Actually this is a misleading question. The answer to the question above is probably “[place name here] in the Information Technology department.” That’s the person who makes requested changes and who fixes the website when it crashes.
My question should actually have been phrased “Who is in charge of your website strategy/content?” And I’m guessing that your answer at this particular point is probably “I’m not sure.”
Most websites have tended to grow somewhat organically, with Sales putting some brochure ware on line, Human Resources adding a few job postings, Customer Service reluctantly agreeing to a place for customers to submit emails, and … you get the idea. Information tends to be added once, and then forgotten, with no one given the responsibility for keeping content up-to-date and little (if any) thought given to maximizing the website’s potential or measuring how well the website is supporting the company’s goals.
Assigning the responsibility to one department isn’t a good idea. Whoever you give the website responsibility to, everyone else in the company can say “Oh, that’s XXXX’s responsibility” and forget about it. Dividing the ownership is not much better—your website is likely to become a co-located group of single-function “silos.”
The solution developed by more effective companies is a Web Steering Committee—generally 6-8 fairly senior managers under the leadership of an executive officer, meeting at least quarterly to ensure that the company gets the maximum possible utility out of this extremely important client-facing communication channel.
Typical Web Steering Committees have a mid-level Website Leader to centralize administration, plus representatives from:
Executive Level (strategy)
Sales (prospecting & direct sales)
Marketing (branding & public relations)
Customer Service (customer interfacing)
Information Technology (technical issues)
Finance (budgeting & performance analysis)
Two key ways the Web Steering Committee can help maximize the utility of the website are by prioritizing website improvement projects (by the monetized benefits they’ll produce?) and designating and monitoring performance metrics. (This is in addition to the natural benefits of raising the website’s profile and keeping its content current.)
If you’d like some outside help making your website a more useful tool, I’ll be happy to talk with you!
Monday, August 18, 2008
Are you listening to your customers?
Got your ears on good buddy?
Many years ago, during the CB (CITIZEN BAND RADIO) craze, this was a slang way of saying “Are you listening?” As marketers, it is easy to fall into the habit of communicating to consumers rather than communicating with consumers. And that is dangerous—because without consumer feedback, your products and marketing are likely to become increasingly irrelevant, uncompetitive, and unsuccessful.
In today’s environment of rapid change, successful products and marketing need to accurately follow the shifts in this environment.
A marketer’s view of her or his products is based both on their own perceptions and on the perceptions of others. But who are those “others?” In too many cases they tend to be fellow employees, retailers, and management—NOT consumers. Unless a marketer makes a systemic effort, we may seldom come into direct contact with prospects or customers.
When was the last time you took the time to seek out direct customer feedback? Can’t remember? It’s easy to understand—there is almost always some crucial meeting, or project, or conference that takes precedence. And even if you can find the time, there is rarely enough budget to have researchers set up interviews or focus groups.
So how do we get the consumer feedback we need to stay on course? Remember, the goal is to get honest feedback from consumers (not to confirm our own personal biases). While we might not agree with what they say (it may not even be correct), their perception is your reality.
First let’s talk about some opportunities to systematically collect feedback:
--Soliciting input on your web page: Make it easy for people to leave you messages. Not just a CONTACT US tab in the menu bar, but a prominent “we want to hear from you” box on the home page. Note: If you ask for communication, you’re going to get it. Be prepared to keep the dialogue going. That means responding to consumers in a timely fashion.
--Monitoring customer service: Schedule time to monitor your customer service people’s interactions with consumers. It is usually possible to obtain tapes of telephone interactions, and copies of customer correspondence (with the corporate replies).
--Monitoring outside web conversations/postings: Search engines make it easy to find out where people are discussing your company, products, and promotions. If internet “buzz” is really important to you, there are services like Nielsen Online which will locate comments and summarize the content.
Finally, let’s talk about a couple of useful questions to ask:
--What one thing would you change about this product? Any other things you’d change?
--What one thing would you tell the company to never change?
Any other things you’d never change?
--What is the silliest thing that this company does? Anything else?
--What is the best thing that this company does? Anything else?
Many years ago, during the CB (CITIZEN BAND RADIO) craze, this was a slang way of saying “Are you listening?” As marketers, it is easy to fall into the habit of communicating to consumers rather than communicating with consumers. And that is dangerous—because without consumer feedback, your products and marketing are likely to become increasingly irrelevant, uncompetitive, and unsuccessful.
In today’s environment of rapid change, successful products and marketing need to accurately follow the shifts in this environment.
A marketer’s view of her or his products is based both on their own perceptions and on the perceptions of others. But who are those “others?” In too many cases they tend to be fellow employees, retailers, and management—NOT consumers. Unless a marketer makes a systemic effort, we may seldom come into direct contact with prospects or customers.
When was the last time you took the time to seek out direct customer feedback? Can’t remember? It’s easy to understand—there is almost always some crucial meeting, or project, or conference that takes precedence. And even if you can find the time, there is rarely enough budget to have researchers set up interviews or focus groups.
So how do we get the consumer feedback we need to stay on course? Remember, the goal is to get honest feedback from consumers (not to confirm our own personal biases). While we might not agree with what they say (it may not even be correct), their perception is your reality.
First let’s talk about some opportunities to systematically collect feedback:
--Soliciting input on your web page: Make it easy for people to leave you messages. Not just a CONTACT US tab in the menu bar, but a prominent “we want to hear from you” box on the home page. Note: If you ask for communication, you’re going to get it. Be prepared to keep the dialogue going. That means responding to consumers in a timely fashion.
--Monitoring customer service: Schedule time to monitor your customer service people’s interactions with consumers. It is usually possible to obtain tapes of telephone interactions, and copies of customer correspondence (with the corporate replies).
--Monitoring outside web conversations/postings: Search engines make it easy to find out where people are discussing your company, products, and promotions. If internet “buzz” is really important to you, there are services like Nielsen Online which will locate comments and summarize the content.
Finally, let’s talk about a couple of useful questions to ask:
--What one thing would you change about this product? Any other things you’d change?
--What one thing would you tell the company to never change?
Any other things you’d never change?
--What is the silliest thing that this company does? Anything else?
--What is the best thing that this company does? Anything else?
Once upon a time...
Everyone loves a story. Marketers should love stories more than most people. They don't necessarily. But they should. A famous 1910 baseball poem, BASEBALL'S SAD LEXICON, talks about a famous 1902 double play by three Chicago Cubs players named Tinkers, Evers, and Chance. Knowing this, would you find it easy to remember their names tomorrow? Probably not. But suppose I asked you the question "Do you think three gypsy TINKERS could EVER(S) have a CHANCE to make a double play?" Easier to remember, right? You've probably used similar mnemonics yourself.
[A mnemonic device (pronounced /nəˈmɒnɪk/) is a memory aid. Mnemonics rely on associations between easy-to-remember constructs and lists of data, based on the principle that the human mind much more easily remembers data attached to personal or otherwise meaningful information than that occurring in meaningless sequences.] A story is just another kind of mnemonic. Stories are an easy way to communicate your message to an audience, and to get them to remember it. It's hard to recall a simple list of benefits, or a quick series of video clips, and associate them with a particular product or service. [Automobile advertising is particularly prone to this mistake.]
But we are culturally hard-wired to pay attention to stories, and are more likely to remember them. So when I see a commercial that shows a little boy stealing a base in a little league game , and getting his uniform filthy from the slide, and them mom washing that uniform sparkling clean with Tide, I remember that Tide is good at getting out tough stains. BINGO! A classic example of the value of a good story is the J. Peterman phenomenon. If you've never experienced it, go here now: http://jpeterman.com/product~cat~110206~sku~WSL%201019.asp. See if the story doesn't seduce you into paying much more attention to an ordinary nightshirt than you ever would if it were prosaically listed in a less imaginative catalog. Stories can ignite the imagination, tap hidden emotions, drive home a message, and create lasting memories. Sounds like just what you want your advertising to do, right? So....tell me a story!
[A mnemonic device (pronounced /nəˈmɒnɪk/) is a memory aid. Mnemonics rely on associations between easy-to-remember constructs and lists of data, based on the principle that the human mind much more easily remembers data attached to personal or otherwise meaningful information than that occurring in meaningless sequences.] A story is just another kind of mnemonic. Stories are an easy way to communicate your message to an audience, and to get them to remember it. It's hard to recall a simple list of benefits, or a quick series of video clips, and associate them with a particular product or service. [Automobile advertising is particularly prone to this mistake.]
But we are culturally hard-wired to pay attention to stories, and are more likely to remember them. So when I see a commercial that shows a little boy stealing a base in a little league game , and getting his uniform filthy from the slide, and them mom washing that uniform sparkling clean with Tide, I remember that Tide is good at getting out tough stains. BINGO! A classic example of the value of a good story is the J. Peterman phenomenon. If you've never experienced it, go here now: http://jpeterman.com/product~cat~110206~sku~WSL%201019.asp. See if the story doesn't seduce you into paying much more attention to an ordinary nightshirt than you ever would if it were prosaically listed in a less imaginative catalog. Stories can ignite the imagination, tap hidden emotions, drive home a message, and create lasting memories. Sounds like just what you want your advertising to do, right? So....tell me a story!
Getting it all together
HOW’S YOUR GESTALT?
ge·stalt or Ge·stalt (gə-shtält', -shtôlt', -stält', -stôlt') n. plA physical, biological, psychological, or symbolic configuration or pattern of elements so unified as a whole that its properties cannot be derived from a simple summation of its parts.
Your business represents a “gestalt” to your customers. Customers don’t judge you solely based on the rosy descriptions in your advertising (although you probably wish they would). Naturally, they judge you on the value of your product or service. But they also judge you on your billing, your customer service, your distribution, and every other interaction that you have with them. All of these impressions add up to their overall evaluation of your company—it’s “gestalt.”
Your gestalt didn’t used to matter so much. Given the relatively few choices that were generally available, people were more likely to settle for a gestalt that was “OK.” But then along came the internet, and things haven’t been the same since. Now there are dozens (if not thousands) of choices just a click away.
Today every customer interaction matters—because if they’re not happy, they’ll look for “greener pastures” somewhere else. And as they leave, they may “poison the water” by posting an internet comment or evaluation for other potential customers to find.
To quote an old cartoon song, what your customers want is “Happy Happy Joy Joy.” And if you don’t give it to them with every interaction, you’ve probably lost them. There are just too many other choices available [if you don’t believe me, type in a description of your product or service in Google, and see how many links it offers; there are 2,720,000 links for “artificial flowers” for heaven’s sake!].
There’s a tendency for all of us to concentrate on our immediate area of responsibility—outside of that is “someone else’s problem.” But if all of your customer interactions aren’t first rate, then the outcome will be unhappiness for everyone at your company. Because your customers will go away, and not come back. And that means pretty soon your paychecks will do the same thing!
Someone at your company needs to be keeping an eye on how happy your customers are with every aspect of your operation. And you need to take prompt action to fix any aspect that isn’t earning rave reviews.
ge·stalt or Ge·stalt (gə-shtält', -shtôlt', -stält', -stôlt') n. plA physical, biological, psychological, or symbolic configuration or pattern of elements so unified as a whole that its properties cannot be derived from a simple summation of its parts.
Your business represents a “gestalt” to your customers. Customers don’t judge you solely based on the rosy descriptions in your advertising (although you probably wish they would). Naturally, they judge you on the value of your product or service. But they also judge you on your billing, your customer service, your distribution, and every other interaction that you have with them. All of these impressions add up to their overall evaluation of your company—it’s “gestalt.”
Your gestalt didn’t used to matter so much. Given the relatively few choices that were generally available, people were more likely to settle for a gestalt that was “OK.” But then along came the internet, and things haven’t been the same since. Now there are dozens (if not thousands) of choices just a click away.
