by Société Générale on Twitter (Figure 5.3, frame 4) differs from the other three banks observed. Indeed, instead of only serving as a channel for after-sales service, the SG_etvous Twitter account is also used to increase interactions with Internet users via contests and offers to participate in prize draws. Box 5.1. Listening to customers through social network analysis: the example of four French establishments on Twitter

To conclude, social network analysis makes it possible to identify and classify interactions in a visual form while restoring the dynamics of discussion between actors. 5.3.2. Step 2: respond to online customers The customer’s voice raises another challenge for companies, namely the response to comments made online, whether in terms of speed, content to be transmitted or engagement to be demonstrated. For example, communications that have a direct mention (@username) should normally be processed quickly because Internet users who address companies in this way generally want their problem resolved. The customer listening system includes the analysis of direct messages, but also the mentions of brand’s or the company’s product names as well as the mention of events specific to product categories. Figure 5.4 provides a framework for analyzing response strategies along two axes: (1) the extent of customer listening and (2) the main objectives of interaction. When a user directly messages a company’s account (brand or after-sales service), they often expect a quick, simple and efficient resolution (Figure 5.4, (1). The interaction then focuses on problem solving. According to a study conducted by Lithium Technologies in 2013, more than half of Twitter users expect a response to their tweet in less than 1 h [LIT 11]. However, in an analysis of the response behaviors of large U.S. companies, Einwiller and Steilen [EIN 15] show that companies respond to only 47% of the 5,000 Twitter complaints examined in their study. Moreover, in the event of a response, companies react on average after 7 hours; and only a quarter of these responses were published within 18 min of the Internet user’s first tweet [EIN 15]. In a study with more than 800 respondents, Sparks and colleagues [SPA 16] demonstrate the importance of responsiveness in digital environments: the faster the company responds, the more the Internet user will consider the company trustworthy and capable of caring about the well-being of its customers. On the other hand, while the slowness of response to negative messages can lead to dissatisfaction, the speed of response seems to be a main factor

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because it does not automatically increase Internet user satisfaction [MIN 15]. It is, therefore, in the interest of companies to respond quickly to complaints in order to avoid impatient Internet users talking about them to their entourage or looking for other communication channels to share their frustration [LIT 11]. At the second level (see Figure 5.4, (2), it is a matter of examining all conversations that include the names of the company’s brands and/or products. In this case, Internet users do not address the company directly to solve their problem, but will tend to use branded hashtags to improve the visibility of their message. The response strategy to be implemented must then be proactive: the company must respond to messages posted on the Internet spontaneously [NPV 12].

Interaction goals

Anticipation and engagement

3

Proactive response

Issue resolution

2

1

Direct mention @username

Brand / product

Broadcast Events / category

Scope of social media listening tools

Figure 5.4. Response strategies to be implemented as part of customer listening tools in social media (according to Twitter [TWI 14, p.13], with some modifications)

Finally, the approach may also include listening to the customer’s voice at events that are related to the product category or of interest to the company and its products (Figure 5.4, (3). In this situation, the response must allow the anticipation of market trends and the detection of prospects and/or opportunities. The objective is to link the brand to potentially positive events for the company. Thus, it is important for a company to respond to positive feedback in order to increase the future engagement of satisfied customers [CHS 15].

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Figure 5.4 presents three levels of response, but does not specify the strategy and communication style to be adopted to respond to customers. English marketing literature has recently developed the concept of customer care on the Internet (Webcare) to emphasize the attention to be paid when interacting with Internet users [DEN 15, SCH 15]. For van Noort and Willemsen [VAN 12, p. 133], Webcare refers to “the act of engaging in online interactions with (complaining) consumers, by actively searching the web to address consumer feedback (e.g. questions, concerns and complaints)”. In the event of a complaint on social media, the best strategy is to respond to the Internet user [BOB 05] because the latter is still waiting for a response after having formulated and published an online complaint [BRA 09, LEE 10]. The advantage of having a response strategy is twofold: first, complaint management prevents the customer from expressing themself to other individuals via eWOM and prevents them from changing companies. Second, it allows the company to protect its reputation and maintain a good image toward future customers who consult and read content generated by other users before making their decisions. According to Scott and Lyman [SCO 68, p. 46], the company can then respond by providing explanations to their customers, i.e. developing a communication method to “explain unanticipated or untoward behavior”. Depending on the type of explanations and the stages of the complaints process [FEL 81], companies therefore have different responses they can choose from (see Figure 5.5). 1

2

3

NAMING

BLAMING

CLAIMING

Identification of a harmful event.

Assignment of responsibility for the harmful event.

Voicing grievance and/or seeking redress.

Ideological account (justification) Referential account

Causal account (excuse) Penitential account (apology)

Explanations in which the fact that a harmful event has occurred is challenged.

Explanations in which responsibility for the harmful event is accepted or denied.

4

Response strategies by the firm

Figure 5.5. Response options according to the steps of the complaints process [MUN 24]

According to the proposed typology of response strategies [IBE 87, BOB 05], two approaches can be implemented. The first strategy combines the company’s responses to challenge the occurrence of a negative event. The company then refuses to accept that a problem has occurred (in the case of denial) and tries to legitimize its

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actions [BRA 09] while minimizing the seriousness of the problem [BOB 05] in the case of justification. When the company challenges the seriousness of the incident for the claimant by demonstrating that other individuals have suffered more serious consequences, it implements a reference-based response strategy by making a social comparison with another group of individuals [TEB 87]. This first group of responses often presents an attempt by the company to mitigate the severity of an incident and thus modify the individual’s perceptions. Due to the public nature of the communications, contesting either the seriousness or the occurrence of an incident can be risky and aggravate the situation, particularly when other consumers concerned by the incident also express themselves and thus amplify the scope of the conflict [BOB 05]. Therefore, when the company accepts the incident (asks for forgiveness or apologizes) or refuses responsibility for the incident (but does not dispute its existence), this represents a strategy that may delay the conflict. This type of response allows the company to express its regret about the inconvenience encountered by the customer. The company then hopes that the customer will forgive them [BOB 05]. Studies on this subject show, in particular, that the response strategy must correspond to the seriousness of the problem encountered by the customer: the more serious the incident, the more exhaustive the response provided by the company will have to be and possibly include (material) compensation [DEN 15]. Various studies also show that it is better for a company to accept its responsibility than to deny it [MUN 13, MUN 14]. In addition, when there is a strong customer community surrounding the brand, other Internet users can also support the company and respond to negative feedback. Taking into account community reactions is therefore essential to increase the effectiveness of the response strategy [KUN 12, LEE 10]. Recent literature raises and addresses the question of communication style, particularly from the perspective of whether or not it should be adapted to the specific context of a platform. This gives the company two response options: (1) maintain the same tone, regardless of the context and platform-specific communication codes, or (2) adapt its language to each environment. Communication Accommodation Theory (CAT) provides a framework for interpersonal interactions [GAL 05]. While the strategy of maintaining institutional communication can strengthen brand consistency, especially when it is present on many platforms, adjusting language according to context and people can also be useful to demonstrate the company’s proximity to its customers. For example, Jakic et al. [JAK 17] show through an experimental study that adjusting the tone of a message according to the person is the preferred strategy to promote customer trust in the brand because it reflects the company’s goodwill and quality of interaction, an effort generally well perceived by Internet users.

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5.4. Current and future challenges 5.4.1. Challenge 1: when the customer’s voice is manipulated (the case of deceptive reviews) Listening to the customer’s voice offers companies the opportunity to have a more reactive and/or proactive management of incidents reported by customers. However, because of the potential impact of these messages on consumer attitudes and purchasing decisions, companies also perceive online conversations as potential risks that can affect the credibility of their brand and the effectiveness of their marketing communication. Therefore, this freedom of consumer expression encourages companies to seek ways to regain control over their communication [MUN 15]. To do this, some companies do not hesitate to publish deceptive reviews [LUC 16, MUN 15, MUN 16]. The practice of deceptive reviews refers to “the deliberate attempt, whether successful or not, to conceal, fabricate, and/or manipulate in any other way factual and/or emotional information, by verbal and/or nonverbal means, in order to create or maintain in another or in others a belief that the communicator himself or herself considers false” [MAS 04, p. 148]. In accordance with this definition, Xiao and Benbasat [XIA 11] emphasize three main characteristics of misleading communication: (1) deception is an intentional and deliberate act and is thus distinguished from disinformation (i.e. an unintentional distortion of information); (2) the attempt at deception involves the manipulation of information and (3) the actor uses deception for the purpose of exploitation. In order to appear authentic, marketers and reputation specialists generally demonstrate professionalism in the production of these opinions by imitating the customer’s voice to perfection. Ott et al. [OTT 12, p. 201] stress, moreover, that these “fictitious opinions have been deliberately written to sound authentic, in order to deceive the reader”. These deception attempts, which represent nearly one-third of the reviews published on online platforms, are not without consequences because they also tend to erode consumer trust [MUN 12]. Even if measures to combat fake reviews such as the French law for the digital republic and the AFNOR standard have been put in place, consumers are increasingly sceptical about opinion platforms and are turning to their nearest and dearest again to obtain offline WOM [MUN 12]. 5.4.2. Challenge 2: when the internal customer – the employee – expresses himself online A systematic listening approach should not neglect another stakeholder as important as the company’s customers, namely the company’s employees. While customer voice and customer service via platforms and social media have been the subject of an increasing amount of research [KIN 14], studies on employee voice,

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via websites such as Glassdoor or on social media evoking a company’s reputation, are still few in number [KÖN 18]. Opitz et al. [OPI 18] point out that negative reviews posted by employees disproportionately damage the company’s reputation compared to customer reviews. Despite these results, a study conducted by the Glassdoor website [GLA 18] also shows that 62% of job seekers’ perceptions of a company improve after reading an employer’s response to an online notice. Another recent analysis indicates that only 12% of companies listed on Glassdoor interact with site visitors by creating a free account in order to respond to negative opinions left by employees or candidates [ADA 16]. In conclusion, the systematic listening to the customer’s voice should take into account the multiplicity of existing platforms as well as all stakeholders likely to express themselves through these digital channels. 5.5. Conclusion The opportunities offered by new technologies to companies, and in particular to marketing departments, continue to grow with the development of technologies such as artificial intelligence (AI) or connected objects (Internet of Things (IoT)). First, AI could transform the way customer service is managed by allowing companies to react more quickly to online complaints and thus shorten the valuable time between the publication of a message by the customer and the management by the company. AI could even anticipate negative messages on the Internet in order to intervene before they are published. However, in most cases, customers express themselves on social media only after they have attempted to file a complaint with customer service and it has not been answered. Thus, to reduce the risk of customers expressing themselves against the brand on the Internet, companies must work on the quality of their customer service and ensure that complaints are handled as soon as they are first contacted by dissatisfied customers. Second, the IoT market could make it possible to collect customer opinions and impressions in a more objective and systematic way because IoT technologies, such as connected wristbands or sensors, transmit a variety of information such as heart data, number of steps, sleep quality, calories consumed and emotional state, all of which is valuable information to improve understanding of consumer behavior. Amazon’s connected buttons (Dash Button) already allow the automatic purchase and replenishment of food or everyday products. Why not consider connected buttons that allow customers to vote or submit their opinions when using everyday products?

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Finally, the phenomenon of “fake news” also leads to a reconsideration of the importance of the discourse presented to customers. Indeed, as the authenticity of online messages is increasingly questioned, companies will also have to be vigilant about the information circulating about their brand. On the consumer side, the authenticity of messages must also become a priority and consumers should consider whether or not to listen and react to messages published by other Internet users. 5.6. References [ADA 16] ADAMS S., “How companies are coping with the rise of employee-review site Glassdoor”, 2016, available at https://www.forbes.com/sites/susanadams/ 2016/02/24/howcompanies-are-coping-with-the-rise-of-employee-review-site-glassdoor/-1f01afa76263. [BIE 87] BIES R.J., “The predicament of injustice: the management of moral outrage”, in CUMMINGS L.L., STAW B.M. (eds), Research in Organizational Behavior: an Annual Series of Analytical Essays and Critical Reviews, Jai Press, Greenwich, 1987. [BOB 05] BOBOCEL D.R., ZDANIUK A., “How can explanations be used to foster organizational justice”, in GREENBERG J., COLQUITT J.A. (eds), Handbook of Organizational Justice, Lawrence Erlbaum Associates, Mahwah, NJ, 2005. [BRA 09] BRADLEY G.L., SPARKS B.A., “Dealing with service failures: the use of explanations”, Journal of Travel & Tourism Marketing, vol. 26, no. 2, pp. 129–143, 2009. [DAV 12] DAVENPORT T.H., PATIL D.J., “Data scientist: the sexiest job of the 21st century”, Harvard Business Review, vol. 90, no. 10, pp. 70–76, 2012. [DEN 15] DENS N., PELSMACKER P.D., PURNAWIRAWAN N., “‘We(b)care’: how review set balance moderates the appropriate response strategy to negative online reviews”, Journal of Service Management, vol. 26, no. 3, pp. 486–515, 2015. [EIN 15] EINWILLER S.A., STEILEN S., “Handling complaints on social network sites – an analysis of complaints and complaint responses on Facebook and Twitter pages of large US companies”, Public Relations Review, vol. 41, no. 2, pp. 195–204, 2015. [FEL 81] FELSTINER W.L.F., ABEL R.L., SARAT A., “The emergence and transformation of disputes: naming, blaming, claiming”, Law & Society Review, vol. 15, nos. 3/4, pp. 631– 654, 1981. [GAL 05] GALLOIS C., OGAY T., GILES H. (eds), “Communication accommodation theory: a look back and a look ahead”, Theorizing about Intercultural Communication, Sage, Thousand Oaks, 2005. [GLA 18] GLASSDOOR, “Top HR statistics”, 2018, avalable at https://www.glassdoor.com/ employers/popular-topics/hr-stats.htm.

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[JAK 17] JAKIC A., WAGNER M.O., MEYER A., “The impact of language style accommodation during social media interactions on brand trust”, Journal of Service Management, vol. 28, no. 3, pp. 418–441, 2017. [JAM 13] JAMES G., WITTEN D., HASTIE T. et al., An Introduction to Statistical Learning with Applications in R, Springer, New York, 2013. [KIN 14] KING R.A., RACHERLA P., BUSH V.D., “What we know and don’t know about online word-of-mouth: a review and synthesis of the literature”, Journal of Interactive Marketing, vol. 28, no. 3, pp. 167–183, 2014. [KÖN 18] KÖNSGEN R., SCHAARSCHMIDT M., IVENS S. et al., “Finding meaning in contradiction on employee review sites — effects of discrepant online reviews on job application intentions”, Journal of Interactive Marketing, vol. 43, pp. 165–177, 2018. [KUN 12] KUNZ W.H., MUNZEL A., JAHN B., “Serving in an online world – how to react on negative electronic word-of-mouth?”, AMA Marketing Educators Summer Conference, Chicago, IL, 2012. [LEE 10] LEE Y.L., SONG S., “An empirical investigation of electronic word-of-mouth: informational motive and corporate response strategy”, Computers in Human Behavior, vol. 26, no. 5, pp. 1073–1080, 2010. [LEV 11] LEVINE R., LOCKE C., SEARLS D. et al., The Cluetrain Manifesto: the End of Business as Usual, Basic Books, New York, 2011. [LIT 11] LITHIUM, “Consumers Will Punish Brands that Fail to Respond on Twitter Quickly”, Press release, October 29, 2011. [LOR 13] LORIN D., “Bienvenue dans la ‘war room’ de Nestlé”, Management, pp. 36–38, 2013. [LUC 16] LUCA M., ZERVAS G., “Fake it till you make it: reputation, competition, and yelp review fraud”, Management Science, vol. 62, no. 12, pp. 3412–3427, 2016. [MAS 04] MASIP J., GARRIDO E., HERRERO C., “Defining deception”, Anales de Psocologica, vol. 20, no. 1, pp. 147–171, 2004. [MEY 12] MEYER-WAARDEN L., VOLLE P., “CRM et e-CRM: enjeux socio-culturels, stratégies clients et technologies relationnelles, questions de mise en œuvre et performance organisationnelle”, Recherche et Applications en Marketing, vol. 27, no. 4, pp. 3–9, 2012. [MIN 15] MIN H., LIM Y., MAGNINI V.P., “Factors affecting customer satisfaction in responses to negative online hotel reviews: the impact of empathy, paraphrasing, and speed”, Cornell Hospitality Quarterly, vol. 56, no. 2, pp. 223–231, 2015. [MUN 12] MUNZEL A., KUNZ W.H., “The power of saying sorry – insights on customer service in new media online channels”, 12th International Research Conference in Service Management, La Londe les Maures, 2012.

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[MUN 13] MUNZEL A., Interactions Within Online Review Sites – Motives, Effects, and Management, FGM, Munich, 2013. [MUN 14] MUNZEL A., JAHN B., KUNZ W.H., “Sharing experiences via social media as integral part of the service experience”, in KANDAMPULLY J. (ed.), Customer Experience Management: Enhancing Experience and Value through Service Management, Kendall Hunt Publishing Company, Dubuque, IA, 2014. [MUN 15] MUNZEL A., “Malicious practice of fake reviews: experimental insight into the potential of contextual indicators in assisting consumers to detect deceptive opinion spam”, Recherche et Applications en Marketing, English edition, vol. 30, no. 4, pp. 24– 50, 2015. [MUN 16] MUNZEL A., “Assisting consumers in detecting fake reviews: the role of identity information disclosure and consensus”, Journal of Retailing and Consumer Services, vol. 32, pp. 96–108, 2016. [MUN 18] MUNZEL A., GALAN J.-P., MEYER-WAARDEN L., “Getting by or getting ahead on social networking sites? The role of social capital in happiness and well-being”, International Journal of Electronic Commerce, vol. 22, no. 2, pp. 232–257, 2018. [OPI 18] OPITZ M., CHAUDHRI V., WANG Y., “Employee social-mediated crisis communication as opportunity or threat?”, Corporate Communications: an International Journal, vol. 23, no. 1, pp. 66–83, 2018. [OTT 12] OTT M., CARDIE C., HANCOCK, J., “Estimating the prevalence of deception in online review communities”, 21st International Conference on World Wide Web, Lyon, France, 2012. [SCH 15] SCHAMARI J., SCHAEFERS T., “Leaving the home turf: how brands can use webcare on consumer-generated platforms to increase positive consumer engagement”, Journal of Interactive Marketing, vol. 30, pp. 20–33, 2015. [SCO 68] SCOTT M.B., LYMAN S.M., “Accounts”, American Sociological Review, vol. 33, no. 1, pp. 46–62, 1968. [SMI 10] SMITH M.A., MILIC-FRAYLING N., SHNEIDERMAN B. et al., NodeXL: a Free and Open Network Overview, Discovery and Exploration Add-in for Excel 2007/2010, The Social Media Research Foundation, 2010, available at: http://www. smrfoundation.org. [SMI 14] SMITH M.A., RAINIE L., HIMELBOIM I., SHNEIDERMAN B., “Mapping Twitter topic networks: from polarized crowds to community clusters”, PewResearchCenter, 2014. [SPA 16] SPARKS B.A., SO K.K.F., BRADLEY G.L., “Responding to negative online reviews: the effects of hotel responses on customer inferences of trust and concern”, Tourism Management, vol. 53, pp. 74–85, 2016. [TIR 14] TIRUNILLAI S., TELLIS G.J., “Mining marketing meaning from online chatter: strategic brand analysis of big data using latent Dirichlet allocation”, Journal of Marketing Research, vol. 51, no. 4, pp. 463–479, 2014.

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[TWI 14] TWITTER, “Customer service on Twitter”, Twitter, San Francisco, 2014. [VAN 12] VAN NOORT G., WILLEMSEN L.M., “Online damage control: the effects of proactive versus reactive webcare interventions in consumer-generated and brand-generated platforms”, Journal of Interactive Marketing, vol. 26, no. 3, pp. 131–140, 2012. [VIG 16] VIGNOLLES A., GALAN J.-P., MUNZEL A., “Twitter opinion leaders: identification and dynamics”, 45th Annual Conference of the European Marketing Academy (EMAC), Oslo, Norway, May 2016. [XIA 11] XIAO B., BENBASAT I., “Product-related deception in e-commerce: a theoretical perspective”, MIS Quarterly, vol. 35, no. 1, pp. 169–195, 2011.

6 Redesigning the Customer’s Role in a Connected World

Digital technology has profoundly changed the way customer relationships are managed, with marketing and CRM professionals using new digital and mobile channels on a daily basis and massively exploiting the data collected along customer journeys. However, marketers will soon have to take a new step forward: the Internet of Things (IoT). According to Benghozi et al. [BEN 09], the IoT refers to: “a network of networks that allows, through standardized and unified electronic identification systems and mobile wireless devices, to directly and unambiguously identify digital entities and physical objects and thus to be able to retrieve, store, transfer and process, without discontinuity between the physical and virtual worlds, the related data”. The IoT thus creates a sort of link between the physical and virtual worlds and increases the possibilities of connection, identification, transmission and tracking of individuals in their daily places, at work, shopping, on holiday, etc. Technologies for connecting short-range and long-range objects are now spreading on a large scale: RFID chips, Wi-Fi, Bluetooth (beacons for example1), cellular networks (GSM, etc.), low power wide area networks (LPWA, such as LoRa or SigFox2), etc. IDATE forecasts 155 billion connected objects in 2025 worldwide, corresponding to an average annual growth rate of 14%3. For Hoffman and Novak [HOF 17, p. 1178], Chapter written by Pauline FOLCHER, Sarah MUSSOL and Gilles N’GOALA. 1 Technology explained in the Chapter 12 “Data Marketing for Customer Intimacy” in this book. 2 Low power wireless connection. 3 https://fr.idate.org/internet-of-things-news2016/.

Augmented Customer Strategy: CRM in the Digital Age, First Edition. Edited by Gilles N’Goala, Virginie Pez-Pérard and Isabelle Prim-Allaz. © ISTE Ltd 2019. Published by ISTE Ltd and John Wiley & Sons, Inc.

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these new possibilities for connecting consumers and their objects should “revolutionize the consumer experience” and challenge the traditional approach of considering “a person’s internal subjective responses to branded objects”. The challenge is no longer just to consider the customer or consumer in their relationship with a given brand, as CRM did, but to understand the customer’s consumption and uses in a connected environment such as their home (smart home), car (smart car, smart mobility) or city (smart city). In a context where people, objects and places begin to communicate, what does “customer relationship management” (CRM) still mean? Are CRM models inherited from direct marketing (one-to-one marketing, datamining, customer value, RFM scoring, loyalty programs, etc.) still relevant? Moreover, is it still a question of being a “customer”, in the patrimonial sense of the term, the person with whom everyone wishes to develop lasting relationships with in order to obtain the greatest value in the long term (customer lifetime value)? In the customer capital approach, the customer was mainly seen as an intangible asset, as a form of “stock” that could be valued from the company’s point of view. With digital transformation, “flows” count as much as “stock”: website traffic, engagement on social networks (post, share, comment), the multiplication of experiences and uses, the data collected and used (location, tastes, evaluations, etc.), etc., become performance indicators in the same way as sales made. In this flow economy, does CRM still make sense? And if so, what is that sense? The purpose of this chapter will be to examine the meaning of CRM in this increasingly connected and digitally dominated environment. We will focus on three key changes: first, the connected customer has multiple faces depending on the circumstances, that of being a consumer, user, buyer, influencer, collaborator, citizen, etc. Although until now CRM has been aimed at an identified customer, companies are now facing individuals whose roles and identities are multiplying and diversifying. Second, technologies (smartphones, IoT, etc.) now make it possible to better capture and exploit the digital traces left more or less unconsciously by individuals in their homes, shops, workplaces, cities, etc. As a result, the marketing practices become less detectable, classifiable and identifiable by customers. It combines both a form of invisibility and speed of execution (covert marketing, stealth marketing4) and constantly intrudes into the daily lives of individuals. Third, the connected customer, even if operating in a constrained technological environment, remains the true leader of their consumption and brand relationship. While CRM mainly considered the brand–consumer or customer–supplier dyad, the 4 Hidden marketing consists of setting up marketing techniques, passing a message without the recipient (the consumer) noticing it (product placement by web influencers or the use of cookies are examples).

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challenge is now to understand the individual’s total experience in a connected environment (home, store, city) and to better understand how the various products, services, brands and technologies co-create value. These three points will be discussed in more detail in the following sections. 6.1. A connected customer with multiple faces First, characterized for a long time as a consumer, an impersonal term associated with a simple purchasing and consumption function, then considered as a customer with whom lasting relationships must be established, the individual is regularly assigned roles and representations that evolve according to organizations’ ambitions and concerns. The digital revolution has only accentuated the phenomenon by simultaneously transforming the individual into an object and a marketing subject. On the one hand, marketing professionals expect more involvement, commitment and performance from these connected individuals, and do not hesitate to constantly solicit, motivate and reward them. On the other hand, individuals themselves become aware of their marketing role and sometimes try to take advantage of it (influencers, partners, etc.). Thus, the customer’s representations have changed with the rise of digital technology (social networks, collaborative platforms, IoT, etc.) and the customer now has a fragmented identity that is no longer reduced to the role of a regular buyer of products and services. 6.1.1. The connected customer’s fragmented identity Digital technology has not only changed the way customers are represented, but also the way the customer defines themselves in relation to others. Indeed, if the Internet has made it possible to facilitate communication or to find childhood friends on social networks, it has also facilitated the emergence of new markets and with them new activities for individuals. As a public servant by day, self-employed Uber driver by night, the individual will tend to diversify their activities and enter, at the same time, into new social roles. This evolution of the company therefore presents a new challenge for marketers who must understand this “fragmented” identity of the connected customer. The difficulty, even more significant today, lies in the fact that the person or individual does not evolve in a single social sphere (family, circle of friends, professional environment) but simultaneously in several environments that are both real (the physical world) and virtual (on the Internet). In their daily life, the individual can then be alternately or simultaneously a citizen, customer, patient, consumer, user or an employee or an entrepreneur, a tenant or property owner, and they can exercise these roles physically or online through social applications or networks. In our connected environment, the individual is called upon to constantly

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and perpetually juggle between the different roles he or she assigns themselves, changing hats depending on the situation he or she is facing. Moreover, the ubiquity allowed by connected technologies – more particularly by the IoT – nowadays leads the individual to compartmentalize the tasks associated with their different roles or identities at a lesser scale. A public transport user can, during a simple streetcar journey for example, pay for their children’s lunch, consult social networks, reply to professional e-mails, read blood test results, validate a shopping list or even set their house alarm. Through the facets of their fragmented identity, individuals can have simultaneously diverse expectations and objectives: purely utilitarian or convenient (saving money and energy, saving time, making less effort, etc.); or hedonic and/or relational (communicating at any time, with “anyone”, having a personalized public service, experimenting with new services or products, sharing opinions, etc.). To support these statements, Figure 6.1 illustrates the individual’s fragmented identity in his or her connected environment.

Figure 6.1. The fragmented identity of the connected individual

The offer of products or services must then be adapted to these new expectations. More and more accustomed to algorithms governing their daily lives, individuals

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and society in general nowadays expect technology to simplify their lives, allow them to free up time to pursue these multiple occupations, whether as a citizen, a self-employed entrepreneur or simply as a practitioner of a sport or cultural activity. Connected objects and their applications are not only a source of experimentation for curious and innovative customers, but they must also meet concrete needs such as security, energy and financial savings or time saving. The promise of an easier and effortless life then seems to be the essential condition for the individual to accept that brands use his or her personal data. With a 210% increase in sales between the first quarter of 2017 and 20185, voice assistants such as Amazon Echo or Google Home reflect this change in behavior and expectations. However, it is not only product or service offerings that must be adapted for this evolution of society and the individual’s identity. The personalization of brand/customer communication, which today seems inevitable for customer relationship managers, will also necessarily have to evolve with technological innovations. The programming of e-mails, SMS or posts on social networks already makes it possible to contextualize communication in time in order to reach its customers at times when their attention is most appropriate. Real-time geolocation – enabled by smartphones and other connected objects – allows messages or notifications to be adapted to the individual’s location. For example, a clothing retailer can send a notification about a promotion when the customer walks through the door of a shopping mall. To be consistent with individuals’ expectations, this spatial contextualization should also take into account their social position. From this perspective, an employee from the mall who walks through the door would not receive the same notification as the average consumer – the latter could instead report a specific promotion for employees, for example. This contextualization, both temporal and spatial, seems to be the next essential step in the personalization of brand/customer communication. Finally, it is a question for the marketer to imagine this “fragmented identity” through different roles assumed by the individual. Indeed, the representations that managers make of their “customers” allow them to set up performance indicators to facilitate their management. 6.1.2. Representations and performance of the connected customer Customers construct multiple relationships with brands and organizations (consumer brands, public institutions, political parties, associations, etc.). They may 5 Etude Canalys, “Estimats sur les assistants vocaux intelligents”, May 2018, https://www. stuffi.fr/assistant-vocaux-google-home-amazon-echo-leader-t012018/.

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be fans or detractors, loyal or unfaithful, or they may be passive targets or active partners. The customer is simultaneously a revenue generator (through purchases, prescriptions), a communication vehicle (offline and online by word of mouth and published content), a co-creator through their ideas, actions and consumption, or even sometimes a collaborator, employee or part-time employee of the organization (in the case of platforms, such as BlaBlaCar for example). They are also potentially themselves a “marketing product” due to their visibility and increased influence through social media: connected customers can set up online communication strategies in order to work on their e-reputation and have an impact on their audience. Through messages and content published online, they implement strategies of influence as a brand, a journalist or an intellectual would do. Just as marketing has become part of people’s daily lives, so too have organizations to deal with this consumer interference in their own communication. Digital technology is thus leading to an extension of customer roles and representations. The customer is not only expected to be able to fulfill the role expected of them (intra role performance, such as inquiring, buying and buying again) but they are also expected to surpass this by becoming an ambassador, an employee, a shareholder or an exemplary citizen (extra role performance). The multiplication of the roles assigned to customers is accompanied by a multiplication of the terms assigned to them. Marketing professionals alternatively speak of the customer, consumer, user, fan, basher6, influencer, ambassador, citizen, voter, etc. The fruitful language used by marketing professionals and academics attests to the fact that these multiple representations of the customer are increasingly embedded in our society and that it is becoming increasingly possible to name and classify customers according to the roles assigned to them and the performance that is expected of them. These new roles are also objectified through multiple performance indicators measured within companies (commitment rates, conversion rates, etc.), making these representations more and more concrete. It should be noted, however, that by representations we mean: “mental constructs present in the mind of an actor, which can be shared by several actors, and which allow them to make sense of another entity (material or not) external to this actor” [BUS 17]. In other words, it will be a matter of the marketer being sensible or embodying the different roles assumed by the connected individual, using a name such as the customer, the influencer or the citizen.

6 See definition in Table 6.1.

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The connected customer, thus, manifests themselves both offline and online and then questions the definitions and use of the different terms used to characterize them. But when should we talk about a customer rather than a user? Is a user necessarily a consumer? Should we distinguish a brand fan from a Facebook fan? These are all questions that are of interest in the sometimes confusing use of these concepts in the media, among marketing professionals and also in academic research. Beyond semantic questions, the multiplication of these terms attests to the evolution of customer representations and roles as digital technology opens up new possibilities. We propose to reproduce in the following summary table some definitions of these terms and to attach examples of performance indicators used by managers. Its objective is not to draw up an exhaustive list of all the terms associated with “customers” when they consume or use products and services, but rather to go into more detail on terms that are commonly used today. Definition Consumer

Customer

Influencer

Examples of “performance” indicators

A person or group of people who use a good or service to meet individual or collective needs.

Penetration rate, turnover, satisfaction rate, recommendation rate, loyalty rate

A more or less regular buyer (physical or legal person) of goods or services offered by a commercial establishment. It is not necessarily the user of the good or service.

Turnover, quantity purchased, average basket, purchasing frequency, recommendation rate, satisfaction rate, loyalty rate, customer profitability rate (lifetime value), customer influencer value (organic word of mouth), customer knowledge value (useful information provided by the customer)

Internet user who, through their Internet audience and the impact they exert on it, has the ability to influence attitudes and behaviors toward a brand, a product or a service.

In the definition of the influencer: Online audience (number of subscribers), engagement rate on posts (likes, shares, comments), share of votes among influencers On the performance of the influencer Customer influencer value, customer referral value, net promoter score (NPS), the number of mentions of a brand’s product/campaign by the influencer, the evolution of traffic on the website or the brand’s social media, the evolution of the brand community (number of fans, followers, engagement rate), evolution of the conversion rate

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User

A person, community that uses, takes advantage of or uses (something/someone) for a specific purpose.

Frequency of use, intensity of use, variety of use, sharing of usage experience

User of public services

A person who uses a service (frequently a public service), who usually uses a domain or a public place.

Frequency of use of the “public good”, intensity of use of the “public good”, variety of use of the “public good”, sharing of the experience of use of the “public good”

Fan

A brand fan is a person who feels a strong attachment or even admiration for a brand. A Facebook fan is an Internet user, a member of the social network, who has clicked on the “Like” button of a company, brand, website or organization page in the broadest sense.

Degree of attachment to the brand [LAC 00], net promoter score or recommendation rate, engagement rate on social networks (positive vocation)

Ambassador

An individual who more or less voluntarily and spontaneously promotes a brand through offline and online word of mouth. They can be a customer, employee or influencer.

Net promoter score, customer influencer value (i.e. word of mouth between consumers, without marketers’ influence), number of mentions of a product/brand campaign by the ambassador, evolution of traffic on the brand’s website or social media, evolution of the brand community, evolution of the conversion rate

Basher

A person, often an Internet user, who, in his or her posts and published content, strongly criticizes a brand or an individual.

Degree of hatred toward the brand [ZAR 16], rate of engagement on social networks (negative or even hateful)

Citizen

Member of an organized political community, of a state and who therefore enjoys the civil and political rights guaranteed by that state/inhabitant of a town or city. The inhabitant who, in the service of the state, pursues the good of all before their own.

Frequency of participation in public consultations, frequency of participation in public surveys, degree of participation and engagement (messages, posts) contributing to the well-being of the community

Elector

A person who has the right to vote to participate in an election.

Potential membership in a political party/movement, frequency of participation in elections/abstention, degree of consistency of choices

Table 6.1. Representations and performance indicators of the connected customer

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While there is no doubt that CRM has become more complex with the development of digital technology, we do wonder how the individual perceives and lives with this fragmented identity. 6.2. Managing the customer in their connected environment Each connected customer consciously or unconsciously leaves fingerprints and digital traces that can potentially be used by companies. For example, a tourist will be geolocated, leave traces on their visited destinations, personal appreciations at museums, hotels and restaurants, and will be encouraged to share photos and souvenirs. For local authorities, tourism professionals and all other economic actors (banks, transport companies, etc.), this information provided in real time will potentially make it possible to adapt, promote or improve services and also to better manage tourist flows within the destination. In general, the name and qualities of this tourist are less important than the ability of this actor ecosystem to reach the customer at the right time with the most appropriate offer. CRM practices generally aim to identify customers (or potential customers), characterize and rank them in order to differentiate offers and increase both customer satisfaction and business performance. They have often been criticized for their potentially intrusive, discriminatory and manipulative nature [NGO 15]. But with IoT, not only does it become technically possible to track individuals in their offline journeys in stores, in the city or in workplaces and leisure facilities, but it is also possible to remotely and automatically activate alerts, notifications, actions, sanctions, etc.7 The natural separation between the private and commercial spheres thus inevitably disappears: the unit of analysis becomes the home (smart home), the store (connected shop) or the city (smart city). Unlike CRM, this marketing is often undetectable, fast and impersonal. IoT, thus, paves the way for stealthy and hidden marketing that is largely dominated by artificial intelligence and process automation. 6.2.1. Customer marketing, between secrecy and stealth With digital transformation, the idea of stealth marketing, covert marketing or undercover marketing is becoming particularly relevant. Originally, these terms refer 7 Depending on the country, legislation may limit these possibilities of identification and require explicit consent to the use of personal data revealed by connected objects. For example, in Europe, the General Data Protection Regulations (GDPR) require, in the absence of implicit user consent, anonymization – or even pseudonymization – in order to separate data directly identifying individuals from other data transmitted by objects.

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to communication strategies that “attempt to present a product or service by skillfully creating and disseminating ‘buzz’ in an opaque and secret manner” [KAI 04]. In other words, neither the company nor the brand or agency appear to be the authors and sources of this communication. With the rise of digital marketing, these practices have indeed multiplied and lead to more or less reprehensible tactics, such as writing false consumer opinions, creating false blogs, remunerating influencers (YouTubers for example), placing products in films and games, discreet sponsorship of various journalists and prescribers, recruiting celebrities and actors to play “early adopters” on the day a new product is launched, etc. In 2008, a special issue of the Journal of Public Policy & Marketing was dedicated to this subject. The authors pointed out that these hidden marketing practices could be perceived as acts of deception, generating a feeling of intrusion, leading to greater scepticism toward these communications or reinforcing consumer resistance [MAR 08, SPR 08, MIL 08]. The legal and economic risks (image, reputation, etc.) are certainly important for the firms involved. However, it must be noted that with the rise of digital technology, these practices are progressing and are now spreading on a large scale. Mobilizing more social, local and mobile technologies (SOLOMO), marketing practices are increasingly hidden and stealthy, preventing users, customers, citizens, etc., from determining the source, credibility and intentionality of the communication and influence they receive. These practices already raise many ethical questions (is it wrong? can they be legitimate? etc.) and managerial questions (is it effective and profitable? is persuasion enough to change behavior? etc.). Marketing has always been accused of exploiting information asymmetries to its advantage and manipulating, misleading or even abusing consumers through the advertising and marketing mix. With the digital transition, the business world is paradoxically less and less accessible and intelligible. With the IoT in particular, the home, car, shop, city, etc., will be able to constantly emit signals and transmit information on the routes, interests and uses of individuals. This will generally not be apparent and obvious to them, except in some cases through digital and mobile tools (a mobile application for example), to which they have access and over which they will have some control. As a result, marketing is increasingly escaping the sight and sensitivity of users who not only do not see the technologies in place but also constantly leave their own digital traces or transmit signals that can be exploited by companies of which they have absolutely no idea. The development of platforms, in digital communication (Google, Facebook, etc.) as well as in IoT, effectively reinforces this feeling of opacity prevailing on the digital and the fear that these data will be used without consumers’ knowledge.

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6.2.2. The dark side of the IoT The potentially dark side of the IoT today counterbalances the generally positive vision that highlighted the many interests in the industrial field as well as in various other fields, such as health or the environment. Using data collected in real time, companies can offer new services, identify new sources of value creation, refine their positioning and improve their communication strategies [POR 14]. In distribution, it is also becoming more possible to offer a seamless and fluid experience and to build bridges between the real world and the virtual world [BRY 13]. IoT is certainly a tremendous promise for marketing professionals: objects communicate and tell us about customers and their uses in real time, it becomes possible to accentuate customization and personalization of services, and finally, IoT can foster a win–win exchange with greater satisfaction and value for customers and more effectiveness and efficiency for the company. The IoT, thus, has a power of attraction, even fascination (how did they know where I was, what I was doing and what I wanted?), and it is also a source of all fantasies, illusions and fears in the media and among users. De Cremer et al. [DE 17] highlight, in particular, four categories of risk for users: – market knowledge and intelligence: companies can misuse the data collected (uses, purchases, in-store trips, etc.) and disseminate them to other stakeholders. The installation of sensors in all compartments of personal life (kitchen, home, car, city, etc.) can also lead to the collection of intimate information or excessively intrusive communication; – transactional: IoT can lead to a greater individualization of prices and offers, according to consumers’ tastes, customs and practices. For example, insurers are now developing insurance policies whose rates vary according to the way vehicles are driven and apply penalties for increased risk taking by drivers. The use of algorithms that are largely unintelligible to most consumers – especially the most vulnerable – could allow the least virtuous companies to keep their customers by creating misunderstandings and confusion and thus generate additional revenue; – relational: individual tracking of behaviors and practices paves the way for strategies of preferential treatment for the best customers, favoritism and discrimination. In addition, the establishment of an IoT network – for home automation, for example – entails switching costs (barriers to exiting a contract, irrecoverable investments) and tends to permanently “lock down” users; – integrity and manipulation: IoT opens up many opportunities for consumer manipulation and deception. For example, a car manufacturer concerned about improving their income may unduly encourage owners of connected cars to consider

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repairs, buy new parts or even renew their vehicles. This would result in an unfair and inequitable situation. Like many innovative technologies, IoT today produces strong and sometimes disproportionate resistance, such as for the Linky electricity meter or other IoT solutions developed by banks, insurance companies, etc. On a practical level, this requires companies to first establish a climate of trust, regular accountability and effective pedagogy. With IoT, asymmetries of information and power will indeed spread and user resistance mechanisms could increase [CHO 16], which goes against the very idea of co-creation of value and collective intelligence. On the other hand, if it were to make marketing and its technologies visible to its targets, it could have perverse effects and generate, for example, more anxiety and stress, create a climate of mistrust or make any strategy of influence counterproductive... even if it is morally desirable (promoting soft mobility, improving waste collection, etc.). In this context, transparency becomes a prerequisite and it is necessary to determine “what must be seen”, “what to see” and “what is worth seeing” [NGO 15, NGO 16, POR 17, POR 18]. 6.2.3. Toward the disappearance of the “customer” in a connected world? CRM has made customer identification and individualization/customization of offers an absolute priority. The massive collection of customer data has made it possible to propose appropriate offers and thus improve customer experience and satisfaction. Most CRM research therefore focuses on internal psychological responses (emotions, evaluations, etc.) and behavioral responses (loyalty, recommendation, etc.) that can be measured at the customer level, as well as the programs and tactics implemented for these same individual customers. However, the digital transition and the development of the IoT are changing the situation. Admittedly, companies have invested heavily in technologies, digital channels and social networks (social CRM) to collect individualized data and optimize the management of their contacts. But is the customer still the right unit of analysis? Indeed, digital transformation has not only impacted CRM strategies and tools. It has transformed the “customer” into a “user”, as evidenced by the daily use through the “user experience”, “user generated content”, “lead users”, “user friendly” strategies, “user innovation”, “user stories8”, etc. Although with CRM the 8 User experience, user-generated content (text or shared videos online), key users (expert customers who experiment with new products/services and collaborate with the company), digital environments that promote user comfort (utility, ergonomics, pleasure, fun, etc.),

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consumer had been supplanted by the customer, digital transformation makes the customer “disappear” – with the customer’s regular and sustainable purchasing mission – for the benefit of the user – with function of use and the ability to draw value from the objects that surround them in everyday life (value in use). Thus, the challenge is no longer just to understand and target the customer in their experiences and relationship with a given brand. It is becoming crucial to place the customer in a broader environment, that of cooking, housing, mobility, travel, health, sport, etc., in order to offer and deliver a valuable experience. Looking further ahead, the city will soon become a crucial playground for connected marketing. Today, 50% of the world’s population lives in cities. In 2050, it will be 70% of the world’s population. All fields of consumption will be affected by the connection of cities. In addition to the housing and mobility issues mentioned above, the smart city refers to issues of energy and water consumption, waste management, travel and tourism, well-being and public health, economic, social and educational development, etc. For Anthopoulos and Fitsilis [ANT 14], the smart city is: “an infrastructure and service environment based on information and communication technologies that promote an understanding of the city, quality of life and other attributes (i.e. environment, entrepreneurship, education, culture, transport, etc.)”. The objective of the smart city is therefore to transform the city into a “hub of services”, the latter being generally deployed by a group of large companies and a myriad of start-ups. Marketing in a connected world will necessarily encourage the customer to return to his or her place of residence, to understand how he or she extracts value in this context and to cooperate with multiple actors. However, CRM is still based on a completely different logic, that of the individual in their relationship with a brand, that of competition toward players in the same field and that of the long term (long-term relationship with a customer) as opposed to real time marketing, which is both reactive and brief toward users. 6.3. Connected customers, masters of their own consumption and relationship with brands In the context of IoT, the customer relationship thus changes toward a user service-provider platform where the “user” has access to different services provided by objects. These connected objects – objects that retain their original physical innovations created with users, user stories explaining their needs and desires in terms of new products in particular, etc.

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attributes and have been implemented with elements that make them smarter [POR 14] – are classic objects that have been enhanced with technological elements that allow them to be: “mobile, personalized, (with) a multi-tasking operating system, accessible remotely rather than through local services” [POS 09]. They can interact with other objects and individuals by sharing or exchanging data. They primarily provide services to the user. Thus, the Amazon Dash button is designed to make life easier for customers by allowing easy and convenient renewal of purchases at the right time. As technology becomes more and more transparent, our relationship with brands is also changing. For example, this Amazon Dash button focuses on meeting a utilitarian need without taking into account the choice of brand. The relationship with brands is erased to give way to a use of objects for utilitarian purposes. Whether it is Amazon’s Dash button, personalized product recommendations on e-commerce sites or the ability to access recipes on the screen of your refrigerator, these new features primarily meet a need for convenience and speed. The relationship with connected objects is motivated by an expectation of “making life easier”, for example being alerted in real time with notifications or controlling consumption. What creates value from objects is thus access to a service. 6.3.1. Connection as a source of value creation for the individual As Hoffman and Novak [HOF 16] and Folcher and Mussol [FOL 18] show, value derives from the uses and ways in which consumers arrange their connected objects and orchestrate their consumption within their homes. For example, the Open Food System9 project, developed in particular at the initiative of the SEB group, aimed to “build a ‘digital kitchen’ ecosystem that makes it easier to eat on a daily basis through the provision of enriched digital recipes, connected cooking appliances and innovative services”. The creation of value for customers then comes from the interaction of three environments: food, household appliances and digital. In the same way, the Human at Home project10 brings together the same connected scientists specializing in sensors, data, language, movement, marketing, etc., from various Montpellier laboratories, as well as innovative companies wishing to understand and design the apartment of the future. Another example is Michelin’s Open Lab Mobility11, which brings together nearly 200 organizations 9 www.openfoodsystem.fr. 10 www.hut.edu.umontpellier.fr. 11 www.total.com.

