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October 2010 Archives

Are Your Customers Creating Apps?

Posted by Bill Lee on October 27, 2010 at 11:09 AM

And no, you don't have to be Apple, RIM, Google, AT&T, or Verizon to care. Whatever your business is, your customers may very well be creating "apps." And these can be gold mines for your business.

Apps are developed to enhance the value of your product or platform. They can be developed by anyone: your company, a 3d party, or--and this is where it gets espeically interesting--your customer. When customers go to the time or trouble to develop their own app, as insurance firm Aflac or consumer survey firm General Growth Properties did, then it can get very interesting. The reason they're going to such trouble is because the app has great value to them. And if a lot of other buyers in their industry want the app too, then you've got instant market verification of its value.

That can allow your firm to bypass all the R&D, market testing (which often fails) and so forth needed to roll out new products. And the chances are very good that whatever customers in your market have created, it's not as good as you could ultimately make. And that can open a serious business opportunity for your firm, as 3M and MIT professor Eric Von Hippel have shown.

And remember. The broad concept of app isn't just limited to software programs that go on a mobil device. Apps can show up on any sort of product or platform--medical devices, pipe hangers, extreme sports equipment, whatver--and also, very possibly, on the products you're creating. Anywhere that customers are going to the trouble of making improvements to a product.

So what apps are your customers creating? Have you investigated this?


Customers Are Not Your Friends

Posted by Bill Lee on October 20, 2010 at 02:16 PM

How's that for a provocative statement? But stay with me on this. I hear a lot of smart business professionals talk about how they often regard customers as good friends, even close friends--that indeed, they make it a personal goal to build such a relationship with some customers.

I say, be very very wary.

Great customer relationships are built on achieving a rich exchange of mutual value. Economic value. Both sides have a responsibility to keep it that way--and it's a solemn resonsiblty to your investors, employees, management, and yes, to your customers. That's not friendship. The danger if you start mixing the two up is that you start doing things for each other--favors, special deals, and the like--that make no business sense. Not good.

Some years ago when I was consulting for a commercial developer in Dallas, I found that project managers in his ' construction division had gotten a little too cozy with subcontractors. How? Because one of them got outraged at me when I insisted that a subcontracting bid be awarded to the lowest priced qualified bidder. (What a concept!) The offended (losing) sub was buddies with the project manager on the job, and as a result of their friendship had gotten used to submitting bids with little competition, and when his bids weren't low, he expected to get a heads up so he could  lower his bid. 

That wasn't good for the project manager's boss (and my client)--not for his bottom line, and not for his goal of building a more price competitive construction division. And by the way, it wasn't good for the preferred sub: relying on such "friendships" and cush deals in business dulls your competitive edge and also tarnishes your ethical compass. In business, those are liabilities.

So whatever action or arrangement you're contemplating with a customer, it's a good idea to stop and ask, are we doing this because it makes economic sense for both our businesses? Or is it to further some misguided sense of "friendship." 


Luxe Brands Submit to Hoi Polloi Reviews

Posted by Bill Lee on October 18, 2010 at 02:56 PM

Bar the gates, fill the moats. The Wall Street Journal reports that luxury retailers such as Saks Fifth Avenue, Macy's, Nortdstrom, and even Neiman Marcus (sort of) are opening their websites to customer reviews, following in the path of book, electronics and heaven forbid, office supply retailers. 

Kidding aside, the concerns of luxury brand owners are legitimate. One negative customer review can overturn a dozen positive reviews in the minds of consumers--and create serious problems for high end brands that depend on a relatively small number of sales. "The notion of having a user saying that Chanel No. 5 smells like Brooklyn is so scary that [luxury brands] were literally paralyzed," said Scott Galloway, founder of L2, a think tank that specializes in prestige brands. But even luxury retailers have to bow to changing customer expectations. "The customer wants a more objective voice saying, 'I own this, and these are the things you need to know about it,"' says Denise Incandela, president of Saks Inc.'s Saks Direct.

Neiman Marcus is trying to manage the dilemma, allowing only its "insiders"--an elite group of customers--to provide feedback on purchases. They may be on to something. Call me a snob, but why let a one time buyer have as much say as your most loyal repeat customers?

Two retailers provide a striking contrast in handling negative feedback. Bud Konheim, chief executive of the brand Nicole Miller, was furious when a customer complained that a dress she bought from Notdstrom was "hot and uncomfortable." His first reaction: "Let's go find and kill that woman." HIs second one was acceeptance: she "was tapping into something we are well aware of: Our clothes do not fit everybody universally." he remarked. Hey, how about figuring out if this is a problem that needs to be fixed?

Which is what Nordstrom did when a customer complained about a pair of Burberry riding boots that looked "cute online" but were too big in person. Nordstrom is forwarding the comment on to Burberry to see if there's a manufacturing issue. I'd give that a 5 star review. Why not get over the idea of portraying your products as always perfect and beyond reproach to the public? They know better.  Why not engage in a healthier exchange in which you work with customers to approach that ideal together?