Today every customer interaction matters—because if they’re not happy, they’ll look for “greener pastures” somewhere else. And as they leave, they may “poison the water” by posting an internet comment or evaluation for other potential customers to find.
To quote an old cartoon song, what your customers want is “Happy Happy Joy Joy.” And if you don’t give it to them with every interaction, you’ve probably lost them. There are just too many other choices available [if you don’t believe me, type in a description of your product or service in Google, and see how many links it offers; there are 2,720,000 links for “artificial flowers” for heaven’s sake!].
There’s a tendency for all of us to concentrate on our immediate area of responsibility—outside of that is “someone else’s problem.” But if all of your customer interactions aren’t first rate, then the outcome will be unhappiness for everyone at your company. Because your customers will go away, and not come back. And that means pretty soon your paychecks will do the same thing!
Someone at your company needs to be keeping an eye on how happy your customers are with every aspect of your operation. And you need to take prompt action to fix any aspect that isn’t earning rave reviews.
What price whimsy?
The Encarta English Dictionary defines ‘whimsy’ as “the quality of being slightly odd or playfully humorous, especially in an endearing way.”
You don’t see a lot of whimsy these days. And that’s a pity—because whimsy may be directly translatable to increased ROI. I’ve recently been reading a marketing classic—INFLUENCE, THE PSYCHOLOGY OF PERSUASION—in which author Dr. Robert Cialdini exhaustively documents the point that “We most prefer to say yes to the requests of someone we know and like.”
“Well I knew that!” I hear you thinking. Sure. But while I’m sure your customers know you, what are you doing to make them like you? (Note: The annual holiday card is not enough.) Think about your company’s or brand’s personality. Does it ever give your prospects and customers a reason to smile? When we’re wearing our corporate hats, most of us are dead serious. And how likeable is that?
I tried to come up with some examples of likeable brands and came up pretty dry. Which just supports my point. Sure there are companies with funny advertising—but it rarely seems to carry over to their other materials. What is there on your website (or mine—I’m guilty too!) to make you smile? How about on your billing? Your sales collateral? The recorded announcements on your automated phone system? Forget likeable—most times, these things aren’t even user-friendly!
Ben & Jerry’s probably qualify as “likeable.” Who doesn’t smile when they see a pint of “Cherry Garcia” ice cream? And Snapple was likeable before Quaker Oats “corporatized” it (Wendy is still one of my favorite spokespeople of all time). But such examples are very few and far between.
None of us want to look or sound frivolous. And “likeability” costs money—it’s easy to be serious and factual, but adding (a likeable) personality takes extra effort. And that effort cannot come at the expense of the value you offer customers—it is the whipped cream on top of the dessert, not the dessert itself.
Still, look at the benefits. Properly executed (in today’s cheerless environment), the creation of a likeable brand personality can generate buzz, attract additional prospects, increase conversion rates, and improve retention. Put like that, it sounds like it might be worth a try, doesn’t it?
You don’t see a lot of whimsy these days. And that’s a pity—because whimsy may be directly translatable to increased ROI. I’ve recently been reading a marketing classic—INFLUENCE, THE PSYCHOLOGY OF PERSUASION—in which author Dr. Robert Cialdini exhaustively documents the point that “We most prefer to say yes to the requests of someone we know and like.”
“Well I knew that!” I hear you thinking. Sure. But while I’m sure your customers know you, what are you doing to make them like you? (Note: The annual holiday card is not enough.) Think about your company’s or brand’s personality. Does it ever give your prospects and customers a reason to smile? When we’re wearing our corporate hats, most of us are dead serious. And how likeable is that?
I tried to come up with some examples of likeable brands and came up pretty dry. Which just supports my point. Sure there are companies with funny advertising—but it rarely seems to carry over to their other materials. What is there on your website (or mine—I’m guilty too!) to make you smile? How about on your billing? Your sales collateral? The recorded announcements on your automated phone system? Forget likeable—most times, these things aren’t even user-friendly!
Ben & Jerry’s probably qualify as “likeable.” Who doesn’t smile when they see a pint of “Cherry Garcia” ice cream? And Snapple was likeable before Quaker Oats “corporatized” it (Wendy is still one of my favorite spokespeople of all time). But such examples are very few and far between.
None of us want to look or sound frivolous. And “likeability” costs money—it’s easy to be serious and factual, but adding (a likeable) personality takes extra effort. And that effort cannot come at the expense of the value you offer customers—it is the whipped cream on top of the dessert, not the dessert itself.
Still, look at the benefits. Properly executed (in today’s cheerless environment), the creation of a likeable brand personality can generate buzz, attract additional prospects, increase conversion rates, and improve retention. Put like that, it sounds like it might be worth a try, doesn’t it?
What people REALLY want...
...probably isn’t what your advertising or your salespeople talk about.
I like to do wood-working. And one of the tools I use is a router that puts fancy edges on wood. Most people, if they were designing an advertisement for a router, would talk about how much horsepower it has, how inexpensive it is, how it has a built-in light, or how easy it is to clean. But those things aren’t why I bought the router. I bought the router because:
1) I want people (especially my wife) to “ooh and aah” over my projects.
2) I want to feel the glow of competency and pride from building useful, attractive pieces.
3) I want to avoid making mistakes that will cost me wood and time.
So to the extent the advertising, or the sales pitch for any woodworking tool “promises” to help me fulfill one (or better yet, all) of these desires, I will be much more likely to buy that product. I don’t really care about the horsepower, or the light, or (if the desire is strong enough) even the price, as long as the product gets me what I REALLY want.
Think about your commercials, advertisements, brochures, website, and salespeople’s scripts. Do they address the fundamental reasons people buy products or services like yours? Or have you slipped into the trap of just describing features, and assuming that people will be able to figure out how those features will help them get what they really want? How much have you even thought about your customers’ real “wants” recently?
To the extent that your persuasive communications address fundamental motivations, you will be able to command a higher price and build greater brand equity than competitors who sell on features. Let’s get together sometime and talk about how “fundamental” your advertising is!
I like to do wood-working. And one of the tools I use is a router that puts fancy edges on wood. Most people, if they were designing an advertisement for a router, would talk about how much horsepower it has, how inexpensive it is, how it has a built-in light, or how easy it is to clean. But those things aren’t why I bought the router. I bought the router because:
1) I want people (especially my wife) to “ooh and aah” over my projects.
2) I want to feel the glow of competency and pride from building useful, attractive pieces.
3) I want to avoid making mistakes that will cost me wood and time.
So to the extent the advertising, or the sales pitch for any woodworking tool “promises” to help me fulfill one (or better yet, all) of these desires, I will be much more likely to buy that product. I don’t really care about the horsepower, or the light, or (if the desire is strong enough) even the price, as long as the product gets me what I REALLY want.
Think about your commercials, advertisements, brochures, website, and salespeople’s scripts. Do they address the fundamental reasons people buy products or services like yours? Or have you slipped into the trap of just describing features, and assuming that people will be able to figure out how those features will help them get what they really want? How much have you even thought about your customers’ real “wants” recently?
To the extent that your persuasive communications address fundamental motivations, you will be able to command a higher price and build greater brand equity than competitors who sell on features. Let’s get together sometime and talk about how “fundamental” your advertising is!
How many people are there in your marketing department?
Many more than you think!
You would probably agree that marketing has the primary responsibility for your company’s relationship with its customers; developing and delivering official customer communications.
But there are a whole bunch of other people in your company that also interact with your customers. Of course (I hear you saying) our sales people interact with our customers all the time. But no, although that’s true, they are not who I was thinking of.
There are three customer interfaces that most people overlook. You won’t find them assigned to the marketing department, but they can strongly reinforce (or damage) your company’s relationship with its customers.
Your receptionist (or whoever customers reach first when they are calling your company). Do customers get a knowledgeable, friendly human when they call, or an impersonal, hard-to-navigate voicemail system? Which would you prefer? Which is more likely to set the stage for a successful customer interaction?
Your service department. How good is your service? It recently took me seven calls to reach someone in customer service at Sears. Think I’ll be buying anything from them again soon? On the other hand, the service people who delivered and set up my new Sleep Number bed last month really reinforced my purchase decision—they were on time, efficient, and did an excellent job of explaining how to use this expensive new piece of furniture. Treating your customer service as an extension of your marketing rather than as a necessary evil can make a huge difference to your repeat sales and retention.
Your billing department. How understandable are your invoices? [I hope they’re not like my telephone bill] Do they reinforce the wisdom of the customer’s purchase? [Insurance companies always miss this opportunity—how much would it reinforce the policy’s value if every bill included a story about how their insurance had helped a policyholder?] If customers have a question about their billing, is it easily and cheerfully answered? Or is it like unraveling a puzzle [hospital bills are a good example of this].
Expanding how you define your “marketing department” can unlock the route to improved customer relations. Want to talk about how to redefine your “marketing staff?” Give me a call!
You would probably agree that marketing has the primary responsibility for your company’s relationship with its customers; developing and delivering official customer communications.
But there are a whole bunch of other people in your company that also interact with your customers. Of course (I hear you saying) our sales people interact with our customers all the time. But no, although that’s true, they are not who I was thinking of.
There are three customer interfaces that most people overlook. You won’t find them assigned to the marketing department, but they can strongly reinforce (or damage) your company’s relationship with its customers.
Your receptionist (or whoever customers reach first when they are calling your company). Do customers get a knowledgeable, friendly human when they call, or an impersonal, hard-to-navigate voicemail system? Which would you prefer? Which is more likely to set the stage for a successful customer interaction?
Your service department. How good is your service? It recently took me seven calls to reach someone in customer service at Sears. Think I’ll be buying anything from them again soon? On the other hand, the service people who delivered and set up my new Sleep Number bed last month really reinforced my purchase decision—they were on time, efficient, and did an excellent job of explaining how to use this expensive new piece of furniture. Treating your customer service as an extension of your marketing rather than as a necessary evil can make a huge difference to your repeat sales and retention.
Your billing department. How understandable are your invoices? [I hope they’re not like my telephone bill] Do they reinforce the wisdom of the customer’s purchase? [Insurance companies always miss this opportunity—how much would it reinforce the policy’s value if every bill included a story about how their insurance had helped a policyholder?] If customers have a question about their billing, is it easily and cheerfully answered? Or is it like unraveling a puzzle [hospital bills are a good example of this].
Expanding how you define your “marketing department” can unlock the route to improved customer relations. Want to talk about how to redefine your “marketing staff?” Give me a call!
Make Sure You’re Findable!
I had a frustrating experience the other day. I’ve been developing a new direct response TV commercial to replace one that has been airing for the past few months. The original commercial has done well, so I want to use it as a benchmark. This original commercial was pre-tested by a research company, and I wanted to get in touch with them to get a quote for running a similar test for the new creative I’m developing. This proved to be so difficult that I almost gave up and used a competitor. I’m sure this isn’t what the researcher would have desired, and the communication problem was easily preventable. See if any of their failures might apply to your company…
The only evidence of the original test was a copy of the finished report. That commercial had been created and tested before I joined our company, and the people who had commissioned the pre-testing were no longer with the company.
I checked through the report, and while the research company name was on it, there was absolutely no contact information provided. [LOST OPPORTUNITY #1: put your company’s contact information as a footnote on every page you publish!] “No problem” I thought. “I’ll just google them.” Google provided their website, but it wouldn’t open because I didn’t have the latest copy of FLASH software on my computer. The website provided a link to this (free) software, but when I tried to download the software, my computer wouldn’t let me do it.
Turns out that at my company, I require an IT administrator to download software. That wasn’t the research company’s fault, but it cost me another day before I could get in touch. [LOST OPPORTUNITY #2: if you’re going to require special software to access your site, at least put some company contact information on an easily accessible initial landing page.]