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(manufacturers, transporters, energy players, local authorities, insurers, etc.) around the challenges of sustainable mobility. It seems appropriate to conceive the perceived value of objects in a more holistic approach [AUR 04]. There is value when the user receives benefits from the object [VAR 04]. We can thus distinguish between different types of benefits: – utilitarian benefits: these refer to the monetary economy that can be achieved but above all to convenience, practicality and speed of access to services; – hedonic benefits: beyond the possession of futuristic objects, in advance of their time, consumers have access to products that adapt in real time to their needs, even if they are unspoken. With the possibilities of monitoring, the customer gains better self-knowledge. The smart home, by combining a set of connected objects, offers a multiplicity of possibilities and functionalities to the user to optimize their daily life in a perspective of better living, because of an appropriation of objects and a personalization of services; – self-expression benefits: objects allow the individual to live different consumption experiences depending on the interactions they have with them [VER 09]. The experience is enabling or constraining for the user’s identity [HOF 18], thus making it possible to extend or restrict oneself. Beyond all the benefits received by the user, it is the relationship with the brand that is redefined. Even if they can support the brand relationship, technologies are not “in themselves” relational and individuals develop ambivalent expectations toward them. 6.3.2. Orchestration of connected objects and organization of services around the individual The development of the relationship with technology and objects can increase perceived value. Linking devices and their data helps to make consumers more informed [POR 14]. The interactions between object and the user (heterogeneous parts) make both parts more intelligent. For example, consumers buy objects that provide services that, in turn, create value, particularly through a particular organization. In the context of an assemblage, the value is defined by and co-created with the consumer rather than being integrated into the product [VAR 04]. By explaining the perceived value of connected objects and their associated services based on the layout they compose, we take into account the “active” role of the user in the personalization and orchestration of the organization of connected objects. To better understand their relationship with objects and services, it is necessary to question the role and place of the individual in the assemblage or orchestration of objects.

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First defined as a philosophicall concept [DE EL 80], assembblage presuppposes that the partss of a whole innteract with eaach other and that the wholee is better thann the sum of the paarts. Assemblaage is a multiiplicity that co ontains variouus heterogeneoous terms and estabblishes connections or relattionships betw ween them, thuus creating a m multitude of possibbilities [DEL 80]. Each asssemblage is made m up of “external relationships” that makke it unique and give risse to its own n properties and multipliccity. The assemblaage of conneected objects thus combin nes heterogenneous elemennts. It is personallized by the user, u scalable and thus has emerging prooperties: as obbjects are graduallyy discoveredd and associiated servicess are approppriated, invissible and underlyinng ramificatiions are creaated with thee objects, annd new functtionalities appear, as a can be seenn in the exampple in Figure 6.2. 6

Figure e 6.2. Examplle of a "Human n Being, Pedo ometer, App plication, Sma artphone" asse emblage [FOL L 18]

For the user, thee brand relattionship is trransformed innto a networrk where communnication betweeen the differeent services allows a value creation. c In thhis vision, the user is part of thhe assemblagee and co-creattes value throough their intteractions c also be seeen as an orchhestrator. Orchhestration with connnected objectts. The user can in the coontext of relatiionships with objects can bee defined as: “ “the intentionaal association, organization n and coordinaation of varioous heterogeneous elements present p in th he connectedd environmeent (oobjects, humaans, fauna, floora) in order to allow thee appearance of em merging, dynaamic and speccific properties” [FOL 18]. The smartphone associated a withh its applicatiions is now a central elemeent in the orchestraation and mannagement of this t fragmenteed identity. This T tool, whicch allows

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individuals to be informed in real time, to communicate with their relatives on the other side of the world, to buy a rare product from an individual, to carry out administrative procedures or to switch on their coffee machine remotely, has now become difficult to separate from the person in any context, in any facet of their fragmented identity. If the orchestration then allows the elements of the organization to work in a coordinated way, it can be decided either by an external system or by the user. 6.3.3. The individual in a connected environment: control or trust? In order to improve this service relationship, what decision-making power should be left to the individual when faced with the prescription of such objects? This raises the question of how much free will the individual will have left in their decisions, whether or not they relate to objects. The configuration of objects is therefore to be considered in relation to their prescription. The prescriptive power of objects can be important, but this requires that the user accepts being guided by sometimes opaque technologies. Individuals may therefore want to orchestrate the different objects, but would this be a utopia on their part? As data are sometimes presented as the new black gold, it depends on the configuration and freedom given to it by the software architect to collect the said data. Should we guide the user in customizing the features provided in their environment or the scenarios they can deploy? How do you do that? Two perspectives seem to be in conflict: – first – in the line of artificial intelligence – where objects adapt to the uses that are made and make their own decisions. Although it facilitates the user’s life through the proper collection and use of his or her personal data, it does not give the user much freedom in his or her ability to act. This first approach questions the individual’s degree of trust in the object, software and software designer; – an opposite perspective, closer to co-creation, includes the user in software design, to allow them to choose their parameters and thus the functionalities of the objects. It also allows users to regain control over the data. However, it raises the question of how designers can allow end users to simply configure complex features in their intelligent environment. Easier access to data, and therefore to more information, helps to make the individual smarter. Can we not then consider that these new capacities that make them an “increased individual” can be associated with an extension of the self, knowledge and skills? Nevertheless, is it not these connected objects with artificial

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intelligence that tell us what to eat, or how many steps to take in a day, that remind us to pick up our children from school or that provide us with information without us having asked for it, reducing the individual rather than increasing them? Although this technology favors new uses that contribute to “facilitating” the daily life of individuals, would the loss of control over personal data or even over their free will lead to a tendency to reduce the individual’s thinking and the expression of their uniqueness... and therefore their identity? In general, individuals demonstrate their desire to keep people at the heart of their exchanges with companies while presenting a certain mistrust for exclusively robotic relationships. But these same individuals want brands to offer products that spontaneously match their tastes. The use of connected objects by brands must therefore be considered in this sense. Many stores provide their sellers with smartphones or tablets that allow them to access all product information but also customer history in order to offer a wide range of services. Still, offering an adapted service, bots like Mode.ai12, used by both Levi’s and Louis Vuitton, allow a more precise recommendation of clothing and accessories to customers based on an online discussion and a selection of photos. The user is divided between a desire for innovative and simple functionality and mistrust of a technology that is not well-known and that may infringe-privacy. The user also wants to actively protect personal data. The RGPD thus promotes anonymization – or even pseudonymization – of data collected through multiple means, such as smartphones, computers, tablets, connected objects, electronic terminals (e.g. beacons), etc. Obligations on platforms (Google, Apple, Facebook, etc.) also prevent advertisers from recognizing and considering their own customers. Thus, the collection of customer data has obvious limitations and few companies will truly be able to have a 360° customer vision and master the entire customer journey, from the search for information to the conclusion of the purchase and repurchase. While the organization of objects creates value, by giving them a certain autonomy, the consumer may be reluctant to give them too much authority, and may choose to orchestrate their own consumer experience. For designers, it is a matter of developing ergonomic and easy-to-use interfaces, despite technologies that seem impenetrable to the user, while taking into account the user’s ever-increasing need for various functionalities. What about the designer’s ethics and the power left to the consumer?

12 www.mode.ai.

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6.4. Conclusion The purpose of this chapter was to examine the meaning of CRM in this increasingly connected and digitally dominated environment. More than providing definitive and scientifically established answers, it was a question of opening up some avenues for reflection. To date, CRM has adapted and taken advantage of the development of digital technology to better collect data, increase communication and distribution channels, improve services and optimize its internal processes. But the development of IoT muddies the water and seems to impose the development of new models that will be more user-centric and use-oriented, and will lead to the customer being considered in his or her living environment. Is there praise for “effortless” objects, but in defiance of freedom? “I simplify your life but in return, you give me access to your private sphere: your home, your car, your health, your sporting activity, your sleep, etc.”. 6.5. References [ANT 14] ANTHOPOULOS L., FITSILIS P., “Using classification and roadmapping techniques for smart city viability's realization”, Electronic Journal of e-Government, vol. 11, no. 2, pp. 326–336, 2014. [AUR 04] AURIER P., EVRARD Y., N’GOALA G., “Comprendre et mesurer la valeur du point de vue du consommateur”, Recherche et Applications en Marketing, vol. 19, no. 3, pp. 1–20, 2004. [BEN 09] BENGHOZI P.J., BUREAU S., MASSIT-FOLLEA F., L’Internet des objets, Editions de la Maison des Sciences de l’Homme, Paris, 2009. [BRY 13] BRYNJOLFSSON E., HU Y.J, RAHMAN N.S., “Competing in the age of omnichannel retailing”, MIT Sloan Management Review, vol. 54, no. 4, pp. 23–29, 2013. [BUS 17] BUSCA L., Le façonnement des marchés par les pratiques marketing routinières: une application au Social Media Management, PhD Thesis, Toulouse 1 University Capitole, 2017. [CHO 16] CHOUK I., MANI Z., “Les objets connectés peuvent-ils susciter une résistance de la part des consommateurs? Une étude netnographique”, Décisions Marketing, vol. 84, pp. 19–41, 2016. [DE 17] DE CREMER D., NGUYEN B., SIMKIN L., “The integrity challenge of the Internet-ofThings (IoT): on understanding its dark side”, Journal of Marketing Management, vol. 33, nos 1/2, pp. 145–158, 2017. [DEL 80] DELEUZE G., GUATTARI F., Mille plateaux: Capitalisme et Schizophrénie, Editions de Minuit, Paris, 1980.

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[FOL 18] FOLCHER P., MUSSOL S., “La valeur perçue des objets connectés, une lecture par la théorie de l’agencement”, Congrès de l’Association Francaise du Marketing, 2018. [HOF 16] HOFFMAN D.L., NOVAK T.P., “Visualizing emergent identity of assemblages in the consumer Internet of Things: a topological data analysis approach”, Advances in Consumer Research, vol. 44, pp. 480–483, 2016. [HOF 17] HOFFMAN D.L., NOVAK T.P., “Send ‘Her’ my love: a circumplex model for understanding relationship journeys in consumer-smart object assemblages”, 2017, available at https://ssrn.com/abstract=3059093. [HOF 18] HOFFMAN D.L., NOVAK T.P., “Consumer and object experience in the internet of things: an assemblage theory approach”, Journal of Consumer Research, vol. 44, pp. 1178–1204, 2018. [KAI 04] KAIKATI A.M., KAIKATI J.G., “Stealth marketing: how to reach consumers surreptitiously”, California Management Review, vol. 46, no. 4, pp. 6–22, 2004. [LAC 00] LACOEUILHE J., “L’attachement à la marque: proposition d’une échelle de mesure”, Recherche et Applications en Marketing, vol. 15, no. 4, pp. 61–77, 2000. [MAR 08] MARTIN K.D., SMITH N.C., “Commercializing social interaction: the ethics of stealth marketing”, Journal of Public Policy & Marketing, vol. 27, no. 1, pp. 45–56, 2008. [MIL 08] MILNE G.R., BAHL S., ROHM A., “Toward a framework for assessing covert marketing practices”, Journal of Public Policy & Marketing, vol. 27, no. 1, pp. 57–62, 2008. [MUS 18] MUSSOL S., FOLCHER P., “Orchestration et agencement: quel rôle pour l’utilisateur dans la coordination de son environnement connecté?”, Colloque MTO, 2018. [NGO 15] N’GOALA G., “Opportunism, transparency, manipulation, deception and exploitation of customers’ vulnerabilities in CRM”, in NGUYEN B., SIMKIN L., CANHOTO A.I. (eds), The Dark Side of CRM: Customers, Relationships and Management, Routledge Editor, London, 2015. [NGO 16] N’GOALA G., “Edito: le marketing dans un monde connecté, un monde de paradoxes”, Décisions Marketing, vol. 84, pp. 5–18, 2016. [POR 14] PORTER M.E., HEPPELMANN J.E., “How smart connected products are transforming competition”, Harvard Business Review, vol. 92, no. 11, pp. 64–88, 2014. [POR 17] PORTES A., CASES A.S., N’GOALA G., “Vers une définition de la transparence perçue de la relation client sur les canaux digitaux”, Management & Avenir, vol. 4, pp. 105–129, 2017. [POR 18] PORTES A., La transparence numérique: rôle du client et conséquences sur la relation à la marque, PhD Thesis, University of Montpellier, 2018. [POS 09] POSLAD S., Ubiquitous Computing – Smart Devices, Smart Environments and Smart Interaction, New York, Wiley, 2009.

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[SPR 08] SPROTT D.E., “The policy, consumer, and ethical dimensions of covert marketing: an introduction to the special section”, Journal of Public Policy & Marketing, vol. 27, no. 1, pp. 4–6, 2008. [VAR 04] VARGO S.L., LUSCH R.F., “Evolving to a new dominant logic for marketing”, Journal of Marketing, vol. 68, no. 1, pp. 1–17, 2004. [VER 09] VERHOEF P.C., LEMON K.N., PARASURAMAN A. et al., “Customer experience creation: determinants, dynamics and management strategies”, Journal of Retailing, vol. 85, no. 1, pp. 31–41, 2009. [ZAR 16] ZARANTONELLO L., ROMANI S., GRAPPI S. et al., “Brand hate”, Journal of Product & Brand Management, vol. 25, no. 1, pp. 11–25, 2016.

7 The Augmented Customer Experience: Between Humanity and Robotization?

In recent years, experience seems to have become the raw material for marketing and customer relations professionals. Because brands can no longer differentiate themselves by their products and services, they try to do so through experience. In an era of digital transformation where offline and online are intertwined in the customer’s journey, it is no longer just a question of reducing the customer’s efforts or satisfying them at each touchpoint, but of rethinking the entirety of a journey that is becoming sometimes complex, the objective being to build a pleasant, rewarding and memorable omnichannel experience. Thus, it is no longer just a matter of providing customers with an arsenal of touchpoints so that they can connect where, when and how they want with the brand, but of rethinking and orchestrating this arsenal to produce a pleasant omnichannel experience. The customer relationship system must be rethought in a context of digitization and “datalization”, i.e. at a time when the customer journey generates both online and offline data, thus offering companies new levers for action. In addition, this system must be rethought in light of the many technologies and technological support offered to companies (conversational agents, augmented reality, voice assistants, IoT, AI, etc.) because these technologies are likely to profoundly transform their customers’ experience. Finally, in light of the omnipresence of technologies, many professionals are questioning the evolution of the human/ technology duo in the relationship with their customers. A theoretical detour is an essential prerequisite for understanding how customer relationship managers will be Chapter written by Régine VANHEEMS.

Augmented Customer Strategy: CRM in the Digital Age, First Edition. Edited by Gilles N’Goala, Virginie Pez-Pérard and Isabelle Prim-Allaz. © ISTE Ltd 2019. Published by ISTE Ltd and John Wiley & Sons, Inc.

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able to combine people and technology to provide their customers with a quality experience. Thus, if, in the era of the experience economy [PIN 99], experience has become central to consumers’ lives, a question arises is: what is experience? 7.1. From experience to omnichannel experience 7.1.1. Rethinking the experience when it becomes omnichannel Sociology and psychology define an individual’s experience as a subjective and cognitive activity that contributes to the construction of the individual, especially if they are extreme experiences. When we visualize consumer behavior, the consumer experience is considered as a personal experience resulting from “an interaction that is pleasant, memorable and meaningful” [KWO 07] between an individual and an object. This personal experience is “often emotionally charged” and is by nature subjective. Also its perception varies from one individual to another [ROE 08]. The experience is also characterized by the intensity of the emotional responses it generates in the consumer [ROE 08] and by “the sum of the positive or negative consequences derived from the use of a good or service” [IDF 02]. The challenge of marketing is, therefore, to provide the consumer with a memorable, even extraordinary experience, even if ordinary experiences can also be a source of pleasure. In the era of omnichannel and the multiplicity of touchpoints, the uniqueness of experience lies in the fact that in most cases, a customer’s buying experience is no longer experienced with regard to a single touchpoint, but to several. Indeed, the consumer takes the best of each touchpoint throughout his decision-making process. Thus, in the era of the digitization of the purchasing process, the majority of individuals begin their purchasing journey online to finalize their transaction offline. Such behaviors, qualified as ROPO (Read On-line, Purchase Off-Line) or ROBO (Read On-Line, Buy Off-line), are now the norm. Reverse behaviors, known as showrooming, describe behaviors in which the customers enter into the physical sphere to reduce their perceived risk or to receive advice from the shop assistant before finally completing their transaction on the Internet. Multiple round trips between channels are also possible. Moreover, today’s purchasing trajectories are all the more complex as touchpoints have been multiplied and as customers can move from one to the other throughout the same purchasing trajectory. For example, whether it is for a purchase or a complaint, a customer can start a self-care journey on an online site, send an e-mail, be connected or call an online advisor, and then come into the store to get an advisor’s opinion. Similarly, if their journey is

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completely digital, they can use several “devices” (computers, tablets, smartphones). In the same way, some companies put “call-to-action buttons” on their website such as click-to-chat, click-to-call-video, etc. By doing that, they propose that their visitors live an omni-channel experience through several points of contact that facilitate the buying process. The transition between touchpoints, which the company makes available to its customers so that they can contact it as they wish, invites one to rethink the experience offered to customers. It is no longer simply a question of offering an “optimal experience” on each of the touchpoints. Actually, the succession of different optimal experiences may not lead to an optimal overall experience. It is important to provide them with a pleasant overall experience that will make them want to come back and recommend the company to others in their physical or virtual sphere. It is, therefore, necessary that the sum of the microexperiences received at several places leaves a positive memory. The experience at the end of the process must be perceived as positive and the memories left by the emotions felt along the way to the purchase must be pleasant. 7.1.2. From the integration of the Internet into the purchasing process to omnichannel: toward a sublimation of the customer experience? 7.1.2.1. An improved experience... What is the impact of the Internet and today’s multiple touchpoints on the customer experience? Initial work on this subject indicates that the mobilization of the Internet in a purchasing process would not only reduce transaction costs but would also contribute to enhancing the consumer experience [ADB 02]. The Internet would thus be a lever for the production of experience that would reinforce the symbolic nature of the purchasing process for certain categories of products. The mobilization of the Internet in the purchasing process would, indeed, have an influence on the three spheres of experience: the emotional sphere linked to feelings of both pleasure and frustration (which arise from power struggles with the sellers), the cognitive sphere where the learning and discovery of the product are played out, and finally the economic sphere, which constrains the buyers according to their financial resources. The advent of the Internet, and now the multiplication of touchpoints, should offer a more pleasant experience to the customers since it allows them to get in touch with the brand more easily, where they want, when they want and how they want. The experience becomes easier, saves time, and offers more service and convenience in the act of purchasing. Indeed, through the various touchpoints it

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makes available to them, the company offers its customers a new form of freedom. They have the choice of activating a touchpoint to find an answer to their needs or activate several touchpoints for the same purchase decision. Customers can contact the company by e-mail, social networks, speak with online advisors, chat, visit a branch or store and/or meet a salesperson or sales representative. They can start a search for information on a company’s website, continue their reflection through the questions they ask by chat or e-mail to an employee, before calling the telephone platform and then talking with a shop assistant. 7.1.2.2. To a deteriorated experience? However, in order for the shopping experience to be pleasant throughout the customer journey, touchpoints must be consistent, even synchronous [VAN 09]. On the other hand, conflicts [CHE 03] or inconsistencies between touchpoints can generate negative emotions leading to a deterioration of the experience. There is also a risk of dissatisfaction due to inflation in expectations due to customers’ high expectations moving from one channel to next [WAL 04]. Moreover, while the unavoidable omnichannel strategy offers new forms of freedom to the customer, it also gives rise to new irritants that find their source in: – A divergence in the answers given to customers according to touchpoints: a study conducted in the retail and specialized e-commerce sector reveals that to the same question asked, only 17%1 of websites provide consistent answers on the three channels. – The referral of the customer from one touchpoint to another to solve their consumption problem. The customer then has the impression that he or she is seen as a “ping-pong ball” that the touchpoints push back and forth. The multiplication of touchpoints has led to a form of dilution of the responsibility of each of them. No single touchpoint feels truly responsible for the customer’s problem, which was not the case when there was only one channel, often the store, which in fact was required to find an answer or solution to the customer’s problem. Feeling you are being treated as a ping-pong ball is all the more unpleasant for the customers because, having gained power thanks to the Internet, they can no longer bear to have no control over the situation. – The customer’s impression of not being listened to by the company and not being understood. Even today, in an omnichannel approach, it is not uncommon for the customer to have to re-explain their need or problem when they have already done so via another touchpoint. Having to re-explain the situation leads to a feeling

1 https://www.eptica.com/sites/default/files/uploads/cp_160831_eptica_etude_etude_ecommerce.pdf.

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of time being wasted and frustration. The customer has the impression of not being listened to and not being recognized within the company. Moreover, a customer who has already started their journey with a touchpoint does not have the same expectations from the new touchpoint they are requesting [NPV 12]. Yet, few companies seem to have understood this evolution of customer expectations and psychology. For example, a customer who has started an online information search is more impatient when they phone the call center. They want to get straight to the point but the expectations of the sales advisor are not the same; – The impression of not progressing with the purchase: the “ping-pong ball” effect combined with the impression of not being listened to give the customer the impression that he or she is not progressing in his or her decision-making process throughout the omnichannel purchase process. 7.1.3. Creating an unforgettable memory souvenir because of the fluidity between “touchpoints” To provide the customer with a quality overall experience, one of the challenges is to reduce the irritability caused by the multiplicity of touchpoints throughout the customer’s decision-making process. In this perspective, some authors [BAR 11, ACH 05] indicate that the objective is to facilitate the passage from one touchpoint to another to create fluidity between the touchpoints, which in addition fosters a “lock-in effect”. Of course, this search for fluidity is closely related to the notion of customer effort and the “customer effort score”, even if this indicator must be considered here when moving from one touchpoint to another. Such fluidity is probably a way of avoiding the negative emotions that result from the difficulty, from the trouble encountered when attempting to easily continue a journey started with another touchpoint. If such an experience is a way of managing negative emotions, is it a way of creating a rewarding experience that the customer will remember? By dint of fluidity, is there not a risk of creating a tasteless experience? Can an extreme fluidity with an ultra-fast passage not be a vector for a poorer customer experience? If such fluidity seems logical to create a “nonexperience” for common purchases, what about high symbolic value purchases [NPV 17]? So the question today is not only how to create a seamless experience, but how to create a positively memorable omnichannel experience. The question of the transition from one touchpoint to another is no longer a simple one, in terms of

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fluidity, but also in the role of each of these touchpoints in the lived experience or in the memory of the lived experience. What are the moments of truth or key milestones in building a memorable and quality omnichannel experience? Do some touchpoints have a greater ability to create a meaningful experience that is memorable and positively colors the whole perceived experience? Do they have the ability to compensate for emotions or negative experiences in other channels? Are there compensatory touchpoint models involved in the evaluation of an omnichannel journey? Can an experience with one touchpoint compensate for negative experiences elsewhere? 7.2. Management of the omnichannel system: between fluidity, continuity or disruption and jumping between “touchpoints”? The issue of continuity or disruption between touchpoints and their respective roles in recalling the customer experience has been the subject of a limited amount of research. Verhoef et al. [VER 15] define omnichannel management as “the synergetic management of the numerous available channels and customer touchpoints, in such a way that the customer experience across channels and the performance over channels are optimized”. If customer experience is central to this definition, the challenge in the coming years will be to understand how touchpoints will have to be orchestrated in order to effectively “optimize” the experience across multiple channels. 7.2.1. When the experience with a touchpoint is the continuity of an experience started elsewhere A reflection on the optimization of experience first involves identifying the different dimensions of the experience in order to understand what the potential sources of disruption or value creation are when associated with a change in touchpoints or how microexperiences can follow one another. In this regard, based on research conducted in consumer behavior, Camélis [CAM 08] identifies five dimensions of the service experience: sensory activities that refer to the five senses that can be activated during the experience, emotional activities that refer to emotions experienced throughout the experience, cognitive activities through the customer’s reasoning, thoughts and reflections during the experience, behavioral activities that refer to the customer’s behavior and finally social activities that refer to interactions that are created with other people during the experience.

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An omnichannel experience, by definition, implies a change in touchpoint on the same purchasing journey, which is a potential source of disruption on each of these dimensions, whether cognitive, behavioral, social, emotional and sensorial, especially since the experiences lived according to each of the touchpoints are, by nature, different. For example, an experience in self-care, with an online advisor or in-store is, in essence, very different. The possible disruption in the purchasing process is, therefore, explained by the change in touchpoint, but also by the specific feature of each touchpoint to provide unique microexperiences. Ensuring continuity or sometimes deliberately causing disruption when changing touchpoints depends on the customer’s logic and the goals sought by the customer. For example, some authors indicate that the multichannel approach is associated with greater efficiency (physical and cognitive effort, time) and/or productivity gains (money), both in purchases that are not very involving [BEL 04, BEL 05] and in purchases that are involving [NPV 12]. 7.2.1.1. Cognitive consistency A customer who has started a process of collecting and processing information on a touchpoint that is often online will not receive in the same way the additional information given to them later by another touchpoint as a result of their journey. Indeed, unlike the “virgin” customer of any cognitive processing, the customer not only has precise and up-to-date knowledge of the product category sought, but also of the brands and/or products to which they have already directed their search for information. It is, therefore, not possible to welcome this customer, without integrating the journey already completed online and the research and processing of the information developed that has already been implemented. Ensuring cognitive consistency or continuity means giving customers information that is consistent with that provided by the company’s other touchpoints. For example, customers are reassured if the information they receive from the in-store sales team or online advisors is “in the same direction” as the information they have seen on the Internet. Ensuring cognitive consistency also means taking into account what “happened” in terms of cognitive processing among the other touchpoints. Such a reflection therefore calls for a redesign of the touchpoints in order to offer customers: – consistent information between channels (divergent information places customers in a state of cognitive dissonance); – synchronous information that confirms their prechoice in order to reassure them, especially in situations of high involvement; – additional, complementary information (tips for example) in order to give value to their visit with the touchpoint (call center, store);

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– information of a less rational nature that makes it possible to provide the product history, its manufacturing process, the people who work for the company... and that gives meaning to the story that customers experience in their relationship with the brand. 7.2.1.2. Behavioral and social continuity How can a behavior be linked between different touchpoints? In what way can an online initiated behavior be consistently continued in the offline universe depending on the purpose pursued by the customer? How can we orient the customer’s behavior during the point of sale so that it can be optimally integrated with an experience started in self-care on the company’s website? For example, a customer who is following a logic of efficiency in terms of managing their time resources will appreciate continuity in terms of signage or merchandising that will allow them to easily find in store a product identified or preselected on the brand’s site. The question of social continuity presupposes that the customer can continue an interaction that has been created at another touchpoint. 7.2.1.3. Sensory and emotional continuity If we turn to sensory and emotional dimensions, the question of optimizing the experience on these two dimensions is more complex, subtle and less explored. This raises different questions: – Should we and can we really create the same experience according to the touchpoints, knowing that the senses are by nature activated differently through these touchpoints and that each of them probably does not have the same capacity to generate emotions? – What type of sensory and/or emotional experience does the customer expect to receive when visiting a touchpoint after mobilizing another one? An experience lived with a touchpoint is at the origin of an inferred experience, an experience that the customer is about to receive on their journey. In addition, beyond the previous questions, the complexity of the situation arises from the fact that the customer does not necessarily want to “receive the same experience” with regard to the different touchpoints. Furthernore couldn’t interdependencies between the different dimensions of physical, cognitive, social, emotional or sensorial experience occur? For example, a consumer may choose to master all the technical data online to free themselves from these constraints in store, in order to be able to let themselves go, to receive a different experience, made of high moments and pleasant encounters. How do customers react when a clothing brand makes them dream on its website, through fashion shows and stagings, and

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then they only receive a basic experience in store? Does the website create a risk of inflation of expectations, likely to create disappointment when visiting the store, and at the time of the transaction? 7.2.2. The TEAV model as a theoretical basis for the analysis of omnichannel trajectories The question of the omnichannel experiment can be analyzed in light of successive microexperiences, one of which is a continuation of another. But it can also be appreciated in a more holistic way. It is no longer simply a question of considering an experience that is part of the succession of another, but of considering the omnichannel experience in its entirety. The TEAV paradigm proposed by Hirschman and Holbrook [HIR 86] provides an interesting framework for further reflection in this regard and for analyzing the omnichannel experience in a holistic way. While Hirschman and Holbrook [HIR 82] retained in their article on the experiential aspects of consumption, a linear three-phase approach (cognition, affect, behavior), a few years later, they [HIR 86] moved away from this conception of information processing models to propose the TEAV (thought–emotion–activity– value) paradigm. Thus, the linear process of CABS (cognition–affect–behavior– satisfaction) is replaced by a less linear and more complex network that involves consumer thinking, emotions and activity, which includes both actions and reactions and the value that is derived from lived experiences. The “customer journey” where multiple “touchpoints” can be linked in the era of omnichannels can be revisited or rethought in light of the TEAV paradigm in which consumer thinking, emotions and activity play a central role so that value can be created. Faced with the multiplicity of microexperiences that are experienced during the same shopping experience, the question of the sequence of consumer thoughts, emotions and activities arises, knowing that, by definition, these consumer thoughts, emotions, actions and reactions can also take place at different moments in time. How can the orchestration of these touchpoints create thoughts, emotions and activities that can create value for the consumer? Is continuity in thought, emotion and activity a guarantee of value for the customer? Knowing that each microexperience is separated by time or change in touchpoints, how is this coherence achieved in the customer’s system of thought, emotions and activities?

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7.2.3. The contents of the omnichannel experience approached in a holistic way Thus, if “the service experience represents for the customer a slice of life dedicated to consumption during which he acts and interacts in a universe controlled by the company”, the omnichannel experience can be considered as “several successive slices of life dedicated to consumption during which he acts and interacts with several distinct universes controlled by the company and in which he places his own universes there” [ROE 08]. Claire Roederer’s [ROE 08] theory focuses on the content of the experience, its objective being, more precisely, to isolate its stable components, whatever the context. Thus, while the author indicates that the background of each experience is undeniably dependent on its context, it is nevertheless possible to identify dimensions that will be common to any consumer experience. These dimensions, applied to a cross-channel context [COL 16], provide an interesting theoretical basis for understanding the broader customer experience. In addition, the content of the experience as described by Roederer makes it possible to understand an experience that is based on several touchpoints in its entirety. Roederer identifies four dimensions in experience: hedonic-sensory, rhetorical, temporal and praxeological dimensions. The hedonic-sensory dimension of the experience, an individual and selfcentered dimension, refers to the pleasure/displeasure associated with the individual’s experience during the purchasing act. The rhetorical dimension of the experience refers to the object consumed as a vector of meanings. The shopping experience is a meaningful vehicle. Thus, the elements “of an experiential context, and among them, the consummate object, constitute signs (carriers of meaning) that the subject interprets and, in a way, puts at the service of a broader meaning that the experience has for the individual” [ROE 08]. These signs, which carry meaning, are elements of the story that the subjects can tell or tell themselves about the situation. It is, therefore, important to discover the meaning built up over the course of the narrative of experience, and therefore here as the microexperiences unfold. The third dimension of the content of experience refers to time. This concerns the attention paid to time during the experience. The customer, as an acting individual, is aware of time, measurement and control. Such a relationship with time depends on the customer’s temporal orientation [BER 90], but also on the

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experiential context. Time is considered as “a time to be filled”, a “resource to be controlled” or as a “pace to be slowed down”. Finally, the last dimension of experience identified in Roederer’s work is the praxeological dimension of the experience where the individual manages their own experience. These dimensions, by their decontextualized nature, make it possible to understand the experience, even globally, including when it is lived on different points of contact. When the experience becomes “omnichannel” and different touchpoints are activated by the customer to contact the company or by the company to elicit a reaction from the customer, it is the entire content of the experience and therefore all dimensions that can be impacted. The hedonic-sensory dimension and pleasure/displeasure can be expressed not only on the lived experience with each of the touchpoints but also on the omnichannel experience as a whole. Pleasure and displeasure can be felt both on each touchpoint and on the entire “touchpoint journeys”. The question is, therefore, to locate the sources of displeasure and/or that of pleasure. The pleasure or displeasure can arise from a continuity in the succession of experiences or, on the contrary, from discontinuities through emotions, surprises, through experiential or emotional jumps. It all depends on the customer’s purchasing logic and objective. A growing pleasure among the succession of touchpoints could, for example, generate a stronger memory of the experience. The question of the story that the individuals tell themselves or others refers to the meaning that they construct through the narrative of their microexperiences on the different touchpoints within the same buying experience. The question, therefore, arises from a coherence of historic discourses, without these discourses leading to an impoverishment or an extreme simplification of the story. The history refers not only to the one that the company tells its customers about the touchpoints, but also to the one that the customers will be able to tell themselves in this back-and-forth between touchpoints, which invites us to shift the logic of the company’s “story telling” to that of the customer. The question of the praxeological dimension of experience can also be raised. The consumer, who has taken power over the Internet, is becoming a driver of their own experience. The implementation of an omnichannel platform responds to this steering logic, since the customer can theoretically manage their experience of the place and in the way they wish remotely, in the physical or virtual world. But such

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steering can take place if the omnichannel platform gives the customer the impression of being the master and actor in building their own experience. Finally, there is the question of the relationship with time. The customer, as an acting individual, is aware of time, measurement and control. Then omni channel can be used to control time, slow it down or accelerate it. 7.2.4. An experience that is exacerbated when it is experienced over several channels? Empirical research [COL 16] has made it possible to understand the dimensions of a “meta-shopping experience” [ANT 13] consisting of a multiplicity of microexperiences that can take place successively or simultaneously in the real and virtual world. This research shows that the identification of the dimensions of cross-channel experience very logically joins, because of their decontextualized nature, those identified in a point-of-sale experience by Roederer [ROE 08, ROE 12]. In addition, beyond the four dimensions of Roederer’s experience (hedonic-sensory, praxeo, rhetorical and temporal), the research identifies a fifth dimension of the crosschannel experience, namely a social dimension and a more intense experience of each of the dimensions of experience, compared to what is experienced on a single channel. Indeed, not only the hedonic-sensory dimension is exacerbated by the multiplicity of stimuli, but also the praxeological dimension. Feeling that they have control over the channels that they can operate as they please, the indivuals manage their own experience, according to their preferences, their current desires and career path. This contributes to enriching the meaning attributed to their action, which refers to the rhetorical dimension of experience, through the freedom and power provided by the experience lived on different channels. In addition, the consumers have control over the temporal dimension, which they control more or less consciously by activating the channels as they see fit to accelerate time or slow it down according to the sensations they wish to experience and their own constraints. As for the social space, it is expanded and is based on both the virtual and physical sphere. The consumer can, therefore, be accompanied or advised virtually or physically.

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7.3. Conclusion: the place of the human being and technology to create a quality experience The objective of this chapter was to analyze the customer’s experience when it is based on several touchpoints. The transition from one touchpoint to another can cause unpleasant disruptions that the company will have to reduce by creating fluidity. The dimensions underlying the experience also provide an analytical framework to identify the levers of action available to companies so that they can provide their customers with a rewarding, memorable, omnichannel experience that will inspire them to return and talk to others about it in their real and virtual spheres. The singularity lies in the company’s ability not necessarily to provide a satisfactory experience with regard to the five dimensions of experience previously discussed, for each touchpoint, but to orchestrate the succession of these microexperiences so that in the end the overall experience is positively understood. Some dimensions or touchpoints can also have more weight in the experience as the customer experiences it and tells themself about it. Making the experience fluid and seamless and “without memories” or on the contrary making it rewarding and memorable must now be thought of according to several touchpoints throughout the purchasing process. Digital transformation changes the relationship between the company and its customers. The digitization of the customer experience coupled with its “datalization” offers new levers of action for companies that now have expanded tools to interact and converse with their customers (chatbots, voice assistants, social networks, IoT, etc.) and better understand them (data, AI, semantic analysis, etc.). Faced with this digitization, an essential question arises today – that of the respective roles of people and technology in customer relations. Technology can support simple operations with low added value and help to smooth the transition from one touchpoint to another, for example by immediately identifying the customer, logging actions regardless of the touchpoint and complementing the actions that can be implemented. With regard to the latter point, let us mention clickto-chat or click-to-call which facilitate the connection with an advisor when the Internet user is identified as being in difficulty or in need of additional information. Technology can affect different dimensions of the omnichannel experience such as the cognitive, behavioral and even social dimensions. This is the case when technology makes it possible to give the customer consistent information on the different touchpoint to continue with him/her in a seamless fashion even in the event of a change in touchpoint. In this respect, Air France or Hello Bank allows the Internet user, during a device change, to continue where they left off with the

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previous device, without forcing them to restart the process from the beginning. In the same way, when it offers the possibility for the customer to continue a conversation started with a contact in the store or an online advisor, the technology helps to reinforce the social dimension of the experience (social networks, e-mails, chat, etc.). Increasingly invisible technology is particularly relevant to move faster in lowvalue interactions, move quickly between multiple touchpoints or ensure continuity on certain dimensions of the customer experience. In addition, because technology relieves staff of the burden of low-value transactions, they will be able to focus on higher value transactions and take care of customers when they are waiting for personalized support or even complete management of a problem that they cannot solve on their own [DIX 17]. In the human/technology pair, the role of each person could thus gradually be redefined in light of the digitization of customer experience. The human being freed from low value added operations will have a central role, magnifying the customer experience and making it memorable. Because humans can influence the social, emotional and sensory components of the shopping experience in the same way as Zappos’ online advisors do, whose goal is to make customers happy and find a solution to their problem, no matter how long it takes, away from the traditional measures used by customer relationship services. Technology can also help them in their mission. In some banks, online advisors are helped by “bot prompters” like in the theater, robots that help them better serve their customers by “pushing for the right information at the right time”. They, thus, regain relational ease and empathy and can be truly concerned by the customer’s problem or question. Bots can help advisors to offer more services like the American clothing brand Stitch Fix, which, more than just selling clothes on its website, offers personal stylist services through online advisors, themselves accompanied by bots to help them make better proposals to their contacts. The quality of human interaction is and will be more fundamental than ever at a time when technology has become omnipresent. Human interaction is the interaction that the customer remembers and it is this that contributes most to remembering the experience [FLA 17]. Their action is therefore fundamental... but humans must not behave like a robot... However, the introduction of too narrow scripts or instructions given to advisors has generated a loss of relational and situational intelligence, which must be urgently regained... In the era of digitization, where the human being must

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become human again, it is all the fundamentals of customer relations that must be reinvented... 7.4. References [ACH 05] ACHABAL D.D., KALYANAM K., CHU J. et al., “Cross-channel optimization”, IBM Institute for Business Value/IBM Global Services, Somers, New York, 2005. [ANT 13] ANTEBLIAN B., FILSER M., ROEDERER C., “L’expérience du consommateur dans le commerce de détail. Une revue de la littérature”, Recherche et Applications en Marketing, vol. 28, no. 3, pp. 84–113, 2013. [BAD 02] BADOT O., NAVARRE C., “L’achat de véhicules automobiles sur Internet: un exemple d’articulation multi-canaux expérientielle”, Actes de la 7ème Journée de Recherche en Marketing de Bourgogne, Dijon, 2002. [BAR 11] BARBA C., “2020: la fin du e-commerce... ou l’avènement du commerce connecté?”, FEVAD, 2011. [BEL 04] BELVAUX B., Recherche d’information et achat dans un environnement multi-canal. Le cas du ‘Click and Mortar’, PhD Thesis, University of Bourgogne, 2004. [BEL 05] BELVAUX B., “Internet: un compagnon indispensable à l’acheteur”, in BADOT O., BENOUN M. (eds), Commerce et distribution: prospective et stratégies, Economica, Paris, pp. 76–84, 2005. [BER 90] BERGADAÀ M., “The role of time in the action of the consumer”, Journal of Consumer Research, vol. 17, no. 3, pp. 289–302, 1990.
 [CAM 08] CAMÉLIS C., L’influence de l’expérience sur l’image de la marque de service, Paul Cézanne University, Aix-Marseille III, 2008. [CAM 11] CAMÉLIS C., LOSA, S., “Intégrer l’expérience dans la gestion de l’image de la marque de service”, Décisions Marketing, vol. 61, pp. 11–22, 2011. [CHE 03] CHEVALIER J.A., “Free riders issues and Internet retailing”, 2003, available at http://www.ftc.gov/opp/ecommerce/anticompetitive. [COL 16] COLLIN-LACHAUD I., VANHEEMS R., “Naviguer entre espaces virtuel et réel pour faire ses achats: exploration de l’expérience de shopping hybride”, Recherche et Applications en Marketing, pp. 43–61, 2016. [DIX 17] DIXON M., PONOMAREFF L., TURNER S. et al., “Kick-ass customer service”, Harvard Business Review, February, 2017. [FIL 02] FILSER M., “Le marketing de la production d’expérience: statut théorique et implications managériales”, Décisions Marketing, vol. 28, pp. 13–22, 2002. [FLA 17] FLACANDJI M., “Le souvenir de l’expérience vécue en magasin physique, les apports de l’analyse de réseaux”, Décisions Marketing, vol. 88, pp. 71–87, 2017.

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[HIR 82] HIRSCHMAN E., HOLBROOK M., “Hedonic consumption: emerging concepts, methods and propositions”, Journal of Marketing, vol. 46, pp. 92–101, 1982.
 [HIR 86] HIRSCHMAN E., HOLBROOK M., “Expanding the ontology and methodology of research on the consumption experience”, in BRINBERG D., LUTZ R. (eds), Perspectives on Methodology in Consumer Research, Springer Verlag, New York, 1986. [KWO 07] KWORTNIK R.J., ROSS W.T., “The role of positive emotions in experiential decisions”, International Journal of Research in Marketing, vol. 24, no. 4, pp. 324–335, 2007. [PIN 99] PINE J.B., GILMORE J.H., The Experience Economy: Work is Theatre and Every Business a Stage, Harvard Business School Press, Boston, 1999. [ROE 08] ROEDERER C., L’expérience de consommation: exploration conceptuelle, méthodologique et stratégique, PhD Thesis, University of Burgundy, 2008. [ROE 12] ROEDERER C., “Contribution à la conceptualisation de l’expérience de consommation: émergence des dimensions de l’expérience au travers des récits de vie”, Recherche et Applications en Marketing, vol. 27, no. 3, pp. 81–96, 2012. [VAN 09] VANHEEMS R., “Distribution multicanal: pourquoi les clients mixtes doivent faire l’objet d’une attention particulière”, Décisions Marketing, vol. 55, pp. 41–52, 2009. [VAN 12] VANHEEMS R., “Cross-canal: comment le site Internet d’une enseigne modifie le comportement de ses clients en magasin”, Revue Française de Gestion, vol. 227, pp. 13– 29, 2012. [VAN 17] VANHEEMS R., “Are all experiences really worthwhile? or The golden triangle of experience, an analytical framework to reinvent the customer experience”, Paris Retail Week, September 12, 2017, available at: https://blog.parisretailweek.com/experiences-reallyworthwhile-golden-triangle-experience-analytical-framework-reinvent-customer-experience/. [VER 15] VERHOEF P.C., KANNAN P.K., INMAN J.J., “From multi-channel retailing to omnichannel retailing: introduction to the special issue on multi-channel retailing”, Journal of Retailing, vol. 9, no. 2, pp. 174–181, 2015. [WAL 04] WALLACE D.W., GIESE J.L., JOHNSON J.L., “Customer retailer loyalty in the context of multiple channel strategies”, Journal of Retailing, vol. 80, pp. 249–261, 2004.

8 Designing Your Customer Experience

Many professionals and researchers have tried to define customer experience. Doing so is a challenge because, after almost 40 years of use, the word is used to cover different realities and points of view. First, with Holbrook and Hirscham’s studies in 1982 [HOL 82], consumer experience was used to define interaction time between an individual and a product; then came the time for research on buying experiences with the emergence of new sales channels, especially the online market. At the same time, the research is focused on the extraordinary experiences of customers in stores, and then, because of digital innovations, with virtual reality for example. Finally, for less than 10 years, the managerial dimension of experience has been explored because the arrival of new places and new forms of interaction complicate the creation of omnichannel experiences [AND 16]. Finally, the experience is a moment of interaction(s) defined in time and space, between an individual and a material environment shaped by the company beforehand. This creates a memory and expectations for a customer’s future experiences of it. Thus, the experience has three dimensions, depending on the point of view adopted: – the experience imagined by the company, called here the desired experience; – the moment of interaction or interactions with the environment, referred to here as lived experience; – the memory of the individual’s experience, referred to here as the perceived experience.

Chapter written by Florence JACOB.

Augmented Customer Strategy: CRM in the Digital Age, First Edition. Edited by Gilles N’Goala, Virginie Pez-Pérard and Isabelle Prim-Allaz. © ISTE Ltd 2019. Published by ISTE Ltd and John Wiley & Sons, Inc.

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The lived experience can be defined as: “Customer experience is the evolvement of a person’s sensorial, affective, cognitive, relational, and behavioral responses to a firm or brand by living through a journey of touchpoints and continually judging this journey against response thresholds of co-occurring experiences in a person’s related environment” [HOM 17]. The customer experience takes the customer’s point of view, which is, by nature, broader. It includes all the interactions experienced by the customer during their journey. This goes beyond the levers that can be activated by the company to also include competitors, customers or service providers and partner companies. This point is only addressed by a limited literature, but we can cite as an example the research on other customers, i.e. initially unknown customers but who are present during the customer experience and the consequences on the lived experience and customer satisfaction [CAM 13]. Experience management requires evaluating the experiences of the company’s customers, measuring how the experience is perceived and building new desired experiences. This lived experience is composed of five elements for the individual [ROE 08]: – sensory elements are all the information captured by the individual’s five senses; – emotional elements represent all types of emotions generated by the experience (anger/frustration, fear/anxiety, abandonment/sadness, humiliation/shame, relief/ serenity, enthusiasm/pleasure, love/feeling, pride) [LAR 09]; – cognitive elements include all the elements that allow the individual to decode their environment as well as conscious thoughts; – relational elements include all interactions with other individuals during the experience; – behavioral elements are related to the physical actions performed by the individual to move around (actually in a store as well as virtually on a website) but also to accomplish tasks by interacting with objects (use of an automatic cash register at the store’s exit for example). The perception of experience is resultant and, depending on the latency time between the experience and the evaluation of the lived experience, the individual will have a more or less vague memory of the latter [FLA 17].

