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April 2012 Archives

Say What They Expect, Cover Your Backside

Posted by Bill Lee on April 30, 2012 at 02:14 PM

This was the statement from an attorney representing doctors, in response to a lawsuit filed by a 20 year old patient whose arms and legs--all of them--had to be amputated when a bacterial infection got out of control. According to The Dallas Morning News, the hospital withheld appropriate antibiotics for more than a day and a half after she was first admitted to the emergency room.

"We have great empathy for Miss Mitchell and her family. At this point, our investigation indicates that all Questcare practitioners who treated Miss Mitchell provided appropriate care, notwithstanding her tragic outcome."

I wonder what impact doctors and hospitals officials think such a transparently obvious and uncaring statement will have on their patients, and on people in the community who might one day be their patients? Or on Miss Mitchell and her family.

Too Much Value

Posted by Bill Lee on April 23, 2012 at 02:48 PM

Some companies get too caught up in providing superior value to customers, because they regard value as something they provide rather than something customers perceive. "We strive for excellence in everything we do--especially if it's something that touches the customer," goes such thinking. But a lot of that "excellence" that companies obsess over getting perfect is, in fact, a matter of complete indifference to the customer--or worse, annoying like a syncophant pursuing every angle to get a promotion. 

When I'm at your restaurant, I really don't want you to train your wait staff to chat me up and form deep personal bonds. I just want unobtrusive, efficient service. When I'm calling your credit card company, I really don't want to be asked a series of questions about how good your service was. Just answer my question quickly so I can get out of there. When you're installing a cabinet in my kitchen, I really don't care if you paint the wood in places that no one will ever see. In fact, I wish you wouldn't. When a craftsman respondes that, even if no one else will know, he will know, I'm thinking, "Yeah, but I'm the one paying for it."

Great companies take the time to figure out what customrs value, and then stop investing in all those other things that don't make any difference to them--no matter how much others protest that that's not the way things should be done, that you lack pride, that you lack standards. Nonsense. What you're doing is providing value.

Your Product or Service--What Do You MEAN?

Posted by Bill Lee on April 17, 2012 at 02:28 PM

From the April edition of Reference Point.

Gaining customer references and other advocates--and inspiring them to communicate passionately about your firm--are the bedrock for growing a business. Many firms, particularly B2B firms, get hung up on the utility of their products and services; things like business impact and ROI. 

The usefulness of a product or service is important of course, but more important is it's meaning. Its intangible and emotional impacts are far more critical to selling it, marketing it, and in forming a customer community around it. Be aware of--or if need be, figure out--what your product or service means to your customer advocates. Explore this with them in the case studies you do together, their  testimonials and speeches and other communications. That's what will engage the emotions of your audience and, as the saying goes, reason makes people think, but emotion makes people--including the buyers you're trying to influence--act. 

Here's a few things to keep in mind on this.   

1. More companies-including very likely yours-can create meaning around their products or services than think they can. A data storage system, for example, might give its CIO customers a deep sense of security that their data will be there when they need it. Or provide an enjoyable experience when they interface with it. The vendor may have an exceptional, visionary CTO who shares his insights and expertise with the customer community, making them feel secure that they're on the cutting edge of important trends like virtualization. Hitachi Data Systems has created all of these "meanings" in its products and services. 

The best example I've found is from the B2C world. Procter & Gamble has created deep meaning for teen-age girls around - of all things - it's feminine care products. This is one of the last lines of products you'd think you can do that with. But P&G has formed a superbly successful community of teen age girls around these products--called BeingGirl. Their meaning? They symbolize the difficult, exciting, scary transition into woman hood. The BeingGirl community gives them a way to share with other your woman on the challenges they face at this important point in their lives. 

2. You can change the meaning of your product or service. 

Harley Davidson motorcycles mean much more to Harley riders than an alternative form of transportation. In the 60s and 70s, Harleys were associated with gangs and outlaws. Harley worked hard to change not the motorcycles, but their meaning. 

They began getting police departments to use them, placing themselves on the right side of the law. Then they helped its reputable customers--middle aged, prosperous men--to build one of the great customer communities in the world, HOGs (Harley Owners Group) which now numbers in the millions. They take trips together and organize local and national events. What do Harleys mean now? "Family - the brothers (and now sisters) you always wanted!" 

#3. One of the best ways to instill meaning into a product or service is when it enters into a poorly served market. 

That's what Marc Benioff did when he started Salesforce.com -- perhaps the most successful business software company in the last decade. Benioff positioned his products as everything the established products weren't. Frustrated customers for years had to pay huge up front fees, enter into long-term contracts, and found the softward to be complex and difficult to use. And they had to pay more huge fees if they wanted to modify their software.

A SFDC customer could demo the product for free, found it much simpler to use, and could buy it under a simple monthly contract that he could cancel at any time. SFDC's platform came to mean freedom and independence from the onerous products its competitors produced--a tremendous value proposition that these same customers were eager to communicate to new buyers. 

#4 Look for unexpected meaning you may not realize exists--particularly with customers you never expected to get. 

Recently, I was helping a good friend of mine who was going through a painful divorce. She'd moved into her new house and was faced with all the stuff you have to do -- contractors, store her accumulated stuff, organize the house, hang pictures, etc. We went down to a local hardware store to buy tools and supplies that she'd need, and as the shopping basket filled with hammer, wrench, pliers, measuring tape--I finally said, "You need a tool box." 