Once we’d installed the software, I opened up the researcher’s website, and the contact information tab on the site wasn’t working! Worse, there was no other place on the entire website with any contact information [LOST OPPORTUNITY #3: make sure everything on your website is working, and in case it isn’t, footnote basic contact information on your home page.]
Meanwhile, I looked for other Google citations for the research company. There were hardly any, even though this was a large, international firm. [LOST OPPORTUNITY #4: firm didn’t generate any separate mentions. Publishing some white papers or participating in trade organizations would produce alternate pathways to the company’s website and build credibility.]
I am very persistent. Finally on the third Google search page I found a mention of the company in a press release published by one of their clients. I called the client contact listed on the press release and asked if they could help me get in touch with the researcher. They didn’t have a business card [LOST OPPORTUNITY #5—not staying in touch with a current customer], but dug up an old email from someone in the researcher’s Los Angeles branch.
From there things improved rapidly. The Los Angeles researcher called me immediately, and provided contact information for the company’s Cincinnati Branch—which was located less than a quarter mile from my office! [LOST OPPORTUNITY #6: There is no B-2-B yellow pages listing—it’s under the corporate parent’s name.]
Make sure you don’t put prospects through a similar search for your company’s contact information.
The only evidence of the original test was a copy of the finished report. That commercial had been created and tested before I joined our company, and the people who had commissioned the pre-testing were no longer with the company.
I checked through the report, and while the research company name was on it, there was absolutely no contact information provided. [LOST OPPORTUNITY #1: put your company’s contact information as a footnote on every page you publish!] “No problem” I thought. “I’ll just google them.” Google provided their website, but it wouldn’t open because I didn’t have the latest copy of FLASH software on my computer. The website provided a link to this (free) software, but when I tried to download the software, my computer wouldn’t let me do it.
Turns out that at my company, I require an IT administrator to download software. That wasn’t the research company’s fault, but it cost me another day before I could get in touch. [LOST OPPORTUNITY #2: if you’re going to require special software to access your site, at least put some company contact information on an easily accessible initial landing page.]
Once we’d installed the software, I opened up the researcher’s website, and the contact information tab on the site wasn’t working! Worse, there was no other place on the entire website with any contact information [LOST OPPORTUNITY #3: make sure everything on your website is working, and in case it isn’t, footnote basic contact information on your home page.]
Meanwhile, I looked for other Google citations for the research company. There were hardly any, even though this was a large, international firm. [LOST OPPORTUNITY #4: firm didn’t generate any separate mentions. Publishing some white papers or participating in trade organizations would produce alternate pathways to the company’s website and build credibility.]
I am very persistent. Finally on the third Google search page I found a mention of the company in a press release published by one of their clients. I called the client contact listed on the press release and asked if they could help me get in touch with the researcher. They didn’t have a business card [LOST OPPORTUNITY #5—not staying in touch with a current customer], but dug up an old email from someone in the researcher’s Los Angeles branch.
From there things improved rapidly. The Los Angeles researcher called me immediately, and provided contact information for the company’s Cincinnati Branch—which was located less than a quarter mile from my office! [LOST OPPORTUNITY #6: There is no B-2-B yellow pages listing—it’s under the corporate parent’s name.]
Make sure you don’t put prospects through a similar search for your company’s contact information.
The (recently necessary) evolution of Branding
Branding was developed to allow consumers to differentiate among products in a category so that they could more easily choose the ones that were likely to deliver the benefits they were looking for.
Manufacturers used branding to tell consumers how the manufacturer’s product differed from similar products. Procter & Gamble wasn’t the first, but they’re a good example. Soap was soap, until they started telling people that IVORY and its sudsy brothers and sisters provided particular features at specific and consistent levels of quality.
But how to know that manufacturers were telling the truth?
It would be expensive and time consuming for a consumer to test all the different products available for a particular use, and so for many years consumers were willing to take manufacturers’ promises at face value, and make their selection based on those promises. If a product failed to live up to its branding, then maybe that was just a fluke. There was no way to tell.
After all, what was the alternative? Personally and repeatedly test every brand to see how well the promises were being kept? That wasn’t (and still isn’t) very practical. And there wasn’t any way for consumers to band together to share their experiences with given products.
During much of the recently concluded 20th century, manufacturers (of services as well as products) came to rely on pounding their brand messages into consumers via newspapers, magazines, radio and television. In the face of relentless advertising, if a product didn’t live up to its branding, consumers were as likely to mistrust their personal experience as they were to mistrust the manufacturers’ promises. And again, what was the alternative?
Then came the internet, and in the 21st century we’ve entered a new world for branding. Consumers “get it,” but I’m not sure that the change has sunk in yet for many manufacturers. You see, CONSUMERS NO LONGER HAVE TO TAKE A MANUFACTURER’S WORD FOR HOW GOOD THAT MANUFACTURER’S PRODUCT IS. Anyone with access to the internet (and that is rapidly approaching “everyone”) can now look up any major product (and most minor products!) to see what experiences people have had with that product.
This is a profound change. Almost overnight, promises (which had become vastly overinflated and greatly undersubstantiated in many cases) have become the starting point instead of the final word for consumers. Consumers may use a manufacturer’s promise to pre-sort candidates, but it is no longer the final word. The final word comes from the reported experiences of other consumers, reported across millions of websites, and instantly accessible via incredibly efficient search engines.
As a result, it is time for branding to evolve. Manufacturer promises are as important as ever, but the product MUST live up to those promises. First time. Every time. Exactly as consumers should have been able to count on (but couldn’t) for the past few decades. Because if the product doesn’t perform for someone in Iowa, consumers in California, Florida, and Maine will know about it.
Advertising can no longer compensate for products deficiencies. Manufacturers who survive and thrive in the future will be those who develop meaningful differentiation that can be consistently delivered. Does that describe your products? If you feel like your branding needs to be working harder in this brave new world, feel free to give me a call, and we can talk about it.
Manufacturers used branding to tell consumers how the manufacturer’s product differed from similar products. Procter & Gamble wasn’t the first, but they’re a good example. Soap was soap, until they started telling people that IVORY and its sudsy brothers and sisters provided particular features at specific and consistent levels of quality.
But how to know that manufacturers were telling the truth?
It would be expensive and time consuming for a consumer to test all the different products available for a particular use, and so for many years consumers were willing to take manufacturers’ promises at face value, and make their selection based on those promises. If a product failed to live up to its branding, then maybe that was just a fluke. There was no way to tell.
After all, what was the alternative? Personally and repeatedly test every brand to see how well the promises were being kept? That wasn’t (and still isn’t) very practical. And there wasn’t any way for consumers to band together to share their experiences with given products.
During much of the recently concluded 20th century, manufacturers (of services as well as products) came to rely on pounding their brand messages into consumers via newspapers, magazines, radio and television. In the face of relentless advertising, if a product didn’t live up to its branding, consumers were as likely to mistrust their personal experience as they were to mistrust the manufacturers’ promises. And again, what was the alternative?
Then came the internet, and in the 21st century we’ve entered a new world for branding. Consumers “get it,” but I’m not sure that the change has sunk in yet for many manufacturers. You see, CONSUMERS NO LONGER HAVE TO TAKE A MANUFACTURER’S WORD FOR HOW GOOD THAT MANUFACTURER’S PRODUCT IS. Anyone with access to the internet (and that is rapidly approaching “everyone”) can now look up any major product (and most minor products!) to see what experiences people have had with that product.
This is a profound change. Almost overnight, promises (which had become vastly overinflated and greatly undersubstantiated in many cases) have become the starting point instead of the final word for consumers. Consumers may use a manufacturer’s promise to pre-sort candidates, but it is no longer the final word. The final word comes from the reported experiences of other consumers, reported across millions of websites, and instantly accessible via incredibly efficient search engines.
As a result, it is time for branding to evolve. Manufacturer promises are as important as ever, but the product MUST live up to those promises. First time. Every time. Exactly as consumers should have been able to count on (but couldn’t) for the past few decades. Because if the product doesn’t perform for someone in Iowa, consumers in California, Florida, and Maine will know about it.
Advertising can no longer compensate for products deficiencies. Manufacturers who survive and thrive in the future will be those who develop meaningful differentiation that can be consistently delivered. Does that describe your products? If you feel like your branding needs to be working harder in this brave new world, feel free to give me a call, and we can talk about it.
Riding the WOM Whirlwind
TV, Radio, Newspaper, Magazines, Online Ads—there’s one advertising medium that beats them all. It’s WOM (Word-of –Mouth). Thanks to the internet, WOM is exponentially stronger these days (because it’s so easy to find). In pre-internet days, you had to either hope someone would mention an experience with a product or service you were curious about, or else you had to come right out and ask people if they had any such experience. Today, you just type in the name of the product or service you are interested in, and you can instantly find dozens (or thousands) of opinions. The internet put WOM on steroids. For example, type “hamburger opinions, Cincinnati” into Google and you will get 288,000 citations, headed by my wife’s favorite, The Burger Guys, at http://cvgburgerguys.blogspot.com.
Internet WOM can grow like a snowball rolling downhill. It may start with one opinion, then people comment on that opinion, and the next thing you know you have a website like www.amexsux.com containing hundreds of experiences and exerting a significant effect on a major corporation.
So your customer’s experience with your product becomes paramount. Bad experiences become bad WOM, and bad WOM becomes particularly damaging when it is so easy to access. Especially since people are much more likely to go public with a bad experience than with a good one.
What can help you ride the WOM whirlwind?
1) Know what is being said about your product or service. Regularly search the internet for mentions. You can do it yourself if your operation is small. If you are a TIDE or FIDELITY, you’ll want to create a robust internal capability or hire a company like Nielsen’s Buzzmetrics to keep a finger on the pulse of WOM.
2) Respond to negative WOM. If it is pointing out something that is wrong about your product or your service, don’t go into denial—get it fixed! If someone has misunderstood or misused something, try to correct the misconception by replying (using the same channel where they published their opinion) in a polite and measured way.
3) Nurture positive WOM. Identify satisfied customers and obtain testimonials from them. Publish those testimonials on your website, and tell all your other customers about them. Help your proponents talk to each other for reinforcement. Think about Harley-Davidson “hog” owners. With considerable help from the company, they have reinforced each others’ positive opinions to the point where if someone says something negative about a Harley, the complainer is likely to get tossed through a window!
Want to talk about your WOM? Give me a call, and maybe we can think of some ways to tilt the buzz in your favor!
Internet WOM can grow like a snowball rolling downhill. It may start with one opinion, then people comment on that opinion, and the next thing you know you have a website like www.amexsux.com containing hundreds of experiences and exerting a significant effect on a major corporation.
So your customer’s experience with your product becomes paramount. Bad experiences become bad WOM, and bad WOM becomes particularly damaging when it is so easy to access. Especially since people are much more likely to go public with a bad experience than with a good one.
What can help you ride the WOM whirlwind?
1) Know what is being said about your product or service. Regularly search the internet for mentions. You can do it yourself if your operation is small. If you are a TIDE or FIDELITY, you’ll want to create a robust internal capability or hire a company like Nielsen’s Buzzmetrics to keep a finger on the pulse of WOM.
2) Respond to negative WOM. If it is pointing out something that is wrong about your product or your service, don’t go into denial—get it fixed! If someone has misunderstood or misused something, try to correct the misconception by replying (using the same channel where they published their opinion) in a polite and measured way.
3) Nurture positive WOM. Identify satisfied customers and obtain testimonials from them. Publish those testimonials on your website, and tell all your other customers about them. Help your proponents talk to each other for reinforcement. Think about Harley-Davidson “hog” owners. With considerable help from the company, they have reinforced each others’ positive opinions to the point where if someone says something negative about a Harley, the complainer is likely to get tossed through a window!