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8.1. Designing a new customer experience Designing or improving customer experience involves five steps [JAC 16] as shown in Figure 8.1.

Figure 8.1. The five steps to designing customer experience

8.1.1. Step 1: analyzing past customer experiences Continuous and discontinuous monitoring systems must be established to monitor the customer experience created. The measurement of experience requires multiple associated measures because the five elements of the lived experience and the perception of past experience(s) must be evaluated [LEM 17]. 8.1.1.1. Measuring the lived experience The measurement of lived experiences has long been limited to quantifying behavioral elements of the experience by observing journeys in a store to determining cold and hot spots. With cookie tracking, the behavioral elements of the Internet experience become easily measurable (time spent on a web page, number of clicks, etc.) as well as certain relational elements that pass through social networks (the sending of photos of the experience by the customer to Instagram, for example). In addition, there is also in-store tracking using iBeacons and the measurement of emotional elements using facial expression decoding [SHA 18]. The measurement of sensory, cognitive and relational elements with other individuals is still beyond the company’s control. 8.1.1.2. Measuring the perceived experience Measuring the perception of experience often involves measuring service quality and satisfaction with SERVQUAL-type scales, engagement (with the Net Promoter Score [REI 03]) or the perception of the behavioral effort required by the experience (with the Customer Effort Score [DIX 10]). The difficulties encountered during the experiences are measured because of measures of efficiency and reliability of the interaction points (reliability of a website, response time of a mobile application, processing time of a customer

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request, etc.) but also the study of complaints or evaluation grids by mystery customers. The critical incident technique (CIT1) can be used, through qualitative interviews, to determine the moments that generate satisfaction and those that generate irritation during the experiment. 8.1.2. Step 2: taking strategic prerequisites into account A customer experience can only be conceived if it is backed by prior strategic choices that must be taken into account [LEM 17]. Brand strategy with, for example, a brand platform [KAP 08] allows the desired experience to be aligned with brand positioning. It is also necessary to have defined the business model associated before with a Canvas Business Model [OST 10], for example. Thus, the desired experience, and therefore the interactions, will embody the value promised to the customer and the ability to capture the determined revenues. 8.1.3. Step 3: prioritizing and determining the place for the desired experience Defining a desired experience implies that the company determines: – the strategic objective of the experience; – the behavioral, relational, sensorial, emotional and cognitive elements that the customer should experience. The choice to create/modify/improve certain customer journeys expresses one of five strategic options:

1 The CIT is unique in that it is based on the study of behaviors during a service relationship and was invented by Flanagan. Two characteristics were created to determine the criticality of an incident: the respondent’s perception of having experienced an event that created a positive or negative emotional feeling and the conative aspect of the event. Indeed, the latter affects the individual’s behavior and the relationship established. This method is adapted according to our research objective since the customer experience is a series of perceptions and actions of the customer in interaction with the manufacturer. This method has become a classic for assessing consumer perceptions of multiple interactions with a company [EDV 01].

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– Increasing satisfaction This is the most common strategic priority. After observing critical incidents on customer journeys, i.e. steps that are crucial to the customer and a source of high satisfaction or dissatisfaction, the company decides to modify the experience in order to provide solutions to increase customer satisfaction. In order to determine the priority moments for improvement, the “tetra-class” model [LLO 97] is a good way to separate the elements of the experience that are essential from the secondary elements. – Saving money The second priority criterion is financial. This is again a common feature. With the digitization of society, there is great temptation to make physical touchpoints such as stores or call centers disappear in favor of websites and chatbots. This strategic choice leads to two questions: – To what extent is the digitized touchpoint able to offer the same attributes as the touchpoint being removed? – Will we be able to move customers from an old touchpoint to a new one? If so, according to which argument? Will all customers be able to do so? – Implementing an innovation The third option is the willingness to implement an innovation, for technological experimentation purposes, as a brand image accelerator or simply to follow new uses. – Developing an experiential differentiation The fourth priority criterion is to develop differentiation through experiential positioning that is better than that of its competitors. The journey will be developed as a priority around this criterion of excellence. The objective is then that experience is a criterion of competitive advantage. This strategic choice includes all the literature on extraordinary experiences. In this context, we can also take the case of Amazon’s strategic choice to offer customer experience based on logistical excellence. – Communicating the desired experience The experience desired by the company can take the form of a sentence describing the scope and strategic choice, but it is more often presented in the form of storytelling or as an empathy map.

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Storytelling takes the form of films, cartoons or stylized comics that tell the desired story of the ideal customer experience [BEN 13]. Storytelling is used to present the behavioral, relational, sensorial, emotional and cognitive elements that the customer should experience. Storytelling tools are not strictly speaking experience design tools but rather internal communication tools showing the desired customer journey. Thus, they are disseminated to initiate the organizational changes necessary to operationalize the journey. They also make it easy for management committees to present new choices in terms of customer experience. The empathy map, created by Xplane, allows the manager to determine what the customer will see, hear, say and feel. It is a tool focused on the customer’s emotions. The empathy map has a lot of connections with Schmitt’s proposals, considering that customer experience is composed of five dimensions: the senses (SENSE), the affect (FEEL), the mind (THINK), actions (ACT) and social relations (RELATE). 8.1.4. Step 4: operationalizing the journeys that constitute the experience This desired experience defined in the previous step must then be formalized into one or more customer journeys composed of a series of touchpoints perceived as a way of optimizing customer satisfaction. To do this, it is necessary to define different experience scenarios adapted to the various customer profiles. The company has an interest in drawing the operational outlines of the transformation of experience with: – the temporal scope of the experience to know if it works with regard to a service, on a purchasing act, on the entire relationship or on the period of use of a product in order to precisely describe different contexts and situations of services/ purchasing/relation/use; – the spatial perimeter of the integration of touchpoints by determining whether it works on a particular touchpoint, on several or on all of the proposed touchpoints; – by identifying the company’s internal stakeholders (services concerned) but also the partners and subcontractors involved in the experience. This phase of route operationalization is the most difficult phase because it requires reflection on: – the changes to be made within organizations and the impacts on the various business lines of the company (IT, Marketing, Sales, HR, etc.);

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– the project management method including varied and transversal skills within the company; – the development of a new corporate culture including the new dimensions of experience; – transcription of the journeys into business processes but also into information monitoring within information systems; – the practices of testing new courses and accepting the failure of certain measures. More generally, the question arises as to whether one wishes to make iterative changes by changing the experience as it happens or whether one wishes to make a radical change of experience by removing many elements of the experience in favor of new ones. 8.1.5. Step 5: checking the created journeys The Service Quality Model [PAR 85] is a model for identifying and correcting service quality problems by detecting gaps between what the customer experiences and their expectations. This model identifies seven sources of discrepancies between customer perception of experience and the company’s desired experience: – the knowledge gap between the experiences of customers’ and managers’ perceptions of them; – the difference in standards between the desired experience and the specifications decided by the manager; – the delivery gap between the customer’s expectations and the experience delivered by the company; – the communication gap between the experience delivered by the company according to the front-office and the promise of communication; – the perceived gap between the experience delivered by the company and the experience perceived by customers; – the difference in the interpretation of communication with the difference between the message given by the communication and what the customer understood of the promise; – the service gap between the customer’s experience and expectations.

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Study of needs and past experiences

Knowledge gap

Managerial definition of customer needs

Gap in standards

Strategic choices of specification

Communication

Execution of specifications

Front-office

Measure of experiences lived by the customer

Delivery gap Perceptive gap

Interp. gap of com. Communication gap

Past experiences

Expectations

Perceived experience

Lived experience

Service gap

Figure 8.2. Possible gaps between the target experience and the lived and perceived experiences in service marketing, in blue the company’s work steps and in orange the customer’s work steps [ZEI 90]. For a color version of this figure, see www.iste.co.uk/ngoala/augmented.zip

This model can be used as a basis for creating experience control reporting and gap measurement to define points for continuous improvement. 8.2. Designing customer journeys The fact of representing the career journeys seems to be a structuring element in the manager’s strategic work, as this quotation underlines: “Utilize mapping tools to improve the customer experience: both TNT and Guinness mapped out the perfect customer experience to understand and identify opportunities for improvement. Several tools can be used to undertake this task including: process mapping, service-blueprinting, customer activity cycles and customer-firm touchpoint analysis. These techniques are useful in highlighting opportunities for improving customer experience, identifying failure points, re-engineering processes and supporting differentiation. Another outcome can be enhanced employee understanding of their role in achieving a perfect experience for their customers” [FRO 07]. 8.2.1. The classic graphic tools: blueprint and contact matrix 8.2.1.1. The blueprint The blueprint [SHO 82] service technique was initially introduced as a quality assurance process because it had many advantages: it was more precise than a verbal

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definition and it made it possible to discover deficiencies and solve problems quickly [BIT 08]. This technique is different from flow tasks because it highlights the customer’s actions by defining two lines: an interaction line between the customer and the organization and a line of sight defining what the customer sees and what they do not see. It is used to identify incidents or inconsistencies in a linear customer journey. The blueprint service tool is cited in a reference research article as the only valid tool to graphically represent a customer journey [LEM 17] because it is the most robust tool to present touchpoints and the impact of these points on the company’s internal organization but also because it requires managers to integrate the customer’s perspective and requires customer data. A blueprint is composed of five elements: material proof of service, actions taken by the consumer, actions of staff in direct contact with customers, actions of staff invisible to the customer and technical support procedures. 8.2.1.2. The contact matrix A matrix grid integrates the consumer’s decision-making time in columns, with which communication and online transaction channels are associated. It then indicates which channel can be used at each step of the consumer’s purchasing decision. Reference can also be made to Moriarty and Moran’s grid [MOR 90]. Payne and Frow [PAY 04] recommend using a channel value chain diagram, which integrates, in a matrix, a logical time journey materialized by arrows. The latter includes the consumer’s decision-making steps: awareness of need, information sought, comparison of offers, and purchase and postpurchase with which a channel is associated. These matrix representations are often cited in managerial articles. Since 2010, David Edelman has published several articles in the Harvard Business Review on customer journey design and is developing a new form of representation in the shape of a circle by taking the classic steps of consumer purchasing decisions. This representation was taken up by Forrester in one of his white papers. 8.2.2. Practicing design thinking by creating personas T. Brown, a designer, gave this definition of design thinking: “a discipline that uses the designer’s sensibility and methods to match people’s needs with what is technically feasible and what business

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strategy can convert into customer value and market opportunities” [BRO 08]. Design thinking is the designer’s ability to reconcile the imperatives of technical feasibility with those of economic profitability and desirability for the individual. Design thinking is perceived as a source of structuring marketing thinking and uses personas in particular. Personas have often been cited by practitioners and have defined by Brangier et al. [BRA 12]. “The personas method consists of describing probable users in a nominative, archetypal and personalized form”. The persona is the flagship tool in customer journey design, as shown by this testimony from the customer experience director of the musketeers group: “We prefer to use the persona technique. I am really a fan of the persona concept but not of marketing segmentation. The objective of the persona is really to embody the customer. Often we use four to five people and we truly embody them by creating their photos or their constraints and resources: what their computer equipment could be, their consumption, their needs, their way of thinking about shopping. People, it’s really a great method even if it’s caricatured and fantasized but it’s deeply human”. Most of the people observed in companies [JAC 16] follow the structure of the model presented in a book [OST 10], proposing to present them with photos and text. The persona makes it possible to mirror the company’s vision and the customer’s needs. Thus, personas allow us to have a critical vision of managerial work. This is because the persona provides the opportunity to compare the mental representations shared by the company with the persona’s representations in order to challenge the teams’ work. The persona is often linked to marketing segmentation: “Defining personas also means insisting on the fact that they cannot be assimilated to marketing segmentations, in particular because they do not come from market research and do not represent identified percentages of users” [BRA 12]. The interest in using personas is that the customer appears as a hoped-for and embodied target. Persona practices differ from segmentation because the persona practice is punctual and has no quantitative purpose; however, it should allow the manager to better extract themselves from their vision of the company in order to

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make them endorse the customer’s clothes. The persona is, therefore, not intended to define quantitative commercial objectives or to serve as a basis for mix marketing. 8.2.3. Interests and limitations of graphic tools No literature had ever really linked design to customer experience management. Design practices are quite naturally associated with the creation of products, packaging or logos or with the brand image called “design orientation”, aimed at integrating the work of designers within the company. However, design could also define a working position for managers in management [BOL 04] by using tools and designer approaches to create new sources of value for the customer. Design thinking is complementary to managerial decision-making because it can be developed when the problem to be solved is complex and the solutions all contain advantages but also disadvantages. Design thinking should have points in common with the managerial approach such as the desire to create value for the customer, the desire to reduce costs and to rely on the company’s key activities but also strong differentiating points and sources of creativity [RYL 09]. These points of differentiation would be the way (1) to approach problems that are considered difficult and seemingly without a single and final solution [BUC 92]; (2) to work in a pragmatic, iterative and experimental way; and (3) to represent the solutions visually. Finally, design thinking should go beyond product design to be applied to the organization of the company or the design of organized systems. Research shows that the contribution of design thinking to traditional marketing practices makes it possible to improve the visibility of brand positioning [BEV 15] or product innovation design thinking within organizations would make it possible (1) to better understand customer needs by focusing on usage values through qualitative research; (2) to break away from a unique and fixed strategic thinking by creating breakthrough innovations; and (3) to restore the brand’s image to its central role as a guide to marketing design thinking. The first result is to allow the project team to focus their attention on the customer by reflecting on their needs through a persona, to better understand the proposed routes and to avoid journey dependence by remaining limited to the company’s vision. The persona becomes a common totem for design teams by breaking down customer stereotypes in the company and contextualizing all customer behaviors. The second result is to facilitate and develop transmission capacities by creating esthetic and simple diagrams to address a complex problem. It is the power of the “simplexity” of design thinking advocated by the designer Ora-Ito and therefore the

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ability of design thinking tools to disseminate, within companies, this vision of the desired journeys. Finally, these tools integrate the customer’s desired emotions and thus work on the value created in a global way. This takes up Benoît Heilbrunn’s work on product marketing design showing that: “What design marketing expects is precisely to project a universe of signs on products to induce purchasing criteria that are no longer the only springboard for the function [...]. In this sense, design seems to relay the marketing project, which is to make sense of consumer objects by projecting emotional and imaginary meanings to increase their desirability and perceived value” [HEI 06]. In design thinking, the designer’s unique thinking system is an integral part of the method: “In its core functioning (i.e. doing it as distinct from studying about it), design thinking is embodied in the design thinker, in terms of behaviours, values, attitudes, intuition, creativity. This is a relativist and constructivist perspective where knowledge is primarily resident in the thinker and context” [DEV 13]. These techniques are, therefore, not free from criticism. In design literature, the personas technique can also present many flaws. For example, many personas created by designers had not been shaped from data collection and were used to support their design choices [AMP 06]. Finally, some designers consider that the persona is counterproductive because it is impersonal. Indeed, some designers consider that the persona goes against the principle of focusing on the individual’s needs, which requires a thorough understanding of the users by meeting them. The limitations of design thinking also arise from the fact that graphic representations are often not based on any quantitatively measured elements. This limitation explains why they are complementary to the work on the algorithmic representation of the customer’s journey. 8.3. Big data and design: the two necessary areas of expertise Improving or designing customer experiences will require mastering new skills for the company. On the one hand, understanding and mapping customer journeys by collecting data will make it possible to evaluate current systems and touchpoints.

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This will require the development of fine allocation models for each touchpoint to contribute to the final purchasing act. Big data will also be able to determine the most popular customer routes in order to optimize them. Skills in statistical data processing are, therefore, an obvious first area of expertise. It will have to be complemented by skills in data visualization and graphic design in order to make the statistical results intelligible to the management committees. This graphic effort should lead teams to better picture experiential issues, make effective strategic decisions and communicate them to other company functions such as front-office employees, for example. Design will also be used in marketing departments to design stores that integrate more and more digital offers (interactive displays, etc.). Design skills must make the different physical and digital touchpoints homogeneous (identical cognitive and ergonomic measures in a store like on the merchandising website, for example) in order to facilitate the customer’s transition from one touchpoint to another. Beyond design, it is a recruitment and training challenge that awaits companies. It will also be a project management challenge, because designing an experience often means working in different professions (marketing, sales, information systems, logistics), thus creating organizational decompartmentalization. Without a strong managerial willingness on the part of the management committees to transform the company, designing new experiences often remains an unfinished project. We are moving toward organizational policies that aim to adjust customer journeys in successive waves, first by changing the most common and simple customer journey while gaining organizational experience, and then, in successive waves, to change, touchpoint by touchpoint, different journeys in order to control the organizational transformation. 8.4. References [AND 16] ANDERL E., SCHUMANN J.H., KUNZ W., “Helping firms reduce complexity in multichannel online data: a new taxonomy-based approach for customer journeys”, Journal of Retailing, vol. 92, no. 2, pp. 185–203, 2016. [BEN 13] BENMOUSSA F., MAYNADIER B., “Brand storytelling: entre doute et croyance. Une étude des récits de la marque Moleskine”, Décisions Marketing, vol. 70, no. 3, pp. 119– 128, 2013. [BEV 15] BEVERLAND M.B., WILNER S.J.S., MICHELI P., “Reconciling the tension between consistency and relevance: design thinking as a mechanism for brand ambidexterity”, Journal of the Academy of Marketing Science, vol. 43, no. 5, pp. 589–609, 2015.

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[BIT 08] BITNER M.J., OSTROM A.L., MORGAN F.N., “Service blueprinting: a practical technique for service innovation”, California Management Review, vol. 50, no. 3, pp. 66– 94, 2008. [BOL 04] BOLAND R., COLLOPY F., Managing as Designing, Stanford University Press, Palo Alto, CA, 2004. [BRA 12] BRANGIER E., BORNET C., BASTIEN J. et al., “Effets des personas et contraintes fonctionnelles sur l’idéation dans la conception d’une bibliothèque numérique”, Le travail humain, vol. 75, no. 2, pp. 121–145, 2012. [BRO 08] BROWN T., “Design thinking”, Harvard Business Review, June, pp. 85–92, 2008. [BUC 92] BUCHANAN R., “Wicked problems in design thinking”, Design Issues, vol. 8, no. 2, pp. 5–21, 1992. [CAM 13] CAMELIS C., DANO F., GOUDARZI K. et al., “The roles of co-clients and their influence on overall satisfaction during the service experience”, Recherche et Applications en Marketing, vol. 28, no. 1, pp. 46–69, 2013. [CHA 06] CHAPMAN C.N., MILHAM R.P., “The personas’ new clothes: methodological and practical arguments against a popular method”, Proceedings of the Human Factors and Ergonomics Society Annual Meeting, vol. 50, no. 5, pp. 634–636, 2006. [DEV 13] DEVITT F., ROBBINS P., “Design, thinking and science”, in HELFERT M., DONNELLAN B. (eds), Design Science: Perspectives from Europe, Springer International Publishing, Geneva, pp. 38–48, 2013. [DIX 10] DIXON J., MATTHEW F., FREEMAN K. et al., “Stop trying to delight your customers”, Harvard Business Review, vol. 88, nos 7/8, pp. 116–122, 2010. [EDV 01] EDVARDSSON B.O., ROSS I., “Critical incident techniques: towards a framework for analyzing the criticality of critical incidents”, International Journal of Service Industry Management, vol. 12, pp. 251–268, 2001. [FLA 17] FLACANDJI M., “De l’expérience au souvenir de l’expérience: étude des invariants et des décalages entre parcours de magasinage et souvenirs immédiats”, Management et Avenir, vol. 86, pp. 79–100, 2017. [FRO 07] FROW P., PAYNE A., “Towards the ‘perfect’ customer experience”, Journal of Brand Management, vol. 15, no. 2, pp. 89–101, 2007. [HEI 06] HEILBRUNN, B., “Le marketing à l’épreuve du design”, in FLAMAND, F. (ed.), Le Design: essais sur des théories et des pratiques, Paris, Institut français de la mode et éditions du regard, pp. 277–294, 2006. [HOM 17] HOMBURG C., JOZIĆ D., KUEHNL C., “Customer experience management: toward implementing an evolving marketing concept”, Journal of the Academy of Marketing Science, vol. 45, no. 3, pp. 377–401, 2017. [JAC 16] JACOB F., Création d’un artefact modulaire d’aide à la conception de parcours client cross-canal visant à développer les capacités des managers des entreprises du secteur du commerce, PhD Thesis, PSL Research University, Paris, 2016.

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[KAP 08] KAPFERER J.N., The New Strategic Brand Management – Creating and Sustaining Brand Equity Long Term, Livro, London, 2008. [LAR 05] LAROS F.J., STEENKAMP J.B.E., “Emotions in consumer behavior: a hierarchical approach”, Journal of Business Research, vol. 58, no. 10, pp. 1437–1445, 2005. [LLO 97] LLOSA S., “L’analyse de la contribution des éléments du service à la satisfaction: un modèle tétraclasse”, Décisions Marketing, vol. 10, pp. 81–88, 1997. [LEM 17] LEMON K.N., VERHOEF P.C., “Understanding customer experience throughout the customer journey”, Journal of Marketing, vol. 46, no. 2, pp. 1–62, 2017. [LOV 94] LOVELOCK C., Product Plus, McGraw Hill, New York, 1994. [MOR 90] MORIARTY R., MORAN U., “Managing hybrid marketing systems”, Harvard Business Review, pp. 45–56, 1990. [OST 10] OSTERWALDER A., PIGNEUR Y., Business Model Generation: a Handbook for Visionaries, Game Changers, and Challengers, John Wiley & Sons, London, 2010. [PAR 85] PARASURAMAN A., ZEITHAML V., BERRY L.L., “A conceptual model of service quality and its implications for future research”, Journal of Marketing, vol. 49, no. 4, pp. 41–50, 1985. [PAY 04] PAYNE A., FROW P., “The role of multichannel integration in customer relationship management”, Industrial Marketing Management, vol. 33, no. 6, pp. 527–538, 2004. [REI 03] REICHHELD F., “The one number you need to grow”, Harvard Business Review, vol. 81, no. 12, pp. 46–55, 2003. [ROE 08] ROEDERER C., L’expérience de consommation: exploration conceptuelle, méthodologique et stratégique, Thesis, University of Dijon, 2008. [RYL 09] RYLANDER A., “Design Thinking as knowledge work: epistemological foundations and practical implications”, Journal of Design Management, vol. 1, pp. 1–20, 2009. [SCH 00] SCHMITT B.H., Experiential Marketing: How to Get Customers to Sense, Feel, Think, Act, Relate, Simon and Schuster, New York, 2000. [SHA 18] SHAW S.D., BAGOZZI R.P., “The neuropsychology of consumer behavior and marketing”, Consumer Psychology Review, vol. 34, no. 2, pp. 22–40, 2018. [SHO 87] SHOSTACK G., “Service positioning through structural change”, Journal of Marketing, vol. 51, no. 1, pp. 34–43, 1987. [ZEI 90] ZEITHAML V.A., PARASURAMAN A., BERRY L.L., Delivering Quality Service, Balancing Customer Perceptions and Expectations, The Free Press, New York, 1990.

9 Customer Relationships and Digital Technologies: What Place and Role for Sales Representatives?

New digital technologies are changing sales representatives’ daily lives and profoundly transforming customer relationships. Many scientific articles have been devoted to these topics for several decades and concern, in particular, customer relationship management (CRM) software and their acceptance by sales forces [AHE 10, MAR 12]. However, digital technologies are constantly evolving at a very rapid pace, with the advent of social media and artificial intelligence (AI) in particular. Through this chapter, we wish to successively take stock and offer a prospective vision on these two digital technologies (i.e. social media and AI), which should in the future continue to transform customer relationships and offer new opportunities to sales representatives. The first section will be devoted to social media, which is making its way into the daily lives of sales people, particularly in B2B through social selling. This section will highlight that social media is not just an additional contact channel for several reasons: it profoundly disrupts the relationship between salespeople and their customers, it changes its nature (now more virtual and instantaneous), it redistributes roles (salespeople support customers in their purchasing journey rather than encourage them to buy) and it reinforces the need for certain relational qualities from salespeople (more availability, more responsiveness). The second section will be dedicated to AI – defined as “[the automation of] activities that we associate with human thinking and activities such as decisionChapter written by Eric JULIENNE, Maud DAMPERAT and Romain FRANCK.

Augmented Customer Strategy: CRM in the Digital Age, First Edition. Edited by Gilles N’Goala, Virginie Pez-Pérard and Isabelle Prim-Allaz. © ISTE Ltd 2019. Published by ISTE Ltd and John Wiley & Sons, Inc.

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making and problem solving, learning” [BEL 78] – and its perspectives in terms of CRM. The development of AI heralds a profound change in the world of work and a fortiori in the commercial profession. This section will attempt to imagine the impacts on sales and customer relationships through three prospective scenarios, oriented toward the technologies of the future and which may exist simultaneously in the medium to long term: (1) the augmented seller, (2) the sale without a seller and (3) humanoid robots. 9.1. A new way of selling: social selling A strategic question for marketing and sales departments is whether they should promote the use of social media by sales people, which means investing in these technologies and in training salespeople. Resistance is fueled by several questions [AGN 12]: Is not face-to-face interpersonal relationships preferable to virtual relationships? Should we invest in social selling, even though attempts to implement sales force automation (SFA) software solutions and CRM solutions have often failed? Finally, what is the expected return on investment? Here, we will try to answer these questions by showing that social selling structurally and irreversibly modifies the relationship between salespeople and their customers. 9.1.1. What is social selling? Social selling is a sales practice based on social media, a set of applications based on WEB 2.0 principles that allow users to create and exchange content [KAP 10]. Social media makes it possible to search for information, analyze it, create and share content, integrate into communities, interact online with other users and build relationships [ASH 16, HEN 10, MON 15]. Social media marketing is distinct from social selling. Both use the same technologies, but social media marketing is a brand promotion tool, implemented by marketers, brand managers or community managers, and it aims to achieve brand awareness and preference, while social selling aims to create a one-to-one relationship between a salesperson and a buyer around the solution to a customer’s problem [MIN 16]. Finally, it is important to distinguish between social networks and social media. Social networks are an important component of social media, but do not summarize them. Social media includes not only social networks, but also discussion forums, online communities, blogs and wikis [ASH 16]. In the practice of social selling, it is mainly social networks such as LinkedIn, Facebook, Twitter, Snapchat and Instagram

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that are used by sales representatives. However, we will continue to use the term social media mainly in the rest of this chapter, because social selling is not necessarily limited to social networks. 9.1.2. Meeting customers on their buying journey Social selling is essential in sales practices, because it is necessary for salespeople to meet prospects and customers wherever they are, hence why buyers like social media [GIA 12]. This is mainly where buyers go when they are looking for information, to exchange ideas with other buyers, watch YouTube videos, sign up for webinars and read blogs related to the products they are considering buying. Giamanco and Grégoire [GIA 12], thus, explain that customers carry out most of the purchasing process (57% according to LinkedIn1) even before having their first contact with a sales representative [GIA 12]. At this stage, they know more about the seller’s offer than the seller has information about them. Being active on social media allows sales representatives to be present earlier in the purchasing process, which means that they have a better chance of participating in developing a customer solution. Thus, by adopting the customer’s vision early on, they increase their chances of gaining business [MIN 16]. The presence of sales representatives on social media is not only the result of the sales representatives’ own decision and those of their sales management. This change is often imposed by professional buyers who streamline trade with salespeople by reducing the number of face-to-face encounters to increase their efficiency [MAR 12]. It is true that, on the part of both buyers and sellers, the search for cost reduction favors the increase in virtual relationships to the detriment of faceto-face interaction. According to LinkedIn, 75% of B2B decision-makers use social media in their decision-making process2. 9.1.3. Adopting a sales approach focused on meeting needs For a long time, salespeople held product information (data sheets, advantages and disadvantages of each solution), and this control created an asymmetry that placed them in a position of strength with customers. Things have changed. New technologies have made information easily accessible, and this has empowered 1 https://business.linkedin.com/content/dam/me/business/en-us/sales-solutions/cx/2017/pdfs/linked in-6-steps-to-accelerate-sales-in-2017-en-us.pdf, accessed 15/05/2018. 2 Ibid.

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customers. The role of the sales representative is, therefore, less and less to provide information, a task that is now often automated [CUE 18]. It is customers who now search the web for abundant information, define their needs, compare offers, exchange with other customers, select potential suppliers and finally make their purchases and then leave an opinion online themselves. Customers have taken control of the purchasing process and are leading it from start to finish. As a direct consequence of this takeover by customers, outbound prospecting techniques have become less effective than inbound prospecting [MIN 16]. Outbound prospecting involves pushing the product toward the customer, reaching out to customers to give them product information and offer goods or services. In this sales strategy, contact is initiated by the sales representative. Typically, these can be cold calls or an e-mail campaign. However, this type of operation requires a lot of energy for results that are often disappointing, because there are many roadblocks (for example, a secretary screening calls). Buyers are responding less and less often to this type of request: according to LinkedIn, 90% of decision makers never respond to a cold call3. Customers prefer to be active in finding a solution adapted to their problem rather than being under commercial pressure to purchase a product that is not always adapted to their needs. As such, buyers’ use of social media is in line with the principles of vendor relationship management, which aims to restore control over customer relationships. Social media contributes to this by connecting customers to each other and by promoting the formation of groups with converging interests4. Inbound marketing is also moving in this direction. Inbound prospecting involves letting customers approach the company naturally; they have a need to satisfy and they are looking for a solution to meet it. To implement an inbound approach, the company must produce content that is likely to interest the target audience and should be in different formats (blogs, white papers, webinars, etc.). It is then the customer who initiates the contact. Salespeople, in this logic, should not push products toward customers, but listen to customers to help them solve their problems. They must, therefore, appear as experts who can help customers in their approach, and to do so they must cultivate their personal brand5 that will give them credibility with their customers. As shown in Table 9.1, social selling is a very different way of selling.

3 Ibid. 4 Project VRM, https://cyber.harvard.edu/projectvrm/Main_Page, accessed 27/06/2018. 5 The concept of personal branding, which appeared at the end of the 1990s, has taken on a unique importance in the digital age. It involves considering that each individual has the same attributes as a brand (identity, image, notoriety, credibility, etc.) and that it is therefore up to each individual to manage their personal brand to develop their target of influence.

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Objectives

Traditional selling Purchase of lead lists

Find customers

Limited personal address books Secretary’s screening of calls Random contacts

Create a link with customers

Restricted to internal addresses only Accumulation of unnecessary data Focus on cold calls

Engage customers

Unrolling of the sales script Fixed sales process

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Social selling Use of professional networks Use of the company’s social network Targeting key decision makers Focus on the people who matter Online information collection Identification of social relationships Takes advantage of networking Develops targeted dialogues Glides through the purchasing process

Table 9.1. From traditional selling to social selling. Adapted from http://www.coldsalesprospecting.com/social-media-sales-prospecting

9.1.4. Using social media at every stage of the sale Social media is a new place where traditional sales talks take place [AND 12, MAR 12]: finding sales opportunities, making contact, discovering customer needs, presenting products, answering objections, closing the sale and ensuring customer care. But the order of steps can be changed, such as a sales representative who could discover a customer’s needs through the wealth of information offered by social networks, even before contacting them. There are many ways to get in touch with a customer: by sharing links, answering comments or questions, participating in focus groups, contributing in discussions through an online survey, etc. These techniques allow conversation to start without forcing contact. According to Giamanco and Gregoire [GIA 12], the reciprocity standard applies [GIA 12]. For example, if a salesperson follows a customer or retweets content, it is likely that the customer will follow the salesperson back. The sustainability of the link created depends on the customer’s interest in the content posted by the sales representative.

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Second, social media offers a wealth of information that allows a lead to be better qualified, for example by using the BANT method6. For example, it is possible to track prospective new customers, identify decision makers and use automated tools for collecting and carrying out predictive an analysis of social media data. For example, Meire et al. [MEI 17] showed how Coca-Cola Refreshments Inc. could use B2B lead data from Facebook company pages to significantly improve lead qualification and optimize lead to customer conversion rate. Then comes the time to develop the customer solution. This work can be done through virtual exchanges between the salesperson and the prospective customer. Social media, thus, makes it possible to be attentive to the needs, concerns and experiences of customers in order to work together to develop the best solution for the customer project. In this sense, they are a favored means of developing customer engagement and collaboration, and they promote co-creation of value [AND 12]. But customers not only interact with salespeople, they also exchange with other customers, which gives sales using social media a collective character. Finally, social media makes it possible to manage the rest of the relationship, in particular customer care. Maintaining the link via social media, thus, makes it possible to increase the frequency of contacts, which fuels the relationship of trust between the customer and the seller. The seller can, thus, feed the customer by sharing content with information related to their interests; they can ask about their satisfaction following a particular order, or simply send a friendly signal when the occasion lends itself to it (birthday, celebration, etc.). 9.1.5. Improving business performance Companies and consultants that market social selling solutions claim that salespeople who practice the technique are more effective than others at identifying leads, converting them into business opportunities, and ultimately reaching their sales quota. Academic studies generally confirm this. For example, according to a study by Rodriguez et al. [ROD 12] on 1699 B2B sales representatives from 25 different business sectors, social selling makes it possible to create new business opportunities, better understand customer needs, strengthen and deepen customer relationships and ultimately increase sales performance. However, academic research seems to show that social selling is not the panacea that guarantees seller success, but rather that it is one of the elements of success. 6 Invented by IBM, the BANT method (Budget, Authority, Need, Timeframe) makes it possible to qualify a lead: check that the prospect has a budget, that they have decisionmaking power, that their need is real and that the horizon of the customer project is close.

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Thus, the study carried out by Itani et al. [ITA 17] shows that social selling makes it possible to better adapt to customer needs, and that this ability of the seller to adapt (adaptive selling) is itself a means of increasing commercial performance, without there being a direct link between the use of social media and commercial performance. In the same vein, Trainor et al. [TRA 14] show that the practice of social media must be coupled with a customer-centric management system to create a real strategic capacity to increase business performance. As a result, it is not enough to use social media to increase performance; it is necessary to rethink the overall sales process and link it to the customer strategy. It seems that social selling can only be successfully implemented if salespeople really seek to satisfy customers and build a long-term relationship with them by adopting sales behaviors based on listening, understanding needs and finding appropriate solutions; in short, if they are customer-oriented. 9.1.6. Overcoming social media challenges Social media poses major challenges for sales representatives and organizations, which appear to be prerequisites for companies to successfully make the change to social selling. 9.1.6.1. Acquiring new skills Allowing sales representatives to express themselves on the public spaces that are known as social media can be perceived as a serious risk for management [GIA 12]. First, sales representatives must apply certain communication rules, so as not to harm their own business. For example, they should be careful not to disclose confidential information, infringe copyright, or convey inaccurate representations of their company. Second, there is a way of communicating, without spelling mistakes and in an attractive way, with specific expertise (personalization of messages, frequency of posts, respect for interlocutors, etc.). This is important because online communications do not allow for the same assessment of how messages are perceived by callers as face-to-face relationships. Third, content related to customers’ needs and interests should be posted, rather than technical characteristics and prices [MIN 16]. Finally, salespeople need to know which social media are appropriate for professional use, how to use them to leverage them and how to manage their time so that they do not get absorbed in this time-consuming activity [ASH 16]. 9.1.6.2. Strengthening collaboration between marketing and sales The sales force is in direct contact with customers and can therefore be a valuable source of customer listening for marketing departments [MIN 16]. In return, marketing can contribute to the effective use of salespeople by preparing

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content that can be shared by them. Sales and marketing departments have a strong interest in synchronizing their efforts and unifying their social media strategy to act effectively in creating value for customers [AND 12]. 9.1.6.3. Managing the different generations of sales representatives The use of social media is a generational phenomenon for both salespeople and customers. The younger generations (digital natives) are perfectly comfortable with social media. They often prefer virtual interactions with salespeople to face-to-face interactions [SCH 12]. Older salespeople, on the other hand, are abandoning social media because they have less often integrated it into their daily lives. They generally consider social media to be time consuming and a barrier to human relationships [ASH 16]. As a result, a relatively older sales force probably offers greater resistance to the adoption of social selling. In any case, it is mainly a question of finding the right balance between the generation of sales representatives and the generation of customers [MAR 12]. 9.1.6.4. Managing stress and pressure With the development of social media, salespeople are constantly connected to their customers and managers [MAR 12]. Some salespeople have integrated this change into their daily lives, but others experience it with greater difficulty, because they consider it intrusive, depriving them of space of tranquility. This ultra-connectivity brings with it a requirement for customers and managers to access information in a totally open, immediate and unrestricted way, which considerably increases the pressure on sales representatives. This pressure is even greater when markets are globalized, as a sales representative can be in virtual contact with any individual on the planet despite the time difference. Finally, is social selling a sustainable change or just a fad? While social media will probably not replace other relationship channels, especially face-to-face interaction, they will be increasingly present in the commercial relationship, and this change seems irreversible to us. The first reason is that salespeople have no choice but to meet customers where they are (i.e. on social media). The second is a generational phenomenon, because while it is likely that older generations are sometimes reluctant to integrate social media into their daily lives, it is quite the opposite for younger generations. The departure of older generations and their gradual replacement will definitively strengthen the anchoring of social media in the customer relationship landscape. While it is possible to perceive with relative clarity the consequences of the arrival of social media to customer relationships, the changes brought about by AI appear more uncertain.

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9.2. The prospects of AI for the commercial sector One of the legitimate fears expressed by salespeople is to hear about the end of their business. However, while this is unlikely in the short term, the beginnings of a profound change are already being felt. In a report co-written by MIT Sloan Management Review and the consulting firm, Boston Consulting Group, Ransbotham et al. [RAN 17] indicate that 20% of companies integrate AI into their offers or processes and only 5% do so intensively. According to this report, large companies (more than 100,000 employees) are more likely to have an AI strategy (about 50% of them) than smaller companies. The report indicates that most organizations expect AI to have a particularly significant impact on IT, operations and customer-focused activities (including sales and marketing). Thus, for salespeople, the changes brought about by AI will concern both the tasks and processes within the organization, but also the offers they will present to their customers and the way they manage customer relationships. The scale of the changes that are announced with AI should surpass previous developments related to mobility (GPS, mobile phones) and digital technology (databases and CRM tools). However, “AI won’t be able to replace most jobs anytime soon. But in almost every industry, people using AI are starting to replace people who don’t use AI, and that trend will only accelerate”– remarks by Erik Brynjolfsson, 2017, Schussel Family Professor at the MIT Sloan School of Management [RAN 17]. Companies are currently seeking to understand how digital technologies, and in particular AI, will affect their industry and businesses. This prospect may seem intimidating, even embarrassing, when it comes to imagining machines making decisions and anticipating their consequences. While salespeople have long relied on digital tools to act, future developments in AI should still significantly change the sales profession and CRM. So, what are the prospects for the sales profession? Will this profession still exist tomorrow? What is being handled by the sales representative today and what will be handled by the machine tomorrow? How can salespeople take full advantage of these new technologies for better CRM? This section is devoted to emerging technologies and attempts to imagine the possible impacts on the commercial function and customer relationship. The aim is more prospective, futuristic and oriented toward future technologies. Technology is changing and will continue to change customer relationships and teamwork habits. It is, therefore, necessary to anticipate, from now on, the medium-term and even long-term prospects. For this purpose, we establish three plausible scenarios that, in our opinion, should exist concurrently in the medium and even the long term. The first scenario is that of an augmented salesperson, who has not disappeared but is instead strengthened by decision support tools resulting from advances in AI. The second scenario is that of a sale without

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a seller, where web platforms take the place of the seller for less complex purchases in particular. And a third scenario discusses a scene where humanoid robots play the role of salespeople because of, in particular, the development of emotional AI and the capacities of understanding and adapting to emotions that will probably be provided by tomorrow’s robots. 9.2.1. The new strategic toolbox or the augmented salesperson Jobs related to complex sales (e.g. key account manager) require the physical presence of a salesperson and are less likely to be replaced by e-commerce than those related to simple sales. Hoard [HOA 15], based on a March 2015 Forrester study, indicates that sales representatives are appreciated and considered important for the purchase of complex solutions requiring internal consensus among several stakeholders. Nevertheless, the tools, skills and tasks for these types of positions are expected to evolve significantly. Here, the seller would not be replaced by the machine but rather would have to see their tools and work environment change significantly, as well as the offers to be marketed. It would then be necessary for vendors to adapt and make the best use of new technologies (e.g. augmented reality, big data, AI). 9.2.1.1. Toward intelligent virtual assistants An increasing number of repetitive tasks (e.g. phoning, mailing, quotation writing, sales order processing) will be handled electronically, allowing salespeople to focus on higher value added tasks such as interaction with the customer, understanding needs, and customizing offers. Sales support tools such as intelligent virtual assistants and lead identification software should continue to develop rapidly. Intelligent personal assistants or digital assistants are not only intended for customer support in the case of simple sales but should also help the seller during more complex sales. While these wizards can only support one simple command today, Google, in particular, is working to support multiple actions from a single voice command [NEW 18]. There are many future promises for future digital assistants, and they should facilitate the task of salespeople by automating repetitive actions and helping them to prospect, qualify and provide customer support. The salesforce – the leader in CRM solutions – develops software applications, with Salesforce Einstein-AI, which automatically discovers relevant information, predicts future customer behavior, proactively recommends the best actions to take and automates certain tasks. To do this, Salesforce Einstein-AI relies on the data contained in the company’s CRM, but also on the data available on the Internet, in particular LinkedIn, via datamining. It should be noted that in Europe, legislation on the use of personal data was tightened on May 25, 2018 with the GDPR (EU General Data Protection Regulation) and that consent has become mandatory, which is not the case in the United States except in California which,

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like Europe, is currently working on this issue. Amazon, Google and Microsoft are also investing heavily, so major developments are to be expected on the market for smart assistants for companies. Lead generation is a crucial part of the sales process in many companies, especially in B2B. Prospecting automation software is already available (e.g. Freshsales, Marketo, Iko System, GetQuanty). These software programs use social media as a source of information on prospects, particularly LinkedIn, which explicitly asks its users for their consent. Moreover, in a B2B context, as it concerns companies and not individuals, the regulations allow the use of social media information. However, there are restrictions in B2C concerning the use of personal information in Europe, with the prohibition of automatic data collection and its retention for no specific purpose. For B2B, this prospecting software is able to identify potential customers, to contact them and to maintain the discussion, by e-mail and soon by phone or video conference. They will prove in many ways better than humans, who tend to give up too soon, write bad e-mails and sometimes forget to answer. In 2016, Epson America, the printing and imaging giant, deployed Conversica’s AI assistant. This assistant is able to contact prospects by email and propose appointments when a prospect is identified. The appointment is then automatically assigned to a sales representative and noted in their calendar. This practice will probably be the norm in the coming years as AI seems infallible for this type of mission. If properly exploited, AI should save the salesperson time, help them sell and allow them to focus on CRM and negotiations. 9.2.1.2. Assistance in customizing offers Beyond the identification of prospects, data analysis – data resulting in particular from advances in big data and data mining – will allow faster and more precise customization of offers to meet customers’ specific needs. Access to large databases should change the customer–seller relationship, since the seller will have information that they did not have before, such as information on the profile (personal and professional) of the prospect, their employer and the precise details of their visit to the company’s website with the number of pages visited or the time spent reading each page. The question will be to transform their data (e.g. logs, visit times) into useful information that is easy for the seller to use. Customers, too, are increasingly informed, autonomous and able to find almost all the necessary information about the products they want to buy [DUS 16]. The added value of the sales representative will be in the advice and expertise they will be able to mobilize using ever more efficient tools to respond even more precisely to the needs of their customers. The salesperson of tomorrow must redefine themselves as an adviser/salesperson in order to provide increasingly personalized solutions to their customers.