I don't think she knew what a tool box was, but when I got one and placed all her new stuff neatly into a compact, easy to carry plastic box--she want over the moon. "I LOVE my toolbox," she said. I cracked up. This is a sophisticated, senior executive at a major corporation we're talking about, raving about a tool box! Why? Because of its meaning. She was establishing her independence and self-reliance. When it came to taking care of her new house and turning it into a home, the stuff she'd need would always be right there, neatly stored away in her toolbox--the very symbol of her growing sense of autonomy. What does YOUR product or service MEAN to your customers? What COULD it mean?

5 Things Your Customers Can Do Better Than You Can

Posted by Bill Lee on April 9, 2012 at 02:04 PM

From my Harvard Business Review Blog post (see link below).

Many firms assume that customers can do just one thing of real significance: buy their products and services. It's time to seriously challenge that assumption, as many companies are doing by looking to customers to fuel their growth engines.

Facebook, for example, has close to 1 billion customers who don't pay a cent. Yet the company is receiving valuations of $50 billion and more — despite having just 3,000 or so employees — because of the extremely high-potential, non-purchasing value such customers provide. In a phrase, Facebook and other forward-thinking companies look to their customers to grow their businesses.

This isn't genius at work. In fact, entrepreneurs like Mark Zuckerberg and Marc Benioff ofSalesforce.com, are simply recognizing — and acting upon — entirely obvious realities about customers and their desires and competencies, choosing to leverage these rather than fight against them, as so many firms do. Here are five examples:

Customers know more about each other than you know about them. 

That's the source of much of the stratospheric value placed on Facebook by investors. Imagine a traditional company that tried to generate the kind of information Facebook generates: real time data on what movies people are watching, where they travel, the books they're reading, the restaurants they've tried. Facebook dispensed with all the research most companies would have tried to dig up, and instead focused on letting customers provide it. Westlaw, which provides legal research services for law firms, realized that its clients were interested in how they and the markets they serviced stacked up to other firms and markets. So Westlaw created West PeerMonitor, which aggregates anonymized data on firms' financial and operational performance, collected from participating clients — which turned into a lucrative new business.

Customers are more credible than you are. 

That means they make better marketers for a firm than agencies or internal employees. SAS Canada, for example, had a serious customer retention issue several years ago — retention rates had declined from the high 90s to the mid 80s and were continuing to drop. It was terribly frustrating to firm executives, because SAS software was doing an excellent job of keeping up with customer needs. The problem was, customers didn't realize this. A small group within SAS, led by Wally Thiessen, saw that it would be futile for SAS to keep trying to point this out, and instead built a team of 250 customer "champions" to do so. With support from Thiessen and his team, SAS customer champions established regular events in more than 20 major cities, set the agendas, selected speakers (and made presentations, themselves) and stayed in touch afterwards in online forums and through e-newsletters. Result: retention rates rebounded back up to the high 90s.

Customers are more persuasive than you are. 

That means they make better sales people. Marc Benioff realized this in the early days of building Salesforce.com. Lacking the multi-million dollar budgets of competitors like Oracle and SAP, he relied instead on face-to-face meetings with prospects and customers in major city markets. He found, to his surprise, that prospects at such events were much more interested in talking with SFDC customers than with him and his executive team, and found to his delight that 80% of prospects who attended the events wound up becoming customers themselves — an amazing close rate for any offering. And unlike sales people, SFDC's customer sales people didn't require a bit of training.

Customers often understand buyer needs better than you do. 

One of the great misconceptions still floating around is that customers can't articulate their needs, much less develop ideas for products to satisfy them. A substantial body of well-established research has shown that many if not most successful innovations are customer-originated. In one compilation of studies of 1193 commercially successful innovations across nine industries by MIT's Eric von Hippel, 737 (60%) came from customers. Companies who languish with poor success rates for their product development efforts should consider looking outside to customer innovators for this. 

Based on such research conducted by von Hippel and others, 3M's Medical-Surgical Markets Division tried a last gasp project in the 1990s to kick-start its consistently poor innovation record. A team was formed to bypass the internal innovation process and search for breakthrough innovations being created by outside "lead users." When the results were compared with ordinary product development projects at 3M, the differences were dramatic: Lead-user innovations achieved average revenue of $146 million dollars in their fifth year, compared with $18 million for internally generated innovations. So the message has been clear for years. The remaining big challenge is getting more and more companies to recognize this and to create ways to capture this customer knowledge in their everyday operations.

Prospects in your market would rather affiliate with their peers (your customers) than with you. 

By nature, most all of us are open to creative new ways to affiliate with our friends and peers — the very foundation on which Facebook was originally built. Companies are often uncertain about being able to create opportunities to affiliate that customers would embrace— but they can, as long as they avoid making the common mistake that customers want to affiliate with the company. They want to associate with their peers — meaning your customers, not you.

One example of this is Procter & Gamble's BeingGirl community for teen and pre-teen girls, which was formed initially to promote feminine hygiene products because TV and print ads made its young audience uncomfortable. P&G enlisted experts to provide content, which did little to build interest. After that misstep, P&G created forums so that girls could talk to each other about the issues and challenges of growing into young womanhood. And with that the site took off, with girls from around the world eager to get into the conversation — and with P&G able to market its products more subtly and effectively than before. Customers are often more apt to trust and be interested in information if it comes from a peer, rather than a company.

So remember, there are many things your customers can do better than you. How are you involving your customers to help grow your business?

Btw,the post generated some lively comments on the HRB site, which you can read here:

http://blogs.hbr.org/cs/2012/04/five_things_customers_can_do_b.html