Customer Videos Are Barely Scratching the Surface of Their Potential

Posted by Bill Lee on October 15, 2010 at 12:48 PM

FROM THE OCTOBER ISSUE OF OUR NEWSLETTER, REFERENCE POINT: (to subscribe, email me by clicking "Contact Me" on the right)

Customer video 2.0. What will that look like? How can you give your customer reference videos a jump on your competitors'? It's worthwhile thinking about these questions, because customer videos are proving to be powerful tools for engaging visitors to websites and generating qualified leads, and we're only beginning to tap their potential. It's an exciting area, and it will reward innovation.

To get a great glimpse into the power and the future of this medium, i highly recommend this video by TED's Chris Anderson--it's one of the best TED videos I've seen (which is saying something), and although it's subject is the impact video can have on innovation, trust me, there's a great deal here for those who make customer videos.

Here then, are some thoughts on how customer videos will evolve in the near future and more fully realize their potential:

1. Video will do more to convey the customer's emotion.
This isn't just about showing the customer is happy or pleased. It means thinking through, "What was the underlying emotional driver that caused him or her to buy--and that presumably your firm has delivered on?" And every experienced sales person knows that it was an emotional driver that caused the customer to buy. It might be a sense of reduced stress because your solution enables so much more productivity than the one they had before. Or a sense of security because yours is more dependable.  High production values, music and other devices don't convey this nearly as well as the customer himself, unscripted, talking in the moment about this with real feeling. Here's a great example, which I blogged about recently.

2. Video will SHOW what your solution did.
So many videos have the customers just telling what happened--hardly the best use of a medium that's so adept at showing! It may seem difficult to show what a complex technological solution does, in a way that can be quickly grasped by a prospect who knows very little about it--but I think leading edge firms will starts cracking that code. Management consultants have grown extremely skilled at creating process visuals--illustrated charts, diagrams, and so forth--that convey the gist of complex concepts in ways the mere text descriptions can never match. And video should be able to take that up a notch. Check Chris's TED video for (mid way through or so) showing scientists how to conduct a complex biological experiment--which provides a much more effective way to communicate the process than a text description.

3. Customer videos will facilitate idea-sharing.
Why not encourage your customer communities to share ideas using video? Among the many benefits of this to your product development people, you would likely get additional footage that would make terrific testimonials. Toward the end of Chris's video is a particularly inspiring example of how this can work--and it comes from poor villagers in Africa who used video to share ideas on improving the efficiency of their once primitive food growing efforts. It will bring tears to your eyes.

4. Customer videos will help qualify the buyer.
Some customer videos could do more to qualify the buyer and make sure she gets to the videos and other information on your website that are most relevant to her situation. Instead of relying on a system of website categories and links that require the customer to navigate her way to the right video, why not provide an elegant and entertaining video that does the work for her? Something like this Groundswell winning video used by marketing intelligence firm Eloqua--and think how much more effective it might be if peers of the buyer--that is, your customers--were guiding him through the process.

5. Customer videos will interact with the buyer.
Marketing departments will regard the video as one part of the engagement process, which accelerates the buyer to deeper and more intimate engagement with the firm. After getting the buyer emotionally involved, providing compelling information and substantial value, he'll want more. Videos can interact with him to determine where he would like to go next: to a teleconference, demo, event, online community, etc.

BE the Influencer

Posted by Bill Lee on October 6, 2010 at 03:48 PM

There's a great deal of interest now in Influencer marketing--finding and engaging with the mavens, connectors, network hubs and the like in your marketplace and getting them to say positive things about you. The Web has created a platform in which bloggers, often unaffiliated with traditional media or analyst firms, can create large followings that are quite attractive to marketers. 

But why not focus even harder on BEING a major influencer in your market? (A better aspiration is to become a thought leader, but that's a subject for another day. 

Think about it. First, you’ve got access to your customers who are in the trenches every day, facing and solving (hopefully with your help) the real world issues confronting your industry.

In addition, your firm has professional business, technical, and process experts who are working side by side with your customers to help them find real world solutions. This is the sort of information that outside influencers, as well as analysts and industry media, crave. And you’ve got it. Why depend on a marketing communications strategy that hands over such powerful intellectual property to these mediators? Why not develop a communication strategy in which YOU leverage your IP to develop your own large following in the marketplace? Why not be the big dog influencer yourself?


Customer Reference Video Watch

Posted by Bill Lee on October 4, 2010 at 07:52 AM

A great customer video. No glossy production values. No one says "state of the art," "seamless," "best of breed," or other tiresome buzzwords. It's about the customer. Notice you learn very quickly how his business benefits from the vendor's solution. You get a sense of his emotional response to what the vendor has done for him. Thumbs up!