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ARE YOU EDUCATING THE BUYER?

Posted by Bill Lee on February 11, 2014 at 03:49 PM
If you want to reach and influence buyers today, you have to educate them. They can increasingly avoid traditional marketing and sales approaches that pitch, spin, manipulate, or try to control the conversation. Marketing and sales need to respond to this reality, and no one in your firm is better able to help them do so than customer advocacy and reference programs. Why? Because you have access to and relationships with the one resource buyers want most to hear from: their peers (your customers).
 
Here are some ideas on how to do leverage customer advocates to give buyers what they're demanding: education:
 
* Develop authentic customer stories.
Encourage customer references and advocates to provide more balanced stories, rather than "everything about your product and service is perfect." Of course, show how it played a critical role in your advocates' success. But also encourage the advocate to talk about the context--what factors make your solution ideal, and in what context your solution wouldn't be a good fit. Aim for authenticity, not spin. Your buyers know the difference.
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* Keep abreast with how your buyer's are purchasing.
In many industries, including yours very likely,  buyers' "decision journeys" are dramatically changing. Don't assume they're going through the same process they were a year, or six months ago. There are all kinds of tools out there to help you with this, but a good way to do so is just ask them. One firm (I can't mention the name) did this and found that a significant number of buyers--about 16%--relied solely or at least mainly on a few specific product review sites. When they crunched the numbers, this translated into $30-40 M in sales generated by these sites. You can bet they got their customer advocates providing reviews on them.

 

* Expand your horizons to the entire buyer's decision journey.
The days when references are just called in to close deals are long over. Buyers who increasingly demand to be educated are doing so in all stages of the decision journey, starting with "awareness" --and that means they're receptive to hearing from your customer advocates sooner. Sirius Decisions' Megan Heuer will share the latest research on what customer content they're interested in and when, at the 2014 Summit later this month..

 

* Get your advocates engaged with relevant 3rd party "educators." 
These include analyst firms as well as your industry's equivalent of Yelp-type firms. In the IT world, for example, Yelp-type firms include IT Central Station, G2Crowd, Credii, Trust Radius and others. These firms build communities of IT users to create and exchange information about various IT solutions--often it's surprisingly in-depth. Traditional analyst firms, meanwhile, responding to this trend, are often bringing in client customers into advisory boards and forums. Find the ones relevant to your buyers (see second tip above), and encourage your advocates to participate in these.

 

* Create events where advocates can educate buyers.
That is, instead of talking about your firm's products and services, host events (or have your advocates host events--I know of at least one company who's advocates have done so) where the topic is a compelling issue that your buyers are facing in their jobs and businesses. That will draw an audience. As your advocates show how they've addressed the issue successfully, your buyers will get the idea that your products and services helped. Fast-growth Apptio is focused on creating a "movement" in its market, and central to that effort is the Technology Business Management Council it formed a few years ago that focuses not on Apptio's offerings, but on helping CIOs and other CXOs to "identify and promote best practices for running technology organizations like a business." That compelling educational component draws elite members. The Council has expanded in the past two years from just over 200 members to more than a thousand, and includes senior technology executives from many of the top firms in the world, including Facebook, Goldman Sachs, Univision, Cisco, Time Warner, etc. Btw, Apptio's Maria Galindo will present on this at the 2014 Summit.
 
* Make liberal use of the most powerful relationship-building technology!
And note, it's not social media (which isn't even social, but I digress). The most powerful technology for building relationships is F2F (face-to-face). Marc Benioff--who invented cloud computing, and who you think would have built his firm using fancy analytics--relied most heavily on old fashioned F2F. He found that when he did live events with prospects and buyers, 80% of the prospects became customers themselves. Some of his sharper sales people began requesting budget to host prospect & customer events at local bars. These were very low budget, and included no presentations from SFDC people--just casual conversations between prospects and buyers. Result: 80% of those prospects became customers too.
 
 
Increasingly buyers demand to be educated. That's the new reality your marketing and sales departments are facing. You hold the keys to this new kingdom--the one resource your buyers most want to hear from. Resist the temptations to turn these into traditional marketing and sales pitch men and women. Turn them into genuine educators for your buyers.
 