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9.2.1.3. The development of collaborative and nomadic tools Beyond the sales act, collaborative and nomadic tools are being developed that should greatly contribute to changing company culture, the working environment of salespeople and customer relationships. These tools are intended to facilitate exchanges and collaboration between project participants. They structure customer relationships from simple delivery information to real-time monitoring of the progress of a complex project including knowledge of each other’s roles, tasks and deliverables management. The scale and speed of current changes in collaborative nomadism is illustrated by the success of Slack, founded in 2014 and now ranked among the top 100 companies listed by Fortune magazine. It is a collaborative work platform that provides tools to enable project participants to communicate and collaborate effectively. In concrete terms, Slack centralizes all the communication flows of a project team (e.g. employees, customers, service providers) and allows all project information (e.g. files, calls, messages, colleagues’ contact details) to be shared in real time, searched for and archived in a single place. This platform is often created at the initiative of the client company and the sales representative can monitor and contribute directly to the progress of the project, and thus promote the smooth running of the customer relationship. These new tools are useful for both internal project management and CRM, providing real added value to the offer. Other tools allowing a more collaborative and nomadic work are currently emerging such as: Ideaflip, which allows users to find, exchange and refine ideas on projects in a team; Swabbl, which allows users to exchange contacts, prospects and recommendations via a collaborative platform; Azendoo and Wimi, which centralize project management and facilitate collaborative work in real time; and PeopleDoc, which allows digital transformation by dematerializing administrative documents. The dynamics created by these new tools are changing team collaboration and customer relationships, with, for example, real-time exchanges (corporate chat), document sharing and information sharing. The digitization of processes and exchanges makes the seller’s work more transparent and collaborative. The relationship with work changes and with this, so do the power relations within the company. 9.2.1.4. The skills of tomorrow’s salesperson According to the World Economic Forum’s report on “The future of jobs” in 2016 [WOR 16], major employment changes are to be expected with a global loss of 7.1 million jobs and the parallel creation of 2 million, or a net loss of 5.1 million jobs over the period 2016–2020. Over this period, jobs should increase by +303,000 in sales, +492,000 in finance, +405,000 in IT, while other sectors such as administration (–4.8 million), production (–1.6 million) and construction (–0.5 million) should see their workforce significantly reduced. However, if the number of jobs in the sales sector

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increases, the way we do business tomorrow will be different from today, partly because of the introduction of AI. A typical day for tomorrow’s sales representative should involve AI on many occasions, such as making appointments and writing sales offers using a virtual assistant, using a CRM connected to big data to identify prospects, or using augmented reality during customer appointments (see Box 9.1). At 9:00: making an appointment The sales person consults the appointments that their virtual assistant has made for them. This virtual assistant allows you to schedule appointments according to the degree of progress of prospects’ or customers’ projects, localities, travel time between each appointment and the specific relational needs of each prospect or customer. At 9:30: remote launch meeting The sales person to the co-working area to attend a launch meeting remotely by simulating their presence. They take advantage of their presence in a co-working area to extend their network of professional contacts. At 11:00: preparation of the sale The salesperson obtains all the useful information about their prospect because of CRM software connected to big data. Because of it, they know the buying habits and the important points to prepare for their appointment. They also consult the technical data sheets for their products and develop a strategy during their journey in an autonomous car. At 11:45: real-time response to a lead The salesperson processes in real time an alert – automatically issued by their CRM software – indicating that a need has been anticipated at the prospect level. At 2:00 pm: in face-to-face meetings During exchanges, sales person uses augmented reality glasses with facial recognition, allowing them to receive additional information in real time about their interlocutors. These glasses make it possible to adapt one’s discourse to overcome possible difficulties, especially relational ones, by decoding the non-verbal language of interlocutors. If necessary, their virtual assistant issues real-time proposals on price, and functional and technical elements. At 4:30: writing a personalized offer At the end of the customer appointment, the virtual assistant writes an offer that is then adapted and personalized by the sales person. Box 9.1. A typical day for tomorrow’s sales representative

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While deep learning faculties allow AIs to learn from their mistakes and improve the processes they have to follow themselves, they are not ready to replace the sales representative in complex tasks in the future. Indeed, AI does not know how to transfer the acquired information in a transversal way, i.e. it is a single task and specialized in very specific fields, unlike human intelligence which is competent in various fields. For example, the AI embedded in Nao robots that are able to play a football match will not be able to cook or prospect commercially, unlike humans. AI is, therefore, unable to apply reasoning in a field for which it has not been programmed. In addition, the creative abilities of AI still work in a rather rudimentary way by adding randomness to algorithms. The salesperson of tomorrow will therefore have to develop their creative capacities, versatility and adaptability. They will also have to know how to use AI tools and develop skills in the field of digital and data analysis. New skills will emerge from the hybridization of skills at the intersection of several disciplines, such as sales and data analysis, for example. “Data scientists who study the lifespan of living organisms are being researched in customer life cycle predictive analytics in online commerce. Video game usability analysts optimize merchant sites with the experience of Internet users” – futurstalents.com [AUD 18]. 9.2.2. Toward sales automation or sales without a salesperson In the case of simple sales (i.e. personalization or simple associated services), purchases are already made online via e-commerce platforms. These are short sales cycles where the need is easily met in terms of products (e.g. amazon.com, alibaba.com) or services (e.g. Microsoft, Salesforce). The buyer has direct access to the information, the transaction is easily carried out online – regardless of the medium (computer, tablet, smartphone) – and the intervention of a seller is not necessary. To get an idea of the phenomenon, Amazon was the most popular brand in the world in 2018 with an estimated brand value – according to the International Organization for Standardization ISO 10668 – of about US$ 150.81 billion [STA 18a] and amazon.com was the most popular online store in the United States in 2017 with more than US$ 52.8 billion earned by selling physical goods over the Internet, far ahead of Apple [STA 18b]. This type of simple sale is now carried out very largely online without the intervention of a seller. In the case of online sales, the improvement of the customer’s buying experience should evolve toward a more personalized customer experience in terms of both offers and customer relationships. Today, the purchasing process must be “seamless” with only a few clicks. Tomorrow, it will be a question of adapting the customer experience in real time on the basis of user/customer characteristics (e.g. age, gender, preferences, profile, purchase history, visual impairment, dyslexia) through the development of dynamic

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personalization algorithms in terms of the content of the information communicated to the customer, and also, in terms of the presentation of the man–machine interface [CÉR 16]. User characteristics may be derived simultaneously from different sources of information such as data voluntarily provided by the customer (e.g. loyalty cards), customer profile or data extracted (via data mining) from digital traces left on the web. This means that two customers entering the same keywords on the same website will have a different and personalized experience depending on their individual characteristics. At the same time, the positions of customer service manager or customer success manager are being developed. Their roles are not only to increase online sales, but also to support customers to facilitate their shopping experience. New advisors are also emerging: software robots called conversational assistants (chatbots or voicebots depending on whether the answer is textual or vocal, respectively). These conversational assistants are becoming more and more sophisticated and take care of the role of contact and customer support. If the former conversational assistants used question and answer libraries, technological advances allow them – and will allow them more and more – to analyze and interpret the meaning of the messages and will give them a satisfactory answer via the development of machine learning machines. For example, Orange Bank deployed its IBM Watson-based virtual advisor at the end of 2017 to provide its customers with a 24/7 contact person. IBM’s program has also been adopted by organizations such as Crédit Mutuel, Royal Bank of Scotland, Citigroup, ING and Deutsche Bank. 9.2.3. New forms of sale or the humanoid robot-seller Robots are arriving in stores and car dealerships. Their main role is to welcome customers and create activity (e.g. the Hilton’s robot-concierge based on the IBM Watson AI). Robots are also used in factories as employees (e.g. Cobot in Valéo factories), and companion robots are also available to help us in our daily management. Other robot companions are currently being developed to accompany elderly people (e.g. Nao robots or SoftBank’s Pepper robots) and to replace the presence in class of a hospitalized child who is following teaching from their hospital room. Further research is aimed at developing robots’ emotional AI to increase their ability to communicate and interact with humans. IBM Watson Analytics’ AI attempts to reproduce cognitive functions to allow discussion in natural language. Sensors are used to analyze the emotions or intensity of an individual’s cognitive efforts through occulometry or facial expression reading. The question of representation, the embodiment of AI, arises for the customer relationship. Should it be physically embodied? By a digital avatar? By a humanoid robot?

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Further work is emerging on persuasion through technology. Robots that now only have a public reception function could have a more persuasive function by directing customers in the store, informing them, or even advising them on how to make their purchases, especially in cases where it is the buyer who travels to the point of sale (e.g. banking services). Will we see the development of robot sales consultants tomorrow? Or humanoid robot salespeople? This type of robot questions the need for a physical representation of AI, since the software can be integrated into a computer, an interactive terminal or a humanoid robot. These perspectives question the evolution of the sales forms, professions and skills of tomorrow’s salesperson. In conclusion, whether they are perspectives related to social media or AI, “the greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic” [LEM 19]. This thought expressed by Peter Drucker still seems to us to be relevant today and we think it is better to be wrong about the future than to believe that tomorrow will be like today. Who could have imagined the current developments in the 1970s? Also, our proposals for the future of the sales function and customer relationships are made both from a few certainties but also from expectations that only the future can confirm. 9.3. References [AGN 12] AGNIHOTRI R., KOTHANDARAMAN P., KASHYAP R. et al., “Bringing ‘social’ into sales: the impact of salespeople’s social media use on service behaviors and value creation”, Journal of Personal Selling & Sales Management, vol. 32, pp. 333–348, 2012. [AHE 10] AHEARNE M., RAPP A., “The role of technology at the interface between salespeople and consumers”, Journal of Personal Selling & Sales Management, vol. 30, pp. 111–120, 2010. [AND 12] ANDZULIS J., PANAGOPOULOS N.G., RAPP A., “A review of social media and implications for the sales process”, Journal of Personal Selling & Sales Management, vol. 32, pp. 305–316, 2012. [ASH 16] ASHNAI B., KOTHANDARAMAN P., KIHEE K. et al., “An exploratory study of B2B salespeople’s social media usage”, AMA Summer Education Conference Procedings, vol. 27, no. D-37, 2016. [AUD 18] AUDRERIE J.-B., “Il faut se parler de ces nouvelles compétences”, Futurs Talent, 2018, available at: https://futurstalents.com/transformation-digitale/intelligence-digitale/ discussion-nouvelles-competences/ [BEL 78] BELLMAN R., An Introduction to Artificial Intelligence: Can Computers Think?, Thomson Course Technology, San Francisco, 1978. [CÉR 16] CÉRET E., CALVARY G., BITTAR M. et al., “System and method for magnetic adaptation of a user interface”, Patent TPI2015053 filed via INPI France, 2016.

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[CUE 18] CUEVAS J.M., “The transformation of professional selling: implications for leading the modern sales organization”, Industrial Marketing Management, vol. 69, pp. 198–208, 2018. [DUS 16] DUSSART C., Smart Transformation. Plus de la moitié de vos clients sont des digital natives, Eyrolles, Paris, 2016. [EZR 18] EZRATTY O., “Les batailles industrielles de l’intelligence artificielle”, Forbes France, March 9, 2018, available at: https://www.forbes.fr/technologie/les-bataillesindustrielles-de-lintelligence-artificielle. [GIA 12] GIAMANCO B., GREGOIRE K., “Tweet me, friend me, make me buy”, Harvard Business Review, vol. 90, pp. 89–93, 2012. [HEN 10] HENNIG-THURAU T., MALTHOUSE E.C., FRIEGE C. et al., “The impact of new media on customer relationships”, Journal of Services Research, vol. 13, pp. 311–330, 2010. [HOA 15] HOARD A., “Death of a (B2B) salesman”, Forbes, April 2015, available at: https://www. forbes.com/sites/forrester/2015/04/15/death-of-a-b2b-salesman/#25370bde7e3d. [KAP 10] KAPLAN A.M., HAENLEIN M., “Users of the world, unite! The challenges and opportunities of social media”, Business Horizon, vol. 53, pp. 59–68, 2010. [LEM 19] LE MONDE, “Citations”, 2019, available at: https://dicocitations.lemonade.fr. citations/citation-58318.php. [MAR 12] MARSHALL G.W., MONCRIEF W.C., RUDD J.M. et al., “Revolution in sales: the impact of social media and related technology on the selling environment”, Journal of Personal Selling & Sales Management, vol. 32, pp. 349–363, 2012. [MEI 17] MEIRE M., BALLINGS M., VAN DEN POEL D., “The added value of social media data in B2B customer acquisition systems: a real-life experiment”, Decision Support System, vol. 104, pp. 26–37, 2017. [MIN 16] MINSKY L., QUESENBERRY K.A., “How B2B sales can benefit from social selling”, Harvard Business Review Blog, November 8, 2016. [MON 15] MONCRIEF W.C., MARSHALL G.W., RUDD J.M., “Social media and related technology: drivers of change in managing the contemporary sales force”, Business Horizon, vol. 58, pp. 45–55, 2015. [NEW 18] NEWMAN J., “Eight trends that will define the digital assistant wars in 2018”, FastCompany, April 2018, available at: https://www.fastcompany.com/40512062/eighttrends-that-will-define-the-digital-assistant-wars-in-2018. [RAN 17] RANSBOTHAM S., KIRON D., GERBERT P. et al., “Reshaping business with artificial intelligence: closing the gap between ambition and action”, MIT Sloan Management Review and the Boston Consulting Group, p. 21, September 2017. [ROD 12] RODRIGUEZ M., PETERSON R.M., KRISHNAN V., “Social media’s influence on business-to-business sales performance”, Journal of Personal Selling & Sales Management, vol. 32, pp. 365–378, 2012.

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[SCH 12] SCHULTZ R.J., SCHWEPKER C.H., GOOD D.J., “An exploratory study of social media in business-to-business selling: salesperson characteristics, activities and performance”, Marketing Management Journal, vol. 22, pp. 76–89, 2012. [STA 18a] STATISTICA, “Brand value of the 25 most valuable brands in 2018 (in million U.S. dollars)”, Statistica: the Statistics Portal, 2018, available at: https://www.statista.com/ statistics/264875/brand-value-of-the-25-most-valuable-brands/. [STA 18b] STATISTICA, “Most popular online stores in the United States in 2017, by net ecommerce sales (in million U.S. dollars)”, Statistica: the Statistics Portal, 2018, available at: https://www.statista.com/statistics/646030/top-online-stores-united-states-revenues/. [TRA 14] TRAINOR K.J., ANDZULIS J.M., RAPP A. et al., “Social media technology usage and customer relationship performance: a capabilities-based examination of social CRM”, Journal of Business Research, vol. 67, pp. 1201–1208, 2014. [WOR 16] WORLD ECONOMIC FORUM, “The future of jobs: employment, skills and workforce strategy for the fourth industrial revolution”, January 2016.

10 Engaging Reciprocity from the Complainant Customer in the Digital Age

Events leading to customer dissatisfaction can be extremely detrimental to brands because they weaken customer relations. Since the end of the 1990s, complaint handling has become an essential tool for restoring a deteriorated customer relationship resulting from a lower quality of the product due to company problems. Nevertheless, in a connected and globalized world, customer complaint management is at the heart of the new challenges facing brands. Thus, by offering complainant customers new spaces to express themselves, Internet ecosystems tend to divert them from holding direct dialogue with brands, with the risk of a deterioration in their e-reputation. Obtaining the voice of the complainant customer to initiate a repair process with them becomes a more complex challenge. In addition, companies are aware that in complaint handling, achieving a high level of customer satisfaction is no longer sufficient to guarantee repurchase behavior. Initiating reciprocal behavior from the complainant customer following the handling of their problem becomes a new challenge in relationship marketing. Finally, faced with the fragmentation of the field of complaints associated with the increasing diversity of the modes of expression available and motivations of complainant customers, consumer services can be more efficient by better differentiating their response to the problem. 10.1. Obtaining the complainant customer’s voice: a multifaceted challenge In the digital age, customer complaints are becoming more and more diverse. In addition to complaints filed with consumer services or on the brands’ social media Chapter written by Françoise SIMON.

Augmented Customer Strategy: CRM in the Digital Age, First Edition. Edited by Gilles N’Goala, Virginie Pez-Pérard and Isabelle Prim-Allaz. © ISTE Ltd 2019. Published by ISTE Ltd and John Wiley & Sons, Inc.

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accounts (Facebook, Twitter, Instagram, etc.), there are also complainant customer voices that de facto bypasse the brands. This usually takes the form of negative opinions posted on blogs or forums, online opinion sites or brand platforms such as Amazon. However, this proliferation of the complaints field tends to obscure an unavoidable reality of customer relationships: the complainant customer’s word is golden. This reality has been highlighted by the work of the American socioeconomist Albert Hirschman, whose Exit, Voice, Loyalty model published in 1970 [HIR 70] has contributed to managers’ awareness of the value of customer complaints for the company and the need to invest in their management. In other words, brands must strive to obtain the voice of the complainant customer in order to engage in a remediation process with them, which is a prerequisite for restoring customer relationships. However, does the now protean nature of customer complaints in a digitized world challenge this model? In addition, what are the levers available to the company to obtain the complainant customer’s voice? 10.1.1. Back to the Exit, Voice, Loyalty model 10.1.1.1. The Exit, Voice, Loyalty model of complainant customers Applied to the case of complainant customers, the Exit, Voice, Loyalty model first considers that these customers can adopt two types of behavior: either they can adopt a flight behavior (Exit) or they can speak out so that the company can repair the damage suffered and improve its services (Voice). In addition to these two dominant behaviors, Hirschman distinguishes between loyalty behavior (Loyalty) in which the consumer, because they are attached to the company, neither speaks out nor flees, but believes in the company’s ability to quickly correct the quality of its services. Even if dissatisfied, the loyal customer continues to invest in the relationship. However, loyalty in the sense of Hirschman can be transformed into speaking out if the company does not react quickly enough to improve the situation. Following Hirschman’s work, a fourth behavior described as “apathy” has been proposed [BAJ 88] to characterize resigned behaviors in which consumers, who have no alternative but to remain customers of the company, withdraw from the relationship. 10.1.1.2. The risk of public protest against private complaints For brands, two major lessons from the Exit, Voice, Loyalty model remain valid. On the one hand, the Voice behavior is more favorable to the company than that of the Exit, which should encourage companies to facilitate complainant customers’ comments to departments of the company that are able to collect their dissatisfaction. On the other hand, inadequate or late takeover of the company can lead to a transformation of Loyalty in the sense of Hirschman’s model into Voice, or

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even apathetic behavior. This is particularly detrimental to customer relations because it results not only in less frequent use of the brand’s products, but also in a lack of interest in the communication it sets up. However, the Exit,Voice, Loyalty model fails to account for the new possibility that Internet ecosystems offer to protest to a wider audience, in addition to or instead of the “private complaint”, which refers to the complaint filed directly by the customer with the company in the absence of third parties. This suggests that the Exit,Voice, Loyalty model should be extended (see Figure 10.1). The updated model includes, on the one hand, “public revenge” as a means of defecting with a public protest aimed at harming the company [KAH 70] and, on the other hand, the “mixed complaint”, in which the customer complaint is accompanied by discourse on social networks generally aimed at exerting additional pressure on the company with a view to receiving faster compensation for the damage suffered or a more permanent improvement in the services [SEN 18].

Figure 10.1. Update to the Exit,Voice, Loyalty model for complainant customers

10.1.2. When the customer’s desire for discussion depends on the state of the relationship with the brand If brands have an interest in promoting the expression of the complainant customer in the form of a private complaint, it is also necessary to identify the factors that will favor the filing of this type of complaint with the brand’s consumer service or on one of its social pages. Two main families of factors can be distinguished: on the one hand, the state of the relationship with the brand, which appears to be a major factor, and on the other hand, the customer’s assessment of their chances of being heard by the brand.

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The customer’s trust in the brand and the importance of this relationship to the customer is a decisive factor in the intention to file a private complaint with the company, whether the complaint is filed digitally, by telephone or face-to-face [BOV 05]. This constant property of brand–customer relationships continues to shed light on the behavior of complainant customers, even in the digital age. In particular, the perception of brand benevolence, as a constituent element of the customer’s trust in the brand, plays a major role. Therefore, that the organization is perceived as listening to its customers’ feedback is essential. Whether the environments are physical or digital, customers evaluate their chance of being heard by the company by considering the power of the employee who handles the complaint and their ability to relay it and influence the remediation process [BOV 05, SEN 18]. In this regard, it is important to note that company employees generally exercise significant discretion in the deferral of complaints, particularly when they are informal [LUR 09]. This results in a variable capacity on the part of the organization to take into account the feedback from its customers, which would benefit from further discussion and guidance within the companies. In particular, the ambiguities relating to the company’s policy of openness in receiving customer complaints and the role of front-office employees in the process of handling such complaints deserve to be resolved. In addition, in the digital age, customers infer the benevolence of companies in handling customer complaints from the observation of brand activity on their social media pages in response to dissatisfaction expressed by customers. Empirical studies suggest that the active and vigilant presence of brands on their social pages in response to expressions of dissatisfaction is interpreted as a signal of brand openness and care, which in turn promotes the expression of more feedback, whether positive or negative. Analysis of the Twitter interventions of a major U.S. telecommunications brand shows that while the volume of complaints on the brand’s Twitter account increased, this also lead to a greater increase in positive opinions while improving the average level of customer relationship status [MA 15]. However, it is important to bear in mind that when a customer feels highly dependent on a company, especially if they consider that the market does not offer them other equivalent alternatives, they will tend to delay the filing of a private complaint for fear of damaging their relationship with the company [MIT 08]. The risk here is that the customer may complain about the quality of the company’s services to third parties or file negative opinions online anonymously [UMA 17]. Consequently, companies with a specific technological advantage or a contractualization system that penalizes early exits – all forms of company action that function as entry barriers to “lock in” the customer – have an interest in

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identifying loyal customers who are characterized by silent behavior toward the company. Indeed, in the digital age, these customers will be the first to file negative opinions online in cases of dissatisfaction. 10.2. Understanding the complainant customer’s levers of reciprocity Abundant marketing literature has made it possible to identify the main factors of complainants’ satisfaction [ORS 10, GEL 11]. This literature generally assumes that the perception of fair treatment at the time the complaint is processed by the company explains a large part of customer satisfaction regardless of the communication channel used by the customer. However, managers are increasingly aware that satisfying complainant customers only partially contributes to the intention to re-purchase. More recent studies therefore have attempted to identify complementary factors, such as customer gratitude, in order to understand the complainant customer’s levers of reciprocity. 10.2.1. The central role of perceived justice in shaping customer satisfaction Marketing researchers use justice theory quite widely to explain the generation of satisfaction among complainant customers. The complainant customer will assess the fair handling of the complaint if it is appropriate to compensate for the damage he or she considers to have suffered. To understand the impact of perceived justice on satisfaction, it is necessary to distinguish three dimensions of justice: distributive, procedural and interactive. Distributive justice aims to restore the balance of economic exchange between the customer and the company, this balance having been upset by the fact that the company did not keep its commitments in the eyes of the customer. The customer’s perception of distributive justice is based on the evaluation of two aspects of equity [ADA 65]. Internal equity refers to the comparison made by the customer between their own contributions in the exchange and the benefits they receive from it. It is completed by taking into account the contributions/benefits balance of other customers of the company: this is the principle of external equity. To trigger the perception of distributive justice, companies offer compensation in various forms: total or partial reimbursement, replacement of the faulty product or discount vouchers to be used on a future purchase. The procedural and interactional dimensions of perceived justice refer to the way in which the complaint is made, beyond the economic compensation to which it

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gives rise. Thus, interactional justice concerns the relational aspects of handling the complaint: respect and attention toward the complainant, providing explanations of the malfunction at the source of customer dissatisfaction and expression of regret or apologies for the damage suffered. It seems that interactional justice is perceptible to the customer regardless of the communication medium considered: telephone conversation with call center agents and e-mail or messages transmitted from the brand’s social media pages [SIM 15]. In addition, the accessibility of the complaints handling service, the speed of response and the simplicity, fluidity and traceability of the procedures set up by the company to collect and process complaints are part of procedural justice. In particular, it aims to reduce the effort required by the customer to file a complaint. Overall, it is difficult to propose a hierarchy of justice dimensions in the case of caring for a complainant customer. While distributive justice seems to explain a larger share of the immediate satisfaction on the part of the complainant customer [ORS 10], it seems that interactional justice has a greater impact on cumulative customer satisfaction than distributive justice, which integrates all the customer’s experiences with the company [GEL 11]. With regard to distributive justice, it is important to note that the customer’s assessment of external equity at the time of handling their complaint has been significantly modified by the development of social networks and online opinion sites. These allow a better representation of what other customers in similar situations have or have not obtained from the company as a result of a complaint. Moreover, while the digital filing of complaints by e-mail, Twitter or on the social media pages of brands has improved the procedural handling of complaints, in particular by increasing the traceability of their processing for the benefit of the customer, it does not seem that the weight of procedural justice in shaping the complainant customer’s satisfaction has been strengthened. Finally, it appears that the digital channel provides access to levels of interactional justice equivalent to those of face-to-face or telephone exchanges, as long as the company gives the customer the possibility to choose the preferred communication channel to file their complaint [GOD 11, SIM 13]. In this respect, the practice of some companies to eliminate telephone call centers in favor of a single digital support including conversation robots or chatbots appears risky from a customer relationship point of view. 10.2.2. The triggering of the customer’s desire for reciprocity 10.2.2.1. The explanatory scope of gratitude in customers’ reciprocal acts Since the seminal article by Palmatier et al. [PAL 09], the psychological mechanisms governing customer gratitude have been recognized in marketing as a

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key vector for customer reciprocity actions toward the brand. More generally, social psychology [EMM 04] has shown that individuals, after receiving a favor, experience psychological pressure to return that favor, in any form. If the act of reciprocity is associated with positive emotions, not returning the favor is usually accompanied by feelings of guilt. In this process, gratitude refers to the highly emotional evaluation of the favor received, which in turn generates a desire for reciprocity toward the person who granted said favor. In the field of customer relationship marketing, the introduction of the concept of gratitude makes it possible to renew the understanding of relational investments. These have been defined by DeWulf et al. [DEW 01] as a set of resources deployed by the company to maintain the relationship with a customer; these resources being irrecoverable in the event of a relationship breakdown. Relational investments can be distinguished according to their nature: relational communication [SIM 17]; social benefits including statutory benefits or membership of a brand community [SIM 18]; monetary benefits (loyalty programs in particular) or structural investments (tailor-made offers, etc.). The positive impact of relational investments on customer loyalty has been established by numerous empirical studies [PAL 06], with brand relationship quality based in particular on customer trust playing a significant mediating role. Introducing the gratitude of the customer who has benefited from a brand relational investment makes it possible to usefully complete the analysis of the psychological processes leading to the customer loyalty. 10.2.2.2. The respective contributions of gratitude and satisfaction in postcomplaint behavior Following on from the work of Palmatier et al. [PAL 09] on customer gratitude, marketing research focused on relational investments made by companies when handling a customer complaint reveals these relational investments could generate feelings of gratitude on the part of the complainant customer. For example, a call center agent’s empathy or friendliness, their efforts to find a solution to the customer’s problem or the monetary benefits granted can be considered as branded relational investments [SIM 13]. In particular, it was established that the satisfaction and gratitude from the complainant customer contributed differently to postclaim loyalty [SIM 15]. If the customer is satisfied with the handling of their complaint, they tend to practice positive word of mouth to recount how they have been treated, but this does not mean that they will purchase with the brand again. This finding confirms the lessons learned from the meta-analyses conducted previously [GEL 11, ORS 10]. On the other hand, the customer who has developed feelings of gratitude because of the relational investments made by the brand at the time the customer complaint was processed will tend to renew their purchases more often. It should be noted, however, that gratitude does not lead to word-of-mouth behavior in this

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situation, probably because feelings of gratitude are more difficult to express to third parties than the state of satisfaction that tends to highlight the explicit characteristics of the complaint handling. More generally, consumer services would benefit from identifying the types of relational investment with high gratitude potential in order to trigger “reciprocal” loyalty (see Figure 10.2).

Figure 10.2. Prescriptive characteristics of relational investments in complaint handling

From the teachings of the psychology of gratitude [PAL 09], it is possible to identify the major characteristics of relational investments with high gratitude potential. Thus, the potential gratitude involved in the relational investments deployed by the brand at the time the complaint is processed will be all the higher if they are discretionary, express benevolence and are granted without any compensation obligations (see Box 10.1). – Relational investments with high gratitude potential : The effort deployed by the brand at the time the complaint is processed has a high potential of creating gratitude if it is perceived as: – Discretionary: in the customer’s mind, relational investment is not part of normal business practices or contractual terms and conditions. Consequently, consumer services have an interest in allowing a certain level of decision-making freedom for their call center agents or community managers in charge of handling complaints, particularly with regard to the interactional and procedural dimensions of this handling; – Benevolence: that is, oriented toward satisfying the customer’s interests. This implies in particular that actions or discourses that may be associated by the customer with disguised commercial strategies [TSA 06] must be avoided when processing the complaint. Indeed, customers are able to detect the manipulation intentions of companies [CAM 00]. As a result, programmatic advertising strategies, often perceived as highly intrusive, should not target complainant customers within a week of the claim being processed in order to avoid the creation of cognitive dissonance on the part of the customer who has recently felt a form of gratitude toward the brand;

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– Consent without any obligation to compensate: the company is not certain to obtain a commercial return; in this case the maintenance of their relationship with the customer, and therefore to recover the resources committed during the handling of the complaint. Thus, the time spent settling a customer’s complaint can be perceived as an “outright fund” and, as such, lead the customer to feel gratitude toward the brand. Box 10.1. Relationship investments with high gratitude potential

10.3. Differentiating the care of complainant customers Faced with the fragmentation of the field of complaints, under the dual impetus of the multiplication of customer modes of expression and their diversity in a globalized world, brands have an interest in differentiating the care of complainant customers in order to improve efficiency. The matrix of restorative actions proposed here can be an effective tool in this regard. 10.3.1. Globalization and taking the intercultural factor into account In a globalized world, which has greatly benefited from the digitization of economies, consumer services support cosmopolitan customers whose cultural specificities can influence the way in which complaints are assessed. The influence given to the individual at the expense of the group is a major characteristic of Western national cultures [HOF 91]. Western cultures are also characterized by an explicit coding of situations (so-called “weak context” societies). On the other hand, other national cultures favor the group and organize communication around implicit codes (so-called “strong context” societies). In Eastern cultures, in particular, the concept of “face” refers to the respect that a person is entitled to receive because of their social position. However, as long as they are filed on the brand’s social media pages, complaints can reach a large public audience. As a result, online public complaints involve the “face” of customers from an Asian background. In a study on complaints processing conducted from an intercultural perspective, Sengupta et al. [SEN 18] compared the assessments of German versus Indian complainants. As expected, Indian customers are more sensitive than German customers to the status of the manager who offers them a public apology online. Indeed, the public apology operated the symbolic function of restoring the “face” of the customer from an Asian background. On the other hand, if the manager’s apologies were transmitted online in a private way, the difference in perception

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between German and Indian customers disappeared and the effectiveness of the statutory tool deployed by the company was undone. Overall, globalized consumer services operating on several communication channels have an interest in identifying which dimensions of national cultures are likely to influence the satisfaction of the complainant customer. 10.3.2. Identifying the complainant customer’s motivations on social networks The Internet ecosystem has made it possible to express customer dissatisfaction to a wide audience, thus encouraging the multiplication of complainant customer reviews posted on social network platforms (Twitter, Facebook, YouTube, etc.) or on customer review sites (TripAdvisor, Ciao, etc.). Consequently, managers must try to distinguish two types of Internet user motivation expressing dissatisfaction on social networks that do not depend on the brand: the request for remedial action stricto sensu, which may be similar to a so-called mixed complaint, or the desire to destabilize the brand [GRE 08, KAH 16]. If the request for remedial action calls for action to restore the perceived sense of justice and to encourage the desire for reciprocity in the company’s remediation efforts, the processing of destabilizing online posts must target other objectives. Destabilizing posts come from customers who want to achieve public conduct that is extremely harmful in order to harm the company itself. For these customers, the separation with the company is irrevocable. Their anger is often the result of a “double deviation” of the company: not only is it the cause of customer dissatisfaction, but it has not been able to put in place an explicit, rapid and satisfactory repair action. In the case of a destabilizing post, the company should focus its efforts not on winning back the customer, but rather on reducing the vengeful energy that drives them. In this perspective, globalized brands have set up virtual war rooms, centers for monitoring Internet users’ conversations and detecting such destabilization actions before they spread. War rooms are also potential tools for identifying external repair opportunities, which consist of taking care of complainant customers from other companies. Early studies on this subject show that these operations can be effective in terms of customer acquisition as long as consumers perceive that companies are not bound by any affiliation [ALL 15]. 10.3.3. The “love becomes hate” effect of the loyal customer In their relationship with the brand, the loyal customer has the particularity of developing a greater sensitivity to reciprocity standards [GRE 08]. As such, they

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intend for their “good customer” status to be recognized and for the brand to pay attention to them, to communicate with them in an appropriate and transparent manner, to not take advantage of situations at their expense and to reserve more favorable treatment than that granted to newly acquired customers, or to express regret (quickly) following a problem. In addition, the loyal customer tends to take for granted the satisfactory behavior that the brand has hitherto reserved for them [AAK 04]. This behavior is the standard against which the customer evaluates the brand’s relational performance. The fall is all the more severe when the brand no longer complies with the reciprocity standards internalized by the customer. Such deviations, described as relational transgressions, often have harmful consequences on the quality of the relationship with the loyal customer, who experiences the brand’s transgression as a form of betrayal: this is the famous love becomes hate effect highlighted by Grégoire and Fisher [GRE 08]. The issues related to relational transgressions are still poorly understood by companies. First, the phenomenon is rarely named. Then, it is addressed on the same level as the dissatisfactions resulting from breaks in quality. However, expressions from the customer exposed to a brand’s relational transgression are difficult to collect apart from a close interaction with the company’s staff. Consumer services in their current configuration, anonymous and focused on resolving disputes relating to the offer, have a limited capacity to receive this voice. When interacting with a consumer service, the customer can only put on the table what is socially acceptable to debate. To borrow Thevenot’s terminology [THE 06], the complainant’s discourse usually falls either within a “planned regime” (the damage suffered and the compensation expected are highlighted) or within a “justification regime” (the discourse mobilizes socially recognized values such as the right to compensation or equity). Conversely, dissatisfactions of a relational nature, more subtle and personal, are unlikely to be formulated in this context because they depend on a regime based on intimacy (familiarity regime). Consequently, the management of relational transgressions implies a shift in the approach to the complainant customer, generally focused on the quality of the product or service, in order to focus on relational expectations whose drivers are more complex and less objectifiable. 10.3.4. The matrix of restorative actions Because fair compensation is a major expectation of the complainant customer, particularly in the context of a private or mixed complaint, brands have an interest in working simultaneously on the distributive, procedural and interactional dimensions of their remedial strategy. Each of the three dimensions contributes to maintaining or even improving overall satisfaction with the company. However, this finding

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must be balanced against the nature of the customer’s dissatisfaction and degree of loyalty to the brand, as indicated in the matrix of remedial actions (see Figure 10.3).

Customer Loyalty

Type of failure

Offerrelated Relational or ethic

High Compensation ++ Speed +++ Communication +++ Speed ++ Communication +++

Low Compensation +++ Speed ++ Compensation + Speed ++ Communication +

Figure 10.3. Matrix of restorative actions (adapted from [CAM 15])

Thus, when the sources of customer dissatisfaction concern relational dimensions (inappropriate employee behavior, lack of brand attention, personalized communication considered intrusive or offensive, etc.) or ethical aspects of company policy, compensation is less effective in generating satisfaction among complainant customers [CAM 15]. Moreover, as explained above, the loyal customer has a strong expectation of reciprocity from the brand in relation to their status as a “good customer”. The customer can be particularly demanding regarding the speed with which their complaint is dealt with, particularly in the context of digital communication, and in the expectation of careful and personalized communication. With regard to the loyal customer, the company is exposed to a devastating “love becomes hate” effect in the case of a double deviation. On the other hand, customers with little attachment to the brand or who have a very episodic relationship with it are mainly looking for economic compensation and are less sensitive to the company’s communication actions. 10.4. Conclusion Customer complaints have become protean, and in the digital age brands are challenged to convince their customers – especially their most loyal customers – of their ability to listen. Indeed, collecting the online voice of complainant customers is becoming a priority in order to limit the volume of negative opinions online and to obtain positive reciprocal behaviors from complainant customers. On this last point, the monitoring by consumer services of relational investments with

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high gratitude potential is a major asset. In particular, consumer services must ensure that these relational investments are adapted to the communication channel chosen by the complainant customer. The matrix of restorative actions can also help brands to better differentiate the care of complainant customers by taking into account the degree of customer loyalty and the nature of customer dissatisfaction. 10.5. References [AAK 04] AAKER J., FOURNIER S., BRASEL A., “When good brands do bad”, Journal of Consumer Research, vol. 31, pp. 1–16, 2004. [ADA 65] ADAMS J., “Inequity in social exchange”, in BERKOWITZ L. (ed.), Advances in Experimental Social Psychology, vol. 2, pp. 267–299, 1965. [ALL 15] ALLEN A., BRADY M., ROBINSON S. et al., “One firm’s loss is another’s gain: capitalizing on other firms’ service failures”, Journal of the Academy of Marketing Science, vol. 43, no. 5, pp. 648–662, 2015. [BAJ 88] BAJOIT G., “Exit, voice, loyalty... and apathy. Les réactions individuelles au mécontentement”, Revue Française de Sociologie, vol. 29, no. 2, pp. 325–345, 1988. [BOV 05] BOVE L., ROBERTSON N., “Exploring the role of relationship variables in predicting customer voice to a service worker”, Journal Of Retailing & Consumer Services, vol. 12, no. 2, pp. 83–97, 2005. [CAM 15] CAMBRA-FIERRO J., MELERO I., SESE F., “Managing complaints to improve customer profitability”, Journal of Retailing, vol. 91, no. 1, pp. 109–124, 2015. [DEW 01] DEWULF K., ODEKERKEN-SCHRÖDER G., IACOBUCCI D., “Investments in consumer relationships: a cross-country and cross-industry exploration”, Journal of Marketing, vol. 65, pp. 33–50, 2001. [EMM 04] EMMONS R., MCCULLOUGH E., The Psychology of Gratitude, Oxford University Press, New York, 2004. [GEL 11] GELBRICH K., ROSCHK H., “A meta-analysis of organizational complaint handling and customer responses”, Journal of Service Research, vol. 14, no. 1, pp. 24–43, 2011. [GOD 11] GODFREY A., SEIDERS K., VOSS G.B., “Enough is enough! The fine line in executing multichannel relational communication”, Journal of Marketing, vol. 75, no. 4, pp. 94–109, 2011. [GRE 08] GRÉGOIRE Y., FISHER R., “Customer betrayal and retaliation: when your best customers become your worst enemies”, Journal of the Academy of Marketing Science, vol. 36, no. 2, pp. 247–261, 2008. [HIR 70] HIRSCHMANN A., Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States, Harvard University Press, Cambridge, MA, 1970.

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[HOF 91] HOFSTEDE G., Cultures and Organization: Software of the Mind, McGraw-Hill, Berkshire, 1991. [KAH 16] KÄHR A., NYFFENEGGER B., KROHMER H. et al., “When hostile consumers wreak havoc on your brand: the phenomenon of consumer brand sabotage”, Journal of Marketing, vol. 80, no. 3, pp. 25–41, 2016. [LUR 09] LURIA G., GAL I., YAGIL D., “Employees’ willingness to report service complaints”, Journal of Service Research, vol. 12, no. 2, pp. 156–174, 2009. [MA 15] MA L., SUN B., KEKRE S., “The squeaky wheel gets the grease – an empirical analysis of customer voice and firm intervention on Twitter”, Marketing Science, vol. 34, no. 5, pp. 627–645, 2015. [MIT 08] MITTAL V., HUPPERTZ J., KHARE A., “Customer complaining: the role of tie strength and information control”, Journal of Retailing, vol. 84, no. 2, pp. 195–204, 2008. [ORS 10] ORSINGHER C., VALENTINI S., DE ANGELIS M., “A meta-analysis of satisfaction with complaint handling in services”, Journal of the Academy of Marketing Science, vol. 38, no. 2, pp. 169–186, 2010. [PAL 06] PALMATIER R., DANT R., GREWAL D. et al., “Factors influencing the effectiveness of relationship marketing: a meta-analysis”, Journal of Marketing, vol. 70, pp. 136–53, 2006. [PAL 09] PALMATIER R., JARVIS C., BECHKOFF J. et al., “The role of customer gratitude in relationship marketing”, Journal of Marketing, vol. 73, pp. 1–18, 2009. [SEN 18] SENGUPTA S., RAY D., TRENDEL O. et al., “The effects of apologies for service failures in the global online retail”, International Journal of Electronic Commerce, vol. 22, no. 3, pp. 419–445, 2018. [SIM 13] SIMON F., “The influence of empathy in complaint handling: evidence of gratitudinal and transactional routes to loyalty”, Journal of Retailing and Consumer Services, vol. 26, no. 2, pp. 599–608, 2013. [SIM 15] SIMON F., TOSSAN V., GUESQUIÈRE C., “The relative impact of gratitude and transactional satisfaction on post-complaint consumer response”, Marketing Letters, vol. 26, no. 2, pp. 153–164, 2015. [SIM 17] SIMON F., “Relationship norms and media gratification in relational brand communication”, Journal of Business Research, vol. 79, pp. 12–22, 2017. [SIM 18] SIMON F., TOSSAN V., “Does brand-consumer social sharing matter? A relational framework of customer engagement to brand-hosted social media”, Journal of Business Research, vol. 85, pp. 175–184, 2018. [THE 06] THEVENOT L., L’Action au pluriel. Sociologie des régimes d’engagement, Éditions La Découverte, Paris, 2006. [TSA 06] TSANG J., “The effects of helper intention on gratitude and indebtedness”, Motivation & Emotion, vol. 30, pp. 199–205, 2006.

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[UMA 17] UMASHANKAR N., WARD M., DAHL D., “The benefit of becoming friends: complaining after service failures leads customers with strong ties to increase loyalty”, Journal of Marketing, vol. 81, no. 6, pp. 79–98, 2017. [XIA 13] XIA L., KUKAR-KINNEY M., “Examining the penalty resolution process: building loyalty through gratitude and fairness”, Journal of Service Research, vol. 16, no. 4, pp. 518–532, 2013.

11 The Firm’s Empathic Capacity: a Social Neuroscience Perspective for Managing Customer Engagement in the Digital Era

11.1. Introduction: the dilemma of digital transformation in customer relationship management The rapid development of the digital economy and its technological substrates – very high-speed Internet, Internet of Things, big data and artificial intelligence – poses an additional challenge to firms already operating in a globalized and hypercompetitive market. In particular, it requires the adaptation of procedures for managing customer relationships – ubiquity, ease of access, integrated experience, instantaneous responses – all while maintaining a personalized and authentic discussion with the customer. Faced with these new challenges, the digital transformation of customer relations is gradually becoming an essential strategy. However, it also presents firms with a major dilemma. On the one hand, digital transformation is based on a method of cost control and relies on automated interactions to improve profitability. Firms can thus transfer to the customer the economic burden of management operations deemed unprofitable: booking an airline ticket or hotel room while automating interaction procedures to reduce the size of the workforce. This “putting the consumer to work” [DUJ 14], combined with the automation of service interactions, significantly reduces costs. In the United States, for example, the cost of contact between a manager and the customer was estimated in 2009 at $7.50 compared to

Chapter written by Mathieu LAJANTE.

Augmented Customer Strategy: CRM in the Digital Age, First Edition. Edited by Gilles N’Goala, Virginie Pez-Pérard and Isabelle Prim-Allaz. © ISTE Ltd 2019. Published by ISTE Ltd and John Wiley & Sons, Inc.

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32 cents for a comparable but automated service [YEL 09]. In addition, the digital transformation of the relationship and the automation of interactions with the customer help to free up sales time for the sales force. In the banking sector, for example, the online management of day-to-day operations by the customer – deposits, transfers, account inquiries – has allowed agents to refocus on the sale of financial products, a source of immediate revenue for the firm. On the other hand, digital transformation presents all the risks of a strategy that is profitable only in the short term. This is because if the interaction between the firm and the customer is limited to the technical capacity of automated service interactions, it will lead to a rationalization and dehumanization of the relationship that is detrimental to the customer engagement [GOR 11a]. Indeed, dematerialized and digital interactions with the firm are major sources of customer frustration [GOR 11b]. They reduce the opportunities for spontaneous sharing of emotions and force the customer to rationalize their experiences to adapt them to the technical constraints imposed by automated service interactions. For example, chatbots, or conversational robots, are based on language processing algorithms that limit their effectiveness to elementary queries and conversations. On the other hand, managers lose the physical link with the customer – now perceived as a fragment of a transaction process – and compromise their empathic capacity in managing the relationship [GOR 11a]. Finally, excessive digitization degrades the emotional connection – the firm’s ability to establish an emotional connection with its customers – as well as the customer engagement, and affects the firm’s performance. Physical and social relationships in service interactions and the emotional connection established with the customer are, therefore, imperatives that cannot be completely replaced by current technology. This is the dilemma: digitize and automate customer relations to reduce costs, at the risk of losing the emotional connection and degrading the customer engagement? Or maintain physical interaction to preserve the emotional connection and customer engagement, at the risk of increasing costs and reducing profitability? The solution lies in reconciling its two opposing concepts. Firms accepting the challenge of digital transformation must stimulate the customer engagement while controlling their costs [WEI 18]. In particular, we propose that a strategy based on the development of the firm’s empathic capacity would make it possible to respond to the dilemma posed by digital transformation. First, empathy refers to our ability to understand and share the emotional states of others – the need to interact physically at the touchpoints along the customer journey to establish and maintain the emotional connection. Second, empathy also refers to our ability to understand and share the mental states of others – the need to appropriate the tools of digital transformation to anticipate customer expectations and intentions while controlling costs.