Want to talk about your WOM? Give me a call, and maybe we can think of some ways to tilt the buzz in your favor!
Give to Get
To succeed in business today, you have to give to get. A recent column I read contained some of the best advice I’ve seen in months. The author said:
Customers tell me that they gravitate to suppliers who “look after things for me.” These suppliers regularly act in the best interest of their customers, suggesting new ways to do things, helping to train their staff. One of the most favorable reactions that they elicit is: “That’s one less thing I have to worry about.
I suspect that it is a universal business truth that people and companies prefer to give their business to suppliers who demonstrate that they understand that the customer must succeed in order for the supplier to succeed. Businesses that care only about what their customers can do for them (ie. “how much can you buy?” and “how much will you pay?”) are not going to earn any customer loyalty, no matter how good their products and/or services are.
It is common today for businesses to say they want to “partner” with their customers. But relatively few of them walk the talk. Want an interesting exercise? Take ten minutes and list all the things your company does for its customers that aren’t directly concerned with selling and servicing your products. Include how you educate them on ways to improve their business, train their employees, aid them with government regulations, help connect them with prospects, provide technology and industry information, brainstorm solutions to problems unrelated to your products, create networking opportunities, and anything else that is directly designed to make the customer more successful.
The more things you can list, the more of a “partner” you are, and the stronger your customer relationships probably are. If there isn’t much on your list, then you aren’t much of a partner, and your customers are probably looking around for your replacement right this moment. You don’t trust people who are just out for themselves—why would you trust a company that is?
By the way—this advice applies to internal as well as external customers. The more you enable your co-workers to succeed, the more they will support and protect you. And the practice works as well within families as it does between businesses. The more you give, the more you get.
Customers tell me that they gravitate to suppliers who “look after things for me.” These suppliers regularly act in the best interest of their customers, suggesting new ways to do things, helping to train their staff. One of the most favorable reactions that they elicit is: “That’s one less thing I have to worry about.
I suspect that it is a universal business truth that people and companies prefer to give their business to suppliers who demonstrate that they understand that the customer must succeed in order for the supplier to succeed. Businesses that care only about what their customers can do for them (ie. “how much can you buy?” and “how much will you pay?”) are not going to earn any customer loyalty, no matter how good their products and/or services are.
It is common today for businesses to say they want to “partner” with their customers. But relatively few of them walk the talk. Want an interesting exercise? Take ten minutes and list all the things your company does for its customers that aren’t directly concerned with selling and servicing your products. Include how you educate them on ways to improve their business, train their employees, aid them with government regulations, help connect them with prospects, provide technology and industry information, brainstorm solutions to problems unrelated to your products, create networking opportunities, and anything else that is directly designed to make the customer more successful.
The more things you can list, the more of a “partner” you are, and the stronger your customer relationships probably are. If there isn’t much on your list, then you aren’t much of a partner, and your customers are probably looking around for your replacement right this moment. You don’t trust people who are just out for themselves—why would you trust a company that is?
By the way—this advice applies to internal as well as external customers. The more you enable your co-workers to succeed, the more they will support and protect you. And the practice works as well within families as it does between businesses. The more you give, the more you get.
Understanding your target market
How lazy are you when it comes to understanding your target market?
On the whole, many of us prefer to obtain information about the people we are selling to…secondhand. We buy industry reviews. We pay marketing researchers to do surveys. We read summaries of focus groups. We compile purchase transaction statistics. We listen to the sales force’s anecdotes. We build data warehouses and fill them with every possible fact we can collect or buy.
It seems like we chase down virtually every path to insight except actually listening to our prospects and customers. There are reasons for this—we tend to be busy people, and real interaction isn’t an efficient process. So in the time that you can talk with one person, or listen to some calls into the call center, you can study abstract information about of hundreds of people. And there’s the danger that people won’t be truthful with you face-to-face; they’ll be too polite, or too calculating to tell you the truth. Or worse yet, they’ll complain to you! Personal contact is unpredictable, and it takes a lot of work to “mine” it for real insights. So its often easier to take a more lazy way out.
It’s all very understandable—and very dangerous to your company’s health. Maybe it is MBA programs that bred the personal contact out of so many of us, or maybe we’ve just abrogated too much responsibility for personal contact to our salespeople, or call center reps, or (worst case) our internet software!
Printed words and conversion ratios are unlikely to convey the insights that will provide the competitive edge you’re seeking. Often it is the excitement or disgust in someone’s voice that signals an opportunity. Or body language—a lifted eyebrow or shrug—that tells you how engaged someone is with your proposition. Or just a look in their eye that says that’s the sweet spot.
So try to make some space in your schedule once in a while to actually go see some people face-to-face. Travel with your salespeople. Listen to the call center representatives talk with prospects and customers over the phone. I guarantee you, you’ll get more out of it than you will from any piece of paper in your office.
On the whole, many of us prefer to obtain information about the people we are selling to…secondhand. We buy industry reviews. We pay marketing researchers to do surveys. We read summaries of focus groups. We compile purchase transaction statistics. We listen to the sales force’s anecdotes. We build data warehouses and fill them with every possible fact we can collect or buy.
It seems like we chase down virtually every path to insight except actually listening to our prospects and customers. There are reasons for this—we tend to be busy people, and real interaction isn’t an efficient process. So in the time that you can talk with one person, or listen to some calls into the call center, you can study abstract information about of hundreds of people. And there’s the danger that people won’t be truthful with you face-to-face; they’ll be too polite, or too calculating to tell you the truth. Or worse yet, they’ll complain to you! Personal contact is unpredictable, and it takes a lot of work to “mine” it for real insights. So its often easier to take a more lazy way out.
It’s all very understandable—and very dangerous to your company’s health. Maybe it is MBA programs that bred the personal contact out of so many of us, or maybe we’ve just abrogated too much responsibility for personal contact to our salespeople, or call center reps, or (worst case) our internet software!
Printed words and conversion ratios are unlikely to convey the insights that will provide the competitive edge you’re seeking. Often it is the excitement or disgust in someone’s voice that signals an opportunity. Or body language—a lifted eyebrow or shrug—that tells you how engaged someone is with your proposition. Or just a look in their eye that says that’s the sweet spot.
So try to make some space in your schedule once in a while to actually go see some people face-to-face. Travel with your salespeople. Listen to the call center representatives talk with prospects and customers over the phone. I guarantee you, you’ll get more out of it than you will from any piece of paper in your office.
Industry Group Membership Benefits
Your participation in industry groups should go beyond sponsoring a hole at the local golf outing!
There’s a trade group or professional organization for virtually every business and job. You know which ones are most important in your industry or career field. But are you making full use of the opportunity they offer?
Most people skimp on participation in these groups. They may take a foursome to a golf outing, or buy a ticket or a table for the annual awards dinner. They may even sponsor a luncheon or buy an advertisement in a program booklet. But that level of engagement doesn’t begin to tap into the benefits that are available to someone who is willing to become actively involved.
Every group represents a power structure. You can ignore that power structure, or you can take advantage of it. Participation in a group can generate three advantages:
1. It is an opportunity to collect favors. When you volunteer to work for a group, people in that group appreciate it. However unspoken that gratitude may be, it is a “deposit in your account” if and when you choose to take advantage of it. [Think about it: who are you more likely to help-- someone who comes to you out of the blue, or someone who has done you a service in the past?]
2. It provides access to powerful people you might otherwise have trouble meeting. And it typically provides that access under very favorable conditions.
3. It is a chance to showcase how intelligent and hard working you are, and how easy you are to work with (assuming all these things describe you, which I’m sure they do!). Demonstrating these virtues can lead to direct business, referrals, and even the occasional job offer.
4. The right kinds of participation (such as being a speaker or panel member at a convention) can enhance your credibility. People think “If he/she was considered smart/knowledgeable enough to be invited to speak, they must be pretty good. Maybe I should be talking with them!”
Newcomers have to work their way up in organizations—it is unlikely you’ll be immediately asked to run for president of a group. But just letting people know you are interested and willing to volunteer for “whatever needs to be done” will open the door. I’ve found that such participation pays significant rewards for surprisingly little work, and that advancement (and commensurate rewards and opportunities) can come quickly if you’re sincere and enthusiastic!
There’s a trade group or professional organization for virtually every business and job. You know which ones are most important in your industry or career field. But are you making full use of the opportunity they offer?
Most people skimp on participation in these groups. They may take a foursome to a golf outing, or buy a ticket or a table for the annual awards dinner. They may even sponsor a luncheon or buy an advertisement in a program booklet. But that level of engagement doesn’t begin to tap into the benefits that are available to someone who is willing to become actively involved.
Every group represents a power structure. You can ignore that power structure, or you can take advantage of it. Participation in a group can generate three advantages:
1. It is an opportunity to collect favors. When you volunteer to work for a group, people in that group appreciate it. However unspoken that gratitude may be, it is a “deposit in your account” if and when you choose to take advantage of it. [Think about it: who are you more likely to help-- someone who comes to you out of the blue, or someone who has done you a service in the past?]
2. It provides access to powerful people you might otherwise have trouble meeting. And it typically provides that access under very favorable conditions.
3. It is a chance to showcase how intelligent and hard working you are, and how easy you are to work with (assuming all these things describe you, which I’m sure they do!). Demonstrating these virtues can lead to direct business, referrals, and even the occasional job offer.
4. The right kinds of participation (such as being a speaker or panel member at a convention) can enhance your credibility. People think “If he/she was considered smart/knowledgeable enough to be invited to speak, they must be pretty good. Maybe I should be talking with them!”
Newcomers have to work their way up in organizations—it is unlikely you’ll be immediately asked to run for president of a group. But just letting people know you are interested and willing to volunteer for “whatever needs to be done” will open the door. I’ve found that such participation pays significant rewards for surprisingly little work, and that advancement (and commensurate rewards and opportunities) can come quickly if you’re sincere and enthusiastic!
Customer Satisfaction = Marketing Success
Your marketing success (at prospecting, cross-selling, and retention) is inextricably tied to customer satisfaction. Measuring customer satisfaction has traditionally required elaborate questionnaires. However in 2004, Fred Reichheld authored a Harvard Business Review article that offers a simple and effective substitute.
He suggested that a single question—“On a scale of zero to ten, how likely is it that you would recommend [company name] to your friends or colleagues?” —could effectively measure customer satisfaction. And he demonstrated that “net promoter scores” which measure the difference between the percentage of customers who give high responses (promoters) and those who give low responses (detractors) correlate closely with a company’s revenue growth. [Promoters are defined as customers responding with a ‘9’ or ’10,’ while detractors respond with a ‘0’ through ‘6.’ Customers who respond with a ‘7’ or ‘8’ are considered “passively satisfied,” and aren’t counted in the ratio.]
Since the article’s publication, this satisfaction measurement system has been embraced by a list of companies that includes General Electric, American Express, and Intuit.
Why it works is simple enough. Detractors are more likely to defect, and less likely to buy additional products or services from a company. Further, they are less likely to provide referrals to your salespeople, and more likely to write uncomplimentary things about your company online (which is just a reflection of what they are saying to people face-to-face). Promoters are your cheerleaders, providing the referrals and testimonials that should be two of your primary prospecting resources.
[Note: approximately 10% of the population are defined as “Influentials,” a term coined by research company RoperASW to describe those whom others turn to for opinions and advice. Customers in this segment act as “magnifiers,” and have a disproportionate effect on your company’s reputation. It behooves you to give Influentials special attention.]
Having your customers answer the satisfaction question isn’t the end of the process—it is just the beginning. To take advantage of customer responses, you need to leverage your promoters to produce referrals and testimonials, and warm up the passively satisfied to turn them into promoters. Finally, you need to talk to your detractors, record and quantify their complaints, and then do something about them!