All the best,
 
Bill  
 
Bill Lee, President  
Customer Reference Forum  
Author of 
The Hidden Wealth of Customers (June 2012, Harvard Business Review Press)
Twitter (follow me)
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Reference Point I How To Create A Killer Rock Star Value Proposition

Posted by Bill Lee on October 16, 2013 at 04:46 PM
HOW TO CREATE AN IRRESISTIBLE ROCK STAR VALUE PROPOSITION
How do you move customer references and advocates to the level of "Rock Stars" -- those rare advocates who can have a major impact on your business? The short answer is: take the same approach top sales people do

First, position your advocacy program as something that provides tremendous value to your advocates -- as opposed to asking for favors, or quid pro quo arrangements ("we'll do X for you if you give us a testimonial"). Then create an irresistible value proposition that entices potential Rock Stars to participate. Here are the main elements.

Develop a Powerful Rock Star Value Proposition (RSVP) ...
 
... similar to a traditional customer value proposition for your products and services.

No sales person worth her salt would ask a potential buyer of her products or services to purchase them as a favor. Great sales people don't really on monetary incentives either, a sign of weakness or even desperation. Rather, great sales people emphasize value - "here's what using our solution can do in terms of improving your business and making you better at your job." 

Great advocacy pros take the same approach with potential advocates. BUT, they keep in mind one critical difference: when you sell value to a buyer of your products and services, the relationship is governed by market norms. A strong advocacy relationship, on the other hand, is governed by social norms.

While your sales people are fine by emphasizing monetary value (such as ROI, reduced costs greater efficiencies), as a customer advocacy professional, you should emphasize social value. Your opportunity, and it's a big one since most companies don't get this, is to help your advocates build social capital. And unlike your products and services, which will appeal only to a small share of your market, social capital appeals universally to the vast majority of people. In a phrase, it's an easy sale.

Create a needs or "opportunities" assessment. 
 
This is similar to what sales people use to quickly identify potential buyers. You can use something similar as you get to know your potential Rock Stars -- a good needs assessment tool will guide you in WHAT you want to get to know about them. 
Specifically, your sales people have a list of customer needs or opportunities that your products and services can meet.Their customers might need access to mobile devices, faster data processing, point of sale information, and so forth. Salespeople use this to quickly determine if a prospect would be interested in their offerings.

Your team can create a similar needs or opportunities assessment. Our research has shown five main types of social capital that are particularly appealing to potential Rock Stars:

1. Expand your affiliation networks.

2. Help you learn and grow.

3. Build your reputation.

4. Establish a higher status.

5. Have a say in your products and services. 

 By offering to help a potential Rock Star to increase any of these, you help him derive greater value from his peer and other support networks. Helping him increase his reputation, for example, makes him more visible to the rest of his network. Helping him learn important information makes him a person of greater interest to his peer group -- much like your neighbor who knows the best contractors and handymen in the area.

Use this information to create exceptional value for your Rock Star advocates. 

Now as you build your relationship with potential Rock Stars, your needs assessment can guide you into having conversations like these with potential Rock Stars:

YOU:  "I've noticed that you're active in a number of peer or professional groups. What do you get out of those?"   
PRS (POTENTIAL ROCK STAR): "I really enjoy spending time with my professional peers. I like to help them, and they help me."
YOU: "Would you be interested in expanding your peer affiliations?" (#1, above)
 
There's a high likelihood she'll say yes, making her open to participating in your customer community or advisory board.
OR
 
YOU: "I notice you do a good deal of blogging, and seem to have great access to information that your peers really value. You seem to like to learn, and to make your 'insider' knowledge available to others." (#2, above)
PRS: "Yes, I love being in-the-know and have cultivated a lot of sources."
YOU: "It might make sense for us to give you an early heads up when we issue new releases."
 
Chances are excellent he'll say yes to that, and blog or post about it your early releases to his audience.

You get the idea. For PRS's who enjoy building their reputation among their peers, it might make sense to offer to line up interviews with the media or speaking arrangements. For those who want to have a say, you might want to give them access to your product teams. And so forth.
 
To sum up: to land Rock Star customer advocates, there's no need to rely on legal requirements, monetary or other "market-based" incentives, asking for a favor, or crafting quid pro quo arrangements. These are, at best, boring and can undermine the very credulity of someone you want as a spokesperson and advocate. Offer the something much more exciting and valuable: a stage, a platform, insider access, an audience.Offer to help build their social capital.
 
All the best,
Bill  
 
Bill Lee, President  
Customer Reference Forum  
Author of 
The Hidden Wealth of Customers (June 2012, Harvard Business Review Press)
Twitter (follow me)
LinkedIn (connect with me)
LinkedIn Community (connect with other reference professionals)

How Apple Stores Can Keep From Turning Sour

Posted by Bill Lee on August 13, 2013 at 09:28 PM
From Bill’s post on Harvard Business Review Blog Network

What follows is a customer experience cautionary tale, illustrating the kind of lapse that can happen even at a company with a global reputation for being customer-centric. I suppose if it can happen at Apple Stores — meant to be a beacon of customer service — it can happen anywhere. But take note: beyond the caution is a tremendous opportunity, for Apple and other retailers.