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In the remainder of this chapter, we will highlight that the firm’s empathic capacity contributes to shaping a virtuous firm–customer interactivity that creates value for both parties. First, we will emphasize the importance of emotional connection and empathy in the formation and maintenance of social relationships. Then, we will specify the central role of the firm’s empathic capacity in service interactions. It will also provide an opportunity to analyze the cognitive appraisal process developed by the customer to measure the empathic capacity of the emotional firm that underlies the customer engagement. 11.2. What social neuroscience tells us about empathy Neuroscience concepts and methods are generally applied in marketing to open the customer’s “black box” – their brain – and analyze the cognitive and affective processes at work between a stimulus and a behavioral response. In this sense, the contribution of neuroscience to service interactions lies in its ability to answer the fundamental question why is the customer is engaged? before addressing the more applied question how can we engage the customer?. According to the approach we adopt, the firm’s empathic capacity is an important mediating and affective process between the sociotechnical devices on which the digital transformation of service interactions is based, on the one hand, and the formation of behaviors and customer engagement, on the other hand. It determines the firm’s ability to maintain an emotional connection while controlling costs in an ever-changing digital environment. It is necessary to define this empathic capacity and to understand to what extent it contributes to shaping a virtuous firm-customer interactivity that creates value for the firms and their customers. In this section, we adopt a social neuroscience approach to shed light on the concept of empathy. First, we explain what social neuroscience refers to. We then highlight the importance of the principle of emotional connection in social relationships. Finally, we define empathy – an important affective and cognitive process for emotional connection and customer engagement. 11.2.1. Social neuroscience: what is it? Social neuroscience refers to the exploration of the neurological underpinnings of processes traditionally examined by, but not limited to, social psychology [DEC 06]. In a more paradigmatic approach, social neuroscience refers to an integrative field that examines how nervous (…), endocrine and immune systems are involved in socio-cultural processes. Social neuroscience is not dualistic in its view

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of humans, yet it is also nonreductionistic and emphasizes the importance of understanding how the brain and body influence social processes as well as how social processes influence the brain and body. In other words, social neuroscience is a comprehensive attempt to understand mechanisms that underlie social behavior by combining biological and social approaches [HAR 07]. Applied to service interactions, social neuroscience helps us to understand how the interaction strategies developed by the firm influence customer engagement through sociobiological processes. In particular, it highlights the central role of emotional processes such as empathy in building firm–customer interactivity. Social neuroscience therefore invites us to situate social, psychological and behavioral phenomena linked and revealed by physiological phenomena at the center of service interactions. It also invites us to pay particular attention to the principle of emotional connection around which the interactivity between the firm and its customer is built – interactions comparable to the social relationships of an individual with their peers. 11.2.2. The emotional connection is essential to any social and commercial relationship Emotional connection is a necessary principle for the formation of social bonds between individuals. It is not conceptualized as such but refers to different emotional processes that establish and balance social relationships, such as emotional attachment, social experiences of pleasure or pain, and of course, empathy. 11.2.2.1. Emotional attachment Emotional attachment refers to the psychophysiological process through which a social bond is established between two individuals [CAR 07]. It is based primarily on social commitment, which aims to reduce physical distance and thus facilitate the perception and interpretation of physical signals communicated by others: facial features, facial, vocal and bodily expressions, smells and touch. These physical signals are interpreted as positive social indicators – the opportunity to develop approach behaviors – or negative – the need to develop avoidance behaviors. The physical closeness of individuals – or what can be perceived as such – is therefore important for developing a social bond [CAR 07]. At this stage, neural, autonomic and endocrine processes facilitate or inhibit the perception and interpretation of social indicators and contribute to their integration into the individual’s social experience. For example, dopamine secreted via the neuroendocrine system plays an important role because it is associated with behavioral activation and the search for incentives, which are elements of social bond formation [CAR 07].

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In the context of service interactions, the principle of emotional attachment underscores the importance of physical interaction between the firm and the customer to establish an emotional connection and give a positive meaning to the customer engagement. For example, visual or auditory contact is sufficient to reduce social distance and establish an emotional connection. This emotional connection is then the subject of an automatic, unconscious appraisal, which determines the future behavioral predispositions of the customer toward the firm: approach or avoidance predispositions that can be measured by the customer’s loyalty intentions, for example. 11.2.2.2. Experiences of social pleasure and social pain The social engagement that drives the attachment process generates emotional experiences that the individual experiences as positive – social pleasure – or negative – social pain. Social pleasure arises from the feeling of being connected to the members of a reference group and is expressed through a vocabulary that reflects physical warmth: warm relationships, warms the heart [EIS 16]. For example, receiving affectionate messages from people to whom we are attached increases the feeling of warmth – literally and figuratively – and reinforces the feeling of social and emotional connection [EIS 16]. Conversely, social pain arises from the feeling of being excluded or misunderstood by members of a reference group and is expressed through a vocabulary that reflects physical pain. This vocabulary would not only have a metaphorical function: it would describe a real, physical sensation of pain. Indeed, brain imaging studies show that the experience of social pain is based on neural substrates similar to those used in the experience of physical and emotional pain, as well as those used in empathy processes, especially when observing others experiencing pain [EIS 16]. The social experience that the customer experiences in their interaction with the firm can therefore be pleasant – feelings of being listened to, understood and considered – or painful – feelings of being ignored, misunderstood and isolated. These feelings are not only declared, but they are also embodied, which constitutes a somatic marking of the emotional experience conducive to the development of action readiness [DAM 96]. It all depends on the firm’s ability to establish a positive emotional connection with the customer in order to understand and feel their emotions and then respond to their requests in an empathic way. This empathic capacity, which digital technologies have not yet developed, is an eminently human and emotional process that is essential to the quality of customer engagement. 11.2.3. Empathy: the epicenter of the emotional connection Empathy refers to our ability to share and understand other people’s affective and mental states [ZAK 16], which are emotions and feelings, on the one hand, and

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behaviorral intentions,, beliefs and thoughts, t on the other hannd. Empathy m manifests itself thrrough an utilittarian emotionnal episode in n response to observation o but also to the imaggination of othhers’ emotionnal states [INS S 11], and is structured s arouund three distinct but b interrelateed componentss [DEC 04]: – shaaring affect, which w refers too our ability to o experience thhe emotions oof others; – undderstanding emotions, e whiich refers to our o ability to identify the nature of emotionss experiencedd by others; – self-regulation, which refers to our ability y not to confuuse our emotiions with those expperienced by others. o Empaathy is what allows us too live in society. It explaains our proppensity to constantly infer and anticipate a otheer people’s aff ffective and mental m states inn order to connect with each otther [ZAK 166]. Eventually y, it allows uss to develop prosocial behaviorrs such as com mpassion, assisstance and altrruism. 11.2.3.1 1. Empathy is i about sharing and und derstanding the emotional states of otherrs Our ability a to sharre and understtand the emotiional states off others is bassed on the principlee of “neural ressonance”. Neuural resonancee refers to the ability a of an obbserver to unconsciiously activatee the same neeural networkss as those actiivated by the observed person who w is experriencing an em motion [INS 11]. In otheer words, to share the emotionaal experiencess of others, wee simulate theeir emotional states s by activvating our own neuural networks of emotion [D DEC 03]. Forr example, obbserving expreessions of disgust in others activvates similar neural n responses in the anterrior insula andd anterior cingulatee cortex in thhe observer [WIC [ 03]. Th hese cerebral areas are paarticularly solicited in the repreesentation of our own em motional statess and those of others [INS 04]]. For examplle, the anterioor insula is activated when individuals exxperience pain and when they obbserve someonne experiencing g pain [INS 111] (Figure 11.11).

Figure 11.1. 1 Illustratio on of neural re esonance. Th his functional brain b imaging identifies the overrlap of brain activations a in the anterior insula i and an nterior cingula ate cortex when we e receive paiinful stimulatio on (green) orr when we exxperience em mpathy for another person receivving painful stimulation s (re ed) (adapted from f [DEV 06 6]). For a color verrsion of this fig gure, see www w.iste.co.uk/ng goala/augmen nted.zip

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The principle of neural resonance applies to the brain networks involved in the emotional experience but also to those involved in the execution of motor movements associated with an emotional experience. For example, the observation of facial, vocal or bodily expressions involves the brain networks involved in the perception and experience of emotions as well as in their communication [DEC 09]. More broadly, motor, cognitive and linguistic representations of the affective states of an observed individual evoke similar activation patterns at the cerebral, visceral, sensorimotor and physiological levels in the observer to share the same experience [ZAK 16]. Finally, the neural resonance mechanism plays an important role in the development of the empathic response, not only in the sharing and understanding of the emotional states of others, but also in the sharing and understanding of their mental states. 11.2.3.2. Empathy is about sharing and understanding the mental states of others Our ability to share and understand the mental states of others is based on the principle of “mentalization”, also known as “theory of mind”. Mentalization refers to our ability to reason explicitly about the mental states of others and to develop coherent scenarios to understand how a given situation may have produced these mental states [ZAK 16]. In other words, when we mentalize, we combine our intuitions with the signals emitted by others (e.g. facial expressions) to infer their thoughts, beliefs and behavioral intentions in a particular context. Mentalization involves certain areas of the brain – the prefrontal cortex, anterior cingulate, lateral temporal lobe, lateral parietal lobe, lower parietal lobe and temporal–parietal junction – that are linked to psychological processes such as information processing, inferences about the false beliefs of others, autobiographical memory, projection into the future and mental navigation [ZAK 16]. These cerebral processes thus facilitate the projection of the individual beyond a spatiotemporal space reduced to the “here and now” to help the individual imagine and anticipate the mental states of others in different times and places. Our ability to mentalize and infer mental states is, therefore, necessary to develop balanced interactions with others in a social context, whether they are cooperative or competitive [ZAK 16]. It is based on both the process of sharing experience (neural resonance, behavioral mimicry) and the process of adopting the points of view of others. The role of these two processes in determining the accuracy of inferences made with respect to others depends on contextual factors, such as the similarity between the individual observed and the observer.

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11.2.3.3. Empathy is orienting toward feeling compassion and developing prosocial behaviors Empathy is essential for our social and moral development. It is a motivational process that allows us to integrate the emotional and mental states of others in order to experience compassion and thus develop prosocial behaviors [DEC 09]. Prosocial behaviors refer to any form of response or action – sharing, helping, comforting, supporting – that a society considers beneficial to others [PEN 09]. They can be altruistic or selfish in nature. Altruistic prosocial behaviors are the result of an empathic response driven by feelings of compassion for others and an aim to improve the well-being of others. Conversely, selfish prosocial behaviors are the consequence of an empathic response driven by a sense of personal distress and are intended to avoid feelings of guilt and sadness [PEN 09]. Several variables can alter the empathic response. For example, the degree of physical, cultural or social similarity and the emotional ties established with the person being observed influence the empathic response. The closer we feel to others, the more likely we are to respond in an empathic way. The reputation of the person observed can also influence our empathic ability. We feel empathy for someone who is in pain if they have behaved fairly before. On the contrary, we do not feel empathy for someone who behaves unfairly. The observation of this person even evokes brain responses associated with reward networks [INS 06]. Finally, the observer’s level of expertise influences their empathic ability. For example, physicians exposed to painful experiences such as injecting a patient with a syringe react less empathically and use their emotional regulating ability more than laypeople [INS 11]. A lack of empathy can lead to a significant social and relational disability. Psychopathy is the disease that best illustrates these consequences [INS 11]. Psychopaths rely almost exclusively on the cognitive inputs of others to the detriment of their emotional inputs. While they fail to share the emotional and mental states of others, they are perfectly capable of understanding and taking advantage of them: this is what makes them highly effective in anticipating the social and behavioral intentions of others. This ability to understand the mental and emotional states of others without sharing them is reflected in antisocial behavior that shows contempt for the well-being of others and the absence of feelings of guilt, and forms the basis for social manipulation behaviors [ZAK 16]. Does the digital transformation of service interactions expose firms to a lack of empathy, and therefore to psychopathic organizational behaviors? The question is worth asking.

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On the one hand, digital transformation leads to a loss of human and physical interaction, which results in an emotional disconnection with the customer. This emotional disconnection affects the firm’s ability to feel and share the emotional states of its customers. It also hinders the development of compassionate feelings necessary to develop customer-focused behaviors, such as assistance. Moreover, the fact that customers share their emotional states online does not make interaction more humane if these data are processed only in an automated and standardized way. On the other hand, digital transformation provides access to an impressive amount of customer data (big data) and significantly increases the firm’s ability to understand the mental states of its customers without increasing its ability to share them. Their habits, opinions, beliefs, behaviors, feelings and intentions are now digitized, stored and processed to develop predictive models and streamline customer relations. This runs the risk of producing manipulative and antisocial behaviors that are solely in the interests of the firm, even antidemocratic, such as those revealed by the Facebook/Cambridge Analytica scandal. Having an empathic capacity is, therefore, a strategy for balancing digitization and physical interaction. First, understanding others’ internal states is based on cognitive functions that require time, effort and attention. Using artificial intelligence would, therefore, make it possible to develop support systems to “mentalize” the customer’s internal states and help front-line employees to better anticipate customer experiences. Second, the sharing of others’ internal states is based on rapid and automatic cognitive functions beyond the threshold of consciousness. Maintaining physical interaction would, therefore, establish an emotional connection with customers, sharing their emotional states and helping front-line employees to better meet the customers’ assistance needs. Box 11.1. The lack of empathy in automated service interactions: toward psychopathic firms?

11.3. Developing firms’ empathic capacity: a two-level strategy Developing firms’ empathic capacity increases customer engagement and firm performance [GOR 11a]. In the digital age, firms’ empathic capacity must be based on both automated and personalized processes. This is what we introduce in this section: an empathic service interaction strategy with two distinct but interdependent components: the ability to share the customer’s internal states and the ability to understand them. 11.3.1. Sharing the customer’s emotional states Sharing the customer’s emotional states is the first dimension that characterizes empathy. It is based on rapid, automatic and unconscious cognitive processes that

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require physical and human interaction. Put in a strategic context, the firm’s ability to share the customer’s emotional states requires defining an empathic value chain, identifying empathic points on the customer journey and training managers to help them develop an empathic interaction with customers. 11.3.1.1. Defining an empathic value chain and identifying empathic points Engaging customers requires ensuring the ease with which the firm provides access to its services, the relevance of the solutions it offers to the customer in relation to their needs and desires, and the pleasure that the customer derives from their experience with the firm. This need extends to all levels of interaction from the purchasing act to post-purchase activities such as delivery, installation, training, maintenance, warranty and replenishment [GOR 11a]. It is therefore necessary to establish an empathic value chain to identify the customer’s touchpoint necessary to solve their problems and to ensure that each link in the chain adds value to the customer experience. Then, the analysis of the empathic value chain must lead to the identification of empathic points, those highly emotional touchpoints along the customer journey that require a physical interaction structured around the principle of emotional connection. This empathic analysis of the value chain has several major advantages. First, from an operational perspective, the identification of empathic points makes it possible to deploy front-line employees for touchpoints that have value for the customer. This makes it easier to establish an emotional connection with the customer and to respond empathically to their expectations. Then, from a strategic perspective, the identification of empathic points is conducive to the organization of a field monitoring the customer’s emotions and experiences, and then to the dissemination of this information throughout the firm for the continuous improvement of customer engagement [GOR 11b]. If we reason by opposition, the identification of empathic points makes it possible to identify touchpoints that do not merit a particular emotional connection with the customer. Digital transformation then offers automated interaction options that are appreciated by the customer because they meet their simple and immediate needs. In addition, the automatic management of certain customer touchpoints helps to protect front-line employees from “empathic fatigue”. Feeling empathy at any time and in any place is particularly challenging and can lead to emotional contagion and emotional distress, which would be completely counterproductive.

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In order to extend customer engagement beyond the act of buying and establishing a real emotional connection with its customers, Apple developed the genius bar, a physical after-sales service to receive complaints and provide technical solutions to problems encountered. Available in Apple Stores and supported by online options for quick help, the genius bar provides experts who are attentive to customers and illustrates what an “empathic point” in the service interaction value chain could be: a stage of physical and empathic interaction that creates value for the firm and the customer. Box 11.2. Apple’s genius bar

11.3.1.2. Training managers in empathic capacity The identification of empathic points in the service interaction value chain makes it possible to identify touchpoints where emotional connection creates value for the customer and the firm, and creates the possibility of deploying front-line employees at strategic points in the customer journey. For this strategy to achieve the prescribed objectives, it must be based on the training of human service managers in order to develop their empathic capacity – empathic skills and intelligence. As human beings, we have the ability to react empathically by observing the emotional experience of others, but also by imagining it through real or fictional stories that we share on the Internet and through the media, literature and the arts. This unique human capacity could form the basis of training dedicated to developing the empathic capacity of human service managers [GOR 11b]. Listening empathically to customers, correctly identifying the emotional signals they give, being able to adopt the customers’ point of view without confusing the self with others in order to prevent any risk of contagion and emotional distress are all empathic skills that could be taught to managers through the narrative of customers’ experiences shared on empathic points [GOR 11a]. In addition, empathy training based on customers’ experience stories should allow managers to clearly distinguish empathy from sympathy [INS 11]. This nuance, which may seem tenuous, makes it possible, in practice, to guarantee the development of genuine empathic and prosocial behaviors. For example, a manager who is empathic and shares the anger expressed by their customer will likely adopt altruistic behavior to generate calm and will respond constructively to that anger; the manager comes down to the customer’s level. On the other hand, if they show sympathy, it means that they are not affected themselves – in the empathic sense of the word – by the anger expressed by their customer, but that they feel pity instead; they feel they are above the customer’s emotional states. Sympathy is a passive

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feeling, not very inclined to the manifestation of prosocial behaviors and can be interpreted as a condescending attitude in certain situations. Following the arrest of two black customers in one of its Philadelphia stores, the Starbucks coffee chain faced a wave of global outrage and a call for a boycott. In order to respond to the controversy and prevent similar situations, the company is committed to training its coffee shop employees in anti-racism. During a 4 h session, more than 175,000 employees across the United States participated in training explicitly aimed at building empathy, compassion and a welcoming environment for everyone. Experience stories shared by customers were part of the main training materials to illustrate situations requiring an appropriate empathic response (http://www.cbc.ca/news/entertainment/starbucks-commontraining-1.4680521). Box 11.3. Starbucks trains its employees in anti-racism

11.3.2. Understanding the customer’s mental states Understanding the customer’s mental state is the second dimension of empathy. It is based on time-consuming and energy-intensive cognitive processes that could be supported by automated processing systems. From an operational point of view, first of all, the firm’s ability to understand the customer’s mental state implies appropriating digital transformation tools to artificially increase the managers’ mental capacity. From a strategic point of view, it involves developing “empathic” processing algorithms to identify the customer’s emotional motivators placed in the context of his or her consumption. 11.3.2.1. Increasing the “mentalizing” capacity of managers using digital transformation tools The fact that managers are deployed for empathic points to establish an emotional connection with the customer does not mean that service interaction cannot take advantage of the standardized and automated solutions available. On the contrary, the use of digital technologies in physical customer interactions could increase managers’ empathic capacities by assisting them in their mentalization process, and therefore helping them in the development of prosocial and altruistic solutions oriented toward the customer’s interests. One of the significant differences between sharing and understanding the customer’s emotional and mental states is the level of behavioral automaticity. The sharing of emotional states can be triggered very quickly and outside the threshold of consciousness. Conversely, understanding mental states requires explicit and sustained cognitive development that can be disrupted by a lack of time and

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attention constraints in a customer relationship management department. Moreover, this mentalization process requires a form of anchoring and that one adjusts the inferences developed with others to be effective [ZAK 16]. Among the digital transformation tools, it is artificial intelligence that could assist managers in this mentalization process, which is costly in terms of cognitive resources, and thus facilitates the development of their empathic capacity when in contact with the firm. Artificial intelligence offers an unparalleled opportunity to “drill data wells” to identify the origin and nature of the customer’s needs to situate them in a specific context and thus better anticipate the customer’s intentions and behaviors [NEW 18]. The use of this information in an empathic capacity approach would have at least two operational advantages. First, it would assist managers in accurately understanding the customer’s mental state, thereby reducing the risk of empathic fatigue during their multiple interactions. Second, the use of this information would facilitate the identification of solutions adapted to the customer’s needs that are sometimes difficult to verbalize. Personal assistants like Amazon’s Alexa or Google Assistant use natural voice processing algorithms (a form of artificial intelligence) to perform all kinds of tasks with a simple voice command: cleaning services, managing connected objects at home, consulting weather reports or information and ordering products and services. Although this technology is still in its infancy, it promises to revolutionize service interactions. Able to enrich their knowledge through conversations with the customer (machine learning principle), these personal assistants will soon be able to discern the customer’s emotions following voice intonations and will result in a more empathic conversion; they will be able to identify the customer’s needs and advise them on their purchases. True conversational agents are customizable and always available; these personal assistants are gradually integrating into everyday objects, giving them the gift of ubiquity. Several agreements have already been signed with firms such as Toyota, Sony, Samsung, LG and Lenovo to equip different systems with these personal assistants (https://www.cnet.com/ news/ces-2018-voice-assistant-alexa-google-echo-smart-home-bixby/). However, the future will tell us if these assistants meet the challenge of a genuine empathic service interaction. Some customers are already complaining about these devices, claiming they are in fact “spies” working only in the interests of firms – a form of what we called earlier “psychopathic behavior”. However, an empathic interaction is also a relationship of trust (http://www.dailymail.co.uk/sciencetech/article-5182577/HowGoogle-Amazon-SPYING-you.html). Box 11.4. Personal assistants, or when the automated service interaction comes to your house

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11.3.2.2. Identifying the customer’s emotional motivators using big data The development of the firm’s empathic capacity is not only oriented toward operational, reactive customer interactions. It also contributes to a firm’s strategic planning and forward-thinking. In addition to optimizing the emotional connection with front office customers, it promotes the development of a genuine empathic marketing policy in the back office. To achieve this, the firm must take ownership of the use of big data and analyze the available data in an empathic way [AGA 12]. Big data plays a particularly important role in the development of a strategic and prospective approach to empathy. They identify the customer’s emotional motivators – the intrinsic, implicit and emotional goals that guide customer behaviors in his or her interaction with the firm – based on what they do, rather than what they say. Indeed, customers are not always fully aware of the real reasons for their consumption, which makes reporting data unreliable. On the other hand, behavioral data are more objective and offer the opportunity to continuously determine the motivational drivers of customer consumption – data being digitized and stored in real time, including through the use of smartphones and social networks. Below are some examples of emotional motivators according to [MAG 15]: – standing out from the crowd; – feeling free; – feeling connected to the reference group; – succeeding in life. Identifying the customer’s emotional motivators using big data is a central step in the strategic development of empathy. It refers to the firm’s ability to establish the emotional connection by aligning its brand with the customer’s motivations, thus helping it to achieve its far-reaching and unconscious goals. In concrete terms, the strategic development of empathy based on the customer’s emotional motivators follows a four-step procedure [MAG 15]: 1) identify the customer’s emotional motivators by analyzing big data; 2) determine the purchasing behaviors to which the previously identified emotional motivators are attached; 3) quantify the potential value of the customer’s emotional motivators and develop a strategy to leverage them; 4) predict the effect of emotional motivators on standard measures of customer experience such as satisfaction and loyalty.

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This forward-looking strategy of empathy helps to shape a virtuous interactivity that creates value for the firm and the customer. It allows the customer to be satisfied and emotionally connected to the firm by facilitating the achievement of intrinsic and implicit objectives. Finally, it promotes the formation of emotional episodes at the various key points of the purchase-emotional episode journey that constitutes the main antecedent of the customer engagement and appraisal. 11.3.3. How does the customer appraise their engagement with the firm? Customer engagement is a major output of service interactions – especially when the firm aims to place the customer at the center of its marketing strategy. Establishing an empathic value chain and connecting emotionally with the customer to each empathic point is, therefore, essential to preserve customer engagement in the age of digital transformation [WEI 18]. Indeed, the customer appraises their experience at each of these empathic points according to an automatic and unconscious cognitive process. The result of this cognitive assessment process defines the basis on which the emotions that constitute the main antecedent to the formation of the customer engagement are formed. The theory of cognitive and dynamic appraisal of emotion [SCH 09] provides a good understanding of how the customer’s cognitive, emotional and behavioral responses are integrated into the formation of their engagement with the firm [LAJ 13]. According to this theory, the elicitation of the emotion experienced by the customer is based on the subjective, continuous and recursive appraisal of the interactions he or she has with the firm in relation to his or her goals. This essentially automatic and subconscious appraisal process is based on three main criteria specific to the customer engagement [MAN 12]: accessibility (do I get in touch with the firm easily?), pleasure (are my interactions with the firm pleasant?) and relevance (does the firm meet my needs?). The result of this cognitive appraisal process is the formation of an emotional episode that manifests itself in physiological (e.g. skin conductance response related to the level of emotional connection), expressive (e.g. facial expressions of approval) and subjective (e.g. a stated feeling of satisfaction) reactions that result in the customer’s behavioral predispositions (e.g. word of mouth, loyalty), ultimately affecting the strength of the engagement. This theory of emotion, therefore, emphasizes three distinct but inseparable appraisal constructs: cognitive appraisal, emotion and behavior. They indicate that the customer engagement is not only thought about but also felt; embodied. Indeed,

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work in neuroscience has shown that the relationship between the cognitive appraisal process and emotion is characterized by a dynamic cerebral process that simultaneously addresses both emotional and evaluative functions [LEW 05]. In other words, the customer’s cognitive appraisal of their experience with the firm and the resulting emotions are embodied and experienced in a unified way – the distinction between appraisal and emotion being impossible to consciously establish by the customer [BAR 07]. Customer engagement is, therefore, a highly emotional issue. In addition, the fact that the emotional episodes experienced by the customer are guided by the subjective process of individual cognitive appraisal implies that there is a potentially infinite number of emotions associated with customer engagement [SCH 09]. 11.4. Conclusion In this chapter, we have highlighted the dilemma facing firms tempted by digital transformation: automating and standardizing service interactions at the expense of emotional connection and customer engagement, maintaining physical and emotional interaction with the customer at the expense of costs and profitability. To answer this dilemma, we proposed to consider the concept of empathy, first in its neuroscientific and social dimension, then in its strategic and managerial dimension: the firm’s empathic capacity. In particular, we have identified the two key dimensions of empathy: the ability to share and to understand the internal states of others, and how these two dimensions allow us to develop prosocial and altruistic behaviors. From a managerial perspective – and in the context of digital transformation – the ability to share the emotional states of others refers to the need to maintain physical interaction with the customer and thus establish an emotional connection. In order to ensure that this emotional connection is deployed in a way that creates value for the firm and the customer, we proposed to define a genuine empathic value chain for service interactions and to identify the empathic points on the customer journey. The next step is to train front-line employees to develop their empathic intelligence in order to respond effectively and altruistically to the customer’s requests. In addition, and with the objective of assisting managers in their empathic interactions with customers, we advocated for an “empathic” use of big data to increase the “mentalizing” capacity of front-line employees – their ability to understand customers’ mental states, intentions and behavioral tendencies. Second, we stressed that our ability to understand the mental states of others refers to the need to develop a proactive and strategic empathic capacity. In particular, we highlighted the concept of “emotional motivators”, which define the far-reaching

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and unconscious objectives that customers pursue during consumption. The identification of these emotional motivators would notably make it possible to align the firm’s relational actions with the motivations of customers and thus take the principle of emotional connection further throughout the customer journey, before any complaints and requests are made. Finally, we described how customer engagement emerges following emotional episodes structured around three criteria for the cognitive appraisal of service interactions: accessibility/ease of access to the firm, the pleasure experienced during interactions with the firm and the relevance of the interaction to the needs experienced. This is, therefore, the challenge that firms will have to face in the near future: to appropriate digital transformation and direct it toward empathic service interactions in order to preserve customer engagement and promote value creation for both parties. 11.5. References [AGA 12] AGARWAL R., WEILL P., “The benefits of combining data with empathy”, MIT Sloan Management Review, vol. 54, no. 1, pp. 35–41, 2012. [BAR 07] BARRETT L.F., MESQUITA B., OCHSNER K.N. et al., “The experience of emotion”, Annual Review of Psychology, vol. 58, pp. 373–403, 2007. [CAR 11] CARTER C.S., PORGES S.W., “The neurobiology of social bonding and attachment”, in DECETY J., CACIOPPO J.T. (eds), The Oxford Handbook of Social Neuroscience, Oxford University Press, New York, pp. 151–163, 2011. [DAM 96] DAMASIO A.R., “The somatic marker hypothesis and the possible functions of the prefrontal cortex”, Philosophical Transactions of the Royal Society of London, Series B, vol. 351, no. 1346, pp. 1413–1420, 1996. [DEC 03] DECETY J., SOMMERVILLE J.A., “Shared representations between self and other: a social cognitive neuroscience view”, Trends in Cognitive Sciences, vol. 7, no. 12, pp. 527–533, 2003. [DEC 04] DECETY J., JACKSON P.L., “The functional architecture of human empathy”, Behavioral and Cognitive Neuroscience Reviews, vol. 3, no. 2, pp. 71–100, 2004. [DEC 06] DECETY J., KEENAN J.P., “Social neuroscience: a new journal”, Social Neuroscience, vol. 1, no. 1, pp. 1–4, 2006. [DEC 09] DECETY J., “Empathy”, in SANDER D., SCHERER K.R. (eds), The Oxford Companion to Emotion and Affective Sciences, Oxford University Press, New York, pp. 151–153, 2009. [DEV 06] DE VIGNEMONT F., SINGER T., “The empathic brain: how, when and why?”, Trends in Cognitive Sciences, vol. 10, no. 10, pp. 435–441, 2006.

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[DUJ 14] DUJARIER A.M., Le travail du consommateur. De McDo à eBay, comment nous coproduisons ce que nous achetons, La Découverte, Paris, 2014. [EIS 16] EISENBERGER N.I., “Social pain and social pleasure: two overlooked but fundamental mammalian emotions?”, in FELDMAN-BARRETT L., LEWIS M., HAVILAND-JONES J.M. (eds), Handbook of Emotions, The Guilford Press, New York, pp. 440–452, 2016. [GOR 11a] GORRY G.A., WESTBROOK R.A., “Once more, with feeling: empathy and technology in customer care”, Business Horizons, vol. 54, no. 2, pp. 125–134, 2011. [GOR 11b] GORRY G.A., WESTBROOK R.A., “Can you hear me now? Learning from customer stories”, Business Horizons, vol. 54, no. 6, pp. 575–584, 2011. [HAR 07] HARMON-JONES E., WINKIELMAN P., Social Neuroscience: Integrating Biological and Psychological Explanations of Social Behavior, Guilford Press, New York, 2007. [LAJ 13] LAJANTE M., DROULERS O., “Importation de la théorie de l’évaluation cognitive et dynamique des processus émotionnels: illustration par la mesure de l’activité du système nerveux autonome”, Management & Avenir, vol. 4, no. 62, pp. 171–187, 2013. [LEW 05] LEWIS M.D., “Bridging emotion theory and neurobiology through dynamic systems modeling”, Behavioral and Brain Sciences, vol. 28, no. 2, pp. 169–194, 2005. [MAG 15] MAGIDS S., ZORFAS A., LEEMON D., “The new science of customer emotions”, Harvard Business Review, vol. 76, pp. 66–74, 2015. [MAN 12] MANNING H., “You are in the customer experience business, whether you know it or not”, Forbes, 2012, available at: https://www.forbes.com/sites/forrester/2012/08/28/you-arein-the-customer-experience-business-whether-you-know-it-or-not/#82144955df8a. [NEW 18] NEWMAN D., “Want better customer experience? Combine CRM and customer feedback”, Forbes, 2018, available at: https://www.forbes.com/sites/danielnewman/2018/ 04/10/want-better-customer-experience-combine-crm-and-customer-feedback/#158eb1b 93fbb. [PEN 09] PENNER L.A., DOVIDIO J.F., “Prosocial behaviour”, in SANDER D., SCHERER K.R. (eds), The Oxford Companion to Emotion and Affective Sciences, Oxford University Press, New York, pp. 315–318, 2009. [SCH 09] SCHERER K.R., “The dynamic architecture of emotion: evidence for the component process model”, Cognition and Emotion, vol. 23, no. 7, pp. 1307–1351, 2009. [SIN 06] SINGER T., SEYMOUR B., O’DOHERTY J.P. et al., “Empathic neural responses are modulated by the perceived fairness of others”, Nature, vol. 439, no. 7075, pp. 466–469, 2006. [SIN 11] SINGER T., DECETY J., “Social neuroscience of empathy”, in DECETY J., CACIOPPO J.T. (eds), The Oxford Handbook of Social Neuroscience, Oxford University Press, New York, 2011. [WEI 18] WEILL P., WOERNER S.L., “Is your company ready for a digital future?”, MIT Sloan Management Review, vol. 59, no. 2, pp. 21–25, 2018.

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[WIC 03] WICKER B., KEYSERS C., PLAILLY J. et al., “Both of us disgusted in my insula: the common neural basis of seeing and feeling disgust”, Neuron, vol. 40, no. 3, pp. 655–664, 2003. [YEL 09] YELLIN E., Your Call is (Not) Important to Us, Free Press, New York, 2009. [ZAK 16] ZAKI J., OSCHNER K., “Empathy”, in FELDMAN-BARRETT L., LEWIS M., HAVILANDJONES J.M. (eds), Handbook of Emotions, The Guilford Press, New York, 2016.

12 Data Marketing for Customer Intimacy

We can probably all remember an excellent salesperson. A person who recognized you because it was not the first time you entered this shop, who called you by your first name or who, on the contrary, remembered that you prefer a little distance. A person who advised you according to your tastes and preferences, according to your latest purchases or a person who wished you happy birthday. This concept of “customer intimacy” is more difficult to bring to life in the digital sphere, which is by nature colder and more distant. However, the collection and use of data, generated by both connected consumers and businesses, make this approach realistic. These data can be used in a customer knowledge approach to develop, on a large scale, a service-oriented logic based on relevance and personalization. As early as 1993, Roland Rust [RUS 93] formalized a paradigm shift faced by many organizations. This paradigm shift could be summarized by moving from a so-called “product” scenario to a so-called “service” scenario. The product scenario consists of companies offering their customers a relatively standardized offer and in observing in return a flow of aggregated information that gives an indication of the customer’s response to this offer and therefore of performance. The service scenario, on the other hand, reflects a more interactive plan between the company and its customers, which reflects the idea of a company that develops an active and individualized way of listening to its customers in order to design its offer and continuously adapt it to meet multiple and evolving customer needs. A few years later, Christian Grönroos [GRO 97], explained this paradigm shift in marketing: from a marketing mix paradigm (the four Ps) to a relationship marketing paradigm. The latter is based on the construction and management of relationships

Chapter written by Grégoire BOTHOREL and Virginie PEZ-PÉRARD.

Augmented Customer Strategy: CRM in the Digital Age, First Edition. Edited by Gilles N’Goala, Virginie Pez-Pérard and Isabelle Prim-Allaz. © ISTE Ltd 2019. Published by ISTE Ltd and John Wiley & Sons, Inc.

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between the company and its customers. This calls for the development of a long-term vision where value comes less from a series of anonymous transactions than from the development of customer value over time through the satisfaction, trust and commitment that the latter develops toward the company. More than 20 years later, Samsung and LG compete in ingenuity in this logic of switching from a product paradigm to a service paradigm. As their recent announcements at the CES in Las Vegas demonstrate, their connected refrigerators have a resolutely service-oriented value proposition: – they recognize the different family members by their voices; – they integrate home automation systems and now control lighting, heating and surveillance cameras in the home; – they offer recipes adapted to each member of the household’s tastes, adapt to diets and product expiry dates; – they prepare shopping lists and integrate with Alexa, Amazon’s voice assistance system. In short, this is a very characteristic case of a value proposition where the product however (iconic) becomes only one component of a broader service offer. Better still, these systems, equipped with artificial intelligence, progress every day, with each interaction, and thus gain in perceived relevance. Far from being anecdotal, the case of connected refrigerators is indicative of the major acceleration in recent years of the adoption by companies of customer orientation. Three vectors contribute to this acceleration: the evolution of consumer behavior through digital technology, the large-scale generation of data and major technological advances in the analysis capacity of these large volumes of data. This move toward a greater service or customer orientation implies a customer knowledge approach. This is made possible by increasing access to data that allow companies to detect weak signals, intentions, individualize their discourses and adapt their offer in real time. While data collection has long been restricted to companies that had direct access to their customers (e.g. retailers, banks or airlines, pioneers in setting up loyalty programs), new players, historically more distant from their customers, now have the ability to collect and leverage customer data. The paper published by IDC, “Data Age 2025”1, reveals the extent of the phenomenon. The volume of data 1 https://www.seagate.com/www-content/our-story/trends/files/Seagate-WP-DataAge2025-March2017.pdf.

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generated worldwide in 2016 was 16 zettabytes2 and this volume could reach 163 zettabytes by 2025. This exponential growth is mainly driven by the penetration of connected objects (Internet of Things [IoT]), intelligent sensors and connected cars.

Figure 12.1. Evolution of the volume of data created since 2010 and projection to 2025 (source IDC “Data Age 2025”, April 2017)

Access to these data is even becoming a battle in which two types of players emerge: the Data Rich and Data Poor. It is not, moreover, the business line that determines the wealth of data: Uber and taxi companies have the same activity but have an incomparable data asset. In this battle for data, the GAFA have, through their audience pool, a unique position that redistributes power balance maps, such as the Amazon Dash buttons that allow many advertisers to market their products, or Google Home, which offers new applications every week, including those of many brands that see the opportunity to have a conversation with their customers. So where and how do we collect these data? If new actors, whatever their position, have an unprecedented opportunity to collect data, how can these levers be identified and exploited? These questions are all the more essential as the volume of data collected is coupled with an unprecedented operating capacity. For example, the computational power required by a Google search at the moment matches that of the entire 11-year Apollo space program.

2 1 ZB = 1,000,000,000,000,000,000,000,000,000,000 bytes.

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12.1. Multiple customer data sources Gradually, all behaviors generate data. This is explained, on the one hand, by the increasing time spent by individuals on digital media where most interactions generate data and, on the other hand, by the fact that digital media is entering new spheres: homes (home automation and voice assistants are only the first steps), physical points of sale (via WiFi or Beacon technologies3), cars (which become connected before they become autonomous) and media in the broad sense (radio podcasts, replay/VOD television). In short, two levers coexist: – the first one is the rapid penetration of digital technology. The adoption of smartphones demonstrates this. In volume, we are halfway to connecting the entire population with these devices; – the second lever is about usage and adoption of such digital technologies: opportunities for interaction with technologies are more numerous and more frequent. Let us look at these developments through the prism of customer journeys. Let us take the example of a consumer who wants to buy a connected TV. Consumers are now beginning their purchasing journey through the consumption of Web content (nearly 80% of consumers consult the Internet before making a purchase according to FEVAD [French Federation of e-commerce and distance selling] figures). This beginning of the online journey gives rise to multiple interactions: exposure and reactions to targeted advertising campaigns, keyword searches, visits and behavior on brand and retailer websites offering connected TVs, subscriptions to newsletters, etc. The purchase, whether online or at the point of sale, in turn generates transactional data. Omnichannel is the simultaneous use of several channels: the use of the smartphone in store to check prices in real time is a typical example. The rest of the journey leads to the emergence of media consumption (increasingly in digital form, via VOD, radio, online platforms) and interactions on social networks (sharing experiences, online opinions, word of mouth) and finally the continuous use of a product as a service generates more and more data via the IoT. It is therefore in light of this proliferation of touchpoints, at these different moments of a “typical” journey, that opportunities for data collection emerge.

3 A beacon is a small box positioned at the point of sale that can “interact” with smartphones of individuals in the immediate surroundings via a Bluetooth connection. For more information, see section 12.5.

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Throughout this journey, data hubs are being set up, some of them are already mature while others are emerging.

Figure 12.2. The “Data Journey”, an example of data generated throughout a customer journey (source: Numberly)

12.2. The different customer data hubs If we take the case of a customer wishing to acquire a connected television, here are, in order of appearance, the hubs or “groups” of potentially generated data. – The Web content consumption hub, and more generally behavioral data The first stages of this connected journey constitute a Web content consumption hub, often represented by the prism of paid, owned and earned media of brands or retailers. It is a mature Hub, which covers the scope of the Data Management Platforms (DMP), these behavioral databases resulting from digital interactions, often anonymous and traceable in particular through cookies. – The transactional data Hub Transactional data are a second essential Hub, whether online or offline via relational programs that allow a transaction to be linked to a customer ID. These

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data are critical in measuring the effectiveness of early-stage actions, which aim to generate conversions. – The postpurchase data Hub The postpurchase stages of the journey are, more and more, key collection moments. Indeed, new media consumption patterns are contributing to the proliferation of the number of digital touchpoints that can be activated by brands and retailers. A recent OpinionWay survey indicated that 40% of French people had already listened to a radio podcast [AUD 17]. The trend is the same for television content, where replay, VOD and connected TV make it possible to characterize audiences more and more accurately. As such, Amazon’s investments in its Prime Video service are significant. The media, consumed via digital services, is becoming more than ever a very rich source of characterized information. The rise of programmatic media buying, i.e. real-time and individual bidding, thus allows the encounter and convergence between media and data. This media Hub, consumed at home or on the move, is emergent. – The social interactions Hub The next Hub is that of social interactions. More mature, it brings together platforms for sharing opinions, rating, recommendations and influence and is a major source of word of mouth. – The usage data Hub The last Hub of this journey is emerging but highly strategic. Indeed, the IoT is a new opportunity for brands and retailers alike because it generates new and particularly valuable data: usage data, context and recurrence of the use of products and services. This continuous flow of information, relating to the way in which customers use a product or service, could allow the drastic acceleration of service-oriented and interactive logic where the offer becomes totally adaptable, individualized and therefore scalable. Samsung and LG’s approaches to their connected refrigerators, similar to Axa’s with You Drive, are the first steps in the large-scale exploitation of data from the IoT. In the end, these different data hubs are, in addition to the colder or more static information (sociodemographic, for example), considerably enriching customer knowledge by helping to reconstruct an increasingly exhaustive view of consumer behavior.

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Provenance

Sociodemographic data

– Personal data: first name, surname, gender, date of birth, postal address, e-mail address, telephone number, etc. – Family and patrimonial data: marital status, number of children, tenant/owner, etc. – Professional data: position, socio-professional group, etc.

– Order forms – Registration/subscription forms – Data reported in the customer online account

Transactional data

– Products and quantities purchased – Dates, recency, frequency of purchases – Purchasing channels/geographical locations – Payment methods, use of promotional codes, etc.

– Orders/purchases – Request for quotation/simulations – Newsletters subscriptions/white paper downloads

Behavioral data

– Navigation behavior: shopping journeys, pages visited, time spent per page, clicks, products liked/shared, comments left, etc. – Favorite channels by contact motive: e-mail, chat, phone call to customer service, mail, social networks, store, etc. – Reactions to newsletters, e-mails, satisfaction surveys, customer service calls, etc.

– Cookies – Data from touchpoints – Answers to satisfaction surveys – Feeback from front office

Usage data

– Behavior in the use of products/services: moments of consumption, frequencies, habits, feelings, emotions, etc.

– Online services – Products and connected objects

Social interaction data

– Tastes, preferences, reactions, etc.

– Social networks – Platforms for sharing opinions and comments

Table 12.1. The different types of consumer data

12.3. The difficult consolidation of customer data The prism of the customer journey thus seems interesting in order to study this data marketing ecosystem. In particular, the types of data generated along such paths

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are veryy heterogeneoous. Transactiional and perrsonal data, collected c and used for several years, y are enriiched by dataa often referreed to as behavvioral and anoonymous. Indeed, undoubtedly, u many interacttions througho out these “datta journeys” take place without a customer being identified by name. Such S data typiically includes cookies placed on o a web broowser, geoloccation data orr an anonymoous platform (Twitter, Facebook etc.) and deevice. In otther words, the t spectrum of the so-ca alled “PII” (ppersonally identifiable informattion) data is supplementeed by the so o-called “nonn-PII” (non-ppersonally identifiabble informatiion) data. Thhese allow weak w signals to be pickedd up and intentionns to be dettected. They also make it possible to increase customer addressaability by recconciling sevveral identifieers around thhe same custoomer: an essentiall dimension for real-timee activation through relattional channeels. Data marketinng is part of thhe migration from f a model based on the depth of dataa from the PII world (highly chaaracterized, acccurate and no ominative dataa) to a model based on the voluume of data from f the nonn-PII world (v volume, varieed, real-time and nonnominatiive data) thatt has contributed to the growth g of thee term “Big Data” in relationsship marketingg.

Figure e 12.3. Illustrattion of the multiplication, ovver time, of custom mer data to be reconciled

12.4. Th he intersection of media a and data to t serve cus stomer strattegy Dataa collection is not an end inn itself. The major m challengge of data marrketing is to develoop a companyy that activelyy listens to itts customers, a company thhat learns from thee continuous feedback f it recceives, a com mpany that cann identify weaak signals

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and provide a relevant response in real time and finally a company that can recognize (in every sense of the word) its customers during key interactions. The touchpoints activated by companies are closer to the customers’ life journeys. The challenge for advertisers therefore becomes “to be where the customer is”, on their journey, in a flow. This translates into a significant trend in relational practices that could be summarized by the idea of “being present where the customer consumes content”. As such, the changes in content consumption patterns speak for themselves. A comScore study [COM 18] shows that in 2012, American consumers spent an average of 28 minutes more watching television than using other digital media every day. Forecasts for 2018 revealed that American consumers were expected to spend 126 minutes more on digital media than on television.

Figure 12.4. Comparative evolution of the time spent per day in front of the TV and digital devices from 2012 to 2018 with regard to the American market (source: comScore)

This trend of strong digital growth is mainly driven by mobile phones, which capture most of the extra time spent on digital media.

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Figure 12.5. Comparative evolution of the time spent per day in front of digital devices (laptop, smartphone and tablet) from 2012 to 2018 with regard to the American market (source: comScore). For a color version of this figure, see www.iste.co.uk/ ngoala/augmented.zip

The first issue in data marketing operations is probably the convergence between two universes that were relatively distinct until recently: the media universe on the one hand and the Customer Relationship Management (CRM) universe on the other. The rise of programmatic media buying allows advertisers to activate new one-to-one channels such as displays, but also video, audio (radio) and smart television. To be relevant, one-to-one activation requires customer knowledge: it is the meeting of media and data that is played out. Customer knowledge from CRM, which is often older and deeper, could therefore find a new source of value: its ability to interconnect with behavioral data. The reconciliation of PII and non-PII data should be a major area of interest for customer relations in the coming years. These behavioral data, collected by

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advertisers, is called “first-party” data. These first-party data constitute an essential new asset for advertisers in this logic of a programmatic CRM, very much in line with the idea of being present where the customer consumes content. Recent figures from Pivotal Research according to Nielsen DCR4 indicate that the Google ecosystem (Google, Youtube, Waze, etc.) represents more than 27% of the time spent on digital media by Americans, while the Facebook ecosystem (Facebook, Messenger, Instagram and WhatsApp) represents just over 16% of the time spent on digital media. The advertisers’ first-party data could be considered as a particularly strategic new asset in the “data battle”. This data convergence is at the heart of multiple service operations for customers. Among these operations, techniques for customizing the relationship are gaining momentum. This is a historical pillar of customer relations that has undergone major recent changes due to the digitization of our economies. The personalization, because of the reconciliation of CRM and first-party data, is done in real time, in an automated and large-scale way. One example is dynamic content optimization (DCO) techniques, which, on programmatic channels, allow the message to be personalized according to: – the detected device of exposure: by democratizing formats in “responsive design” for mobile reading, but also by detecting the operating system (iOS or Android) to automatically redirect Internet users to the appropriate Store to download a mobile application; – geolocation: by indicating the nearest point of sale in a drive-to-store logic, or by creating digital catchment areas, allowing for the targeting of only Internet users passing through this area; – CRM data available on the target: Coca-Cola is thus able to recognize certain customers who browse the Web to wish them a happy birthday with a bottle personalized with their first name; – real-time weather forecasts or prices charged by competitors because of third-party data available to advertisers. The same relational campaign can thus have, in real time, an infinite number of variations depending on the Internet user’s context, their profile in the advertiser’s databases and their history (purchase, visit or reaction) in the relationship.