If you would like to talk about establishing a customer feedback program, or giving your current program a jump-start, please give me a call. Your CMO will be happy to discuss steps you can take to create and exploit customer satisfaction data!
He suggested that a single question—“On a scale of zero to ten, how likely is it that you would recommend [company name] to your friends or colleagues?” —could effectively measure customer satisfaction. And he demonstrated that “net promoter scores” which measure the difference between the percentage of customers who give high responses (promoters) and those who give low responses (detractors) correlate closely with a company’s revenue growth. [Promoters are defined as customers responding with a ‘9’ or ’10,’ while detractors respond with a ‘0’ through ‘6.’ Customers who respond with a ‘7’ or ‘8’ are considered “passively satisfied,” and aren’t counted in the ratio.]
Since the article’s publication, this satisfaction measurement system has been embraced by a list of companies that includes General Electric, American Express, and Intuit.
Why it works is simple enough. Detractors are more likely to defect, and less likely to buy additional products or services from a company. Further, they are less likely to provide referrals to your salespeople, and more likely to write uncomplimentary things about your company online (which is just a reflection of what they are saying to people face-to-face). Promoters are your cheerleaders, providing the referrals and testimonials that should be two of your primary prospecting resources.
[Note: approximately 10% of the population are defined as “Influentials,” a term coined by research company RoperASW to describe those whom others turn to for opinions and advice. Customers in this segment act as “magnifiers,” and have a disproportionate effect on your company’s reputation. It behooves you to give Influentials special attention.]
Having your customers answer the satisfaction question isn’t the end of the process—it is just the beginning. To take advantage of customer responses, you need to leverage your promoters to produce referrals and testimonials, and warm up the passively satisfied to turn them into promoters. Finally, you need to talk to your detractors, record and quantify their complaints, and then do something about them!
If you would like to talk about establishing a customer feedback program, or giving your current program a jump-start, please give me a call. Your CMO will be happy to discuss steps you can take to create and exploit customer satisfaction data!
Great Expectations isn’t just a Dickens novel
How picky are you? What do you expect from the companies that serve you? If you are like me, you have pretty high expectations. You are disappointed when those expectations aren’t met. And if that disappointment doesn’t set you searching for a better alternative, it at least makes you more receptive to competing goods or services.
I am more than averagely tall, and require extra-long ties on those occasions when I have to wear one. Recently I walked into Macy's and asked where their extra-long ties were. “We don’t sell any big or tall products” the clerk said without apology. He then proceeded to tell me that Dillard’s (a different department store) sells them. What a missed opportunity! I understand how “turn” affects inventory costs. But a big company like Macy’s could at least offer XL ties over the internet (saving the sale). Instead this clerk directed me to the competition!
Wait, it gets worse! Before I went to Dillards, this experience prompted me to look on the internet, where I subsequently bought just what I wanted at SaveOnTies for half the price and $.99 shipping (less than the cost of the gas I burned getting to Macy’s). So now it’s not just Macy’s that’s lost me—it’s the whole department store distribution channel.
Every business is probably doing some things that disappoint their customers. (Yes, even yours!) If customers complain, I’m sure you try to make them happy. But most don’t complain—they simply leave. And it is difficult (and expensive) to get them back again.
It just hasn’t soaked in for most businesses just how much choice their prospects and customers have today, and just how easy it is to find someone else who wants their business. Many businesses still behave as though customers continue to have the same limited choice as before the Internet radically enlarged the competitive environment.
Executives talk about how they want to provide a great customer experience, but most still don’t put any real effort into developing or delivering that experience.
The bad news? Given the amount of choice available today, you need to provide an acceptable experience just to be a commodity, and an exceptional experience to be a preferred vendor.
The good news? Most experiences are so lousy, it doesn’t take that much (yet) to be considered exceptional.
So what’s my point? Make sure that interacting with your company is an acceptable or (preferably) exceptional experience. Unless you have a monopoly on a “must-have” product (like Ma Bell did in the old days), the customer experience is a make-or-break factor. Until you’re providing a good experience, you will be wasting any money you spend on marketing.
Prospecting? Why would I want to buy from you if you’re difficult to do business with?
Cross-selling? Why would I buy something else from you if I was unhappy with my first experience?
Retention? Why would I come back or stay if I don’t like doing business with you?
If you’d like some help in evaluating and upgrading your customer experiences, give Your CMO a call. I will try to make that experience a pleasant one!
I am more than averagely tall, and require extra-long ties on those occasions when I have to wear one. Recently I walked into Macy's and asked where their extra-long ties were. “We don’t sell any big or tall products” the clerk said without apology. He then proceeded to tell me that Dillard’s (a different department store) sells them. What a missed opportunity! I understand how “turn” affects inventory costs. But a big company like Macy’s could at least offer XL ties over the internet (saving the sale). Instead this clerk directed me to the competition!
Wait, it gets worse! Before I went to Dillards, this experience prompted me to look on the internet, where I subsequently bought just what I wanted at SaveOnTies for half the price and $.99 shipping (less than the cost of the gas I burned getting to Macy’s). So now it’s not just Macy’s that’s lost me—it’s the whole department store distribution channel.
Every business is probably doing some things that disappoint their customers. (Yes, even yours!) If customers complain, I’m sure you try to make them happy. But most don’t complain—they simply leave. And it is difficult (and expensive) to get them back again.
It just hasn’t soaked in for most businesses just how much choice their prospects and customers have today, and just how easy it is to find someone else who wants their business. Many businesses still behave as though customers continue to have the same limited choice as before the Internet radically enlarged the competitive environment.
Executives talk about how they want to provide a great customer experience, but most still don’t put any real effort into developing or delivering that experience.
The bad news? Given the amount of choice available today, you need to provide an acceptable experience just to be a commodity, and an exceptional experience to be a preferred vendor.
The good news? Most experiences are so lousy, it doesn’t take that much (yet) to be considered exceptional.
So what’s my point? Make sure that interacting with your company is an acceptable or (preferably) exceptional experience. Unless you have a monopoly on a “must-have” product (like Ma Bell did in the old days), the customer experience is a make-or-break factor. Until you’re providing a good experience, you will be wasting any money you spend on marketing.
Prospecting? Why would I want to buy from you if you’re difficult to do business with?
Cross-selling? Why would I buy something else from you if I was unhappy with my first experience?
Retention? Why would I come back or stay if I don’t like doing business with you?
If you’d like some help in evaluating and upgrading your customer experiences, give Your CMO a call. I will try to make that experience a pleasant one!
A Spoonful of Sugar
“A spoonful of sugar helps the medicine go down…” Mary Poppins
In today’s communication-cluttered environment, this is advice worth remembering.
There are a lot of relatively inexpensive communication choices available to today’s marketers, which has led to consumers being barraged with sales messages. But consumers have more “filtering” tools available than ever before—DVRs, Do-Not-Call registries, anti-spam software, email opt-outs, and satellite radio, just to name a few. They don’t have to listen to those messages.
Many marketers have responded by making their messages as intrusive as possible. They want to make people listen, and they’ll employ celebrities, humor, nostalgic song clips, dancing elephants, and anything else they can think of to get the consumer’s attention.
The problem with this approach is that these marketing messages are still full of what the marketer wants to say rather than what the consumer necessarily wants to hear. This is where the spoon full of sugar comes in.
If you are targeting a well-identified pool of prospects or customers, you should have some idea what their needs and interests are. So you can wrap your sales message (which people are likely to be only marginally interested in) with “value added” content (ie. “sugar”).
This can take the form of education, testimonials, anecdotes, links to other material, tools like calculators, and anything else that your target market finds useful or interesting.
As your prospects and customers find value in your communications, they will become more likely to read them and less likely to filter them out. And while absorbing the content they are interested in, they will be more receptive to the sales messages accompanying that content.
The alternative is to force your marketing message down people’s throats, with the likelihood that they won’t find it useful or interesting, and will therefore be indifferent or hostile toward your company (and more likely to filter out future messages they identify with it).
In today’s communication-cluttered environment, this is advice worth remembering.
There are a lot of relatively inexpensive communication choices available to today’s marketers, which has led to consumers being barraged with sales messages. But consumers have more “filtering” tools available than ever before—DVRs, Do-Not-Call registries, anti-spam software, email opt-outs, and satellite radio, just to name a few. They don’t have to listen to those messages.
Many marketers have responded by making their messages as intrusive as possible. They want to make people listen, and they’ll employ celebrities, humor, nostalgic song clips, dancing elephants, and anything else they can think of to get the consumer’s attention.
The problem with this approach is that these marketing messages are still full of what the marketer wants to say rather than what the consumer necessarily wants to hear. This is where the spoon full of sugar comes in.
If you are targeting a well-identified pool of prospects or customers, you should have some idea what their needs and interests are. So you can wrap your sales message (which people are likely to be only marginally interested in) with “value added” content (ie. “sugar”).
This can take the form of education, testimonials, anecdotes, links to other material, tools like calculators, and anything else that your target market finds useful or interesting.
As your prospects and customers find value in your communications, they will become more likely to read them and less likely to filter them out. And while absorbing the content they are interested in, they will be more receptive to the sales messages accompanying that content.
The alternative is to force your marketing message down people’s throats, with the likelihood that they won’t find it useful or interesting, and will therefore be indifferent or hostile toward your company (and more likely to filter out future messages they identify with it).
The last thing you should do is advertise…
The purpose of advertising is to inform prospective customers of your existence, and to communicate the value of your product or service. So how can you argue with doing it? (Actually, I’m not saying don’t advertise; I’m just saying there are a few other things you should think about first.)
1) Who is your prospective customer? No. Really. Who is it? Most companies define their target much too loosely. They use something like “boys 13-18” or “urban women.” Your target customer can be profiled much more exactly. This shouldn’t be guesswork. Unless you are a start-up business, you already have customers. To find out who your target is, you can simply profile the group that has already bought your product or service. Don’t have a lot of information about these people? Not a problem. If you can get a name and address or telephone number, data aggregators can usually sell you extensive information about them (often for pennies per person).
And you don’t need to get data on all your customers—just a representative sample. That’s usually less than a thousand people. Analysis of the data can be done on either an internal or outsourced basis. I guarantee you’re going to find some surprises when you do this. And when you are ready to advertise, I also guarantee this more precise targeting is going to make your advertising much more effective.
By the way, if you’re working on a start-up business and don’t have any customers yet, give me a call, and I’ll tell you how to develop a profile of the people who will become your best customers.
2) Why should someone buy your product? Who is your competition, and what are you providing that they are not? Unless you are just trying to out-shout your competition—which is an awfully expensive proposition—you should have a clearly understandable competitive advantage. If you don’t, you should be spending your money on developing an advantage instead of on advertising. Advertising creates leads, but it is superior products that turn leads into sales.
3) How do you treat your prospects and customers? Do people enjoy doing business with you? Are your sales associates knowledgeable and professional? Do you have an informative, comprehensive website? Are telephones quickly, politely, and competently answered? Do you reply promptly to e-mails and letters? Until you can answer yes to these questions, you should be spending your money on customer service rather than advertising. It is very expensive to create a warm lead using advertising, and that expense is often wasted if your organization is poor at converting that lead into a satisfied customer.
4) Have you explored less expensive alternatives to traditional advertising? Should you be blogging on the internet? Are there events you should be sponsoring? Press releases you should be distributing? Contests you should be holding? Cross-promotions you should be doing? In-store merchandising you should put up? It’s easy to substitute advertising for creativity. But it is also very expensive.