I recently set up a Genius Bar appointment at my local Apple Store, for 9am sharp (when the store opens). I was the second person to take a seat at the Bar. While waiting — and waiting — for my Genius to show up (about 15 minutes) two or three groups of Geniuses came to the bar, looked intently at some device together, discussed, looked some more — but never said a word to me. When the Genius helping the first customer got done, he began tapping on his iPad. I was just a few feet away from him. After a few moments, I announced, "My man, I'm feeling invisible." The Genius, with a wry smile and hardly looking up from his iPad, assured me someone would be with me shortly. At that early hour, the store had many more blue shirts hanging around than customers. Yet at no time did anyone say, "Are you being helped?"

Since then I've mentioned the episode to two friends who themselves are avid Apple users. Instead of responding with, "Wow, that's never happened to me," they immediately related their own "Bad Apple" story.

Coincidentally, a recent article in the Wall Street Journal reports, among other things, that the last head of Apple Stores (post Ron Johnson) had changed the emphasis from customer service to sales and cost cutting. That's an old story in the business world, that typically doesn't end well — and one you don't expect a firm like Apple to illustrate. Sure enough, it's resulted in declining customer satisfaction, and Apple Stores' famous per square foot sales (the highest in retail) has declined this year.

Apple is now looking for someone to head up its retail operations, but some candidates have expressed wariness, saying that the company's top brass lack clear plans for the stores. Here are some suggestions to help Apple Stores fulfill their original promise, and get beyond it to a new kind of relationship with customers:

Build Real Community
I'm not talking about a social media effort of some sort. I'm talking about the real thing, live and in person. Apple now has more than 400 stores worldwide, an unmatched level of penetration into local communities. Those local communities, of course, contain legions of passionate Apple customers who are doing amazing things with Apple products. The stores, together with these customers, are potentially a customer community-building resource that could dwarf anything that Starbucks is doing.

Find Your Local Rock Star Customers
Instead of pushing the blue shirts to sell, push the stores to attract local "Rock Star" customers, who will in turn, introduce new life, and new motivated buyers into the Stores. In particular, find the customers who are doing amazing things with movies, gaming, workflow productivity, design, blogging, presentations — whatever your customers are most interested in. Find ones who are articulate, who like helping others, are appealing in appearance and demeanor. No doubt many of these folks already like to affiliate — perhaps they're blogging and drawing strong audiences. Get ready to deploy these customers using your Stores as a base. And don't worry about the cost of finding and engaging such folks. First, they won't be hard to find — these natural advocates have a way of making themselves known. They're always interested to build their "social capital." Second, when you invite them into your community building events, you'll find that they'll do amazing things to draw audiences and customers, and they won't cost you a thing.

Organize Live Presentations by Your Rock Stars
The Apple Store in my neighborhood is open from 9am to 9pm Monday through Saturday. That leaves wasted time and space. Why not try a morning commute presentation at 7am on "Seven Ways to Dramatically Increase Your Productivity." A Genius might be able to make such a presentation, but much more effective would be a local Rock Star entrepreneur — an impressive "peer" of other creative and successful customers — presenting cool things he's doing to improve his productivity using his iPad and iPhone. Then many more local entrepreneurs and business people would likely show up. Or try a "Late Show" (9 pm) by a local Rock Star developer showing how he's created amazing Apple-worthy Apps. You get the idea. And by the way, you can be sure that as soon as a high-profile customer knows he's been invited to present at an Apple Store, he's going to let all his friends know.

About Those Video Screens
During my extended wait time, I couldn't help but be struck by all the screens behind the bar containing staid looking Apple content that I had no interest in. Another wasted opportunity. Perhaps the most attention-grabbing business communications today are videos by customers showing how they're using new products they've purchased: Teenage girls on a shopping spree. Skateboarders showing their moves. Researchers showing how they conducted the experiment. And of course, Apple users showing the cool things they're doing with their iPhones, iPads or Macbooks.

Why didn't I see any of this during my recent visit? Also, if Apple were to start having interesting events in its stores, it could get fabulous video of those, too. Show customers who come into your store that it's not just a store, it's a community gathering place with all kinds of interesting things going on. Such activities will get local customers to sign up for your email lists so as not to miss out.

