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Business Models for Transforming Customer Relationships

What if there were a way to turn occasional, sporadic transactions with customers into long-term, continuous relationships--while simultaneously driving dramatic improvements in operational efficiency? What if you could break your existing trade-offs between superior customer experience and low cost?

This is the promise of a connected strategy. New forms of connectivity--involving frequent, low-friction, customized interactions--mean that companies can now anticipate customer needs as they arise, or even before. Simultaneously, enabled by these technologies, companies can create new business models that deliver more value to customers. Connected strategies are win-win: Customers get a dramatically improved experience, while companies boost operational efficiency.

In this book, strategy and operations experts Nicolaj Siggelkow and Christian Terwiesch reveal the emergence of connected strategies as a new source of competitive advantage. With in-depth examples from companies operating in industries such as healthcare, financial services, mobility, retail, entertainment, nonprofit, and education, Connected Strategy identifies the four pathways--respond-to-desire, curated offering, coach behavior, and automatic execution--for turning episodic interactions into continuous relationships. The authors show how each pathway creates a competitive advantage, then guide you through the critical decisions for creating and implementing your own connected strategies.

Whether you're trying to revitalize strategy in an established company or disrupt an industry as a startup, this book will help you:

-Reshape your connections with your customers

-Find new ways to connect with existing suppliers while also activating new sources of capacity

-Create the right revenue model

-Make the best technology choices to support your strategy

Integrating rich examples, how-to advice, and practical tools in the form of "workshop chapters" throughout, this book is the ultimate resource for creating competitive advantage through connected relationships with your customers and redefined connections in your industry.

Nicolaj Siggelkow is the David M. Knott Professor at the Wharton School, University of Pennsylvania, where he also serves as codirector of the Mack Institute for Innovation Management. His research, which focuses on the role interactions among a firm's activities play in creating and sustaining competitive advantage, has been published in leading academic journals such as Academy of Management Journal, Strategic Management Journal, and Organization Science. He has won more than thirty teaching awards and leads many executive education programs on strategy at Wharton. He works with companies around the globe to help them create their distinctive strategies.

Christian Terwiesch is the Andrew M. Heller Professor at the Wharton School, University of Pennsylvania, where he also serves as codirector of the Mack Institute for Innovation Management and holds a faculty appointment in Penn's Perelman School of Medicine. He has written several books and published extensively in many of the leading academic journals, ranging from Management Science to the New England Journal of Medicine. He is an award-winning teacher with extensive experience in MBA teaching, online courses, and executive education.

Prologue: The Magic of Connected Strategy ix
1 The Connected Strategy Framework 1
Part 1 The Rewards of Connected Strategies
2 Breaking the Trade-off between Superior Customer Experience and Lowering Costs 21
3 Workshop 1: Using Connectivity to Provide Superior Customer Experiences at Lower Costs 49
Part 2 Creating Connected Customer Relationships
4 Recognize, Request, and Respond: Building Connected Customer Experiences 63
5 Repeat: Building Customer Relationships to Create Competitive Advantage 91
6 Workshop 2: Building Connected Customer Relationships 121
Part 3 Creating Connected Delivery Models
7 Designing Connection Architectures 147
8 Revenue Models for Connected Strategies 173
9 Technology Infrastructure for Connected Strategies 195
10 Workshop 3: Building Your Connected Delivery Model 217
Epilogue: Seizing the Connected Strategy Potential 235
Sources 239
Index 251
About the Authors and Acknowledgments 261
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