Customer Development (3:07)

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From the course by University of Pennsylvania

Wharton Business Foundations Capstone

146 ratings

University of Pennsylvania

Wharton Business Foundations Capstone

146 ratings

Course 6 of 6 in the Specialization Business Foundations

Wharton's Applied Knowledge Capstone Project enables you to apply your analytic skills to real business challenges – including your own. You’ll use your newly earned business skills to thoughtfully evaluate a real situation or opportunity from Wharton-governed companies like Shazam and SnapDeal.

From the lesson

Marketing Plan for Review

In this Module, you'll write your Marketing Plan for your product or service that will be part of your final project. Because determining who the audience is for a product or service, and how to talk the audience about it is critical to the success of your capstone, you'll have the opportunity to get feedback on creativity and analytical strength of your marketing plan before you submit is as part of your final project. Once you submit your idea, please review the Marketing Plans of five of your peers.

Strategic Marketing Flip Chart (11:05)11:05

How Can Customer Centricity Be Profitable (19:03)19:02

Customer Retention (18:24)18:24

Customer Development (3:07)3:08

Brands and Digital Marketing (14:01)14:01

Customers and Digital Marketing (9:49)9:49

Reputation and Reviews (14:38)14:38

Product Life Cycle (3:29)3:29

More Examples of Influence (8:42)8:42

More Examples of Influence - Part 2 (12:34)12:34

Pricing Strategies 3 - Psychological Factors (9:47)9:47

Distribution Strategies 1 - Introduction (13:38)13:38

Distribution Strategies 2 - Channel Design (13:39)13:39

Horizontal Conflict (12:46)12:46

Meet the Instructors

Christian Terwiesch
Andrew M. Heller Professor at the Wharton School, Senior Fellow Leonard Davis Institute for Health Economics Co-Director, Mack Institute of Innovation Management
The Wharton School

[MUSIC]

Now we're going to talk about customer development.

And before I ask you the same question,

I first want to be real clear what we mean by customer development.

The general idea is, we want to make our customers as valuable as possible.

Right, our existing customers as valuable as possible.

And so what are the tactics associated with customer development?

What are the kinds of things that companies do in order to create and

extract more value from their existing customers?

And we usually think about four different tactics.

You could think about for yourself as a manager or

as a customer how you increase value.

And let's just review them real quickly, and then we'll go on and

talk about managing customer development.

So number one, there's cross-selling, the idea of getting customers to buy

more than just the particular product that they're interested in.

So here in the US,

millions of time a day, we hear people asking, do you want fries with that?

That’s an example of cross-selling, getting people to buy other products.

They could either be from the same product category, like at an Amazon.com

recommending other books to you, or other product categories, cross-selling.

Next to cross-selling would be up-selling.

And of course the classic fast food example there would be

do you want to super size it?

To try to get people to buy a higher margin version of the same item.

Up-selling, again, very common, not just in fast food, but

in financial services and many, many industries.

You want to get people, once they’re going to buy something,

let’s get them to buy the good something.

Those are the big two.

The third one would be frequency.

Let’s just try to get people to buy our stuff more often.

Very often, that's why companies use loyalty programs.

So let's give people just a little bit of motivation, not just to buy this product,

but to buy it on a more frequent basis.

So again, a very common source of customer development there.

And the fourth one, which companies don't like to talk about.

What they like to do, or

at least they wish they could do, would be through margins.

Maybe not just up-selling people but maybe we can get people to pay more money for

the same product or service.

A lot of companies are very hesitant to do that.

They don't want to mess around charging different prices for the same product or

service to different people.

But as we discussed way back earlier when we were laying out the case for

customer centricity, sometimes it makes a lot of sense to do so.

So whether it's cross-selling, up-selling, frequency or margin, and

I'm not going to get into the nitty gritty details of exactly how we do those things.

But I just want to understand customer development as a whole.

How we measure it and where it fits in with acquisition and retention.

[MUSIC]

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