4 See https://www.mediapost.com/publications/article/317449/google-others-cut-into-facebookshare-of-consumer.html.

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Figure 12 2.6. Example of o a relational programmaticc campaign f a customerr named Tom on his birthda for ay

Suchh approaches to differenttiated custom mer knowledgge and activaation are accessible to an increeasing numberr of advertiserrs, some of whom w have hiistorically been furrther away frrom their cusstomers. Manu ufacturers or industrial addvertisers, who do not n distribute their productss directly (B-tto-B-to-C), noow have, via ffirst-party data colllection, a new w gateway to these relation nal approachess. By constructing this asset, reesulting from the interactioons of Interneet users with their t digital eecosystem (paid, owned, earnedd), these advvertisers are able a to evaluuate, for exam mple, the engagem ment of Interrnet users onn their bran nd sites. Theey can deterrmine an engagem ment score by the quality off visitors (timee spent, recurrrence, numberr of brand sites vissited, numberr of product pages visited d) and then set s up a diffeerentiated activatioon of their sttrategic targeets because of o programm matic media: the most engaged Internet userss via VIP treaatments, recog gnition; moderrately engagedd Internet users viaa more transacctional messagges, etc.

Table 12.2. 1 Example e of website vissitor engagem ment scoring based b on non-P PII data. Forr a color versio on of this table e, see www.is ste.co.uk/ngoa ala/augmented d.zip

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12.5. Leveraging data: market research in the era of customer data While they bring real benefits to customers, emerging language and image recognition technologies (chatbots, voicebots and other robots based on artificial intelligence, virtual and augmented realities) are also an opportunity for brands to collect new types of data. The collection of this type of data will intensify in the coming years (an Oracle study [ORA 16] even predicts that more than three-quarters of brands will rely on virtual reality and chatbots to manage customer experience by 2020), and their large-scale exploitation will undoubtedly be one of the challenges of the coming years. These new data availabilities also revolutionize market research approaches, which were historically mainly based on the exploitation of PII. The use of such data, which is always crucial in customer marketing, makes it possible, for example, to answer strategic questions such as: – What are the most attractive product categories for a first purchase? – Can we predict the value of a customer by their very first basket? – How can we identify, through segmentation, the top 10% of high value customers? – Which customer profiles are responsive to promotions versus fashion trends? These studies are considerably enriched by the use of non-PII and Data Science approaches, particularly through machine learning. We are now at the heart of the challenges of migrating from a data depth model to a data volume model where algorithms contribute more than ever to the performance of marketing actions. The progress made by these algorithms in recent years is significant. In language recognition and image recognition, for example, algorithms nowadays have lower error rates than humans (see Figure 12.7). In relationship marketing, these models make the following possible: – to direct acquisition actions to target profiles similar to the most loyal customers: so-called “look-alike” approaches; – to determine the probability of a positive reaction to an advertising message based on customer history to target only the most reactive if they are targeted and would not react if they were not targeted: so-called “incrementality” approaches;

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– beccause of NLP P (natural langguage processsing), i.e. learrning natural llanguage, to perfoorm large-scaale semantic analyses. Th his is a relevvant approachh for the analysis of customerr verbatim, or o even more so for thee analysis off Chatbot conversaations.

Figure e 12.7. Compa arative evolutio on of error rate es in image re ecognition: alg gorithms versus human betwee en 2010 and 20 016 (source: [ELE [ 16]). Forr a color versio on of this figurre, see www.is ste.co.uk/ngoa ala/augmented d.zip

In phhysical stores, retailers are competing c witth innovative technologies to collect data whiile providing a better consuumer experien nce. In 2017, for f example, F Facebook tested a new loyaltty feature within w its mo obile applicattion “Rewardds”. The Applicattion offered users u the optiion of scannin ng QR codess deployed inn physical 5 stores to benefit from targeted prom motions . Thiss technology was w an interesting sales promotioon tool for thhe retailer, which w generateed additional traffic in stoores. But above alll, it was an oppportunity forr Facebook to collect new data d on its useers and to generatee additional advertising a reevenue. The same s applies to connected loyalty cards, which w will enaable retailers to t offer person nalized shoppping experiencces in the future, with w product recommendaations and discounts, d andd will give tthem the opportunnity to learn more about their custom mers: the Kiabbi clothing bbrand, for example, tested a connnected loyaltyy card in stores in January 2017 2 6.

5 Source: https://techcruunch.com/2017//05/01/facebook k-rewards/. que/general-10800/Breves/Kiabi--teste-carte6 Source:: (French) http:///www.e-marketting.fr/Thematiq fidelite-coonnectee-magasiin-313408.htm#E EABi3g3hu0PS SfY8d.97.

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Finally, the rise of mobile tracking technologies at points of sale (beacons) will accelerate data collection outside the digital environment. Beacons are terminals installed in stores (in its surroundings or inside the shelves) that operate using Bluetooth technology. They make it possible to identify and target consumers that are close to the terminals, provided that the company knows how to reconcile a consumer and their smartphone through the use of its database. This opens up a huge field of possibilities in terms of customer knowledge and targeted promotions. According to the Business Insider website [BUS 18], by 2018, there will be 4.5 million boxes in operation in the United States, including 3.5 million for the retail sector. Note that 50% of the main North American retailers have already initiated experimentation phases since 2014. For retailers, this is the fastest speed of technology adoption since the introduction of mobile credit card readers. As is often the case, the European market should logically follow the adoption pattern of the American market by accelerating the equipment of its points of sale in the coming years. 12.6. Data marketing... tomorrow The use of customer data is rapidly evolving and makes it possible to identify tomorrow’s challenges in a forward-thinking manner. But it is also, sometimes, a tricky exercise. Nevertheless, several dynamics seem to be structuring the market. A major trend in data use is the migration from a relatively “push” approach to relationship marketing to a much more “pull” approach. This migration is entirely in line with the logic of ubiquitous commerce, where commercial touchpoints are integrated into consumers’ life journeys. Because of artificial intelligence, this acceleration is intensified with conversational marketing, in particular by Bots (Chatbots, Callbots, Voicebots). The integration of artificial intelligence into the marketing cycle is full of promise, and in particularly the idea that a conversational agent can detect a customer’s dissatisfaction and if necessary make the decision to stop for a given time makes CRM promotional campaigns toward this customer seems very realistic. Another structuring trend for data marketing lies in the next stages of programmatic advertising. While today’s programmatic advertising is essentially based on cookies and is largely limited to the world of the web browser, a major challenge lies in extending programmatic advertising to new connected platforms to escape the browser world. As such, the car, conversational bots, connected objects and the television could become the new gateways to one-to-one marketing. These platforms will undoubtedly generate an unprecedented amount of data. It is up to marketers to find a service-oriented, ethical and transparent exploitation for

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consumers, and finally to give it meaning and to find sources of value for all stakeholders. 12.7. References [AUD 17] AUDIBLE/OPINIONWAY: Livre audio, podcast et autres contenus parlés: L’enjeu culturel de l’audio parlé en France, available at: https://m.mediaamazon.com/images/ G/08/AudibleFR/fr_FR/img/site/mt/newsroom/CP_Audible_Opinionway_20170324.pdf, 2017. [BUS 18] BUSINESS INSIDER, 6 predictions about digital trends in 2018, available at: https://www.businessinsider.fr/us/6-predictions-about-digital-trends-in-2018-2018-6, 2018. [COM 18] COMSCORE, “Le Futur du Digital en Perspective”, White paper, available at: https://www.comscore.com/fre/actualites_et_evenements/Presentations-and-Whitepapers/ 2018/Global-Digital-Future-in-Focus-2018, 2018. [ELE 17] ELECTRONIC FRONTIER FOUNDATION, AI Progress Measurement, available at: https://www. eff.org/fr/ai/metrics, 2017. [GRO 97] GRÖNROOS C., “Keynote paper from marketing mix to relationship marketing – towards a paradigm shift in marketing”, Management Decision, vol. 35, no. 4, pp. 322– 339, 1997. [ORA 16] ORACLE, Can Virtual Experiences Replace Reality? Research report, available at: https://www.oracle.com/webfolder/s/delivery_production/docs/FY16h1/doc35/CXResearc hVirtualExperiences.pdf, 2016. [RUS 93] RUST R.T., OLIVER R.L., Service Quality: New Directions in Theory and Practice, SAGE Publications Inc., London, 1993.

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

Relationship marketing, the basis of customer relationship management, aims to develop lasting business relationships and strong emotional ties between companies and their customers. Despite this “virtuous” principle, a relationship with a company is fuelled by paradoxes (Table 13.1). As Fournier et al. summarize well [FOU 98]: “Relationship marketing is powerful in theory but troubled in practice” (p. 44). On the one hand, the customer is often encouraged to develop their average basket and/or their frequency of purchases through promotional offers or cashback and can therefore make unnecessary or too expensive purchases in relation to their budget. In addition, an exclusive relationship, a critical objective of loyalty actions, would deprive the customer of their freedom and lock them into an often unbalanced commercial relationship. This is all the more true since the Pareto law (20% of customers generate 80% of turnover) encourages companies to allocate more resources and profits to the “best” customers. However, as budgets are limited, let alone constant, this valuation is to the detriment of other customers, giving rise to feelings of frustration and injustice. Finally, although customer knowledge is one of the fundamental pillars of customer strategy, its conduct is sometimes perceived as opaque and intrusive: lack of transparency on the use and dissemination of data, misunderstanding on the reasons for collecting certain data, etc.

Chapter written by Caroline LANCELOT-MILTGEN, Aïda MIMOUNI CHAABANE and Virginie PEZ-PÉRARD.

Augmented Customer Strategy: CRM in the Digital Age, First Edition. Edited by Gilles N’Goala, Virginie Pez-Pérard and Isabelle Prim-Allaz. © ISTE Ltd 2019. Published by ISTE Ltd and John Wiley & Sons, Inc.

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The purpose of this chapter is to: – demonstrate how customer relationship management practices can sometimes have a dark side; – describe customers’ possible feelings when confronted with these practices and the consequences they may have, with a specific focus on the issue of personal data, a major concern for the consumer 4.0; – propose solutions for more effective and responsible practices that limit the probability of managers being confronted with the other side of the coin. 13.1. The dark side of customer relationship management practices The marketing literature extensively describes some of the negative effects that relationship and loyalty practices can have (the dark side of customer relations). Far from referring to effects linked to manipulation or deception, the dark side is defined as all negative effects, undesirable for the customer and harmful to the development of the relationship. It therefore refers to the “other side of the coin” of customer relations, or how the virtuous principles originally pursued can produce negative feelings toward the customer and counterproductive effects for their instigator (i.e. in this case, the company). Table 13.1 presents some examples of companies’ relational practices, opposing the objective initially sought when they were set up (left column) and the undesirable result that may ultimately be generated among consumers (right column). Objective sought by the company

Increased customer loyalty

Rewarding the best customers

Practices Expenses incurred within the same brand to collect points and obtain a reward Performance metrics often exclusively related to spending and acceleration of purchasing behavior Too many “pushy” commercial solicitations Rewards often perceived as low value Rewards often perceived as difficult to achieve Rewards often perceived as too exclusive

Unintended consequences for the customer

Lockdown Restriction of freedom Perceived pressure Oversolicitation

Frustration Perceived injustice

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Increasing the value of the best customers Improving the quality of the experience

Priority allocation of resources to high value customers Development of hierarchical loyalty programs with risks of demotion

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Discrimination between high- and low-value customers Disappointment of low-value customers Loss of control

Collection of customer data

Intrusion Distrust

Table 13.1. Main dark sides of customer relations

In the face of these practices, consumers may then feel a sense of pressure, unfairness and loss of control, with all the consequences that this can have, as described in section 13.2. 13.2. Possible consumer feelings 13.2.1. A sense of pressure The study of consumers’ feelings about their relationships with companies does not always report back positive feelings [GRA 99, FOU 98, NGO 10, NGO 15]. Customers often blame companies for the commercial oversolicitation they receive from them. As consumers, we all receive a plethora of messages (e-mails, letters, text messages, etc.) promoting the merits of a particular product or service with the ultimate goal of encouraging people to buy. Attractive promotional offers, often limited in time, encourage us to buy unnecessary products, sometimes exceeding our budget. New technologies have been developed to allow us to complete an online purchase quickly (e.g. retargeting techniques). Not to mention the constant, and sometimes insistent, invitations to participate in loyalty programs, even from companies that we rarely make contact with. We can also deplore loss of control in the face of an excessively abundant market offer or even in the face of locking techniques that clearly aim to reduce our freedom as consumers (e.g. “cashback” system in a loyalty program). These practices end up generating pressure, i.e. a coercive influence involving the exercise of a constraint (Larousse). This perceived pressure in turn triggers a sense of psychological discomfort (see Box 13.1) that may damage the relationship in the long term.

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Loyalty programs are often based on a point-accumulation principle where the objective is to reach a certain number or threshold of loyalty points in order to trigger the achievement of benefits. The marketing literature praises this mode of operation because of its direct effect on accelerating the customer’s purchasing pace [KIV 06, KOP 12]. Pez et al. [PEZ 17] take the countercurrent of this work by examining the negative effect of felt or perceived pressure. The authors show that customers explicitly refer to the notion of coercion or pressure by spontaneously mentioning four negative effects of loyalty programs: encouraging consumption, locking in, expiring points and intruding into private life. They also show that the perceived sense of pressure increases post-purchase regret. Customers, responding to the incentive of the program, buy unnecessary products just to collect points, and sometimes exceed their budget. The pressure felt also increases discomfort in the relationship, thus reducing well-being in the relationship. Finally, the fear of losing a loyalty status (e.g. gold) contributes to increasing the sense of pressure felt. The work by Pez et al. [PEZ 17] thus invites loyalty program managers to do everything possible to avoid, or at least minimize, the pressure felt by their customers (see section 13.4). Box 13.1. The perceived pressure of loyalty points and its consequences on the customer

13.2.2. A sense of injustice A relationship can only be healthy and lasting if it is balanced. Existing research shows how essential this is in consumer brand relationships and highlights fairness, a major antecedent to loyalty. According to equity theory [ADA 63], individuals feel a sense of fair exchange when they perceive a result achieved as equivalent to the investments they have made to achieve that result. More specifically, the consumer’s perceived fairness can be of two types: internal, when the customer compares their efforts invested in the relationship to what they receive in return, and external, when they compare the benefits they receive to the benefits obtained by other customers of the same value. On this second point, social comparisons play a major part. But then why should consumers feel that the exchange with the company is not fair? First, there is sometimes a misalignment between the customers’ perception of their contribution (the efforts invested in the balance) and the company’s perception

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of the same contribution. In other words, there may be a gap between how companies assign value to each customer and how the customer views their own value/contribution. Existing research (notably [PEZ 15]) shows a significant gap between these two values (perceived by the consumer, and actually attributed by the company), which can be in either direction. A customer may consider themselves to be one of a company’s best customers (having a significant contribution in the balance), even though the company objectively displays a level of spending and seniority in line with the average of other customers; conversely, a customer may consider themselves to be an average customer even though their level of consumption or seniority is clearly above the average of other customers. Taking this gap into account is important, because it is the value that the customer thinks he or she has for the company (and not the value that the company attributes to him or her based on its own criteria) that determines the sense of fairness. Second, before, the exchange was relatively clear: the consumer benefited from a product or service in exchange for a certain amount of effort (monetary effort, of course, through price, but also psychological or temporal efforts). If the benefits obtained were estimated to be lower than the price invested (in the case of a benefit/cost ratio that was deemed insufficient), then the consumer had every chance to change supplier. What has changed with the digital age is that the elements on either side of the balance are no longer so clear. In particular, what does the consumer put in the balance? Is their personal data part of the exchange? To what extent does the company opposite derive benefits from their operations? These are all questions that make the respective benefits unclear and can lead to consumer mistrust. 13.2.3. A sense of loss of control The lack of clarity in the terms and elements of the exchange can also create a sense of loss of control over the relationship for the consumer, thus taking the risk that the consumer will turn away from it. This feeling of losing control may relate to the company’s use of the personal information collected, to problems of commercial pressure or to the status conferred on each of the actors (consumer/company): – The feeling of losing control over personal information. Consumers do not know how their personal data are collected and used, leading to mistrust and distrust.

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– The feeling of losing control in the face of commercial pressure. The data collected lead to increased solicitation of customers who are the subject of multiple commercial campaigns through different channels (e-mails, mail, telephone, SMS, online advertising, etc.). A psychological reaction mechanism generated by this feeling of losing control could lead to the opposite of what the company intends to obtain by encouraging the consumer to turn away from these solicitations or even to reject the company at the origin of these negative emotional reactions. – The feeling of losing control over the consumer–business relationship. The multiple solicitations to which customers are subjected can give the impression to the consumer that they are taking part in the relationship with the company without really being an actor or decision maker–with all the risks that this entails. 13.3. The consequences: consumers are showing signs of resistance 13.3.1. Resistance: what are we talking about? In response to these feelings of pressure, unfairness and loss of control, consumers are also showing visible signs of resistance. These are growing in importance, taking the form of avoidance behavior by certain companies, abandonment of certain products, “deviant” behavior (see Box 13.2) or more active forms of rebellion such as complaints or boycotts. These dynamics have always existed, but with the advent of digital media, they can be easily organized, be quickly visible on a large scale or become viral in just a few clicks. Tools such as brand Facebook pages, forums, consumer opinion sites, even organized petition or boycott sites are all weapons with which consumers regain power. For example, brands such as Apple, Starbucks or H&M are now facing the anger of consumers who are acting as real counterweights. Organizations are facing a widespread and endemic phenomenon [HAR 09]: customers are increasingly engaging in unwanted behaviors. These behaviors, which are widely studied in marketing research, particularly in service marketing, can be grouped under the term “deviant” behaviors, in the sense that they do not correspond to what is “normally” expected by the organization [MOS 89]. Thus, waiting for your turn at the checkout of a supermarket, paying for your product before leaving the store and not consuming it before buying, returning a product within the time limit and under the conditions specified at the time of purchase or being respectful toward the contact staff, are examples of more or less explicit company expectations toward its customers which, as Fullerton and Punj [FUL 98] stress, form the “social contract” between the parties. The breach of this contract thus appears to be characteristic of a situation of deviance.

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What customer deviances are we talking about? Far from always being honest and polite, customers have a number of deviant behaviors that many marketing research studies have sought to characterize: – they steal and defraud, for example by falsifying documents; – they borrow the products (e.g. purchase of a product for temporary use and then returning it, before the return deadline, taking care to keep proof of purchase and other packaging) or consumes products in the store; – they are discourteous or even aggressive toward staff and can even be threatening (e.g. racial or gender discrimination); – they manipulate and lie, by making so-called illegitimate claims, to obtain financial advantages, to take advantage of companies’ sometimes lax return policies or to show their “power” in front of other customers; – they exert a kind of pressure on the staff by being insistent (e.g. repeated calls to the call center to make the same request, even though it has been refused many times), by blackmail, often mentioning an alleged “power” of a customer close to management or a lawyer or journalist. Why are customers deviant? Deviant customer behaviors can easily find their causes in client psychology, particularly in certain personality traits such as narcissism or the tendency to seek preferential treatment or nervousness, but it is not the only cause of these deviances. They are also explained by elements attributed to the company: – a phenomenon of psychological reactance by which the consumer tries to regain power in a situation perceived as oppressive. In other words, the company is not fair and correct with them, does not consider them and tries to manipulate them, so by reaction, they adopt a deviant behavior or do the opposite of what the company expects from them; – the marketing policies of companies that are seeking to promote the ideology of the “king” customer; – company weaknesses: for example, a reluctance of employees to respond to customer requests, opportunities potentially offered by companies to defraud or generate the negative image of the latter. What are the consequences of these deviances? These deviant behaviors have several negative consequences for the company: – on the financial side, American distributors estimate that the average annual cost of fraudulent product returns (retail borrowing) is between 11 and 16 billion [MER 05];

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– on the human level, they are one of the major sources of psychosocial risks suffered by employees in contact with each other and have a negative impact on the way they manage customers; – finally, from a marketing perspective, they can degrade the consumer experience of other customers who see or hear deviant scenes, on the spot or on social networks. What can we do about customer deviance? In this context, marketing research suggests that companies should organize themselves to deal with deviance. – The company must implement a strategy to manage these deviances, using pedagogy or deterrence [HAR 06, HAR 11]. Four types of “organizational responses” to customer deviance can be implemented: educational (in the case of frequent but mild deviances), punitive (when behaviors are serious and proven), tolerant (accepting deviances when they are not necessarily critical) or expert (investigating alleged deviant and serious behaviors) [REN 17]. – As an extension of these strategies, the company must logically set up a management system to manage customer deviations. The challenge is, for example, to develop dashboards and monitor the evolution of indicators, such as the number of attacks on employees, the volume of fraudulent claims, the associated costs, etc. Attention should also be paid to weak signals such as social climate indicators. – Finally, since contact/front-office staff are the most confronted in the company by deviant customers, it is necessary to train them more in these difficult situations to manage and to set up internal support systems. This will include, for example, the establishment of expert units that can also play a mediation role between the customer and the company, or having a referent in points of sale to manage these situations. Thus, in some companies, such as La Poste, the problem is managed by a dedicated entity, the “prevention of incivilities” entity. The major problem remains to characterize deviances that are often difficult to identify or prove (it is difficult to stick to the seller’s “flair” or the fortuitous sightings of staff) and are often the result of social construction and interpretation by the parties involved. Box 13.2. “Deviant customers, a form of resistance?” by Fanny Reniou, Senior Lecturer and Researcher at CREM UMR CNRS 6211, IGR-IAE Rennes, CREM (UMR CNRS 6211)

On a theoretical level, these behaviors may result, in part, from “a motivational state of resistance” [ROU 07], i.e. an internal tension occurring in the consumer following the perception of a situation perceived as oppressive. More specifically, these manifestations are the individual’s response to defeat an attempt at pressure or influence that is

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perceived as unacceptable because of the dissonant representations and negative emotions it generates [ROU 07]. In other words, by putting too much pressure on people, brands could achieve the opposite effect of what they are looking for. In addition, we are reaching a stage where consumers are perfectly familiar with company practices in the digital economy. This familiarity is likely to create “market metacognitions”, the kinds of preconceived ideas that consumers develop about companies and their tools, which tend to associate their preconceived ideas with all practices regardless of their actual characteristics. In fact, individuals construct a body of knowledge about the influence techniques used by companies through their direct observations or interactions with individuals who have been confronted with them. This knowledge is then used to interpret companies’ business approaches. Faced with these, consumers seek to maintain their traditional decision-making process, regardless of what the company is trying to achieve through its approach. Thus, a consumer might systematically consider that the company pre-empts or “steals” its data in an unjustified and illegitimate way (for example to resell them), when they may simply be essential to the provision of the service. 13.3.2. Consumer resistance to the collection and use of personal data Faced with companies’ practices aimed at collecting as much data as possible and then using these data in the form of personalized commercial proposals that are sometimes perceived as intrusive, consumers end up resisting. They use different strategies to better protect their data and privacy, reduce this commercial pressure and limit the loss of control over the use that can be made of the data. These strategies essentially take two forms: technical or behavioral. The first mainly concerns the use of technical tools aimed at being less accessible (reduction of perceived pressure) and at better controlling the use of data, while strengthening their security (e.g. anti-spyware software, anti-virus software, deletion of cookies, advertising blockers, etc.). Thus, in 2016, adblocks experienced an unprecedented increase (+20%1), which reflects consumers’ desire to equip themselves with real “shields” designed to prevent practices that hinder, from their point of view, their privacy or their freedom. The second type of resistance concerns rather the behaviors adopted by consumers to limit the collection and unwanted use of data (e.g. changing privacy settings, using pseudonyms, refusing to use Google or Facebook accounts to identify themselves, etc.). 1 Baromètre Adblocks IAB France/Ipsos, November 2016, http://www.iabfrance.com/ content/presentation-de-la-v2-de-letude-ipsos-realisee-pour-liab-france-sur-les-adblocks.

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Among these behaviors, lying is one of the main strategies used by consumers to resist business practices aimed at openly collecting as much information as possible about them through forms to be completed, particularly when creating accounts. According to studies, between 20 and 80% of individuals have already provided incorrect information on a form at least once2. Some consumers use this strategy very regularly or almost systematically, while others use it only from time to time. This strategy is used in particular when the information requested is perceived as sensitive but appears to be a mandatory field to be completed. When too much sensitive but mandatory information is requested, it can also lead the consumer to simply give up the service. The use of optional fields can, on the contrary, avoid lying by allowing the individual not to provide the information, without giving up the service. Some types of data are more prone to lies than others. Indeed, according to Hoddet et al. [HOD 13], consumers are more likely to lie about their e-mail address, telephone number, date of birth, name or postal address or in response to information about their employment. In the same study, consumer responses to the question “Why are you lying?”, focused on lack of trust and a desire to reduce the risks associated with misuse of data (Table 13.2). Little-known or unknown company or site

68%

Information requested perceived as not useful/relevant in relation to the current transaction

71%

Information requested perceived as not being able to provide any benefit to the person providing it

62%

Perceived risks of misuse of data or other unpleasant consequences (identity theft, commercial pressure, etc.)

68%

Wishes to limit the possible link between this information and other information held by this company/this site or other companies/sites

40%

Wishes to protect their identity and/or remain anonymous

52%

Table 13.2. Main reasons for lying (source: [HOD 13])

But we must be careful, as not all individuals who are highly sensitive to the protection of their data systematically translate this mistrust into resistance. The opposite

2 Data tracking report (2012), https://dma.org.uk/research/data-tracking-report-2012; Baromètre de la confiance des Français dans le numérique (2017), http://harris-interactive.fr/opinion_ polls/barometer-la-confiance-des-francais-dans dans le-numerique-6e-vague/; AIMIA study, What is the future of data sharing (2015), https://www8.gsb.columbia.edu/globalbrands/sites/ globalbrands/files/images/The_Future_of_Data_Sharing_Columbia-Aimia_October_2015.pdf.

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is also true: individuals who are a priori not very concerned about the use made of their data may sometimes adopt behavior or resistance tools. This disconnection between attitudes and opinions regarding data protection, on the one hand, and disclosure or resistance behavior, on the other hand, is known as the privacy paradox. Although widely debated in the literature, there is still uncertainty about the very existence of this paradox. In a meta-analysis conducted on this theme, Kokolakis [KOK 17] shows that among the empirical studies that tested the existence of this paradox, 18 (or 62%) confirmed its existence while 11 (or 38%) concluded that there was no paradox. Several explanations for the existence of this paradox have been mentioned in the literature (Table 13.3) but have not been systematically empirically tested. Further work will need to be done in the future to better understand whether and in what cases consumers may engage in paradoxical behavior when it comes to sharing personal data. Consumers have a highly complex relationship with their personal data, which makes their reactions difficult to understand and estimate. This relationship depends on a very large number of environmental, individual and situational factors that jointly influence decision making [LAN 14] and whose influence can be contradictory. Companies wishing to better understand which data collection and use strategies are acceptable to their customers/prospects cannot ignore ad hoc AB-testing studies to identify the elements on which to act to build trust and thus gain their support. Methodological biases Many methodological biases could explain this inconsistency between the level of sensitivity to data protection (privacy concern), on the one hand, and data sharing or protection behavior, on the other hand. Questions arise about the measurement of data protection sensitivity. In addition, much past research has interviewed consumers in the form of surveys that are appropriate for measuring opinions but are unsuitable for studying actual behavior [KOK 17]. Finally, data sharing behaviors are highly contextual: individuals can behave differently from one context to another. Limited rationality, incomplete information and asymmetric information In terms of data, perfectly rational consumers would seek to make a decision that maximizes their own interests, i.e. maximizes their profit and reduces risks. However, this idealistic vision does not correspond to reality. As consumers, we are limited in our ability to acquire, store and integrate all the information that should be taken into account in order to make a good decision in this regard [ACQ 05]. Moreover, in most cases, only the company has information on how the data collected will be used in the future, which effectively places the consumer in a situation of asymmetric information. Cognitive and heuristic biases The difficulty in integrating all the information that should be taken into account to make a good decision often leads consumers to base this decision on a simplified vision of reality (heuristics) that cannot then maximize benefits [ACQ 07]. In addition, risks are very difficult

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to assess ex ante (risk can only be truly measured when it is proven). Many psychological deviations are also at work: misrepresentation of gains, limited motivation, idiosyncrasy between gains and losses (the burden associated with losses is generally higher than that associated with gains), difficulty in predicting future preferences or erroneous conclusions based on past choices, etc. Immediate gratification bias and hyperbolic discount It has been shown that consumers generally have a preference for immediate gratification/benefit and tend to undervalue future benefits in comparison to current benefits [ACQ 07]. Moreover, when consumers perceive immediate benefits from sharing their data, they also tend to underestimate future risks. Table 13.3. Possible explanations for the privacy paradox

Research on this subject is rare but confirms that the lack of trust in the company requesting the data and the desire to reduce the risks associated with potentially misused data are the main factors explaining the lie [LAN 18]. Other elements such as sensitivity to data protection, perceived control over the data, perceived level of justice or sensitivity of the data requested would also have an influence (see Table 13.4). – Moral obligations – Attitude toward lying – Perceived control over data – Social norms – Sensitivity to data protection (privacy concern) – The cost/benefit ratio – Gender – Sensitivity to data protection (privacy concern) – Level of data sensitivity – Level of justice/perceived equity – Social benefits (context of social networks) – Sensitivity to data protection (privacy concern) – Level of trust in the company collecting the data – Perceived risks in data provision

[LWI 03] [LWI 07] [LAN 09] [SON 08] [JIA 13] [LAN 18]

Table 13.4. Explanatory factors of lying strategies

13.4. Solutions for effective and responsible practices How can we ensure that the founding principles of a good customer relationship continue to produce value and not destroy it? How can we ensure that the feelings of listening, valuing and sharing advocated by companies are really felt by customers? We believe that four avenues, detailed below, should be given priority.

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13.4.1. Optimizing the execution of loyalty practices Practitioners must be vigilant about the implementation and communication of the content and modalities of their relationship programs. A first approach, which makes sense, would be to limit commercial pressures by introducing operating rules based on customer feedback3. A second approach would be to devise new ways of calculating customer value, thus making it possible to reward purchasing behavior but also engagement behavior toward the company. Thus, Kumar [KUM 18] recommends enriching the customer’s net present value model (customer lifetime value) by taking into account the customer’s ability to recruit new customers (customer referral value), to act as the company’s ambassador to their entourage (customer influence value) or to cooperate with the company (customer knowledge value). 13.4.2. Monitoring effectiveness using customer-centric metrics Traditional metrics used to evaluate the effectiveness of relational strategies such as market share or profits do not capture customer feedback. Marketers are invited to supplement them with indicators to measure negative feelings – such as perceived pressure, perceived injustice or frustration – and the consequences of these feelings on the customer’s comfort in the relationship and well-being. Beyond the measurement, the question of use and data intelligence must be raised. In this perspective, the selected indicators must be evaluated repeatedly (why not set up a barometer of perceived pressure, for example?) in order to monitor their evolution over time and compare the company’s performance against industry standards. Only in this way can marketers detect early the risks of frustration or anger, and thus effectively prevent any form of resistance or, worse, degradation of the customer’s well-being. In addition, to reconcile the economic and profitability imperatives of the practices and their sometimes negative consequences, the company can set up strategic functions that guarantee a continuous consideration of the customer and their well-being. Initiatives in this direction are developing today through the growing importance of the Chief Customer Officer function4. This function, which reports directly to the general management, is responsible for consolidating the company’s customer orientation and defending its interests internally.

3 For example, do not send more than X commercial offers in the year to the customer or do not send them commercial offers if they have not replied X times in the past. 4 “Why your company needs a chief customer officer”, Forbes, 12/10/2016, accessed September 18, 2017, available at: https://www.forbes.com/sites/mckinsey/2016/10/12/whyyour-company-needs-a-chief-customer-officer/#6c03cb6b49d7.

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These initiatives should ultimately align the company’s objectives with those of the customer and act accordingly. For example, if a hierarchical program is poorly assessed by customers, should the company maintain it? Is it possible to manage customers internally in a differentiated way, without materializing in statutes and without penalizing low-value customers? 13.4.3. Overseeing the implementation of “virtuous” practices To federate an entire ecosystem (companies, consumers, associations, etc.) with the adoption of “virtuous” practices, not harmful to the customer, an active management strategy seems necessary to us. A code of ethics is certainly a commendable means of guiding corporate practices. However, while specific codes exist in the fields of research, communication and distribution of goods, none of them have been formulated, to our knowledge, with regard to loyalty marketing. Such a code may be accompanied by the establishment, at the level of major professional associations, of an ethics committee whose mission would be to define the rules of good conduct and enable customers to report unethical conduct problems with which they are confronted. The literature, by empirically testing models of ethical judgment formation (e.g. [VIT 90]), also shows that to promote virtuous behavior, it is better to reward ethical behavior than to punish unethical behavior. In addition to the multitude of awards that reward the most advanced companies in terms of customer relations, we could then imagine awards that reward the most responsible programs, that really improve the well-being of their customers and that promote a charter of best practices, beyond simple compliance with legal rules. Another solution would be to legitimize best practices by implementing a labeling strategy. This strategy would allow recognition of the investments and efforts made, better visibility among stakeholders (consumers, associations, suppliers, etc.) and therefore a better image. Finally, we could question the role of the legislator in framing customer relationship management practices. Consumers face an unbalanced relationship with the company and need the legislator to ensure that practices are favorable to them or to decide when the relationship is highly unbalanced. Thus, under the impetus of the work of Pez et al. [PEZ 17], a bill to prohibit the introduction of a time limit for the expiry of loyalty points was submitted to the assemblée nationale in France on April 13, 2018 by Deputy Patrick Hetzel5.

5 http://www.patrick-hetzel.fr/actualites/economie-emploi/patrick-hetzel-a-depose-a-proposal-oflegislation-on-benefits-cumules-of-cards-of-fidelity.html.

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13.4.4. Restoring confidence in the collection and use of data As mentioned above, a majority of consumers are worried about, on the one hand, the use that is or may be made of their personal data, and on the other hand, intrusive practices used by companies to promote the merits of their products (e.g. personalized advertising using previously collected data). While this concern does not always manifest itself in a refusal to share data, there is a general lack of consumer confidence in organizations that collect and/or use data. While the level of trust seems to vary widely depending on the area of activity of these organizations (public bodies and banks are the most trusted while social networks and search engines appear to be the less trusted), it is clearly established that all organizations suffer from a lack of trust that leads consumers to increasingly resist practices aimed at collecting and/or using their data. These signs of resistance have a definite influence on the effectiveness of marketing practices, which can even have an impact on the reputation or even the brand image of the organizations in question. It is becoming more than necessary and urgent to restore the confidence that consumers may have in organizations that collect and/or use data about them. In the course of her work, Caroline Lancelot-Miltgen identified six major elements that could restore confidence in data collection and use: the TRUVEC model (Figure 13.1).

Transparency Do we provide our customers with relevant information, adapted to their wishes and which allows them to make free and clear choices?

Do we respect each customer in terms of their individuality and their needs (proximity, commercial pressure)?

Respect (of Limits And Promises)

Reasoned/ Rational data Use Have we anticipated the impact of our practices? Do we have a rational use for the data? Have we taken into account each customers’ specific expectations in regards to the use of their data?

6 KEY ELEMENTS OF TRUST

In exchange for their data, have we offered our customers something which is valuable to them?

Value

Equity / Justice Does the use of the data benefit our customers as well as benefit us?

Have we given our customers enough control in the collection and use of their data? Can we offer each customer the possibility to change their mind?

Control/ Choice (Empowerment) 1

Figure 13.1. The six key elements aimed at enhancing trust in data collection and use (Lancelot-Miltgen)

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The TRUVEC model can provide operational recommendations on how to implement these six sources of trust in practice (Table 13.5).

Transparency

Most companies today are happy to inform their customers through terms of service (ToS), whose purpose seems more to protect the company than to actually inform the customer. The unanimous observation is that no one reads these ToS that consumers end up accepting because they cannot do otherwise but without knowing what they contain. It is necessary to work on the design of transparency. Two tracks seem interesting: (1) adapting the ToS to the audience (children vs. adults, novices vs. experts, etc.) and making them clearer (clickable menus offering more or less detail), (2) co-constructing the ToS with the customers themselves.

Respect

The collection and use of data should better reflect the depth of the relationship with each customer. The level of customer affinity and commitment to the brand should dictate the experience to be offered to them in terms of data collection and use.

Reasoned and rational data use

The paradigm of the uncanny valley invites us to understand that an overly advanced and personalized use of data has more negative than positive effects, beyond a certain threshold. The concepts of “privacy by design” (product or service that integrates data protection from the outset) and “privacy by default” (maximum consumer protection by default) also invite us to integrate a priori maximum protection of customer data, without waiting for a problem to arise.

Value

Every customer is different. What may be a benefit for some may be a disadvantage for others. In exchange for their personal data, it is therefore appropriate to offer compensation that offers real value to each customer. The possible compensation is either monetary (cash, discount vouchers, points, etc.) or experiential (better service, faster service, comfort, better customer experience, performance measurement, etc.). Among the promising but little-used compensation is decision support. The data could be returned to the customers in the form of information that helps them to learn more about themselves and make better decisions.

Equity

The idea here is to place the customers at the center of the data management system in order to maximize their interest just as much if not more than the company’s interest.

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The systems with which we interact today are mainly binary. For example, when you download an application, you have a list of all the data to which the application will have access, most often without really being able to give your consent for each type of data tracked. Human nature is much more nuanced: we may agree with an app accessing our photos but we may not want to provide our location. It is therefore necessary to devise more modular systems that allow each customer to enhance their privacy by answering all particular needs in terms of data sharing. Table 13.5. The TRUVEC model (Lancelot-Miltgen), restoring confidence in data collection and use

From this TRUVEC model, one can easily deduce the good practices to be implemented by organizations to collect their customers’ data: – Inform the customers: Why do we need their data? Where will the data be stored and for how long? Who will have access to the data? How will the data be used? – Collect only what is strictly necessary for the provision of the service concerned. – Let the customers decide what they agree to give by using as many optional fields as possible (this greatly reduces lying strategies). – Collect data incrementally (as the customer relationship evolves). There is nothing worse for customers than having the feeling that they must decline all of their details from the outset in order to be able to access the service. – Offer compensation adapted to the customer’s needs. Some customers appreciate a cash consideration and others prefer a more personalized service. Customers, users and citizens are increasingly transparent to organizations (companies, media, associations), especially since they can be easily identified and “traced” everywhere, all the time and on many devices (“anytime, anywhere, any device”). However, the tools, practices and technologies used by organizations are generally invisible from the users’ point of view and shine through their opacity (data, algorithms, retargeting6, real-time bidding7, etc.). Many officials are calling for more transparency and the General Data Protection Regulation (GDPR), introduced in May 2018, imposes new ethical, responsible and transparent requirements in order to limit 6 Retargeting: principle allowing a product to be offered again to a customer in their navigation if they have, for example, consulted it on a website before. 7 Real-time bidding: principle of real-time auctions in the field of Internet advertising.

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the vulnerability of individuals and overcome the current crisis of trust. Would the principle of transparency be sufficient to restore trust and engagement in the digital environment? Should we really tell the consumer everything about marketing practices? The question of transparency is now a significant one because of the risks of customer drift and manipulation, but it also arises in a different way, as the modes of exchange and communication are very much affected by the digital revolution. Transparency is no longer just a matter of disclosure of information by the company through a communication campaign (advertising, public relations, etc.); communication is now multiform, multidirectional, instantaneous and takes the form of conversations between consumers, brands and other consumers, which requires rethinking the role of transparency in customer relationship management. Transparency is seen as a way to reduce information asymmetry. It is often understood in terms of the “perfect” disclosure of information (clear, relevant, precise, concise information, etc.) and in terms of the company’s objectivity. In other words, perceived digital transparency could be defined in three dimensions: objectivity, clarity and openness. A company will then be all the more transparent if it: – discloses information that is intelligible (clear, relevant, concise), visible (easily accessible in terms of navigation, prioritization) and contextualized (when needed); – offers objective information (comparable and not manipulated), negative as well as positive customer opinions so as not to affect decision making, and offers the possibility of obtaining feedback from other consumers (through a chat option on its website for example); – is open by giving customers the freedom to discuss with it on all communication channels (social networks, website, e-mail, telephone, etc.), by allowing immediate, instantaneous interactions (automatic callback, etc.) and by allowing the participation and collaboration of its community in improving its offer. Should we then be totally transparent with customers in order to create a relationship of trust and to encourage engagement actions (likes, sharing, newsletter subscription, etc.)? A quantitative study of 445 respondents regarding perceptions of Amazon indicates that to increase individual trust in the brand, it is: – to be perceived as objective by offering both negative and positive customer opinions, by making “sensitive” information accessible, by facilitating frustrating operations such as product returns and refunds and by helping customers to understand what they are paying for (details of packaged offers, details of price changes over time, etc.); – to limit the perceived clarity by proposing the information in two steps (briefly using push communications at first, then in a complete and detailed way at the slightest request of the customer), avoiding detailing all the digital practices used in order not to generate stress and anxiety; by promoting the benefits obtained from customers during the collection and use of personal data, rather than the processes; and by developing digital

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education for customers by supporting them in their adaptation to new digital uses (dematerialized contact, self-service, etc.). In addition, to develop consumer engagement, it is necessary: – to achieve a sufficient level of perceived clarity by giving clear, precise information and giving customers the choice as to how to make contact at the brand’s initiative, basing communication on reciprocity and real-time information; – to develop perceived openness by going further in discussion and collaboration with customers by offering more freedom in making contact and promoting customer insight into the brand (encouraging customers to take an interest in the brand). Finally, on the Web, it is crucial to be transparent with customers in order to create a lasting and effective relationship. However, being transparent does not mean saying “everything” in a comprehensive way about marketing practices (collection and combination of personal data), which instead creates a sense of stress and anxiety in the minds of individuals. Box 13.3. “Should we always be transparent to the customer?” by Audrey Portes, Doctor of Management Sciences – Marketing, Montpellier Research in Management

13.5. Acknowledgements The authors would like to thank Fanny Reniou, from the IRG Laboratory at the University Paris-Est Créteil, and Audrey Portes, from the Montpellier Research in Management (MRM) Laboratory, for their contributions to this chapter. 13.6. References [ADA 63] ADAMS J.S., “Toward an understanding of inequity”, Journal of Abnormal and Social Psychology, vol. 67, no. 5, pp. 422–436, 1963. [FOU 98] FOURNIER S., DOBSCHA S., MICK D.G., “Preventing the premature death of relationship marketing”, Harvard Business Review, vol. 76, pp. 42–51, 1998. [FUL 98] FULLERTON R.A., PUNJ G, “The unintended consequences of the culture of consumption: A historical-theoretical analysis of consumer misbehavior”, Culture, Consumption and Markets, vol. 1, no. 4, pp. 393–423, 1998. [GRA 99] GRAYSON K., AMBLER T., “The dark side of long-term relationships in marketing services”, Journal of Marketing Research, vol. 36, pp. 132–141, 1999. [HAR 06] HARRIS L.C., REYNOLDS K.L, “Deviant customer behavior: An exploration of frontline employee tactics”, Journal of Marketing Theory and Practice, vol. 14, no. 2, pp. 95–111, 2006.

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[HAR 09] HARRIS L.C., REYNOLDS K.L., “Dysfunctional customer behavior severity: An empirical examination”, Journal of Retailing, vol. 85, no. 3, pp. 321–335, 2009. [HAR 11] HARRIS L.C., DAUNT K.L., “Deviant customer behaviour: A study of techniques of neutralization”, Journal of Marketing Management, vol. 27, nos 7/8, pp. 834–853, 2011. [HAR 13] HARRIS L.C., DAUNT K.L., “Managing customer dysfunctional behavior: Challenges and strategies”, Journal of Services Marketing, vol. 27, no. 4, pp. 281–293, 2013. [HOD 13] HODDER M., CHURCHILL E., COBB J., Lying and hiding in the name of privacy, Technical report, Customer Commons, 2013. [JIA 13] JIANG Z., HENG C.S., CHOI B.C.F., “Research note – Privacy concerns and privacyprotective behavior in synchronous online social interactions”, Information Systems Research, vol. 24, no. 3, pp. 579–595, 2013. [KIV 06] KIVETZ R., URMINSKY O., ZHENG Y., “The goal-gradient hypothesis resurrected: Purchase acceleration, illusionary goal progress, and customer retention”, Journal of Marketing Research, vol. 43, pp. 39–58, 2006. [KOP 12] KOPALLE P.K., SUN Y., NESLIN S. et al., “The joint sales impact of frequency reward and customer tier components of loyalty programs”, Marketing Science, vol. 31, pp. 216–235, 2012. [KUM 18] KUMAR V., “A theory of customer valuation: Concepts, metrics, strategy, and implementation”, Journal of Marketing, vol. 82, pp. 1–19, 2018. [LAN 09] LANCELOT-MILTGEN C., “Propension à fournir des données personnelles mensongères sur Internet: Une étude exploratoire”, Systèmes d’information & management, vol. 14, no. 3, pp. 9–42, 2009. [LAN 14] LANCELOT-MILTGEN C., PEYRAT-GUILLARD D., “Cultural and generational influences on privacy concerns: A qualitative study in seven European countries”, European Journal of Information Systems, vol. 23, no. 2, pp. 103–125, 2014. [LAN 18] LANCELOT-MILTGEN C., SMITH J., “Falsifying and withholding: Exploring individuals’ privacy-related decision-making in context”, Information and Management, 2018. [LWI 03] LWIN M.O., WILLIAMS J.D., “A model integrating the multidimensional developmental theory of privacy and theory of planned behavior to examine fabrication of information online”, Marketing Letters, vol. 14, no. 4, pp. 257–272, 2003. [LWI 07] LWIN M., WIRTZ J., WILLIAMS J.D., “Consumer online privacy concerns and responses: A power–responsibility equilibrium perspective”, Journal of the Academy of Marketing Science, vol. 35, no. 4, pp. 572–585, 2007. [MER 05] MERRICK A., BRAT I., “Taking back that bathrobe gets harder. Sears is the latest retailer to tighten returns policy; How to avoid being refused”, The Wall Street Journal, available at: https://www.wsj.com/articles/SB113461607759923123, 2005.

