Skip to main content

Competing in the Third Wave

First of all, what is the "third wave"? There's a treatment of the term and its origins here. This book which is published by the lovely people at Harvard Business School looks to be really good and really thorough. However, I don't have time to get through it as it's very technical and rich in schemata. (I like to use the latin plural, don't you?)

I did want to note this paragraph where the authors, Jeremy Hope and Tony Hope, discuss Reichheld's loyalty business model. These studies could inform a lot more discussions on association membership than I think is the case.
Based on an analysis of various service companies, Reichheld suggests that there are certain common features that determine longer-term customer profitability in the service industry. Specifically, by identifying and measuring six factors, companies can, over an appropriate time period that will vary from company to company and perhaps even customer to customer, form a clear view of the long-ter profitability of their customers. The factors are these:

1. The cost of acquiring a customer
2. The base (or gross) profit from the goods or services provided to the customer
3. The profit from increased purchases arising from the additional spending of satisfied customers
4. The reduced operating costs of serving loyal customers
5. The profit from transactions with new customers who have been referred by loyal customers
6. The profit from the price premium charged to loyal customers who are less sensitive to price.
So, we know a lot of this is going on with respect to association membership, and we particularly observe the "reduced operating costs" part. But it is instructive to look at the way Reichheld and others have articulated these benefits. (I like to use the word instructive because it makes me feel very sort of professorial. Indeed.)

By Tony Hope and Jeremy Hope
ISBN # 0875848079

Popular posts from this blog

We've Always Done it That Way: 101 Things About Associations We Must Change

From what I can tell, the impetus for this book was that the folks who wrote it, Jeff De Cagna , David Gammel , Jamie Notter , Mickie Rops and Amy Smith , were “concerned by the instinctively conservative approach to organizational stewardship that far too many association executives and volunteers continue to pursue in the early years of the 21 st century.” I took notes throughout the book, and now I realize they are far too extensive to make a very good book review. And I am definitely the choir that this book is preaching to. However, I really, really liked the problems these folks addressed and they pretty much slaughtered and butchered several sacred cows. This book is not extensive narrative or heavily footnoted, but it is based on the collective experience of 5 people who together have worked with many different organizations, and the collective themes will be familiar to anyone in the field. On a meta level, this book takes observations of what’s happening in the
Read more

Public sector information design

Here's an article from the UK's Design Council talking about how information design is important in public-sector efforts. Of course, it's helpful to everyone, but this is a good example of the universal need for better presentation of information--and more design.
Read more

An Army of Davids

So, I've been spending some time with Glenn Reynold's book (Glenn being of course the seminal and highly influential Instapundit ), and I must say that it gives me lots of language I can use to talk about phenomena that are easily observable right now. I think you could say that Glenn Reynolds has done for technology what Virginia Postrel did with design topics . Which is to say, they beat the drum and say, hey, look at what this democratization of knowledge can do for you! In that vein, the book is really pretty visionary, pointing out the magic of the internet age. And I for one see it as magical. You know how Laura Ingalls Wilder's Pa in Little Town on the Prairie said to Laura that it was an amazing time to be alive (that was in the 1890s)? I've been actively thinking that to myself for the past few years, and An Army of Davids gives me ample evidence to back that up with its talk of citizen empowerment and the "comfy chair revolution." The theme of "
Read more