You need to figure out who and what influences your target customer. A recent survey ranked media advertising dead last in influencing purchasing decisions, behind personal anecdotes on the internet, news stories, professional assessments, and (strongest of all) word-of-mouth from someone you know personally (ie: referrals). Some big companies today are working on identifying what specific sources influence target segments, so that they can efficiently “influence the influencers” rather than trying to reach each individual prospect.Advertising is a wonderful tool. But like any tool, it is most effective when used in the right way at the right time. It is not a substitute for careful targeting, a competitive advantage, good customer service, or favorable word-of-mouth. So advertise, by all means-- after you have these other elements in place.
1) Who is your prospective customer? No. Really. Who is it? Most companies define their target much too loosely. They use something like “boys 13-18” or “urban women.” Your target customer can be profiled much more exactly. This shouldn’t be guesswork. Unless you are a start-up business, you already have customers. To find out who your target is, you can simply profile the group that has already bought your product or service. Don’t have a lot of information about these people? Not a problem. If you can get a name and address or telephone number, data aggregators can usually sell you extensive information about them (often for pennies per person).
And you don’t need to get data on all your customers—just a representative sample. That’s usually less than a thousand people. Analysis of the data can be done on either an internal or outsourced basis. I guarantee you’re going to find some surprises when you do this. And when you are ready to advertise, I also guarantee this more precise targeting is going to make your advertising much more effective.
By the way, if you’re working on a start-up business and don’t have any customers yet, give me a call, and I’ll tell you how to develop a profile of the people who will become your best customers.
2) Why should someone buy your product? Who is your competition, and what are you providing that they are not? Unless you are just trying to out-shout your competition—which is an awfully expensive proposition—you should have a clearly understandable competitive advantage. If you don’t, you should be spending your money on developing an advantage instead of on advertising. Advertising creates leads, but it is superior products that turn leads into sales.
3) How do you treat your prospects and customers? Do people enjoy doing business with you? Are your sales associates knowledgeable and professional? Do you have an informative, comprehensive website? Are telephones quickly, politely, and competently answered? Do you reply promptly to e-mails and letters? Until you can answer yes to these questions, you should be spending your money on customer service rather than advertising. It is very expensive to create a warm lead using advertising, and that expense is often wasted if your organization is poor at converting that lead into a satisfied customer.
4) Have you explored less expensive alternatives to traditional advertising? Should you be blogging on the internet? Are there events you should be sponsoring? Press releases you should be distributing? Contests you should be holding? Cross-promotions you should be doing? In-store merchandising you should put up? It’s easy to substitute advertising for creativity. But it is also very expensive.
You need to figure out who and what influences your target customer. A recent survey ranked media advertising dead last in influencing purchasing decisions, behind personal anecdotes on the internet, news stories, professional assessments, and (strongest of all) word-of-mouth from someone you know personally (ie: referrals). Some big companies today are working on identifying what specific sources influence target segments, so that they can efficiently “influence the influencers” rather than trying to reach each individual prospect.Advertising is a wonderful tool. But like any tool, it is most effective when used in the right way at the right time. It is not a substitute for careful targeting, a competitive advantage, good customer service, or favorable word-of-mouth. So advertise, by all means-- after you have these other elements in place.
Sales or Marketing—Who cares?
A couple of years ago, I was serving as chairman of the marketing committee of the Life Insurance Marketing Research Association. To start one meeting, I asked the 12 committee members (each heading up the marketing function at a major Life Insurer) to agree on a one-paragraph definition of marketing for use in the brochure for the next annual convention. Two hours later, we still hadn’t reached consensus. I suspect the same thing could happen with a group of sales executives.
Who cares? You should. Because Sales and Marketing are different functions, with different responsibilities requiring different skills. And if you try to put both functions under one person without understanding those differences, you won’t get optimal results in either area.
After a lot of thought, I’ve “assigned” the functional responsibilities like this:
Marketing is responsible for
Identifying the target customer
Matching the company’s products and/or services to the needs of the target customer
Telling sales where target prospects can be found
Sales is responsible for
The sales process (fact-finding, needs-analysis, recommendation, close, delivery)
The service process (providing information, relationship-building, conducting transactions)
Marketing and Sales should share the responsibility for
Developing better ways of approaching the target prospects
Maintaining a relationship with customers once the sale is made
Warming up prospects for the future in “not now” situations.
[To see how these responsibilities fit together into a clearly understandable process, check out the Sales Success Cycle Diagram on my website at www.yourcmo.com]
Marketers usually don’t enjoy selling one-by-one. They prefer persuading people in bunches. They really enjoy poring over data, attending focus groups, designing advertising, and creating automatic systems that are more dependable than salespeople. Marketers are motivated more by deadlines than by results. Put them in charge of sales organizations and they’ll tend to shy away from customer interaction and concentrate on production ratios, sales processes, and management systems.
Salespeople like to get face-to-face. They really enjoy personal interaction, and can be uncomfortable dealing with statistics, processes, and systems. As a result, they prefer ad hoc, customized sales materials over mass-marketing collateral like advertising and printed brochures. Because they’ve probably lived off commissions (where if you don’t make a sale, you don’t get paid) they can be overly focused on short-term results. This frame of mind, coupled with a salesperson’s natural optimism, tends to oppose the idea of targeting—most salespeople consider everyone a viable target!
This difference in mindset is why it is important to carefully assign sales and marketing responsibilities. People can develop an understanding of, and skill at, both responsibilities. But they rarely have the mindset and passion for both. And without them, something is going to get short-changed if you try to combine these functions.
Who cares? You should. Because Sales and Marketing are different functions, with different responsibilities requiring different skills. And if you try to put both functions under one person without understanding those differences, you won’t get optimal results in either area.
After a lot of thought, I’ve “assigned” the functional responsibilities like this:
Marketing is responsible for
Identifying the target customer
Matching the company’s products and/or services to the needs of the target customer
Telling sales where target prospects can be found
Sales is responsible for
The sales process (fact-finding, needs-analysis, recommendation, close, delivery)
The service process (providing information, relationship-building, conducting transactions)
Marketing and Sales should share the responsibility for
Developing better ways of approaching the target prospects
Maintaining a relationship with customers once the sale is made
Warming up prospects for the future in “not now” situations.
[To see how these responsibilities fit together into a clearly understandable process, check out the Sales Success Cycle Diagram on my website at www.yourcmo.com]
Marketers usually don’t enjoy selling one-by-one. They prefer persuading people in bunches. They really enjoy poring over data, attending focus groups, designing advertising, and creating automatic systems that are more dependable than salespeople. Marketers are motivated more by deadlines than by results. Put them in charge of sales organizations and they’ll tend to shy away from customer interaction and concentrate on production ratios, sales processes, and management systems.
Salespeople like to get face-to-face. They really enjoy personal interaction, and can be uncomfortable dealing with statistics, processes, and systems. As a result, they prefer ad hoc, customized sales materials over mass-marketing collateral like advertising and printed brochures. Because they’ve probably lived off commissions (where if you don’t make a sale, you don’t get paid) they can be overly focused on short-term results. This frame of mind, coupled with a salesperson’s natural optimism, tends to oppose the idea of targeting—most salespeople consider everyone a viable target!
This difference in mindset is why it is important to carefully assign sales and marketing responsibilities. People can develop an understanding of, and skill at, both responsibilities. But they rarely have the mindset and passion for both. And without them, something is going to get short-changed if you try to combine these functions.
Anecdotes Trump Advertising
Companies spend millions on advertising every year, but when it comes to influencing consumers, advertising doesn’t hold a candle to the opinion of the person next door according to Intelliseek’s 2005-2006 Consumer Generated Media Engagement Monitor.
When people were asked to rate how strongly fourteen factors influence purchase decisions, advertising came in dead last, behind personal word-of-mouth, expert testimonials, stories in the media, and even postings from strangers on the internet!
To what degree would your decision to purchase something be influenced by:
[ from 0 = not influenced at all to 10 = influenced greatly ]
A positive word-of-mouth report from someone you knew personally 7.72
A negative word-of-mouth report from someone you knew personally 6.95
A positive first-hand report from a credible professional source or expert 6.46
A positive news story on TV or radio or in a newspaper or magazine 6.16
A negative first-hand report from a credible professional source or expert 6.05
A negative comment about a product or company by an employee of that company 5.74
A negative news story on TV or radio or in a newspaper or magazine 5.68
A positive first-hand report from an individual on the Internet with comment
When people were asked to rate how strongly fourteen factors influence purchase decisions, advertising came in dead last, behind personal word-of-mouth, expert testimonials, stories in the media, and even postings from strangers on the internet!
To what degree would your decision to purchase something be influenced by:
[ from 0 = not influenced at all to 10 = influenced greatly ]
A positive word-of-mouth report from someone you knew personally 7.72
A negative word-of-mouth report from someone you knew personally 6.95
A positive first-hand report from a credible professional source or expert 6.46
A positive news story on TV or radio or in a newspaper or magazine 6.16
A negative first-hand report from a credible professional source or expert 6.05
A negative comment about a product or company by an employee of that company 5.74
A negative news story on TV or radio or in a newspaper or magazine 5.68
A positive first-hand report from an individual on the Internet with comment
postings from others agreeing with him or her 5.68
A negative first-hand report from an individual on the Internet with comment postings
A negative first-hand report from an individual on the Internet with comment postings
from others agreeing with him or her 5.41
A positive first-hand report from an individual on the Internet 5.16
A positive comment about a product or company by an employee of that company 5.14
A negative first-hand report from an individual on the Internet 4.97
A television or radio commercial 4.74
An advertisement in a newspaper or magazine 4.63
This study reinforces the need for companies to be aware of the word-of-mouth they are generating. Each interaction and transaction with consumers is the potential source of either a positive or a negative anecdote more persuasively powerful than the your commercials This suggests three important considerations:
1) You need to understand that each consumer interaction creates either an enhancement to, or a detraction from, your advertising. [This effect is magnified if you are dealing with an “influential”—someone who makes an extra effort to communicate their experiences and opinions.] So it makes sense to put a strong effort into making sure every consumer interaction is a positive one.
2) Publicity is more powerful than advertising. Resources should be devoted to obtaining testimonials from experts, placing news stories, and stimulating positive “buzz.”
3) Your company can be badly hurt by negative anecdotes. With millions of people blogging on the internet, you may be getting lambasted and not even know it. It makes sense to have someone regularly search the internet for any negative stories; defusing them if possible, and taking steps to prevent recurrence of the kind of situation that caused the negative story.
A positive first-hand report from an individual on the Internet 5.16
A positive comment about a product or company by an employee of that company 5.14
A negative first-hand report from an individual on the Internet 4.97
A television or radio commercial 4.74
An advertisement in a newspaper or magazine 4.63
This study reinforces the need for companies to be aware of the word-of-mouth they are generating. Each interaction and transaction with consumers is the potential source of either a positive or a negative anecdote more persuasively powerful than the your commercials This suggests three important considerations:
1) You need to understand that each consumer interaction creates either an enhancement to, or a detraction from, your advertising. [This effect is magnified if you are dealing with an “influential”—someone who makes an extra effort to communicate their experiences and opinions.] So it makes sense to put a strong effort into making sure every consumer interaction is a positive one.
2) Publicity is more powerful than advertising. Resources should be devoted to obtaining testimonials from experts, placing news stories, and stimulating positive “buzz.”
3) Your company can be badly hurt by negative anecdotes. With millions of people blogging on the internet, you may be getting lambasted and not even know it. It makes sense to have someone regularly search the internet for any negative stories; defusing them if possible, and taking steps to prevent recurrence of the kind of situation that caused the negative story.
Wisdom as a competitive advantage
Marketing is all about gaining a competitive advantage, and the use of data is a major tool in that effort. With that said, let me get theoretical for a minute (hang in there—I’ll get back to the competitive advantage part soon).