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[MOS 89] MOSCHIS G.P., COX D., “Deviant consumer behavior”, Advances in Consumer Research, vol. 16, pp. 732–737, 1989. [NGO 10] N’GOALA G., “À la découverte du côté sombre des relations de service… Ou pourquoi les relations durables et exclusives s’autodétruisent”, Recherche et applications en marketing, vol. 25, pp. 3–31, 2010. [NGO 15] N’GOALA G., “Opportunism, transparency, manipulation, deception and exploitation of customers’ vulnerabilities in CRM”, in NGUYEN B., SIMKIN L., CANHOTO A.I. (eds), The Dark Side of CRM: Customers, Relationships and Management, Routledge, London, 2015. [PEZ 15] PEZ V., BUTORI R., DE KERVILER K., “Because I’m worth it: The impact of given versus perceived status on preferential treatment effectiveness”, Journal of Business Research, vol. 68, no. 12, pp. 2477–2483, 2015. [PEZ 17] PEZ V., BUTORI R., MIMOUNI C.A., “Le côté sombre de la pression exercée sur les consommateurs par les programmes de fidélité: Enjeux éthiques et pratiques”, Recherche et applications en marketing, vol. 32, pp. 76–89, 2017. [REN 17] RENIOU F., ROUQUET A., SUQUET J.B. et al., “Réclamations ‘déviantes’ des clients : quelles réponses pour les organisations ?”, Finance contrôle stratégie, vol. 20, no. 3, pp. 1–20, 2017. [ROU 07] ROUX D., “La résistance du consommateur: Proposition d’un cadre d’analyse”, Recherche et applications en marketing, vol. 22, no. 4, pp. 59–80, 2007. [SON 08] SON J.Y., KIM S.S., “Internet users’ information privacy-protective responses: A taxonomy and a nomological model”, MIS Quarterly, vol. 32, no. 3, pp. 503–529, 2008. [VIT 90] VITELL S., HUNT S.D., “The general theory of marketing ethics: A partial test of the model”, in SHETH J.N. (ed.), Research in Marketing, vol. 10, JAI, Greenwich, 1990.

14 The Legal Basis for a Data Economy Based on Trust

In the face of the many scandals we are experiencing as a result of personal data leaks, a recent example of which is Facebook, the question of confidentiality and the scope of this secrecy is becoming an urgent matter. Although privacy has a significantly different conception within the Member States of the European Union, a common basis exists beyond our borders, and all democracies tend to recognize a cyber-consumer’s right to privacy. This new kind of consumer, caught up in intensive Internet use, leaves digital traces wherever they go, most often unconsciously. We have moved from a more or less controlled information society to a mass information society, without control, the targets of which go beyond the simple Internet user. This makes it a major challenge for societies and democracy. The recent case of Cambridge Analytica (see Box 14.1) has clearly demonstrated the intensive use of gold in this century: our data. Eighty-seven million users cheated, stolen from, looted, deceived, etc. Will a television mea culpa and a European road show be enough to calm the abused cyber-consumer? Cambridge Analytica is a British communication company that works on collecting data. It uses the data for advertising and commercial purposes, and supported Donald Trump’s presidential campaign, elected President of the United States of America in 2016. In March 2018, the New York Times revealed that the personal data of 87 million Facebook users were purchased by Cambridge Analytica to influence the presidential election vote.

Chapter written by Isabelle LANDREAU.

Augmented Customer Strategy: CRM in the Digital Age, First Edition. Edited by Gilles N’Goala, Virginie Pez-Pérard and Isabelle Prim-Allaz. © ISTE Ltd 2019. Published by ISTE Ltd and John Wiley & Sons, Inc.

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Britain conducted an investigation that led to the prosecution of Cambridge Analytica. On May 1, 2018, the company declared bankruptcy to avoid paying damages to Internet users who were cheated with regard to their data, which were exploited without their knowledge. Box 14.1. Cambridge Analytica, a brief history of the case

In this context, the European Union has adopted the General Data Protection Regulation (GDPR), which came into force on May 25, 2018, in an attempt to strengthen and unify data protection for individuals within the European Union. 14.1. Personal data at the heart of the DGMP 14.1.1. Personal data: the black gold of the 21st Century Primary data are produced by the cyber-consumer and covers their identity data (surname, first name, date and place of birth, place of residence, position) and sensitive data (sexual orientation, health, religious affiliation or membership of political groups). Generated data are the data collected by various entities, whether or not they are profitable (websites, Internet service providers (ISPs), platforms, e-commerce companies, institutions, associations, NGOs), by trackers, cookies, etc., on the basis of the primary data. This concerns consumption data (purchasing habits), financial data (means of payment, loan status and financing), among other types of data. Through its digital activity, the cyber-consumer generates even broader data, collected through the sophisticated tools of digital companies, such as connection data, navigation data, geolocation data and consumption data. Companies are very keen on these data because they enable them to activate a cyber-consumer’s personalized profile and to offer appropriate products. Thus, we can suggest to the cyber-consumer products that they are likely to want, even if it means gradually falling into a panoptic society. But this raises the question of how much freedom the cyber-consumer will have in this world? Aggregate data are those that are analyzed for a specific purpose and used for Mega Data purposes based on the data generated. This task is left to private companies, large and sometimes monopolistic groups. It is the speed and computational capacity of multiple data sources that make the result so rich.

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The source of this lucrative market is always primary data, and it is the cyber-consumer who produces it. The cyber-consumer has thus become the first free provider of 21st Century wealth. 14.1.2. Personal data and brands: the cyber-consumer chooses brands that respect confidentiality The study1 conducted by IFOP for Sendinblue, published on March 26, 2018, on “The French and the General Regulations on the Protection of Personal Data” shows that 88% of French people are concerned by the use of their personal data on social networks. We are currently in a time of consumer mistrust toward brands and 77% consider that the criterion of transparency on the use of personal data will be decisive for the purchase of branded products. 8 in 10 French people think that the best protection is still individual vigilance. This mistrust is justified by an unbalanced membership approach, since consent before the application of the GDPR was an opt-out consent, and the absence of a detailed reading of the general conditions of sale or use would lead to a membership contract whose terms, including judicial jurisdiction, are unfair2. It is therefore important for companies to restore the trust of the cyber-consumer [WAE 18], and the GDPR is one of the tools of trust if the technical and organizational legal tools are put in place. 14.2. GDPR tools to restore trust 14.2.1. Clear and explicit consent From default consent, the GDPR introduces the requirement for clear and explicit consent (this is Article 7 of the GDPR). Consent must, therefore, be in writing, detached from other questions that digital companies may ask. The form is 1 IFOP, Les Français et le Règlement Général sur la Protection des Données personnelles, Sendinblue, Press release, available at: https://www.ifop.com/wp-content/uploads/2018/05/ francais_rgpd_ifop_CP.pdf, 2019. 2 TGI PARIS, chamber 4, section 2, March 5, 2015 and CURIA, Océano Grupo Editorial and Salvat Editores, Judgement of the Court, joined cases C-240/98 to C-244/98, available at: http://curia.europa.eu/juris/showPdf.jsf;jsessionid=9ea7d2dc30dd665e617e5b3b4c4896b2c44f616 81299.e34KaxiLc3qMb40Rch0SaxyNchb0?text=&docid=45388&pageIndex=0&doclang=fr&mo de=lst&dir=&occ=first&part=1&cid=319553, June 2000.

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free but it must be “easily accessible, understandable and formulated in clear and simple terms”. The cyber-consumer must, therefore, be able to consent to the categorical and operator-specific use of their personal data. They must also be able to withdraw their consent at any time in a similarly easy way. Consent is the cornerstone of the GDPR for all processing of personal data, but it is not always respected by European and American companies. For example, the use of cookies, which allow companies to target the consumer, requires the Internet user’s expressed consent (Article 22 of the GDPR). However, if the Internet user refuses, the application does not run properly. In some cases, cookies are inserted without the user’s knowledge and there is no compliance with the GDPR. The result is that operators take advantage of the consent given to trace or even track the Internet user and obtain data with high added value for advertisers. However, these cookies can be quite intrusive. The rate of disenchantment among Internet users toward brands is increasing [WAE 18]: 61% of them find that targeting is too intensive. The future e-privacy directive submits in article 8 of the document to make use of cookies subject to the Internet user’s expressed consent not only on personal data (which is the case with the GDPR) but also on metadata. At present, the Internet user must consent site by site to cookies through a consent banner that appears following each first visit. This system, however, should be replaced by a global consent that would change the settings from the first connection to implement the level of protection the user wants. In the future, companies will have to find alternatives to cookies, such as contextual targeting or microtargeting [NDI 17] because of the use of artificial intelligence. 14.2.2. Ensuring the rights of the cyber-consumer over their personal data The rights of the cyber-consumer are clearly established in sections 12–23 of the GDPR. In addition to the requirement for information on the use of personal data (Articles 12–14 on the transparency of information, GDPR), the cyber-consumer must be able to access their data (Article 15), rectify them (Article 16), erase them (Article 17), restrict their processing (Article 18), and be notified in the event of rectification, erasure or restriction of processing (Article 19).

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The cyber-consumer must also have the opportunity to transfer their data from one operator to another (Article 20, data portability), must be able to oppose without application or system malfunctioning (Article 21) and they must also be able to oppose profiling (Article 22). 14.2.3. Creation of a Data Protection Officer role The creation of a personal Data Protection Officer (DPO), internal or external, single or shared, is the first phase of compliance with the GDPR (Articles 37–39). The DPO becomes the new “strongman” of the company, to managing and coordinating data management and privacy protection, not only of employees but also of customers. This function can only be carried out transversely: the DPO acts in coordination not only with the IT department but with all deparments, including Human Resources, marketing, sales and communication. They are the privileged interlocutors regarding the Commission Nationale de l’Informatique et des Libertés (CNIL) and must make technical, legal and organizational changes for the company. 14.3. The future of our personal data 14.3.1. A right of ownership over our personal data? This ownership right is recognized by both case law, and criminal law, and now by the GDPR. 14.3.1.1. An ownership right over data recognized by case law The first judgment to recognize the patrimonial nature of data, by appropriating the data on a USB key, was the famous judgment of September 26, 2011 (see Box 14.2) of the Criminal Chamber of the Clermont-Ferrand High Court3. The judgment paved the way for the recognition of data ownership owing to the material support used in this case to carry out the theft, the USB key. The Criminal Chamber of the Clermont-Ferrand High Court recognized data theft for the first time. Mrs. Rose, an employee of Michelin, dissatisfied with the fact that she had not received a salary increase, indicated her willingness to leave the company. A contractual breach was negotiated in which there was a confidentiality clause. However, shortly after 3 TGI of Clermont-Ferrand, Correctional Chamber, September 26, 2011, available at https:// www.legalis.fr.

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her departure, she contacted her former employer’s customers directly, thus breaking the confidentiality clause. She had copied all the customers’ files on to a USB key, so there was indeed a material thing stolen. The criminal court was thus able to recognize the theft of the simple thing called data, physically stored on a USB key. For further reading, please visit https://www.doctrine.fr/d/TGI/ClermontFerrand/2011/KFVA7C44A3062A29EFF81C9. Box 14.2. Case law of September 26, 2011, summary

Data theft was characterized by the transfer of data (customer and supplier files) to a USB key and the court therefore recognized the status of data as a thing, within the meaning of Article 311-1 of the French Criminal Code, “fraudulent removal from the property of another”. In a subsequent judgment, the Paris Court of Appeal4 recognized the theft, by the fraudulent access and storage in the automated data processing system of the Agence Nationale de Sécurité Sanitaire de l’Alimentation, de l’Environnement et du Travail (ANSES), and by the removal of data and then the downloading and recording of these data on several media (hard disk and data center). 14.3.1.2. A right established in the French Criminal Code Since the law of January 5, 1988 known as the GODFRAIN law, there has been an offence of intrusion by access to a computer system, imprisonment of 1 year and a fine of 15,000 euros. These violations of automated data processing systems are now punishable by up to 2 years in prison and a fine of 60,000 euros. The deletion or modification of data contained in such systems is punishable by 3 years’ imprisonment and a fine of 100,000 euros. Articles 323-1 to 323-8 of the French Criminal Code, therefore, confirm that data are an asset like any other, which may be concealed by attacks on automated data processing systems. Financial penalties reveal that a value is given indirectly to the data. The value is based on the damage generated by the breach in the system. In 2017, France was sadly the second most affected country in the world in terms of data theft5, showing the urgent need for companies to tackle the issue head-on. Between October 2015 and October 2016, 85.3 million data related to the identity of French were stolen.

4 CA PARIS, pole 4, ch. 10, February 5, 2014. 5 Symantec study, article of October 18, 2017.

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Criminal law, therefore, allows for prosecution and indirect reparation through sanctions. The Cambridge Analytica scandal (see Box 14.1) reinforces the feeling that, more than ever, the right of ownership over personal data for the cyber-consumer shall be instituted in terms of their digital activities to protect this asset from unscrupulous operators. On June 7, 2018, CNN explained that Facebook had triggered a security breach between May 18 and 22, 2018 for 14 million users by testing a new feature. The personal data of these 14 million had been made public. However, Facebook’s Chief Privacy Officer [UNT 18], Erin Egan, did not seem to understand the danger of security breaches and cyber-consumer privacy breaches. Only an ownership right, with payment of damages, could change the business model of these operators. 14.3.1.3. A new right of use of our data: the portability of personal data within the GDPR In several ways, the GDPR reinforces the concept of data ownership, in particular, by introducing a new right, the right to data portability. Article 20 enforces the right to data portability: the recovery of data and transmission of personal data to another system (operator in practice) to which the controller may not object. The right to the portability of personal data is intended to allow data subjects to retrieve the personal data they have provided to a controller, possibly to transmit them to a new controller. This only concerns automated processing operations based on the consent of the person concerned or the performance of a contract. In this context, it remains to be defined in concrete terms what the modalities of transmission and the associated technical standards are. The data concerned is specified by the Article 29 Data Protection Working Party (A296) which, in its guidelines on the right to data portability, states that it is data actively and knowingly provided by the subject but also data observed or generated by the use of the service or device. The so-called inferred and derived data, created by the controller on the basis of the data provided, will not be affected.

6 The Article 29 Data Protection Working Party is an informal group of all data authorities in Europe plus the Swiss Data Authority. This is a working group chaired by Mrs. FalquePierrotin. Its name comes from Articles 29 and 30 of Directive 95/46, which defines its tasks.

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The controller must inform the data subjects of the existence and scope of the right to portability and must respond to such a request within 1 month. This period may be extended to 3 months if the request is complex. The Article 29 Data Protection Working Party recommends that data is transmitted over the Internet, but it may be considered to put them on a physical medium (CD, DVD, USB key, etc.) if this allows faster access to the request. Data portability is also included in Book II of the French Consumer Code: “Article L 224-42-1 – The consumer has a right to recover all their data in all circumstances”. The data must be retrievable by the cyber-consumer in an open way that must be reusable and exploitable by another automated processing system (Article L 224-423 of the French Consumer Code following Article 48 of the law for a digital republic). Portability therefore clearly demonstrates the ab usus7 of personal data by cyberconsumers. In this respect, portability should not be confused with transfer. In fact, portability does not imply the deletion of data; the data may always be kept by the operator in line with its processing purpose. Data portability is not, in practice, very effective today, and instead data interoperability and processing issues are emerging. What about processing operations carried out by an ISP that are useful to somebody for administrative and tax declarations, and that would no longer be accessible to them by switching providers? There is a technical lock set up by the operator. The Article 29 Data Protection Working Party recommends the creation of personal data warehouses, allowing the storage and access to its data on an SFTP (Secure File Transfer Protocol) server with an online application programming interface (API) 8 or a secure Internet portal, of course. This new right to the portability of personal data enshrines the cyber-consumer’s rights, such as a user of services and platforms. It tends to reintroduce balance into the economic value chain of the data market. Initiatives to facilitate the exercise of

7 Right to dispose of the thing (give it away, sell it, destroy it). 8 Advocated by the author more than 3 years ago.

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this right are being organized. For example, Onecub9 is a start-up that organizes data portability by facilitating the import and export of your personal data, while ensuring that the user controls these data. Onecub supports Internet users by identifying the processing and data concerned by portability, identifies uses, protects privacy from the design stage and defines data exchange formats with the Internet user. This company is supported by the French Data authority (CNIL) and the French Bank for Invesment (BPI). 14.3.2. The future: toward a right to an income on our data? The GAFA business model, which makes the cyber-consumer a good “sleeping” supplier of data with enormous potential, can be disrupted by a French and European consideration of the rights of this homo numericus10 and the implementation of a new economic model based on a reversion of the generated revenues to the cyber-consumer: the price of their consent to a categorical exploitation or according to the pursued purpose of their data. We would then move from a free model to a paid model that will not only drive growth but also generate security. Data belong to the person providing them (traditional design) and the business model should be based on the first data provider: the cyber-consumer, who will be remunerated on the added value produced by the data, whether it is primary, generated or aggregated. This new business model would involve several stakeholders and would lay the foundations for the microrewarding of individuals for exploitation of their data. 14.3.2.1. The actors in the data exploitation chain Several actors in the data exploitation chain with various professions are emerging: 1) the cyber-consumer: the leading provider of personal data, through their digital activity or connected objects; 2) the data collector (data centers, ISPs, operators); 3) the data aggregator: it will be the private (commercial or associative) or public entity (why not a state API that would collect EPIC11 category data?) that will have the technical and financial capacity to manage and analyze these data. The 9 https://connect.onecub.com. 10 Terminology of Professor Solange GHERNAOUTI. 11 For more information on EPICs, see https://echa.europa.eu/fr/support/dossier-submissiontools/epic.

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cyber-consumer must receive an income from this collection based on the volume of data and the relevance of the data they generate. The aggregator can sell these data to platforms; 4) the platform: it also seems necessary to reform the status of platforms. In 2014, the Conseil d’Etat in its annual report12 suggested reserving a special status for platforms that offer classification or referencing services for content, goods or services put online by third parties; 5) the data retailer13: the retailer or broker is the one who will sell a service related to the exploitation of the data; 6) the DPO will become the one who will be responsible for defining the content of the usable data and could be able, beyond the application of the GDPR, to decide to whom to sell them on the instructions of the cyber-consumer and the entity that appointed them. 14.3.2.2. A micropayment based on the categorical use of data governed by the legal provisions of the GDPR The reversion of the actors in the data exploitation chain could be done on the basis of a financial counterpart to the consent to the categorical and temporal exploitation of one’s personal data (pay per loyal use, PPLU14) integrated into the data collection system. The system would be as follows: 1) the cyber-consumer creator of data would consent to the categorical and temporal exploitation (with a specific purpose) of part of their data by a platform data manager and could create an income either via connected objects, or via platforms, for a category of data and a specific purpose; 2) this consent would be contained in a license agreement for the categorical exploitation of data for a specific purpose in a blockchain15 that allows for data security and integrity.

12 Conseil d’Etat, annual report 2014, p. 170. 13 Expression by Gérard Peliks. 14 Author’s terminology. 15 Analytica blockchains are a technology that allows the storage of digitally signed information in chain blocks. Each block depends on the previous one and must be validated before being added. Block chains are distributed and synchronized on multiple servers, which allow mutual trust between users to be established.

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This use of the cyber-consumer’s personal data meets GDPR criteria, i.e. categorical and limited in time and quantity. This could be valid for any cyber-consumer but also open to any company working on Mega Data16. A (declare system what you use) DWYU17 could be imagined. This required consent should be explicit. In concrete terms, one could imagine that the cyber-consumer would go to a data management platform or API of a data management company, where they would register with their personal data. This platform would be a management center for the exploitation of personal data. The cyber-consumer would then receive a request for the categorical use of their data on this platform, and they would respond to the request and expressly consent to accept a fair and monetized use of their data; 3) the platform manager would resell the use of this database to enterprise platforms and/or ISPs and/or GAFAs through a smart contact in the blockchain. From then on the purpose and category of data would be locked up and encrypted by the blockchain; 4) the platforms, FAI and GAFA, would pay a percentage to the cyber-consumer for the exploitation of the data category according to the declared purpose; 5) the manager of the data platform would receive an income through micro-payments based on the use value of the data category; 6) the data would be stored on the platform which would become its data broker; 7) a payment by fair use PPLU18 (pay per loyal use for what you declare you use) would be introduced. The control of the use of the data would be the CNIL’s responsibility. Any illegal and unfair use, of which the cyber-consumer would be informed by an intelligent alert system, would result in the suspension or withdrawal by the cyber-consumer of the selective exploitation of their data on the platform or API. There should be an equal correspondence between the DWYU list and the PPLU list, which can be controlled by the CNIL in order to respect the rights of the cyber-consumer who creates data. The CNIL would remain the authority to impose sanctions in the event of exceeding the categorical exploitation that does not comply with the declared purpose. The latter system is relatively easy to set up because it is based on an existing administrative authority, the CNIL and current mechanisms. It is part of the data 16 INPI, IP and Digital Economy Study, 2014. 17 Author’s terminology. 18 Author’s terminology.

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production chain, respecting all the actors involved. It is in line with the new GDPR through the use of expressed consent and ratifies the usus (use) and (abusus) abuse of personal data made by Articles 17 and 20 in particular. 14.3.2.3. Concrete models for reselling personal data in France Several companies have already invented systems for monetizing personal data with a reversion to the cyber-consumer. Virtuous models: Zerotrace (https://www.zerotrace.fr/) is a Toulouse-based start-up that monetizes photo privacy by asking individuals for the privacy threshold they want. Users decide who can read and see their information, and then choose a partner who can create advertising content that will be seen by unauthorized third parties by hiding the original photo. The photo is immediately encrypted and the user can distribute it securely according to their privacy level. They receive a micro-income shared between the partner they have chosen, which can be a charity, and also themselves. Confidentiality is assured, the business model is virtuous and everyone wins. MyCo.coop (https://www.myco.coop) is the first cooperative of Internet users that pays the Internet user. Navigation is private because it is invisible. The browser, myCo, allows you to have a secure email address with an encrypted message exchange system. The user’s identity is therefore not revealed. The browser also gives the user the ability to manage projects between friends or professional relations, or to participate in tests and quizzes that allow the user to earn myCoins. As soon as a person registers, they become a member of the cooperative and receive a remuneration up to the value created by the cooperative in which they participate. Ultimately, the user can deposit this money into their account or reinvest it in the MyCo community to finance private or public projects. Business models: Business models use data from the web to analyze them and provide services to the market sector. Flux vision (https://www.orange-business.com/fr/produits/flux-vision) is a project launched by the telephone and Internet operator Orange working on presence or mobility data that make it possible to know how many people pass through a given commercial area and their frequency of passage according to gender profiles and shopping baskets.

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To date, the sectors concerned are mainly banks, product manufacturers and local authorities. 14.4. Conclusion The GDPR is one of the cyber-consumer’s legal tools, which restores, slightly, the balance between Internet operators and the consumer. This is a step forward, as it confirms the cyber-consumer’s rights of access, information, rectification, limitation, opposition and deletion. It brings new rights, in particular the right to data portability and the right to take legal action against the non-transparent use of their data. According to a study conducted by Pegasystems, 96% of French cyberconsumers19 are determined to ask companies about the data they hold. The cyber-consumer data economy must be oriented toward the exploitation of cyber-consumer data, and thus of the cyber-consumer themself. The cyber-consumer is no longer simply a potential buyer; with digital tools they become a prescriber and a potential seller. Connected objects, the increasing accessibility to the Internet and the volumes of data transferred reinforce nomadism and hyperconnection. The cyber-consumer becomes a sales force because of the different communities to which they belong. We must therefore listen to them. On the corporate side, if they still have fears or even misunderstandings about the GDPR, it is now essential that the cyber-consumers understand it as an asset in terms of customer relations. It is important to restore trust through data confidentiality and the GDPR through the introduction of technical, organizational and legal measures to restore this eroded trust. We must, therefore, listen to the cyber-consumer, and without entering into a panoptic society of targeted, paralyzing recommendation, leaving no more opportunities for choice, we must introduce more services and more humanity to support the cyber-consumer’s choices. CRM must, therefore, evolve from customer relations for the company to a relationship of trust with the consumer, and from CRM to trust management based on GDPR tools: consent, rights, information and portability among others.

19 PEGA, GDPR: Show me the data, Global study, 2017.

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Companies must think beyond the next 3 years. The customer must be seen as a trusted actor where the sum of their data, analyzed and aggregated, will make them an essential actor for brands to innovate and sell. The indications to be taken into account should not be based on emotion alone, as many brands tend to believe, as the consumer is not just an emotional being. The cyber-consumer changes and becomes an ethical being where non-monetary considerations come into play. For brands, therefore, it is necessary to consider the cyber-consumer as a trusted third party who can contribute to the improvement of the product, taking into account their experience and their commercial and ethical expectations. The measurement of brand satisfaction must join the BIB: the French gross domestic happiness index launched by the OECD in 2011 [OEC 11]. On the basis of the criteria of the 2006 [BOA 06] OCED study, brands must therefore integrate the following concepts into their deployment strategy: – the autonomy of the cyber-consumer: it is therefore necessary to support them with personalized services when the products are complex and to make the products compliant with the protection of privacy from the product design stage (Article 25 of the GDPR); – personal service by offering training, support in getting started, webinars, user seminars, sharing experiences, etc.; – equity between cyber-consumers by creating the same conditions of access and use between men and women and between wealthy and less wealthy cyberconsumers; – the relationship with the cyber-consumer should be based on a private community sharing information related to the product and the company. Let us become more human and use this “auxiliary intelligence” that will help humanity, as Joël de Rosnay [ROS 18] describes it, to be more human. 14.5. References [BOA 06] BOARINI R., JOHANSSON Å., MIRA D’ERCOLE M., “Les indicateurs alternatifs du bien-être”, OECD, Cahiers statistiques, no. 11, 2006. [NDI 17] N’DIAYE M., “Les marques devront-elles se passer des cookies?”, Les Échos, September 26, 2017. [OEC 11] OECD, Des politiques meilleures pour une vie meilleure, Report, May 24–25, 2011.

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[ROS 18] DE ROSNAY J., La symphonie du vivant: Comment l’épigénétique va changer votre vie, Les liens qui libèrent, Paris, 2018. [UNT 18] UNTERSINGER M., “Facebook: Après Cambridge Analytica, les annonces en trompel’œil”, Le Monde, available at: https://www.lemonde.fr/pixels/article/2018/03/28/ vie-privee-apres-cambridge-analytica-les-annonces-en-trompe-l-il-de-facebook_5277694_ 4408996.html, 2018. [WAE 18] WAELBROECK P., “Données personnelles, le temps de la defiance!”, Les Échos, January 9, 2018.

15 Information Systems Security: Challenges, Vulnerabilities and Tools

Organizations are increasingly dependent on their information systems (ISs) which contain and create value. Indeed, the collection and use of customer data, stored in databases, makes it possible to improve marketing feedback [MAR 17]. The objective of having a secure and reliable IS leads organizations to implement formalized security rules in the form of an information security policy (ISP). This policy defines security requirements for all resources (hardware, software, personal information data, procedures, processes, etc.) both internally and externally. The advent of the Internet has contributed to the blurring of IS boundaries, and it is becoming part of an increasingly connected and open world. This evolution of the IS (cloud, social networks, etc.) is rooted in the very notion of a system: “Logically, the system can only be understood by including in it the environment, which is both intimate and foreign to it and part of itself while being external to it” [MOR 05, p.32]. Current themes, such as the use of cryptocurrencies or blockchain (e.g. in customer loyalty programs [KOW 17]), further increase the need for security. It should be noted that the cost of cybercrime is estimated at $400 billion [MCA 14]. This cost is in addition to image damage that can result from a “misuse” of data, as in the case of the Cambridge Analytica scandal presented in Chapter 13. Indeed, customers have a very negative perception of the disclosure of personal information by companies [MAR 17]. In this complex context, management faces several threats that need to be assessed. Indeed, people in the organization can be risk factors for the IS: through their non-compliance with security policies, negligence or lack of training. The

Chapter written by Philippe COHARD.

Augmented Customer Strategy: CRM in the Digital Age, First Edition. Edited by Gilles N’Goala, Virginie Pez-Pérard and Isabelle Prim-Allaz. © ISTE Ltd 2019. Published by ISTE Ltd and John Wiley & Sons, Inc.

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identification of levers that affect employees’ ability to comply with safety recommendations is central [BUL 10]. In this chapter, we present the use of cryptocurrency, security risks and needs (CIA-P: Confidentiality, Integrity, Availability and Proof), vulnerabilities, the link with ISP and awareness and training, and finally we present the ISO/IEC 27000 series standards. 15.1. Current uses reinforcing the need for security: cryptocurrency and blockchains Bitcoin, Ethereum, Litecoin, etc., cryptocurrencies are now flourishing, allowing, through technologies, a new facet of disintermediation. These new currencies bring new uses and risks for IT security. A minimum knowledge of the Blockchain system on which these currencies are based is necessary to protect oneself (section 15.1.1). However, blockchain technology goes beyond currencies, allowing contracts to be made (section 15.1.2). 15.1.1. Blockchain principles A blockchain is based on five principles [IAN 17, p.125]: (1) a decentralized database, (2) peer-to-peer transmission, (3) transparency and anonymity, (4) irreversibility of records and (5) computer (computational) logic. A blockchain is a set of blocks encrypted and linked together, ordered chronologically. Each update of this chain is validated upstream by a calculation and consensus process. Then the blocks are broadcast on the entire distributed network (peer to peer). In this network, each machine is both customer and server based. All network nodes include a full version of the general ledger in which transactions are recorded. Each copy of the general ledger must be strictly identical as it is the mechanism that prevents the repudiation of a transaction and therefore the duplication of a currency, for example. If the information of one node differs from the others because there has been a modification (error or fraud), the node is no longer considered valid [LEM 17]. Any digital element can easily be duplicated, so how can you guarantee the uniqueness of a currency or any other value such as the points accumulated in a loyalty program using this technology? How can we ensure that the same bitcoin is not used twice? This is precisely what the bitcoin protocol guarantees by ensuring that the transfer transaction of a bitcoin is validated by entering it in the general ledger that records all transactions. As this book is distributed according to the blockchain mechanism, corruption could be quickly identified by comparison. However, validation is a difficult task to perform, requiring a significant amount of

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computation time. For this reason, those who perform this validation are rewarded by being allowed to create new bitcoins in a controlled way [VEL 13]. 15.1.2. Blockchain applications The following example is based on Velde’s study [VEL 13] in order to clarify how bitcoin works. If Betty has a bitcoin (managed via a portfolio application) and wants to forward it to Jim (who also has a bitcoin management portfolio application), then their two applications will support the transaction using asymmetric encryption (using public and private keys). Their application will therefore distribute the information to a large number of nodes (peers) on the Internet to present the proposed transaction between Betty and Jim’s portfolios. The transaction proposals are periodically retrieved by the nodes, called “miners”, waiting to be integrated into the blockchain. As a reminder, the blockchain is the general ledger where validated transactions are recorded. Fraudulent entries in the blockchain are prevented by a mechanism requiring significant work (significant computational difficulty) for any addition to the blockchain. This work is called “mining”. In other words, an addition to the blockchain necessarily includes the solution to a complex mathematical problem whose resolution is costly (in computer hardware, electrical energy, etc.). To achieve mining, professionals use specialized systems called Mining Rigs. The demonstration of the realization of this work is called “proof of work”, the problem is difficult to solve but easy to verify. Once the solution is found, it is distributed to the other nodes that check and validate it. Finally, the new block is added to the blockchain and the “miner” is paid for their work. While blockchain technology can be used in the implementation of cryptocurrency, it is not its only use. Indeed, it can be implemented more widely within the framework of smart contracts that are executed when a particular condition is met (for example, the delivery of a product) [IAN 17]. The disintermediation proposed by the blockchain via new forms of contract causes a change in customer relations: loyalty programs are particularly exposed to these changes. Although the blockchain is an innovation in this context, it introduces the risk that new players, to whom commissions should be paid, will enter the loyalty process in the same way as the relationship between airlines and major platforms: Priceline, Expedia, etc. [KOW 17]. NOTE.– Computing capabilities are improving every day. A major change in computer architecture, such as the switch to quantum computers, could call into question the current way of encrypting information. The blockchain would thus become vulnerable and could be called into question, but this possibility is not yet

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present. Note that the blockchain can be used for purposes other than cryptocurrency like a smart contract registration system, or customer loyalty programs [KOW 17]. What is the shape of a bitcoin since it is not a physical element (coin, note)? Bitcoin takes the form of a sequence of zeros and ones recorded on a computer and usually in a “wallet” or virtual wallet (encrypted). The use of a physical portfolio (hardware) in the form of an encrypted key is preferred (e.g. Ledger nano, Trezor, archos safe-T, etc.). Indeed, any failure of the storage computer or infection by viruses such as ramsomware (bitlocker, wanacry, etc.) would lead to the permanent loss of value (1 bitcoin costing €8,580 at the time of writing, and the Banque de France warns on the speculative side that these currencies or crypto-assets could have). There are many testimonies on the Internet about the loss of virtual currencies (formatting, piracy, etc.). Ransomwares represent a particular danger in this area (see Table 15.1). In 2014, the botnet “Poney” (network of pc zombies) stole $220,000 worth of cryptocurrency. There are also unscrupulous sites that use visitors’ processors to mine, this process being known as “cryptojacking”. This shows that IT security is becoming increasingly necessary and that a lack of knowledge of the challenges and risks ultimately creates a real security “debt”. Different types of attacks and threats Viruses

A self-replicating program. The purpose of a virus is to survive on a computer system (computer, telephone, etc.) and generally to reach and cause interference with resources (data, memory, network).

Ransomware

An attack that consists of sending the victim malware that encrypts all of their data and asks them for a ransom in exchange for the decryption password. Paying the ransom does not guarantee in any way the recovery of data.

Spyware

Software whose purpose is to collect and transmit to third parties information about the system on which it is installed without the user’s knowledge: uses, data, etc.

Trojan Horse

A program that gives the impression of having a useful function, but also has a hidden function that is generally malicious.

Phishing

Attack that aims to send an e-mail that appears legitimate for the victim to send their bank details or login credentials. It is a form of deception that reproduces the graphic charter of a bank, for example: color, logo, etc.

Based on the ANSSI online glossary, consulted March 5, 2018. Table 15.1. Examples of attacks and threats

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15.2. Protecting yourself from potential threats: safety and security The action cycles for risk reduction in IS (security action cycle, SAC) consist of four steps: deterrence, prevention, detection and remedies [STR 98]. Is it still necessary to determine, needs and for this, we can use the CIA-P approach [ANS 17], as stated previously: (1) Confidentiality, (2) Integrity, (3) Availability and (4) Proof. Confidentiality must guarantee access to information only to authorized persons. Integrity includes both the completeness and the accuracy of information (corruption-free guarantees). Availability is a criterion of information quality: accessible when the user needs it. Proof is an important security element that must allow authentication, traceability and accountability of transactions to the users who performed them. The CIA-P can be further refined by taking into account safety and security elements. Safety concerns protection against accidental events or system malfunctions. These events can be avoided with redundant hardware such as RAID (Redundant Array of Inexpensive Disks) hard disks, the use of inverters to reduce the risk of overvoltage and data loss during power failures, and backup to restore data and application status. Backups are, therefore, important and they must be regularly carried out and tested. The storage location of backups must be secure, both to prevent theft and modification, and to minimize the impact of major events (floods, fires, etc.). Generally, backups on magnetic tapes (type DAT or LTO) are stored in fireproof safes. The Information Technology Infrastructure Library (ITIL), a set of best practices in IT service management that is widely used by IT practitioners, includes a chapter dedicated to IT service continuity to guide the development of business recovery and continuity plans. These continuity plans aim to: ensure the survival of the business by reducing the impact of disasters and major breakdowns, propose risk management and reduction, limit the loss of customer and user trust and develop an IT recovery plan [VAN 09, pp. 103–105]. Continuity management also involves raising awareness among IT staff to highlight existing risks, which shows the importance of this awareness (see awareness-training). Security concerns deliberate malicious actions. Parades involve management processes, specific settings, filtering and the implementation of network systems and security applications. Antiviruses and firewalls are the best known and are used to detect viruses and block/filter access on a machine, respectively. Cryptography and access rights management also enhance security. Do not forget the rules regarding physical access to servers and hardware. Processes should be developed specifically (see ISP). These elements are intended to reduce the attack surface. Hardware and software inherently have security failures called vulnerabilities. Indeed, the development or configuration logic often leaves elements whose logical

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interpretation can be misused or defective. Threats (hackers, programs, etc.) can then exploit these vulnerabilities during attacks to achieve their objectives: data corruption, data theft, embezzlement, destruction, etc. Attackers have various motivations: a need for recognition, militancy or profit motives. The General Data Protection Regulation (GDPR) requires companies in Europe to be more secure in the processing and storage of personal data. These regulations propose creating a register of processing operations (including outsourced processing) mapping the processing operations carried out. This register must also contain procedures in the event of a data breach of information on the data protection delegate (who should be appointed), methods of collecting consent, procedures for exercising rights, etc. The CNIL (the French national commission for computer science and liberty) provides information and documents necessary for the process and the development of the register (six GDPR steps). The GDPR is more broadly presented in Chapter 13. These two dimensions, “safety” and “security”, are fundamental to providing an overall level of security for the organization. The article by Martin et al. shows that customers know the methods used by companies to manage their data and their practices in terms of reducing vulnerabilities [MAR 17]. A more detailed presentation of vulnerabilities, risks and how they are taken into account in the context of IS security policies is provided later in the chapter. 15.3. Security in companies and organizations We will first examine vulnerabilities, risks and ISP (section 15.3.1), then present approaches based on deterrence, neutralization and the central role of training (section 15.3.2). 15.3.1. Vulnerabilities, risks and ISP IS security is represented by the metaphor of the chain – as strong as its weakest link. IS threats can be classified according to four dimensions: (1) external, (2) internal, (3) systems or (4) human [LOC 92]. The severity of a software (system) vulnerability depends on the person who discovers it [RAN 12]. If the vulnerability is first discovered by the technology provider or security professionals, they have the opportunity to eliminate it or protect the systems before they are attacked. If the vulnerability is first discovered by attackers or if vulnerability patches and countermeasures are not installed quickly, then the IS is in danger (risk). When a person discovers a vulnerability and

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wishes to disclose it, there are three options: (1) immediate public disclosure on a mailing list (full disclosure, e.g. on BugTraq), (2) non-public disclosure to a CERT (Computer Emergency Response Team) or (3) selling the vulnerability in a market for vulnerabilities – private (e.g. iDefense, Tipping Point Technologies, etc.). A fourth possibility is that of the pirate, who sells the vulnerability to the black market or exploits it themselves. There is, therefore, a race against time between the diffusion of attacks and the diffusion of patches. However, software and hardware computer systems are only one of the gateways for attackers. The most secure systems are not effective if employees themselves reveal their own passwords. Social engineering, a psychological attack based on persuasion, influence, manipulation and identity theft, is a favored entry point for some hackers: “I could often get passwords and other pieces of sensitive information from companies by pretending to be someone else and just asking for them” [MIT 02, p. 3]. A global survey of 1,400 companies in 50 countries shows that awareness is an important parameter for the success of IS security initiatives [ERN 08]. This study specifies that only 19% of respondents carry out social engineering tests with their employees. In order to address this issue, organization leaders create security regulations to provide employees with guidelines on how to ensure information security. It is specifically to frame the practices that ISP is implemented, “The ISP reflects the formal recognition of the importance given by the organization’s general management to the security of its information system(s)” [DCS 04, p. 8, author’s translation]. It takes the form of a general document that can be disseminated. But even if policies are a good starting point, they are not enough to ensure that employees are in compliance with them [BUL 10]. Several approaches can be implemented within the ISP based on psychology and criminology. For example, in the deterrence approach, security policy is based on the same mechanisms as the law. In other words, by bringing the rules to everyone’s attention, it makes them enforceable. Therefore, what constitutes unacceptable conduct increases the threat of punishment [DAR 09, LEE 04]. We will now present these different approaches and the value of training beyond them. 15.3.2. Deterrence, neutralization and awareness – training Deterrence is a method that aims to relieve the perpetrator of malicious acts by an expected benefit that is far lower than the risk incurred (perceived cost). It is a form of operative conditioning that aims to influence behavior by manipulating consequences through reinforcements by reward or by punishment. Deterrence is the most widely used method, generally through contracts such as the employment contract or the IT charter. It should be noted that in some organizations, the latter is

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still the only document that formally regulates security. Authors, for example Bulgurcu et al. [BUL 10], Lee et al. [LEE 04] and Tejaswini and Rao [TEJ 09], agree that deterrence (cost/benefit assessment) has an impact on employee behavior. These authors propose a detailed review of the functioning of deterrence. In their study on deterrence, Bulgurcu et al. [BUL 10] empirically show that the benefit perceived by an employee of complying with the IS security policy (ISP) positively affects their attitude toward it (respect). They also show that the cost perceived in the event of a transgression leads to compliance with the IS security policy. Deterrence is based on formal factors (documents, charters, etc.), but also on informal factors (social norm, etc.) as Lee et al. [LEE 04] indicate. The social norm through organizational factors reduces the intention of fraudulent use. The decision whether or not to exceed the rules is, therefore, made on the basis of costs/benefits but also on the basis of the social norm in the organization. Moreover, Tejaswini and Rao [TEJ 09] show that subjective norm and peer behavior influence the employee’s safety behavior, which is consistent with the results of Lee et al.’s study [LEE 04]. Tejaswini and Rao [TEJ 09] specify that certainty of detection has a significant effect on the intention to comply with the security policy. Although deterrence has an effect on behavior, half of security breaches are caused directly or indirectly by poor consideration of ISPs by staff. The psychological process of neutralization allows them to minimize the perceived harm of their policy violations. The neutralization approach in connection with the ISP makes it possible to develop a deeper understanding of this phenomenon: for example, a person performing a deviant action will justify their behavior by the absence of resulting damage. According to Sykes and Matza [SIP 12], there are five types of neutralization: (1) denial of responsibility (not knowing the law), (2) denial of injury (minimizing harm caused), (3) victim denial, (4) conviction of offenders (the law is unreasonable) and (5) calling for greater loyalty (responding to a hierarchical request). Two other types were later added like the “ledger” metaphor (compensation of bad actions by good actions) and the defense of necessity (need to go beyond to achieve the objective). Taking into account these psychological mechanisms of neutralization makes it possible to improve the understanding of the phenomenon of non-compliance with the ISP, as shown by Siponen et al. [SIP 12]. In the face of these ISP “psychological bypass” techniques, it is necessary to find measures to make employees aware of their own responsibility for the organization’s safety. In this context, training is favored alongside deterrence: organizations can restructure their training and security awareness programs in order

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to highlight key points or verify that they are in harmony with the needs and motivations of employees [BUL 10]. Several researchers, for example D’arcy et al. [DAR 09] and Puhakainen and Siponen [PUH 10], have examined the relationship between training and awareness and compliance with the IS security policy. D’arcy et al. [DAR 09] studied these relationships with users from eight companies. Their results suggest that three practices discouraged the misuse of the IS (1) by raising user awareness of security policy; (2) with security education, training and awareness and (3) with computer monitoring. The analysis reveals the importance of awareness and training in IS security policies as part of deterrence. The results show that the perceived severity of sanctions and the certainty of sanctions are two key variables in reducing IS misuse. In their research, Puhakainen and Siponen [PUH 10] used three methods of data collection: interviews, questionnaire surveys and participating observations. Their results show, among other things, that in order to improve users’ motivation to comply with ISPs, it is necessary to integrate IS security training into the organization’s overall communication. Our literature review shows that while neutralization makes it possible to understand and explain the concepts at work among users regarding ISP, deterrence alone does not provide a complete and adequate response to the problems of compliance with the IS security policy. This must be accompanied by effective communication and awareness and should be supported by training that is taken into account in vocational training. Safety, security and awareness-raising and training must be structured and integrated into an information security management system. This structuring can be facilitated by the use of the ISO/IEC 27000 series standards presented in the following. 15.4. The standards that govern safety: ISO/IEC 27000 IS security concerns, on a daily basis, all the organization’s services: HR, marketing, sales, finance, etc. Indeed, safety requires the involvement of everyone, regardless of their hierarchical level. The ISO/IEC 27000 series standards are the basis for writing an ISP. Standard 27002 also specifies that the ISP document must be approved by management, published and distributed to employees and external stakeholders. It is managerial support that gives legitimacy and importance to the ISP. But the standards of the 27000 series are numerous (see Table 15.2).

