Service-Dominant Logic of Marketing: The One Academic Publication You Need To Read

It is often said that academia is disconnected from the reality of business and very often this is indeed the case. Nevertheless there is one publication in the field of marketing that has already transformed much of academia and I am convinced that it also helps practitioners deal with a changing competitive environment.

The publication “Evolving to a New Dominant Logic for Marketing” has been published already in 2004 by Stephen L. Vargo & Robert F. Lusch and proposes a new dominant logic for marketing.

Marketing inherited a model of exchange from economics, which had a dominant logic based on the exchange of “goods,” which usually are manufactured output. The dominant logic focused on tangible resources, embedded value, and transactions.

Over the past several decades, new perspectives have emerged that have a revised logic focused on intangible resources, the cocreation of value, and relationships.

The authors believe that the new perspectives are converging to form a new dominant logic for marketing, one in which service provision rather than goods is fundamental to economic exchange.

The authors explore this evolving logic and the corresponding shift in perspective for marketing scholars, marketing practitioners, and marketing educators.

What has started as a controversial thesis has become a new direction in marketing and brings a completely new frame to look at problems. If you are applying this new service-dominant logic to marketing problems, you gain a new dimension to identify sources of competitive advantage.

The original publication is “Evolving to a New Dominant Logic for Marketing” and has been extended in 2008 with the publication “Service-dominant logic: continuing the evolution“. They are academic but they will definitely also open up a new perspectice.

More information and more publications about the Service Dominant Logic can be found on the website of the authors at http://sdlogic.net/ 

The time has come to re-invent finance

Sean Park, founding investor in finance startups such as Betfair, Weatherbill or BankSimple has given an interesting talk at Lift Conference in Geneva titled Re-inventing Finance: An emerging (digital) reformation. While there is nothing truly groundbreaking, his talk gives an excellent overview where innovation is currently happening in the financial sector.

The message is clear: After other industries have already been disrupted by the power of the internet, the time has come that the financial industry will experience the same transformation we have seen before in other industries.

If you don’t find the time to watch the whole talk, make sure to at least check out his presentation on Prezi which gives you a good overview of the developments.

An Interview with Jonathan Ive, VP of Industrial Design at Apple

Insightful. Inspiring.

What I love about the creative process, and this may sound naive, but it is this idea that one day there is no idea, and no solution, but then the next day there is an idea. I find that incredibly exciting and conceptually actually remarkable.

The nature of having ideas and creativity is incredibly inspiring. There is an idea which is solitary, fragile and tentative and doesn’t have form.

What we’ve found here is that it then becomes a conversation, although remains very fragile.

When you see the most dramatic shift is when you transition from an abstract idea to a slightly more material conversation. But when you made a 3D model, however crude, you bring form to a nebulous idea, and everything changes – the entire process shifts. It galvanises and brings focus from a broad group of people. It’s a remarkable process.

Asked whether innovation is the result of solving problems

There are different approaches – sometimes things can irritate you so you become aware of a problem, which is a very pragmatic approach and the least challenging.

What is more difficult is when you are intrigued by an opportunity. That, I think, really exercises the skills of a designer. It’s not a problem you’re aware or, nobody has articulated a need. But you start asking questions, what if we do this, combine it with that, would that be useful? This creates opportunities that could replace entire categories of device, rather than tactically responding to an individual problem. That’s the real challenge, and that’s what is exciting.

Read the full interview in the London Evening Standard.

The Traits of Great Customer Experience Leaders

Are leaders and managers who are working in the customer experience domain different from their peers in other areas of an organization? My observation is that this is the case but what really makes them different has been something that was still an open question.

Recently I stumbled on a question on the Q&A site Quora about the innate traits of great product leaders and it seems to me that these traits also apply to great customer experience leaders:

Happily Dissatisfied

In order to be able to improve something, it is necessary to challenge the status quo. This also means to not be satisfied with the way things are done right now. Nevertheless this should not be a negative feeling that drags everybody down but rather act as the positive feeling that drives improvement.

Personally Involved

Managers are trained to delegate as much as possible and get things done through other people. Things are different for great customer experience leaders. They love to reach out to customers, they get involved in projects, they get emotionally invested to create better experiences. Sitting in the corner office and managing a customer experience team won‘t bring the desired results.

Decipherer of Customer Input

Collecting qualitative (user testing, input from customer service) and quantitative feedback (NPS, A/B, web analytics) is an essential task for every customer experience leader.  However, collecting data is not the main task. Deciphering which input is important, what the input is actually saying, and then turning that into the next great product is the task that requires thorough skills but that can also create the biggest impact.

Guided by an Overall Vision and Philosophy

Customer experience leaders are not just driven by the necessary immediate improvements to make a customer‘s journey more pleasurable and meet annual performance goals. In many cases they are also driven by a very strong vision or philosophy that acts as the guiding frame or vision for all activities. This vision very often develops into a guiding vision that is picked up by top-management to drive throughout the organization.

Thinking in Leaps, Iterating in Steps

Envisioning a future state is one thing, getting there is the real challenge. The ability to envision a desired future state of customer experience and the ability to derive concrete steps that can be taken today to get a step closer to this state is essential.

Excellent Communicators

Communicating your own activities and achievements is always important task. Customer experience leader take new ideas and spread them not just within an organization but also in the customers head. Only great communicators who are able to connect with individuals on different levels – from top-management down to a customer – are able to achieve results.

Focus

Improving the customer experience of an organization tends to be a huge undertaking with a lot of areas that need to be worked on. Spreading the ideas of a new customer experience vision throughout an organization is necessary to create support and momentum to achieve any change at all. The risk is that these efforts are spread out too thin and action gets substituted by talk. Customer experience leaders continuously focus on very concrete projects to achieve results. These results are then translated into „stories of change“ that are then spread within the organization.

The Conclusion: More than an Intellectual Exercise

Is such a discussion more than just an intellectual exercise? I do believe so because the abilities required from a customer experience leader within an organization are different from other positions. By giving clarity to this question it is possible to get a better understanding and ultimately recruit and train individuals to take on these leadership positions.

Group Brainstorming vs. Thinking in Solitude: Where do breakthrough ideas come from?

Which environment is most conducive for the emergence of breakthrough ideas? Are breakthrough ideas developed in solitude? Or are they created in a group of highly energetic people sharing ideas, brainstorming and sketching out solutions.

“Most inventors and engineers I’ve met are like me … they live in their heads. They’re almost like artists. In fact, the very best of them are artists. And artists work best alone …. I’m going to give you some advice that might be hard to take. That advice is: Work alone… Not on a committee. Not on a team.”

To harness the energy that fuels both these drives, we need to move beyond the New Groupthink and embrace a more nuanced approach to creativity and learning. Our offices should encourage casual, cafe-style interactions, but allow people to disappear into personalized, private spaces when they want to be alone. Our schools should teach children to work with others, but also to work on their own for sustained periods of time. And we must recognize that introverts like Steve Wozniak need extra quiet and privacy to do their best work.”