I lunched the other day with a friend who used to be a reporter on the Cincinnati Enquirer newspaper. Our discussion eventually turned to the shallowness of modern reporting. We agreed that it is increasingly rare for reporters to provide any perspective on the news. They seem content to communicate what happened, without mention of the how or why. Meanwhile, newspaper readership (and television viewership and radio listenership) are in sharp decline. Coincidence? We thought not!
Data, or raw facts, is the commonest thing in the world. We are awash in it. So much so, that we are willing to pay to have it organized. Just as flour is worth more than wheat, and cookies are worth more than flour, so data gains in value as it is processed.
When data is organized, it becomes information. We pay authors to organize data into books, and teachers to organize data into lessons. When information is put to use, it becomes knowledge. Anyone can buy an engineering textbook, but we pay an engineer because their knowledge helps them put that information to use more efficiently than we can. And while many people gain knowledge, we will pay a premium to the person that can use that knowledge better than most people.
DATA—raw facts
INFORMATION—organized data
KNOWLEDGE—information put to use
WISDOM—knowledge applied to gain an advantage.
For example, the entire body of data about law and medicine is available on the internet for free. Organized in law books or medical texts, this data becomes information. There are many knowledgeable lawyers and doctors who put this information to everyday use. And when knowledge is manipulated by a particularly creative trial lawyer or diagnostician, it can become wisdom.
OK, back to marketing. Prospects and customers are looking for wisdom. They don’t have time to process all the available data affecting all the areas of their lives themselves, so they look for products and companies that can help them. It is easy to organize data into information, so lots of companies do that (but cannot charge much of a premium for the service). It’s harder to turn information into knowledge, so there are less companies (some of them are called colleges and universities) doing that, and they can charge more for the service. It is hardest to turn knowledge into wisdom, and so wisdom commands the highest price.
So the question you should be asking yourself is, “How do I build more wisdom into my products or services?” Because that is the way you will gain more customers and sell them more at a higher price. And isn’t that what a competitive advantage does?
I lunched the other day with a friend who used to be a reporter on the Cincinnati Enquirer newspaper. Our discussion eventually turned to the shallowness of modern reporting. We agreed that it is increasingly rare for reporters to provide any perspective on the news. They seem content to communicate what happened, without mention of the how or why. Meanwhile, newspaper readership (and television viewership and radio listenership) are in sharp decline. Coincidence? We thought not!
Data, or raw facts, is the commonest thing in the world. We are awash in it. So much so, that we are willing to pay to have it organized. Just as flour is worth more than wheat, and cookies are worth more than flour, so data gains in value as it is processed.
When data is organized, it becomes information. We pay authors to organize data into books, and teachers to organize data into lessons. When information is put to use, it becomes knowledge. Anyone can buy an engineering textbook, but we pay an engineer because their knowledge helps them put that information to use more efficiently than we can. And while many people gain knowledge, we will pay a premium to the person that can use that knowledge better than most people.
DATA—raw facts
INFORMATION—organized data
KNOWLEDGE—information put to use
WISDOM—knowledge applied to gain an advantage.
For example, the entire body of data about law and medicine is available on the internet for free. Organized in law books or medical texts, this data becomes information. There are many knowledgeable lawyers and doctors who put this information to everyday use. And when knowledge is manipulated by a particularly creative trial lawyer or diagnostician, it can become wisdom.
OK, back to marketing. Prospects and customers are looking for wisdom. They don’t have time to process all the available data affecting all the areas of their lives themselves, so they look for products and companies that can help them. It is easy to organize data into information, so lots of companies do that (but cannot charge much of a premium for the service). It’s harder to turn information into knowledge, so there are less companies (some of them are called colleges and universities) doing that, and they can charge more for the service. It is hardest to turn knowledge into wisdom, and so wisdom commands the highest price.
So the question you should be asking yourself is, “How do I build more wisdom into my products or services?” Because that is the way you will gain more customers and sell them more at a higher price. And isn’t that what a competitive advantage does?
Avoiding Checkmate By Thinking Ahead
It has been said that chess is great training for war. It is also great training for business. You learn to balance offense and defense, to make the best use of limited resources, and, most importantly, to think several moves ahead. Given today’s business environment, I suggest we should all be playing a lot more chess!
The minute you think you’ve created a successful business model, it is already out of date. So if you aren’t planning several moves ahead, your business is already in decline.
Over the past three decades written communication has progressed from snail mail to faxes and overnight delivery to e-mail and text messaging. Carbon paper was replaced by mimeographs, then copiers, then computer printers. Music has gone from vinyl to reel-to-reel to eight-track to cassettes to compact discs to MP-3 players to cell phones. The story is similar in every industry. And the interval between changes is becoming increasingly brief.
To be successful in business today, you need to be schizophrenic. Half of you must be thinking about how to optimize your current business model, while the other half must be thinking about how to replace it. Not an easy thing for most people to do!
The way to link these two tasks is to continually focus on providing a unique value for your customers—something that your company is perceived as doing better than anyone else. You can accomplish this by rigorously following these four steps:
Define the group you want to do business with (your target market)
Understand what your target market wants
Find the best way to provide what they want
Repeat this process on a regular basis
It is the last step that is the hardest (and most often ignored). None of us have unlimited resources, and once you have identified a need and become good at filling it, there is a tendency to coast. The more successful you are with your first pass through steps one through three, the less likely you are to repeat the process on a timely basis (if ever).
But the expectations and wants of your target market are constantly changing, fueled by technology and an increasingly efficient marketplace in which a simple internet search can match buyers and sellers with a couple of clicks. As a result, a business that fails to think at least a couple moves ahead is likely to find itself checkmated.
Steps one through three are marketing territory—feel free to give me a call if you would like to get some outside perspective on how to your polish your product portfolio or sharpen your competitive edge. Or if you’d like a game of chess!
The minute you think you’ve created a successful business model, it is already out of date. So if you aren’t planning several moves ahead, your business is already in decline.
Over the past three decades written communication has progressed from snail mail to faxes and overnight delivery to e-mail and text messaging. Carbon paper was replaced by mimeographs, then copiers, then computer printers. Music has gone from vinyl to reel-to-reel to eight-track to cassettes to compact discs to MP-3 players to cell phones. The story is similar in every industry. And the interval between changes is becoming increasingly brief.
To be successful in business today, you need to be schizophrenic. Half of you must be thinking about how to optimize your current business model, while the other half must be thinking about how to replace it. Not an easy thing for most people to do!
The way to link these two tasks is to continually focus on providing a unique value for your customers—something that your company is perceived as doing better than anyone else. You can accomplish this by rigorously following these four steps:
Define the group you want to do business with (your target market)
Understand what your target market wants
Find the best way to provide what they want
Repeat this process on a regular basis
It is the last step that is the hardest (and most often ignored). None of us have unlimited resources, and once you have identified a need and become good at filling it, there is a tendency to coast. The more successful you are with your first pass through steps one through three, the less likely you are to repeat the process on a timely basis (if ever).
But the expectations and wants of your target market are constantly changing, fueled by technology and an increasingly efficient marketplace in which a simple internet search can match buyers and sellers with a couple of clicks. As a result, a business that fails to think at least a couple moves ahead is likely to find itself checkmated.
Steps one through three are marketing territory—feel free to give me a call if you would like to get some outside perspective on how to your polish your product portfolio or sharpen your competitive edge. Or if you’d like a game of chess!
Ranking your Customers Maximizes Profits
Are all your customers equally valuable to you? How about prospective customers?
If you answered “no” (and I hope you did), do you have a system in place for rating the value of your customers?
No matter how big your company is, your sales and marketing resources (be they salespeople or advertising spending) are limited. So it makes sense to apply these resources to the customers who are most likely to buy your product at a profitable price. Are you with me so far?
Whether you call them A-B-C customers or level 1-2-3 customers, or gold-silver-bronze customers, customers should be ranked in importance. Pareto’s Rule suggests that 80% of your profit will come from 20% of your customers. The remaining 80% of your customers are either relatively profit neutral, or are actually costing you money (in another application of Pareto’s Rule, the worst 20% of your customers are probably responsible for 80% of your costs).
Ranking your current customers also creates a valuable spinoff—the ability to rank prospective customers. If you create a profile of your most profitable customers, you can then look for prospects that match that profile. The factors in the profile will differ by business. But by prioritizing prospects using their similarity to the different profiles in your customer ranking system, you can greatly increase the effectiveness of your customer acquisition efforts. Your business development people can concentrate on the prospects matching the profile of your most profitable clients, and consciously avoid wasting time on the prospects matching the profile of your least profitable clients.
It is relatively easy to rank customers based on either relative or absolute profitability—your accounting department can supply you with the necessary information. But a good ranking system goes further, and requires art as well as science. I’ll illustrate with just two of the many factors you may want to consider:
First, let me suggest the importance of potential. If two retail customers generate an equal amount of profit, but one is a 55 year old factory worker, and the other is a 28 year old neurosurgery intern, which of them is the better customer? If you have 10 products in your industrial portfolio, and two companies are spending the same amount with you, is your better customer the company currently buying two of your products, or the company buying 9 of your products? [Answers: the neurosurgery intern, because of their future buying power, and the company currently buying two products, because of the additional cross-selling potential]
Second, let me suggest the importance of understanding relationships between your customers. A bank was culling its “unprofitable” customers, and cancelled the checking account of a college student who overdrew his account. This action enraged the student’s father, who had a highly profitable multi-million dollar business loan with the bank. He subsequently withdrew his business, costing the bank a considerable amount of money.
If you think customer ranking sounds too difficult, you’re wrong. One simple way to create a ranking system is to assemble a cross-departmental team of salespeople, accountants, operation folks, and marketers. Then have them create a list of variables that you want included in your system—revenue, profit percentage, potential, number of products purchased, volume of products purchased, length of time they’ve been a customer, etc.
Finally, have them assign a number of points to for each factor—for example: 3 points if they’ve been a customer over five years, two if they’ve been a customer over two years, and 1 if they’ve been a customer for more than one year.
Remember—a simple ranking system is better than no system at all. You can always refine your system in the future.
If you answered “no” (and I hope you did), do you have a system in place for rating the value of your customers?
No matter how big your company is, your sales and marketing resources (be they salespeople or advertising spending) are limited. So it makes sense to apply these resources to the customers who are most likely to buy your product at a profitable price. Are you with me so far?
Whether you call them A-B-C customers or level 1-2-3 customers, or gold-silver-bronze customers, customers should be ranked in importance. Pareto’s Rule suggests that 80% of your profit will come from 20% of your customers. The remaining 80% of your customers are either relatively profit neutral, or are actually costing you money (in another application of Pareto’s Rule, the worst 20% of your customers are probably responsible for 80% of your costs).
Ranking your current customers also creates a valuable spinoff—the ability to rank prospective customers. If you create a profile of your most profitable customers, you can then look for prospects that match that profile. The factors in the profile will differ by business. But by prioritizing prospects using their similarity to the different profiles in your customer ranking system, you can greatly increase the effectiveness of your customer acquisition efforts. Your business development people can concentrate on the prospects matching the profile of your most profitable clients, and consciously avoid wasting time on the prospects matching the profile of your least profitable clients.
It is relatively easy to rank customers based on either relative or absolute profitability—your accounting department can supply you with the necessary information. But a good ranking system goes further, and requires art as well as science. I’ll illustrate with just two of the many factors you may want to consider:
First, let me suggest the importance of potential. If two retail customers generate an equal amount of profit, but one is a 55 year old factory worker, and the other is a 28 year old neurosurgery intern, which of them is the better customer? If you have 10 products in your industrial portfolio, and two companies are spending the same amount with you, is your better customer the company currently buying two of your products, or the company buying 9 of your products? [Answers: the neurosurgery intern, because of their future buying power, and the company currently buying two products, because of the additional cross-selling potential]
Second, let me suggest the importance of understanding relationships between your customers. A bank was culling its “unprofitable” customers, and cancelled the checking account of a college student who overdrew his account. This action enraged the student’s father, who had a highly profitable multi-million dollar business loan with the bank. He subsequently withdrew his business, costing the bank a considerable amount of money.