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Examples of ISO/IEC 27000 Series Standards ISO/IEC 27000

Information technology – Security techniques – Information security management systems – Overview and vocabulary

ISO/IEC 27001

Information technology – Security techniques – Information Security Management Systems – Requirements

ISO/IEC 27002

Information technology – Security techniques – Good practice guide for information security management

ISO/IEC 27005

Information technology – Security techniques – Information security risk management

ISO/IEC 27037

Information technology – Security techniques – Guidelines for the identification, collection, acquisition and preservation of digital evidence Table 15.2. Examples of safety standards

We will focus on the main standards that enable the implementation of an Information Security Management System (ISMS) and present their operations and recommendations. The ISO/IEC 27000 standard is the basic document that provides an overview of the standard and its vocabulary elements. Terms can have several definitions in everyday life and this standard permits a common vocabulary on security. The standard also explains the principles of ISMS. ISMS can be defined as the set of policies, activities and resources collectively managed by an organization to protect its information assets. This definition clearly shows the different dimensions of this system, which consists of IT (software, hardware), personal and organizational elements as well as management (policies, procedures) oriented toward the protection of the company’s assets. The approach proposed by the standard for the implementation of the ISMS is that of processes, emphasizing its rigor, which transforms inputs into outputs. This approach has the advantage of treating recurrent situations in the same way. This process-based management is coupled with continuous improvement that allows processes to be adapted over time and be transformed. The ISO/IEC 27001 standard (2013 version) sets out the requirements for information security (leading to certification). After initial definitions, the standard proposes a PDCA (Plan-Do-Check-Act) upgrade operation. First of all Plan – establish ISMS, then Do – implement and operationalize the ISMS, Verify – monitor and review the ISMS and finally Act – maintain and improve the ISMS. This model, inspired by the Deming wheel, makes it possible to avoid keeping an obsolete

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system, as change is inherent in the implementation process. The implementation of the standard requires taking into account the following 14 dimensions [ISA 16, p. 11]: – the context of the organization; – leadership and commitment; – IS objectives; – IS policy; – roles, responsibilities and competencies; – risk management; – performance monitoring and key performance indicators; – documentation; – communication; – skills and awareness; – relationships with suppliers; – internal audit; – incident management; – continuous improvement. This standard, which may seem imposing, is applicable to all types of companies: small, medium and large. It is flexible enough to be integrated into existing management systems and the different risk approaches in place within the organization [HUM 06]. Risk management is specifically addressed by ISO/IEC 27005. The EBIOS method (Expression of Needs and Identification of Safety Objectives, author’s translation of acronym), proposed by ANSSI, complies with ISO/IEC standards 27001 and 27005. The code of good practice for IS security management is contained in ISO/IEC 27002. This is the starting point for the development of good practice guides specific to the organization. Not all elements are to be applied; it is necessary to select those that are relevant to the organization in its context. This set of good practices should be kept nearby by IS security managers and should be regularly communicated in appropriate language to staff to raise their awareness. Moreover, standard 27002 includes a section dedicated to human resources security before, during and after the employment period. This standard can play the role of an information security repository in the organization.

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Evidence plays a key role in IS security. Indeed, it is the means by which fraud can be materialized and enforced in court. Without proof, it is impossible to materialize the diversion or destruction. Standard 27037 provides guidance to those responsible for collecting and preserving digital evidence. This evidence comes from several sources and generally from event log files. This name comes from the word “logbook”, which was used by sailors to document their navigation. Log files generally include a time stamp, source and destination of the flows (e.g. IP address), the user concerned and the data accessed or transmitted. Trace erasure is part of the process used by hackers, so they usually try to erase these files. The management of file rights plays an important role here. The standards presented in this chapter help to structure the process of setting up the ISP and of implementing an IS security management system in the organization. This approach must be global: physical (access), human, system and be part of the organization’s processes. 15.5. Conclusion In this chapter, we have discussed the security challenges related to the evolution of digital technologies, in particular the blockchain, a security mechanism that is the foundation of cryptocurrency (and smart contracts). We have highlighted the need for security represented by these currencies, which has led us to address computer security and safety more generally. Attacks are more and more numerous and the cost of cybercrime is estimated at 400 billion dollars [MCA 14]. There is, therefore, a real need for companies to take into account information security as a survival factor. The drafting of an ISP is a key element that allows deterrence but must be accompanied by security awareness and training for staff. All the measures taken to ensure information security should be integrated as a whole: the information security management system. In order to structure the design and documentation of such a system, managers can rely on the available ISO/IEC standards from the 27000 series. These provide a framework and approach based on processes and continuous improvement. Marketing departments use ISs through which they manage customer contact and conduct analyses to understand customers: customer characteristics, motivations, attitudes and behaviors. These analyses are the basis for classifications and targeting. But since customers are very receptive to the use of their data [MAR 17], particular attention should be paid to their data security. In addition, the legislation has increased data protection since the GDPR came into force. The security of customer databases can be enhanced by encryption, but IS security should be taken into account in a comprehensive way. In this context, the ANSSI (Agence Nationale

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de la Sécurité des Systèmes d’Information – National Cyber Security Agency of France) and the ENISA (European Union Agency for Network and Information Security) websites provide a wealth of information that should be consulted frequently. Staff, regardless of their role, should contact their organization’s ISs department for security training/awareness training. Finally, the implementation of an ISP in the organization makes it possible to improve the articulation of security elements and the different levels of staff involvement. 15.6. References [ANS 17] ANSSI, Intégrer la sécurité numérique en démarche Agile, ANSSI, Paris, 2017. [BUL 10] BULGURCU B., CAVUSOGLU H., BENBASAT I., “Information security policy compliance: an empirical study of rationality-based beliefs and information security awareness”, MIS Quarterly, vol. 34, no. 3, pp. 523–548, 2010. [DAR 09] D’ARCY J., HOVAV A., GALLETTA D., “User awareness of security countermeasures and its impact on information systems misuse, a deterrence approach”, Information Systems Research, vol. 20, no. 1, pp. 79–98, 2009. [DCS 04] DCSSI, Guide pour l’élaboration d’une politique de sécurité de système d’information (PSSI), DCSSI, Paris, 2004. [ERN 08] ERNST & YOUNG, Moving beyond Compliance, Ernst & Young’s 2008 Global Information Security Survey, Ernst & Young, London, 2008. [HUM 06] HUMPHREYS T., “ISO/CEI 27001: 2005 – l’état de l’art en gestion de sécurité de l’information”, ISO Management Systems, vol. 1, pp. 15–18, 2006. [IAN 17] IANSITI M., LAKHANI K., “The truth about blockchain”, Harvard Business Review, vol. 95, no. 1, pp. 118–127, 2017. [ISA 16] ISACA, Implementation Guideline ISO/IEC 27001:2013, ISACA, Berlin, Germany, 2016. [KOW 17] KOWALEWSKI D., MCLAUGHLIN J., HILL A., “Blockchain will transform customer loyalty programs”, Harvard Business Review, 2017, available at: https://hbr.org/2017/ 03/blockchain-will-transform-customer-loyalty-programs. [LEE 04] LEE S., LEE S-G., YOO S., “An integrative model of computer abuse based on social control and general deterrence theories”, Information & Management, vol. 41, no. 6, pp. 707–718, 2004. [LEM 17] LEMIEUX V., “Blockchain recordkeeping, a swot analysis”, Information Management Journal, vol. 1, pp. 20–27, 2017.

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[LOC 92] LOCH K., CARR H., WARKENTIN M., “Threats to information systems, today’s reality, yesterday’s understanding”, MIS Quarterly, vol. 16, no. 2, pp. 173–186, 1992. [MAR 17] MARTIN K.D., BORAH A., PALMATIER R.W., “Data privacy: effects on customer and firm performance”, Journal of Marketing, vol. 81, no. 1, pp. 36–58, 2017. [MCA 14] MCAFEE, Net Losses, Estimating the Global Cost of Cybercrime, Intel Security– CSIS, Santa Clara, 2014. [MIT 02] MITNICK K., SIMON W., The Art of Deception, John Wiley & Sons, Indianapolis, 2002. [MOR 05] MORIN E., Introduction à la pensée complexe, Le Seuil, Paris, 2005. [PUH 10] PUHAKAINEN P., SIPONEN M., “Improving employees’ compliance through information systems security training: an action research study”, MIS Quarterly, vol. 34, no. 4, pp. 757–778, 2010. [RAN 12] RANSBOTHAM S., MITRA S., RAMSEY J., “Are markets for vulnerabilities effective?”, MIS Quarterly, vol. 36, no. 1, pp. 43–64, 2012. [SIP 12] SIPONEN M., VANCE A., WILLISON R., “New insights into the problem of software piracy: the effects of neutralization, shame, and moral beliefs”, Information & Management, vol. 49, nos 7–8, pp. 334–341, 2012. [STR 98] STRAUB D., WELKE R., “Coping with systems risk, security planning models for management decision making”, MIS Quarterly, vol. 22, no. 4, pp. 441–469, 1998. [TEJ 09] TEJASWINI H., RAO H., “Encouraging information security behaviors in organizations: role of penalties, pressures and perceived effectiveness”, Decision Support Systems, vol. 47, no. 2, pp. 154–165, 2009. [VEL 13] VELDE F., Bitcoin: a Primer, The Federal Reserve Bank of Chicago, Chicago Fed Letter no. 317, Chicago, IL, 2013. [VAN 09] VAN BON J., DE JONG A., KOLTHOF A. et al., ITIL V3 – Guide de poche, Van Haren Publishing, Zaltbommel, 2009.

16 Organizing the Augmented Customer Relationship

16.1. Introduction Implementing an augmented customer strategy and the organization that goes with it is necessarily a source of paradoxical tensions at multiple levels: control versus collaboration, a collective versus individual approach, seeking efficiency versus flexibility, exploring versus exploiting, favoring profits versus responsible behavior, etc. [SMI 11]. These paradoxical tensions reflect the simultaneous presence of related but contradictory elements that need to be best articulated. They are all the more marked as the business environment becomes more global, more competitive, has faster changes and internal processes in more complex organizations [LEW 00]. The digitization of the economy, and therefore of organizations, is both a cause and a consequence of these developments, requiring a rethinking of customer strategy in the face of new technological, social and environmental challenges (Chapter 1). This is true for a wide range of organizations, large companies, mid-cap companies and SMEs, but also non-market organizations such as NGOs, local authorities, etc. At the level of customer strategy, these paradoxes are manifested on many levels, resulting from the necessary transformation of the organization brought about by the advent of digital technology and simultaneously reinforcing this need for digital transformation. To identify only some of these paradoxes, the previous chapters have shown that with the development of a digitized customer strategy, paradoxical situations appear: Chapter written by Isabelle PRIM-ALLAZ and Pierre VOLLE.

Augmented Customer Strategy: CRM in the Digital Age, First Edition. Edited by Gilles N’Goala, Virginie Pez-Pérard and Isabelle Prim-Allaz. © ISTE Ltd 2019. Published by ISTE Ltd and John Wiley & Sons, Inc.

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– the customer is declared to be at the heart of the organization but their voice is not always formally heard within it, particularly at management committee level; – digital technology leads the organization toward very analytical data management, which sometimes forces the human being into the background (metricbased versus people-based), contrary to what the fundamentals of relational marketing advocate; – brands and customers have more and more communication tools, but in the end, brands face many crises of trust and the development of resistance movements; few customers are thus active when it comes new digital communication media; – the company emphasizes the customer journey but forgets the employee journey. Employees, especially those in contact with customers, play a key role in customer relations, but their work is not always considered and/or facilitated; – the customer is declared as being at the heart of the organization, but many companies outsource a large number of the operations related to customer relationship management; – more and more companies are formalizing a customer strategy, but the means implemented are not always in line with this strategy. Those who do not formalize their customer strategy sometimes tend to adopt many customer relationship tools without “putting them to music”. This chapter proposes to respond, in part, to the management of these paradoxes by first asking the question of the governance of customer strategy within organizations, and then, in a second step, the roles of the various stakeholders. A third section will ask the question of internalization versus externalization of customer relationship management. Finally, as a conclusion, we will see the importance of thinking about a coherent implementation of customer strategy using a configuration theory. 16.2. Governance of customer strategy within the organization 16.2.1. The value of having a Chief Customer Officer The first paradox to be managed by the organization is the governance of customer strategy. Many authors suggest the establishment of a Chief Customer Officer (CCO) or Chief Experience Officer [RUS 10]. This role is increasingly present in organizations. The arrival of a CCO must make it possible to move away from a

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product/service logic toward a real relational logic [RUS 10], i.e. to work on the value of the customer in a long-term perspective. In this context, the product/service serves a long-term relationship with the customer and is no longer an end in itself. IBM’s trajectory from manufacturing computers to proposing solutions is an illustration of this. The product/service is no more than a means, at a given instant t, of meeting a need. The CCO is responsible for developing a customer culture within the organization. However, the introduction of this function is not without risks. The CCO must play the role of a conductor and not let other actors in the organization think that they are no longer concerned with customer relations because of their presence. 16.2.2. The CCO, the one man orchestra The CCO must have a central position in the organization, directly supported by and reporting to the CEO. They must be in charge of defining and implementing the customer strategy and must have the means to supervise all functions related to the customer [RUS 10]. One of the CCO’s major challenges today is to manage the collection and analysis of data, while maintaining a real relational dimension (in the sense of human relations). The multiplication of sources and the nature of the available data make their processing a real challenge that concentrates all the attention. The risk is then to see the metric-based approach totally supplanting the people-based approach. Big data and the many automated processes implemented to “personalize” the relationship are sometimes perceived by customers as a dehumanization of the relationship. To fulfill their mission, the CCO must work closely with the Head of Information Systems (see Chapter 15) or the Personal Data Protection Officer (see Chapter 14) and be able to rely on employees capable of giving meaning to these data (data analysts in larger structures, but also marketing manager or research manager when there is no data analyst, which is often the case in smaller structures). The CCO’s mission is to enable everyone in the organization to understand who the customer is, what they want and what they do not want. To this end, actions can be implemented to lead functional managers to customers, or customers to functional managers (Box 16.1).

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From customers to the management committee Two projects aim to optimize the group’s ability to meet new customer expectations: “Signatures” and “customer engagement in a participatory approach”. First, Club Med has defined 70 “Signatures”, commitments made to travellers to ensure them a quality product, in terms of accommodation, food, excursions and activities. But Club Med innovates above all by involving its customers in its strategic thinking. Indeed, last December, nine Parisian customers participated in the group’s management committee. They were able to discuss several topics with Club Med’s management such as the relevance of a collaborative platform. Other open management committees were considered. A digital portal has also been launched. On Club Makers, loyal or future customers are invited to share their suggestions. This digital portal is an online suggestion box that will allow the creation of working groups if the idea is accepted by as many people as possible. Box 16.1. How Club Med is improving customer experience [DEP 17]

16.3. The role of the different stakeholders in customer relationship management Customer relationship management involves a fairly wide range of stakeholders. If the entire company is to be customer-oriented, employees – especially those in contact with customers – must be the cornerstone. But customer relations also concern shareholders, the service providers with whom the company works and finally the public authorities who have taken on the task of regulating it in recent years. 16.3.1. The key role of employees If relational marketing is initially sought to highlight the human relationship, it must be noted that the digitization of the economy and the advent of big data have taken us a step away from it, moving – as mentioned earlier – from a people-based logic to a data or metric-based logic. This technological transformation has led a number of companies to put the digital sphere at the heart of their strategy, with a “digital first” logic that can lead to “overwhelming” the other dimensions of the organization. Hence the growing idea of considering the “people first” as the driving force of the company, which naturally leads us to consider in a very interdependent way the customer experience and the employee experience, the quality of the first

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being based on the quality of the second [FRI 16]. Thus, the company “attracts and retains its customers because it attracts and retains talents” [FRI 16, p.148]. 16.3.1.1. Thinking about employees to better serve customers “To serve its teams to improve customer service, this simple idea is the foundation of symmetry of attention” [DIT 14, p. 10]. If this concept of “symmetry of attention”1 was first developed in service marketing, it makes sense when it comes to customer strategy. It assumes that the quality of the relationship between a company and its customers is equal to the quality of the relationship between the company and its own employees and in particular between managers and frontline employees. The idea of symmetry of attention is fully in line with a service-profit chain approach as described in Figure 16.1. Quality of internal service Satisfaction and identification of the organization’s employees Employee productivity

Employee loyalty Customer-orientation Perceived value of the service (and perceived quality)

Customer satisfaction and identification to the firm Customer loyalty

Enhancement of the relational dimension by the customer Increased income Increased profitability

Figure 16.1. The key role of employees in value creation (service-profit chain)

The symmetry of attention must lead, in most organizations, to a transformation of managerial culture, involving both marketing and HR managers [DIT 14]. At a time when digital technology is tending to give more and more space, power and freedom to the customer, it is useful to think about freeing employees from their scripts. If the company wants to create an emotional relationship with its customers, 1 The term “symmetry of attention”, taken up by [DIT 14], has been introduced by the French Académie des services (www.symetriedesattentions.com).

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it must have motivated, autonomous and responsible employees, with easy access to useful data to serve the customer [BHA 16], making them “augmented employees”. By motivating and rewarding employees who are positively engaged in customer relationship management, the company will demonstrate its commitment to its employees and in this way align their interests with those defined in its customer strategy [NHA 10]. To do this, it must listen to its employees as it listens to its customers, but also give them a voice, the same that it gives to customers. It should also give meaning rather than rules to the actions of employees. This involves recruiting employees for their expertise but also for their interpersonal skills and their ability to integrate into the organization’s relational culture (attitude versus aptitude). Thus, the symmetry of attention must lead to the redesign of a managerial model known as “relational” in which the employer brand takes on its full meaning and translates what the company has to say in terms of responsible management [DIT 14]. It should lead to the design of an “employee journey” as we now systematically design a customer journey in order to make it more fluid and coherent. 16.3.1.2. Better mobilizing employees to get to know customers better Placing the employee at the heart of the organization, even before the customer – to use the provocative title of Nayar’s book [NAY 10] Employees first, Customers Second – offers the opportunity to better rely on the customer’s knowledge, especially when it comes to frontline employees. Lam et al. [LAM 16] show the interest of combining and integrating big data with what they call “small data” collected and held by the frontline employees. For them, only the articulation between these two types of data will allow an optimal service to be provided to the customer. Small data refer to the data collected by frontline employees during their interactions with customers. The tacit, interpersonal, real-time, emotional and intuitive nature of this knowledge largely complements the historical, disembodied and behavioral knowledge often held in databases. The articulation between small and big data is a real challenge that remains to be solved. 16.3.1.3. The new roles of employees: what are the challenges? Employees, and in particular frontline employees, have always faced difficulties in customer relationship management. However, some of these difficulties are exacerbated in the digital age. To focus on only two of them, this section will deal with the issue of deviant 4.0 customers and the right of employees to disconnect. In addition, another major type of challenge is related to the evolution of digital-related businesses.

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16.3.1.3.1. New difficulties for employees to manage The study of deviant customers is not new [ABR 13]. The deviant customer may be one who seeks to deceive the company, but also to take revenge on it. The development of digital technology has enabled new forms of expression through the mobilization of social networks in particular. The example of Dave Caroll and his viral video2 on United Airlines (more than 18 million views in the summer of 2018) is a good illustration. The musician saw his guitar seriously damaged by the airline and after 9 months of unsuccessful attempts to obtain compensation finally decided to show his adventure in a video clip featuring poor treatment by customer service employees. These situations are sometimes difficult to anticipate and generally not well experienced by employees. Failing to properly manage the situation at the time, United Airlines subsequently decided to use it as a case study for internal training to transform this incident into something useful for the company. The development of digital technology has also led to “the shortening of deadlines, the acceleration of paces and the generalization of simultaneity. In the war waged by the actors of chrono-competitiveness, they have been converted into real weapons” [JAU 14, p. 25]. But these expectations of immediacy from customers – and managers – sometimes make it difficult for employees to disconnect from digital media. Thus, a right to disconnect was enshrined in the French 2016–1088 law on “work, modernization of social dialogue and security of professional careers”3, but it remains very difficult to implement. 16.3.1.3.2. An inevitable evolution of careers In connection with the previous point, it must be noted that employees are strongly impacted by career evolution (career changes and recruitment of new talents). For example, a study by the World Economic Forum published in 2018 indicates that, by 2025, 52% of administrative tasks will be carried out by computers4. While we can be pleased that some very repetitive tasks are now being handled automatically, we can only be concerned about the future of the employees who used to perform them and who are not always able to upgrade their skills to 2 https://www.youtube.com/watch?v=5YGc4zOqozo. 3 “The terms and conditions for the employee’s full exercise of their right to disconnect and the implementation by the company of measures to regulate the use of digital tools, with a view to ensuring compliance with rest and leave periods as well as personal and family life. Failing agreement, the employer shall draw up a charter, after consulting the works council or, failing that, the employee representatives. This charter defines these procedures for exercising the right to disconnect and also provides for the implementation of training and awarenessraising actions for employees, managers and executives on the reasonable use of digital tools”. https://www.legifrance.gouv.fr/eli/loi/2016/8/8/ETSX1604461L/jo/article_55 (in French). 4 Time, October 1, 2018, p. 5.

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embrace new careers. Indeed, it is commonly observed that customer interface businesses are evolving toward more analytics and consulting. Self-care and automatic responses via artificial intelligence (85% of customer/company interactions could be automated by bots by 20205) will not meet all customer expectations. It is then a question of imagining a clever mix between production delegated to the customer, automation of the processing of their requests and the ability to propose a more advanced expertise, an ability to connect6. The store still has a role to play. Chapters 7 and 8, for example, showed the importance of offering unique customer experiences, particularly through human contact and the expertise of salespeople. The development of this expertise (being able to do better than the search engine that the customer can activate on their phone) is a major issue in customer relationship management. Chapter 9 of this book, devoted to customer relations and digital technologies, suggests that the sales force’s business will also change significantly, although it is not yet clear which scenario will arise. 16.3.2. Other stakeholders involved Other stakeholders have a role to play in customer relationship management. As such, customers can be included in the umbrella term of “stakeholders”: they can be stockholders, service providers (see below) and employees (see Chapters 3 and 4). These multiple facets lead to double or triple relationships and sometimes confusion of roles. 16.3.2.1. The stockholders The customer strategy and the quality of the customer relationship that results from it can obviously have an impact on shareholders (see Figure 16.1). Fornell et al. [FOR 06] show that having satisfied customers (which they measure using the American Customer Satisfaction Index) increases the value of stocks, reflecting the fact that customer satisfaction is likely to improve the level and stability of cash flows. Indeed, satisfied customers are more likely to generate large and low volatility cash flows. This is in line with Ramani and Kumar [RAM 07] who propose to approach performance in a financial but also relational way. According to them, a customer’s relational value is captured by their satisfaction, their propensity to exercise positive word of mouth and customer engagement. It deteriorates when customers enter into resistance action [ROU 07, PRI 12]. To take the example of 5 http://fr.blog.genesys.com/futur-de-la-relation-client-les-6-pepites-reperees-par-genesys/. 6 https://www.e-deal.com/it-fr/quoi-ressemblera-la-relation-client-en-2025/?lang=en.

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Dave Caroll and United Airlines, the latter’s share price fell by 10% in the early days of the viral broadcast of the video developed by the singer in revenge for the company’s failure to take his claim into account. A new incident in 2017 – a man who was removed from an overbooked plane and whose video generated buzz – once again impacted the company’s stock market value and led the company’s board of directors to index part of the CEO’s bonus linked to customer satisfaction. The investment company Trusteam Finance (more than €1 billion in assets) has well integrated this since it has constructed its investment model on the level of customer satisfaction in companies in which it invests and has done this with success (Box 16.2). Trusteam Finance: “Customer Satisfaction at the heart of our management approach” “Customers drive performance and growth. At a time when the digital revolution is empowering customers, the company needs to offer the best possible experience. Price is no longer the only distinguishing factor. Trusteam Finance decided to place the customer at the heart of its management approach through the Return On Customer process. The three stages of Trusteam process: Stage 1: Identifying the companies whose customers have the highest level of satisfaction We are able to measure companies’ satisfaction rating because of our exclusive partnership with Ipsos in Europe and the data from some 20 global market research companies. We now have a database covering nearly 5,000 companies. We use the database to analyze these results and how they change over time, keeping only the companies that are growing and that have the highest ratings. Stage 2: Analyzing the customer strategy In addition to measuring the “external” customer satisfaction during the first stage, we also analyze the company’s customer strategy. We work with the customer satisfaction manager to ensure that the company’s customer strategy is sustainable and sound enough for the results obtained during stage 1 to endure. Stage 3: Analyzing the company Our proprietary Company Watch tool gives us an overview of the company: its growth, profitability, governance, etc. We allocate each company a structure score designed to assess its quality and determine bid and offer price objectives, which enable us to build the portfolio”. Box 16.2. Trusteam Finance’s “Return on Customer” process – extract from http://www.trusteam.fr/en/about-us/customer-satisfaction.html

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The more the customer is a stockholder or member, the stronger the interweaving of the customer–stockholder relationship can be. Cooperative or mutualist actors can, in this sense, benefit from a good customer relationship in two ways. Indeed, Béal and Sabadie show that the fact that a customer is also a member creates a sense of ownership that reinforces their commitment to the company and their willingness to collaborate in order to participate in improving services [BEA 18]. The current interest in social economy actors could be a source of rebuilding customer and shareholder relations. 16.3.2.2. The service providers Many services are provided by mobilizing networks of actors. For example, the manager of an airport is highly dependent on the quality of service and customer relationship management implemented by the various stakeholders: security, shops, restaurants, cleaning companies, etc. Similarly, Uber or Airbnb connection platforms are dependent on the third parties who provide the service. Thus, Airbnb describes the commitments of the latter on its site in order to engage them in practices in line with the promise made to customers of providing a unique experience7. Customer relationship management must be designed to involve all these players. It can be formalized in a document approved by all the actors in the chain. The customer’s commitment to the company depends on the actions of all these actors [LEM 16]. As an illustration, the Rana Plaza scandal in Bangladesh in 2013 had an impact on the trust of some of their customers in the clothing brands affected by the collapse of the building. The development of contact channels often involves a multiplicity of actors, some of whom are external to the organization. Lemon and Verhoef [LEM 16] identify four types of touch points: those owned by the brand, those depending on partners, those related to the customers themselves and finally those related to the customer’s social environment. We are interested here in the second category. Research on the impact of this category of actors on customer relationship management remains limited. However, it is easy to show the combined effects: for example, a company that develops its own smartphone application remains dependent on updates from Google or Apple to ensure its successful operation [LEM 16]. The development of connected objects tends to increase the number of players involved (industry, hardware manufacturer, software developer, etc.).

7 https://www.airbnb.fr/help/article/1451/what-are-the-standards-for-experiences.

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16.3.2.3. Public authorities Public authorities have recently addressed customer relationship management issues, in particular through the implementation of the General Data Protection Regulation (GDPR) which came into force on May 25, 2018 and is presented in Chapter 14. This regulation aims to better protect consumers. Work remains to be done in this direction, as shown by the bill to prohibit the introduction of a time limit for the expiry of loyalty points tabled on April 13, 2018 in the French Parliament by Deputy Patrick Hetzel and presented in Chapter 13. Companies continue to “play” with the legal framework, sometimes to the detriment of customers, potentially reinforcing customers’ resistance behaviors. Box 16.2 is an example. Two very different offers for the same package In the summer of 2018, Bouygues Telecom launched a new B&YOU package. Two members of the same family received the same offer but in quite different terms, involving very different scenarios in terms of consumer protection: The first, a customer of the company for more than 20 years, first received an e-mail 2 months before changing package, which they did not process, then a reminder 1 month before: “Your B&YOU Package is evolving! From 07/20/18, you will automatically benefit from the B&YOU 50GB package (instead of the current 20GB) without recommitting, for only €3/month more. You will keep your discounts. For more information or to reject the update, visit http://po.st/BYOU_50Go”. The second, a customer of the company for about 8 years, received two SMS messages, 2 weeks and 6 days before the possible upgrade of their package: “FIDELITY OFFER: Bouygues Telecom reserves an exclusive offer valid for a few days only. Enjoy an extra 30GB of Internet every month for only €3/month more. Send YES BYOU50GB to 2346 before 23/7 to get this benefit. Without recommitment. Text Stop to 2346”. The first case is similar to an opt-out situation and the second to an opt-in situation. When asked for the first offer, the company hides behind the legality of its action: the customer received an e-mail 2 months before and an SMS 1 month before the change of plan. However, the opt-out nature makes the customer feel vulnerable if they have not taken the time to process this unsolicited offer, even if they do not wish to commit to a more expensive subscription for which they do not have an actual need.

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The generalization of opt-in should be a priority in the next few legislatures in order to truly protect consumers from situations that may resemble forced sales and play on the inertia of customers who are overburdened on a daily basis by a multitude of direct marketing actions. Box 16.3. When governments need to protect consumers better

16.4. In-house contracting or outsourcing: who should implement customer relationship management? The implementation of a customer strategy in the digital age raises certain challenges: – as mentioned several times in previous chapters, digital technology opens the organization to the outside world. If the implementation of relationship marketing and customer relationship management had already pushed organizations to ensure that everyone should feel concerned about customer relations, this is even stronger in the 4.0 era. Thus, new professions are emerging and the “old” ones must be transformed; – customer relations, because they are is demanding in terms of human resources and know-how, are often subcontracted. It is therefore difficult to guarantee quality. However, any poorly managed relationship can lead to customer defection, which can be a source of joy for competitors who collect the discourses of dissatisfied customers posted online and contact them to provide them with a solution and thus win them over. These poorly managed relationships can also lead to a lack of attractiveness for potential customers. 16.4.1. Managing customer relations internally The various chapters of this book have shown that everyone in the organization must be involved in the implementation of customer relationship management. This requires the development of a customer-oriented culture [DIT 14] and the development of new professions: community manager, UX (user experience) designer, data analyst, etc. As the legal framework becomes increasingly important, the presence of a lawyer becomes a key element for the company. If the corporate culture succeeds in placing the customer at the heart of the organization and providing common sense through a strong employer brand, the

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answers provided to customers will benefit. However, for reasons of financial and/or human resources, the customer relationship often remains, in whole or in part, subcontracted. It is therefore the outsourcing of core competencies. 16.4.2. Outsourcing customer relationship management 16.4.2.1. Subcontracting to partner companies Subcontracting, while it has a number of advantages, is not without limits. Different situations can lead to the outsourcing of part or all of the customer relationship management. The development of platforms (GAFA, Booking.com, Airbnb, etc.) has led some manufacturers and service providers to delegate the management of customer contacts without this necessarily being a voluntary choice. In addition, companies that voluntarily outsource their customer relationship management (call centers, e-CRM, data analysis, etc.) often do so because they think it is not their core business. However, this means abandoning an essential link between the company and the market and abandoning key skills. We have already mentioned in this chapter the role of employee engagement in the relationship with customers and shown the value of a strong employer brand. It must be noted that subcontractors often have difficulty appropriating the values of the company they defend when they are, in fact, a real showcase [IVE 03]. The frontline employees from the subcontracting company must be trained in the values of the company for which they are working and clearly understand the issues at stake. Giving them a tour of the customer’s premises, meeting regularly with the marketing teams, etc., are elements that go in this direction. In particular, when the management of complaints – a moment of truth between the customer and the company – is subcontracted, the ability of the frontline employees mobilized by subcontracting to be able to decide and respond in a sufficiently autonomous manner is a fundamental element. When the subcontractor manages the customer relationship data, it is sometimes difficult for the ordering company to send these data back and merge them into its own databases for processing and analysis. Managing data ownership and access rights efficiently in this context is not an easy task. 16.4.2.2. Outsourcing to customers themselves The previous chapters have shown a multitude of ways to outsource part of the activity to customers via:

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– crowfunding (Chapter 2): the customer participates upstream in the financing of innovation; – crowdsourcing and upstream co-creation (Chapter 4): the customer participates in innovation; – co-production (Chapter 3): the customer participates in production by taking on new roles, which are increasingly complete and sometimes complex; – downstream co-creation (Chapter 4): the customer communicates and disseminates the innovation on behalf of the company. All these actions by the customer are not without risk for the company. Plé and Lecocq [PLE 12] point out that co-creation does not systematically mean increased income or reduced costs. The integration of the customer into the business model (BM) usually involves a profound transformation of decision-making processes, organizational structure and modalities of action. The contribution (quantity, nature and quality) remains uncertain. The authors highlight a set of risks associated with the customer’s integration into the BM: – working for competitors, e.g. when the company socializes with the customer and teaches them how to take on their role in an organizational process, this can be useful to competitors with similar needs: IKEA has admitted to this and has taught customers how to assemble their furniture, a solution that is now an integral part of the furniture market; – losing strategic flexibility: by involving customers too much, the company risks losing decisions and actions relating to strategic choices when customers go beyond the precise framework given to them. The explosion in Internet use and the generalization of the collaborative dimension of online sites (possibility to comment on news, blogs, exchanges via social networks, etc.) encourage everyone to give an opinion in real time and to put pressure on the company’s choices; – limiting innovation capacities, e.g. when customers involved in co-creation are not disruptive enough or are not representative of the clientele; – taking a reputational risk, e.g. if customer proposals are not taken into account; – increase hidden coordination costs, e.g. when it is necessary to train customers, and verify their work; – losing productivity, e.g. when the customer is not trained well enough to perform a task.

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16.5. Aligning the organization around the customer strategy By exploring and formalizing the different paradoxes set out in the introduction to this chapter, managers can go beyond a polarized and simplistic management of their organization’s challenges and gain a better understanding of managing the complexity of situations [QUI 88]. One of the successful ways of defining and implementing customer strategy, and therefore the paradoxical tension management, is the coherence between the chosen strategy, the organization and the tools at its disposal [JAL 17, AMB 15, SMI 11]. Strategy is a prerequisite. It must be formalized to allow actors to appropriate it and deploy the appropriate means and not the other way around, i.e. to adapt to tools deployed in an “anarchic” way. The tools will only be effective if they are put at the service of a strategy, a strategy that will undoubtedly have been preceded by defining the targets of the relational strategy [VOL 12, RIG 06]. The alignment of the organization and tools with the customer strategy requires the internal actors of the organization to take ownership of the latter. The symmetry of attention can be seen as a necessary but not sufficient step to question the company’s practices more globally – in terms of HR, marketing, etc. – in order to align all these components [DIT 14]. The idea of aligning the organization around strategy is very present in the developments on configuration theory. This theoretical framework suggests that several strategy–organization–tool configurations can be sources of performance and value creation [BRE 17]. It is, therefore, not a question of advocating a “one best way”, but rather of considering that there are different ways of achieving relational performance: for each strategy, it is not necessary to systematically apply a given type of organization, but a relevant type of organization (and the related tools). 16.6. References [ABR 13] ABRAMOVICI M., ABBES M., JULIEN A. et al., Comprendre et gérer la déviance dans la réclamation client. Guide de bonnes pratiques édité par l’Association pour le Management de la Réclamation Client (AMARC), Association for the Management of Customer Claims (AMARC), Paris, France, 2013. [AMB 15] AMBROISE L., PRIM-ALLAZ I., “Gestion de Relation Client et performance des PME”, Décisions Marketing, vol. 77, pp. 13–30, 2015.

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[BEA 18] BEAL M., SABADIE W., “The impact of customer inclusion in firm governance on customers’ commitment and voice behaviors”, Journal of Business Research, vol. 92, pp. 1–8, 2018. [BRE 17] BRENES E.R., CIRAVEGNA L., WOODSIDE A.G., “Constructing useful models of firms’ heterogeneities in implemented strategies and performance outcomes”, Industrial Marketing Management, vol. 62, pp. 17–35, 2017. [DEP 17] DE PAOLA F., “Comment Le Club Med améliore l’expérience client”, L’Echo touristique February 5, 2017, available at : https://www. Lecho touristique.com/article/comment-le-clubmed-ameliore-l-experience-client,87245. [DIT 14] DITANDY C., MEYRONIN B., “La symétrie des attentions, ambition ou utopie?”, L’Expansion Management Review, vol. 3, pp. 10–17, 2014. [FRI 16] FRIMOUSSE S., PERETTI J.M., “Regards croisés. ‘People or Customer first?’, Question(s) de management, vol. 4, pp. 147–159, 2016. [IVE 03] IVENS B., MAYRHOFER U., “Les facteurs de réussite du marketing relationnel”, Décisions Marketing, no. 31, pp. 39–47, 2003. [JAL 17] JALLAT F., PEELEN E., STEVENS E. et al., Gestion de la relation client: Total relationship management, Bis data et Marketing mobile, 4th edition, Pearson, Paris, 2017. [JAU 14] JAUREGUIBERRY F., “La déconnexion aux technologies de communication”, Réseaux, vol. 4, pp. 15–49, 2014. [LAM 17] LAM S.K., SLEEP S., HENNIG-THURAU T. et al., “Leveraging frontline employees’ small data and firm-level big data in frontline management: an absorptive capacity perspective”, Journal of Service Research, vol. 20, no. 1, pp. 12–28, 2017. [LEM 16] LEMON K.N., VERHOEF P.C., “Understanding customer experience throughout the customer journey”, Journal of Marketing, vol. 80, no. 6, pp. 69–96, 2016. [LEW 00] LEWIS M.W., “Exploring paradox: toward a more comprehensive guide”, Academy of Management Review, vol. 25, no. 4, pp. 760–776, 2000. [NAY 10] NAYAR V., Employees First, Customers Second, Harvard Business Press, Boston, 2010. [PLE 12] PLE L., LECOCQ X., “Intégrer les clients dans le business model”, in PIERRE V. (ed.), Stratégie Clients, Pearson, Paris, 2012. [PLO 16] PLOUFFE C.R., BOLANDER W., COTE J.A. et al., “Does the customer matter most? Exploring strategic frontline employees’ influence of customers, the internal business team, and external business partners”, Journal of Marketing, vol. 80, no. 1, pp. 106–123, 2016.

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[POR 15] PORTER M.E., HEPPELMANN J.E., “How smart, connected products are transforming companies”, Harvard Business Review, vol. 93, no. 10, pp. 96–114, 2015. [PRI 12] PRIM-ALLAZ I., “La résistance des consommateurs et le marketing”, in MARTINET A.-C. (ed.), Le management au cœur de la société: mutations et ruptures, FNEGE/Vuibert, Paris, 2012. [QUI 88] QUINN R.E., Beyond Rational Management: Mastering the Paradoxes and Competing Demands of High Performance, Jossey-Bass, San Francisco, 1988. [RIG 02] RIGBY D.K., REICHHELD F.F., SCHEFTER P., “Avoid the four perils of CRM”, Harvard Business Review, vol. 80, no. 2, pp. 101–109, 2002. [ROU 07] ROUX D., “Consumer resistance: proposal for integrative framework”, Recherche et Applications en Marketing (English Edition), vol. 22, no. 4, pp. 59–80, 2007. [RUS 10] RUST R.T., MOORMAN C., BHALLA G., “Rethinking marketing”, Harvard Business Review, vol. 88, no. 1/2, pp. 94–101, 2010. [SMI 11] SMITH W.K., LEWIS M.W., “Toward a theory of paradox: A dynamic equilibrium model of organizing”, Academy of Management Review, vol. 36, no. 2, pp. 381–403, 2011. [VOL 12] VOLLE P., Stratégie clients, Point de vue d’experts sur le management de la relation client, Pearson, Paris, 2012.

List of Authors

Laure AMBROISE Coactis Laboratory Lumière University – Lyon 2 France Grégoire BOTHOREL PRISM Laboratory Pantheon-Sorbonne University France Philippe COHARD MRM Laboratory – Labex Entreprendre Institut Montpellier Management University of Montpellier France Maud DAMPERAT Coactis Laboratory Jean Monnet University University of Lyon France Nathalie FLECK GAINS Laboratory University of Maine France

Pauline FOLCHER MRM Laboratory – Labex Entreprendre Institut Montpellier Management University of Montpellier France Romain FRANCK Coactis Laboratory Jean Monnet University University of Lyon France Florence JACOB LEMNA Laboratory IAE Nantes University of Nantes France Eric JULIENNE LITEM Laboratory University of Évry Val d'Essonne University of Paris-Saclay France

Augmented Customer Strategy: CRM in the Digital Age, First Edition. Edited by Gilles N’Goala, Virginie Pez-Pérard and Isabelle Prim-Allaz. © ISTE Ltd 2019. Published by ISTE Ltd and John Wiley & Sons, Inc.

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Mathieu LAJANTE Centre de Recherche en Commerce de Détail et Marketing Numérique Laval University Canada Caroline LANCELOT-MILTGEN RN’B Lab Research Group Audencia Business School Nantes France Isabelle LANDREAU Smart Law Fabrik and Landreau Law Firm Paris France Sylvie LLOSA CERGAM Laboratory IAE Aix-en-Provence Aix-Marseille University France Aïda MIMOUNI CHAABANE THEMA Laboratory Cergy-Pontoise University France Andreas MUNZEL TSM Research Toulouse School of Management Toulouse 1 University Capitole France Sarah MUSSOL MRM Laboratory – Labex Entreprendre Institut Montpellier Management University of Montpellier France

Gilles N’GOALA MRM Laboratory – Labex Entreprendre Institut Montpellier Management University of Montpellier France Lionel NICOD CERGAM Laboratory IUT Aix-Marseille Aix-Marseille University France Jessie PALLUD HuManiS Laboratory EM Strasbourg Business School University of Strasbourg France Virginie PEZ-PÉRARD LARGEPA Laboratory Panthéon-Assas University Paris 2 and i3-CRG Laboratory Ecole Polytechnique France Daria PLOTKINA HuManiS Laboratory EM Strasbourg Business School University of Strasbourg France Isabelle PRIM-ALLAZ Coactis Laboratory Lumière University – Lyon 2 France Thomas RUSPIL VALLOREM Laboratory University of Tours France

List of Authors

Françoise SIMON CREGO Laboratory University of Upper Alsace France Régine VANHEEMS Magellan Laboratory IAE Lyon Jean Moulin University – Lyon 3 France

291

Cyrielle VELLERA TSM Research Toulouse School of Management Toulouse 1 University Capitole France Pierre VOLLE Dauphine-Recherche-Management Laboratory ERMES Paris Dauphine University France

Index

A accountability of marketing, 2 algorithm, 2, 4, 5 artificial intelligence (AI), 1–5, 8, 18, 149, 150, 156–159, 161–164 assemblage, 109, 110 authorities, 271, 274, 281 automated service interaction, 183, 184, 191, 195, 198 awareness, 258, 261, 263–265, 267, 268, 269

B beacon, 206, 217 big data, 274, 276 blockchain, 250, 251, 257–259, 268 blueprint, 140, 141 business models, 2, 6, 7, 247, 249, 252

C channels, 118, 120, 122, 123, 126, 128 Chief Customer Officer (CCO), 272, 273

co-creation, 42 downstream, 59, 60, 71 upstream, 59–61, 71 co-innovation, 59, 61–64, 66 complaint handling, 167, 170–175, 178 consent, 243, 244, 247, 249–253 consumer well-being, 13–15, 18 consumer/brand engagement, 30, 37 control, 221, 223, 224, 227, 230, 235 crowdfunding, 31, 33 crowdsourcing, 31, 32, 46, 48 cryptocurrency, 257–260, 268 customer emotions, 192, 195 experience, 187, 191–194, 196 expertise, 47–49, 52, 53 irritants, 120 journey, 117, 120, 125 motivation, 41, 45, 50, 52 participation, 41–45, 51–54 training, 41, 43, 49, 53

D data management platform, 26 design thinking, 141–144 deviance, 224–226

Augmented Customer Strategy: CRM in the Digital Age, First Edition. Edited by Gilles N’Goala, Virginie Pez-Pérard and Isabelle Prim-Allaz. © ISTE Ltd 2019. Published by ISTE Ltd and John Wiley & Sons, Inc.

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digital literacy, 7, 8, 10, 14 dimensions of experience, 122–124, 126–130 dynamic content optimization (DCO), 213

E economy of platforms, 1, 6–8 electronic word of mouth (eWOM), 78, 86 empathic points, 192, 193, 194, 197, 198 employee journey, 272, 276 engagement, 30, 35, 37 e-opinion leaders (e-OLs), 68–71 equity, 222, 230, 234

F firm–customer interactivity, 184, 187, 197, 198 fragmented identity, 97–99, 103, 110 free will, 111, 112 frontline employees, 275, 276, 283 frustration, 219, 220, 231

G, H, I GDPR, 242–245, 247, 250, 251, 253 gratitude, 171–175 hub(s), 207, 208 data, 207, 208 influence, 67–71 strategies, 10, 17 influencers, 23, 26, 30, 31 intelligent virtual assistants, 158, 161 interactions, 23, 24, 32, 36 Internet of Things (IoT), 95–98, 103–107, 113 IS security policy (ISSP), 257, 262–267, 269

J, L, N justice, 219, 220, 222, 230, 231 limited rationality, 229 need for meaning, 24, 35 non-PII data, 210, 212, 214, 215

O, P omnichannel, 117–123, 125–127, 129 online reviews, 88, 176 open innovation, 1, 2, 12 orchestration, 108–112 paradox, 271, 272 performance (of the connected customer), 97, 99, 100 persona, 141–144 personal data, 241–245, 247–252 PII data, 210, 212, 215 portability (right of), 245, 247, 248, 253 prescriptive power, 111 pressure, 220–228, 231 privacy, 2, 8, 10, 15, 16, 241, 242, 244, 245, 247, 249, 252 paradox, 229, 230 programmatic, 208, 212–214, 217 public revenge, 169

R relational investment, 173, 174, 178 rights (of the cyber-consumer), 244, 251 robot-sellers, 150, 158, 163, 164 robots, 4, 5, 18

S sales automation, 162 skills, 155, 158, 160, 162, 164 satisfaction, 134–138 seamless experience, 121, 129

Index

self-service technologies (SST), 41, 44, 46, 50, 54 service providers, 274, 278, 280, 283 shareholders, 274, 278, 280 small data, 276 social listening, 26, 170, 178 media, 77–79, 81, 82, 85, 86, 88, 89, 149–156, 159, 164, 170, 172, 175 network analysis, 80, 81, 82, 84 networks, 150, 153 neuroscience, 185, 186 selling, 149–156 stakeholders, 272, 274, 278, 280 stealth marketing, 96, 103, 104

295

T touchpoints, 24–26, 35, 117–127, 129, 130 transparency, 219, 234–237, 239 brand, 23, 24, 27, 28 digital, 9, 10, 11, 18 trust, 221, 223, 228–230, 233, 234, 236

U, V user innovation, 62, 73, 74 utility (of the brand), 24, 35–37 virtuous, 219, 220, 232 vulnerable consumers, 8, 10, 14, 15

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