Is Value Creation from Human Connection an Area of Opportunity for Companies to Stand Out?

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Company executives believe they know the value of their product or service they provide, but the true judge of value comes from the customer’s perspective, which is constantly changing and shaped by every interaction, directly or indirectly, with a company. Customer perspective plays a large part in determining a company’s brand and the values the company stands for. It can impact how the employees of a company work collectively toward specific company values.

The number one reason customers leave a business feeling dissatisfied with their experience is poor customer service and indifferent customer representatives. As a result, customer service is an area that holds great potential for companies to really stand out from their competition.

In a marketplace with fewer competing companies, consumers have little choice as to JCVwhere they buy their goods. Companies can tell the customers that they provide a great service without actually following through with the promise—how easy for the companies! But now that companies face more competitors, companies no longer rule the marketplace. The consumer does. It does not matter how much value the company executives and employees think they are providing the customer. If the customer perceives that the value provided is lacking, then they can easily take their business to a competitor instead.

With the introduction of the Internet and web, information is readily available. Technology has changed the behavior of consumers overnight. That once-trusting ‘believer’ evolved into a very sophisticated ‘researcher,’ and the buying patterns of consumers are no longer as predictable, controllable or reliable as they have been.

When a company transforms into a customer-centric organization, a collective mindset emerges that prompts employees to strive for a positive customer experience and perception.  In every transaction between the customer and a company representative, value is always being created or destroyed! Positive value leaves the customer feeling better than before they interacted with a company and employee. Negative value leaves the customer feeling worse than before the interaction. Understanding customer perceptions is fundamental to facilitating positive customer value creation, and it is something every executives and employees alike should be aware of.

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The abstract:

This article introduces an area of value creation seldom considered in the strategic sense in business: value creation from human connections. And given the number one reason for customers leaving a business is a feeling of indifference from a company representative; this is an area that holds a great opportunity for companies to really stand out from their competition. This article examines where business has come from, where we are now and why the critical need to revamp our way of thinking. When a company transforms into a customer-centric organization, a collective mindset to design for the desired outcome of customer emotion emerges.

Click here to read Human Connection: Uncharted Territory for Value Creation for free from the Journal of Creating Value.

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*Market photo credited to the US Department of Agriculture (CC)

Book Review: A Social Strategy: How We Profit from Social Media

A Social Strategy Cover

Mikolaj Piskorski: A Social Strategy: How We Profit from Social Media. Princeton, NJ: Princeton University Press, 2014. 275 pp. $29.95, cloth.

You can read the book review by Olga Khessina of ILR School Cornell University published online by Administrative Science Quarterly. From the review:

Social strategy is still an emerging phenomenon, but it is increasingly important. There is a great need to understand the role of social strategy not only in building companies’ competitive advantage but also in developing industries. Scholars of industrial evolution, such as organizational ecologists (e.g., Hannan, Pólos, and Carroll, 2007) and researchers of product life cycles (e.g., Klepper, 1996) and dominant design (e.g., Benner and Tripsas, 2012), may find this book appealing, because social strategy may play an important role in the evolution of both new and traditional industries. For example, recent research in organizational ecology suggests that producers may facilitate identity building and legitimation processes in new industries by engaging their audiences to convert the intrinsic appeal of producers’ offerings into actual appeal (Hannan, 2010). Specific forms of engagement, however, have remained underexplored (Verhaal, Khessina, and Dobrev, 2015). Piskorski suggests that one way companies could successfully engage their audiences is by means of social strategy: producers may engage audiences socially and in this way increase the actual appeal of their offerings. Empirical research could investigate whether such social engagement is effective for identity building andASQ_v60n4_Dec2015_cover.indd legitimation processes at both organizational and industry levels, whether new or existing companies are more likely to benefit from social engagement, what role social engagement plays in long-term industrial dynamics, and other interesting questions.

You can read the rest of the review from Administrative Science Quarterly for free by clicking here. Want to know about all the latest research and reviews like this from Administrative Science QuarterlyClick here to sign up for e-alerts!

Mixing Business and Ethics: How the Rotary Club Encouraged Ethical Business Practices

connected-people-988001-mLarge corporations have long been the focus of corporate social  responsibility (CSR) studies. Such studies seem to support the separation thesis, which suggests that business and ethics are mutually exclusive. However, reexamining the role of small businesses in the history of CSR challenges the separation thesis and provides a new perspective on the relationship between business and society. A historical case study of the Rotary Club demonstrates how mixing business and moral decision making has benefited small business owners in the past. Mark Tadajewski recently explored this topic in his article “The Rotary Club and the Promotion of the Social Responsibilities of Business in the Early 20th Century” from Business & Society.

The abstract:

The separation thesis states that business and moral decision making should and can be differentiated clearly. This study provides empirical support for the competing view that the separation thesis is impossible through a BAScase study of the Rotary Club, which fosters an ethical orientation among its global business and professional membership. The study focuses attention on the Club in the early to middle 20th century. Based on a reading of their service doctrine, the four objects of Rotary and the Four Way Test, the author argues that the example of the Rotary Club undermines the separation thesis. The Rotary message was conceptually ambiguous: it did not clearly differentiate business roles from social activities; rather both fed into each other, with the business tools developed by members and disseminated by Rotary, utilized in nonbusiness contexts with a view to enhancing societal well-being.

You can read “The Rotary Club and the Promotion of the Social Responsibilities of Business in the Early 20th Century” from Business & Society by clicking here. Want to be notified of all the latest research like this from Business & Society? Click here to sign up for e-alerts!