If you think customer ranking sounds too difficult, you’re wrong. One simple way to create a ranking system is to assemble a cross-departmental team of salespeople, accountants, operation folks, and marketers. Then have them create a list of variables that you want included in your system—revenue, profit percentage, potential, number of products purchased, volume of products purchased, length of time they’ve been a customer, etc.
Finally, have them assign a number of points to for each factor—for example: 3 points if they’ve been a customer over five years, two if they’ve been a customer over two years, and 1 if they’ve been a customer for more than one year.
Remember—a simple ranking system is better than no system at all. You can always refine your system in the future.
A list of reasons to make lists
My wife makes fun of me, but I do it anyhow. Make lists, that is. I have a home list and a list for my business. The grocery list is on the refrigerator, and there are lists of future vacation sites, presents we’ll buy for next Christmas, and… well, you get the idea.
My memory is fine. But if your goal is to get it right every time, then it’s hard to beat a list. Because even if you only miss one thing out of a hundred, that’s one dinner ingredient that isn’t around when you need it …one errand you have to drive back for again…one broken promise... Sometimes the consequence can be even greater. One of my most important lists is the checklist I use to make sure my SCUBA equipment is hooked up and working properly before I dive.
Do I sometimes feel a little anal? Yes….. but that doesn’t bother me as much as disappointing a customer, friend, or family member. And I get a charge out of how lists help me pump up my productivity.
People who keep lists tend to be organized people. And organized people tend to be efficient and effective people. And efficient and effective people tend to be a pleasure to do business with. Their prices are lower, their delivery times are quicker, their service is better, and they make fewer mistakes. Think about the professionals you count on the most—airline pilots, doctors & nurses, accountants, soldiers, architects, teachers—they all depend on checklists.
Many businesses say that they want to differentiate themselves on “service” or “performance.” I am hard-put to imagine how a company can create a competitive advantage in these areas unless it is trying to dot every i and cross every t. And if you want every person in your organization maximizing every customer contact—that means you’re going to need checklists of your own.
Making a list is a commitment to quality. It says you don’t want to miss something important—from a callback to a potential customer to ordering flowers for Mother’s Day. [It’s no coincidence that one of the definitions of ‘listless’ is “indifferent.”]
So you list-makers, stand up proud. And if anyone laughs at your list, make a note to look superior the next time they forget something!
My memory is fine. But if your goal is to get it right every time, then it’s hard to beat a list. Because even if you only miss one thing out of a hundred, that’s one dinner ingredient that isn’t around when you need it …one errand you have to drive back for again…one broken promise... Sometimes the consequence can be even greater. One of my most important lists is the checklist I use to make sure my SCUBA equipment is hooked up and working properly before I dive.
Do I sometimes feel a little anal? Yes….. but that doesn’t bother me as much as disappointing a customer, friend, or family member. And I get a charge out of how lists help me pump up my productivity.
People who keep lists tend to be organized people. And organized people tend to be efficient and effective people. And efficient and effective people tend to be a pleasure to do business with. Their prices are lower, their delivery times are quicker, their service is better, and they make fewer mistakes. Think about the professionals you count on the most—airline pilots, doctors & nurses, accountants, soldiers, architects, teachers—they all depend on checklists.
Many businesses say that they want to differentiate themselves on “service” or “performance.” I am hard-put to imagine how a company can create a competitive advantage in these areas unless it is trying to dot every i and cross every t. And if you want every person in your organization maximizing every customer contact—that means you’re going to need checklists of your own.
Making a list is a commitment to quality. It says you don’t want to miss something important—from a callback to a potential customer to ordering flowers for Mother’s Day. [It’s no coincidence that one of the definitions of ‘listless’ is “indifferent.”]
So you list-makers, stand up proud. And if anyone laughs at your list, make a note to look superior the next time they forget something!
When it comes to communicating, less is more.
In Lewis Carol’s THROUGH THE LOOKING GLASS, the White Queen advises Alice “Start at the beginning, go on to the end, and then stop.” To this royal advice, I would add “using the fewest possible words in the process…”
People don’t have a lot of time to waste these days, but that doesn’t keep businesses from wasting it. It might be because it is so hard to get a prospect’s attention, or it might be because businesses don’t do enough targeting to know what their prospects really want. But once businesses “connect,” they tend to throw everything but the kitchen sink into their communications, in the hopes that something will catch the prospect’s interest and lead to a sale.
Sarcastic M.I.T. mathematics professor and cult singer Tom Leher once said “I think that if people have nothing to say, the least they can do is shut up.”
But the problem is not that businesses have nothing to say. The problem is, the important part of the communication gets buried in so many different messages, details, and repetitions that it tends to get lost.
Treat your prospects’ time with the same respect you want your vendors to give to you. Boil your communications down to essentials. What is most unique and important about your service or product? What do prospects have to know? Communicate clearly and concisely!
You should be able to make your pitch in a 30-second commercial. That’s about 100 words. If it takes you more than that, then maybe you need help in better defining your product, service, or offer (or in targeting who it should appeal to).
Here’s an example:
“Your CMO can help guide you to the optimal target prospect for your product. Your CMO will then help you develop effective ways of approaching that prospect, establishing a relationship with them, and turning that relationship into persistent, profitable sales.” 40 words. Enough said?
People don’t have a lot of time to waste these days, but that doesn’t keep businesses from wasting it. It might be because it is so hard to get a prospect’s attention, or it might be because businesses don’t do enough targeting to know what their prospects really want. But once businesses “connect,” they tend to throw everything but the kitchen sink into their communications, in the hopes that something will catch the prospect’s interest and lead to a sale.
Sarcastic M.I.T. mathematics professor and cult singer Tom Leher once said “I think that if people have nothing to say, the least they can do is shut up.”
But the problem is not that businesses have nothing to say. The problem is, the important part of the communication gets buried in so many different messages, details, and repetitions that it tends to get lost.
Treat your prospects’ time with the same respect you want your vendors to give to you. Boil your communications down to essentials. What is most unique and important about your service or product? What do prospects have to know? Communicate clearly and concisely!
You should be able to make your pitch in a 30-second commercial. That’s about 100 words. If it takes you more than that, then maybe you need help in better defining your product, service, or offer (or in targeting who it should appeal to).
Here’s an example:
“Your CMO can help guide you to the optimal target prospect for your product. Your CMO will then help you develop effective ways of approaching that prospect, establishing a relationship with them, and turning that relationship into persistent, profitable sales.” 40 words. Enough said?
Better Strategic Reviews
“It’s hard to remember your original objective was to drain the swamp when you’re up to your [bleep] in alligators...”
How do you keep your eye on the strategic “ball?” Everyone tells you to watch the forest as well as the trees, but its a hard thing to do. There are so many tactical issues to deal with, we tend to put strategic reviews off. After all, if a strategic issue is really important, it will bring itself to our attention. Won’t it?
Yes, it will. Unfortunately though, strategic issues tend to bring themselves to our attention in the form of crises. Like key customer defections, competitive break-throughs, and precipitous sales declines. The whole purpose of regular strategic reviews is to identify strategic issues so they can be dealt with before they become crises.
In many companies, strategic reviews tend to be internal affairs. But there are two problems with these.
(1) Most business unit leaders are reluctant to expose themselves to a potentially image-damaging review by peers with whom they may be in competition with for the next promotion. Subordinates are safer participants, but may be less productive due to a reluctance to voice what may be seen as criticisms by their superiors.
(2) Insiders can find it hard to be truly objective—they tend to over-value strengths and under-estimate weaknesses.
Adding outsiders can increase the value of a review. Some smaller companies use all outsiders, in the form of an informal “board of directors.” This can be a good solution—you are probably more ready to listen to people you’ve personally selected and who you are not competing with. Of course, you have to be ready to reciprocate and help them do the same for their businesses.
But just inviting a few professionals (from vendors or non-competing businesses) to participate along with your people can improve your review. If its too much trouble to form your own group, several vendors will be happy to provide one for you. Here in Cincinnati, I know Tim Shepelak (T.Shepelak@TheGrowthCoach.com) facilitates inexpensive sessions to help professionals and business owners do regular, periodic strategic assessments.
At the far end of the spectrum are strategic reviews conducted entirely by outside consultants. For this kind of review, internal people contribute mainly by answering questions and providing information. The results of outsider reviews can be very objective and enlightening, but expensive.
Some other thoughts:
You can reduce the frequency of strategic reviews if you are staying alert to your environment. Attend industry meetings. Continually ask your customers and vendors (1) what you are doing well, (2) what you could do better, (3) what the competition is doing (when was the last time you had someone check out your competitors’ websites?) and (4) what’s changing in your industry.
You can reduce the scope of strategic reviews by concentrating on one functional area per review; even separating operations from sales/marketing can significantly reduce the effort.
Strategic reviews can be painful. But every time I do force myself through the exercise, I always end up with business-building, money-making insights that totally justify the effort. If you’ve got a suggestion for easier or more effective strategic reviews, please share it with me, and I’ll pass it on in a future e-mailing.
How do you keep your eye on the strategic “ball?” Everyone tells you to watch the forest as well as the trees, but its a hard thing to do. There are so many tactical issues to deal with, we tend to put strategic reviews off. After all, if a strategic issue is really important, it will bring itself to our attention. Won’t it?
Yes, it will. Unfortunately though, strategic issues tend to bring themselves to our attention in the form of crises. Like key customer defections, competitive break-throughs, and precipitous sales declines. The whole purpose of regular strategic reviews is to identify strategic issues so they can be dealt with before they become crises.
In many companies, strategic reviews tend to be internal affairs. But there are two problems with these.
(1) Most business unit leaders are reluctant to expose themselves to a potentially image-damaging review by peers with whom they may be in competition with for the next promotion. Subordinates are safer participants, but may be less productive due to a reluctance to voice what may be seen as criticisms by their superiors.
(2) Insiders can find it hard to be truly objective—they tend to over-value strengths and under-estimate weaknesses.
Adding outsiders can increase the value of a review. Some smaller companies use all outsiders, in the form of an informal “board of directors.” This can be a good solution—you are probably more ready to listen to people you’ve personally selected and who you are not competing with. Of course, you have to be ready to reciprocate and help them do the same for their businesses.
But just inviting a few professionals (from vendors or non-competing businesses) to participate along with your people can improve your review. If its too much trouble to form your own group, several vendors will be happy to provide one for you. Here in Cincinnati, I know Tim Shepelak (T.Shepelak@TheGrowthCoach.com) facilitates inexpensive sessions to help professionals and business owners do regular, periodic strategic assessments.
At the far end of the spectrum are strategic reviews conducted entirely by outside consultants. For this kind of review, internal people contribute mainly by answering questions and providing information. The results of outsider reviews can be very objective and enlightening, but expensive.
Some other thoughts:
You can reduce the frequency of strategic reviews if you are staying alert to your environment. Attend industry meetings. Continually ask your customers and vendors (1) what you are doing well, (2) what you could do better, (3) what the competition is doing (when was the last time you had someone check out your competitors’ websites?) and (4) what’s changing in your industry.
You can reduce the scope of strategic reviews by concentrating on one functional area per review; even separating operations from sales/marketing can significantly reduce the effort.
Strategic reviews can be painful. But every time I do force myself through the exercise, I always end up with business-building, money-making insights that totally justify the effort. If you’ve got a suggestion for easier or more effective strategic reviews, please share it with me, and I’ll pass it on in a future e-mailing.
Subscribe to:
Posts (Atom)