Orient the Customer Experience Around What Customers Can Accomplish
When the first Apple Stores were opened, they were organized around the firm's product lines as well as the things customers would want to do with the products — such as importing and editing movies. I don't see this in today's Apple stores. They look more like product displays you'd see in an ordinary retail store — iPads here, Macbooks there, iPhones to the left. I should see something that shows me how to Photoshop pics on my iPad; or how to configure Apple products for my kids; or the top 10 things I can do with my Mac/ iPad / iPhone to organize my life. There could be a couple of community tables in the store, with daytime presentations on these topics.

Such measures would, of course, require experimentation. But the results could be well worth it. There are three areas of huge, latent wealth that the Stores could play a central role in tapping: First, all of the capabilities and expertise that we Apple customers are carrying around. Second, going beyond the use of the physical Stores as mere ABS (always be selling) machines to build them into hubs for customer communities. And third, activating and leveraging the hundreds if not thousands of local Rock Star Apple customers who would jump at the chance to get involved, and to help build such communities. When this potential is unlocked, the devices would almost sell themselves.

The Right Way to Hire Your Customers

Posted by Bill Lee on July 24, 2013 at 09:45 AM

Suppose I told you that you have access to a resource that is more empathetic, more interesting, and more persuasive to potential buyers of your products and services than even your best sales or marketing people. A resource that can do a significant amount of the marketing work that you're spending lots of dollars on, and can do so for free. A resource that can get you to the leading edge of innovation in your industry much faster than internal product developers — and at the same time, can show you how to forego superfluous services or product features that you thought were essential but that in fact, no one would miss.

I'm talking, of course, about your customers. It's astonishing to see companies that lavish so much time and attention (and money) on selecting just the right employees, but show little discernment in selecting their customers beyond making sure their check will clear.

Companies that are pickier about their customers reap major rewards for doing so, particularly in today's economy where customers are not only better able to do the activities described above, but are very often willing to execute them on behalf of the companies they do business with.

So what traits and capabilities should you look for in the customers you want to hire?

They're profitable.

This is not always obvious. Enterprise software firms were famous for signing big contracts generating lots of revenue with customers who turned out to cost more — due to demanding big discounts or excessive service levels — than the revenues they generated. Firms that failed to track the profitability of customers would have no clue there was a problem, until rapid growth stalled and costs caught up with revenues. A supposedly thriving, fast growth firm would suddenly find itself in danger of bankruptcy. Know which of your customers are profitable. For those who aren't, figure out how to make them so, or drop them.

Once you have a handle on their profitability, then look for additional ways they can contribute to your marketing, sales, and innovation efforts, and even help improve your operations.

They derive exceptional value in return.

An excellent, objective way to determine this is to ask customers the Net Promoter question in customer surveys: how likely would they be to recommend you to a colleague or friend. Customers who are highly likely to do so are not only more likely to remain loyal, but also have a positive story to tell to their network. Remember, your buyers find customers more persuasive than any sales rep and you need to put this to work. Even companies with a relatively low Net Promoter Score will still have a core of 25%-30% of their customers identify themselves as promoters. Allowing such a resource to lie fallow is a waste. "Hire" your promoters and help them to advocate for you

They like to affiliate with other customers and buyers.

Companies that build businesses in markets where buyers like to affiliate — or would like to do so if someone made this easy — can develop a whole new set of valuable customer "hires." Book readers, for example, love to form discussion groups. When a couple of bright entrepreneurs launched a vibrant, online community in 2007 to allow book readers from around the world to connect and talk about their favorite books — called Goodreads — the result became an 18 million-member community in just six and a half years. Jeff Bezos "hired" those customers to the tune of hundreds of millions of dollars, according to estimates.

Savvy firms such as SAS Institute working for government agencies have noticed the same thing. Conventional wisdom suggests it's impossible to get such customers to help in marketing and sales efforts due to legal restrictions against endorsing vendors. But government employees love to affiliate with each other, exchange ideas and contribute to the greater good that they collectively strive to represent. And the fact that they don't compete with each other removes a significant barrier to such sharing. So SAS and other companies help their best government customers do so by simply telling their story — "the good, the bad and the ugly" — to their colleagues in other government agencies. Such transparency often results in a more effective customer reference than you see in businesses who coach their references on what to say. That approach has allowed SAS institute over the past decade to win references from the US Departments of Treasury and Commerce, the Army, Navy, Air Force and Coast Guard, and dozens of other prominent state and local government agencies.

They're on the leading edge of their industry.

Business customers who are pushing boundaries, and perhaps disrupting, their own industries are highly attractive "hires." They'll push you to help keep them at the leading edge. And such customers are also more likely to let the world know what they're doing to stay on the leading edge — especially if they're striving for recognition against an entrenched competitor, which means they're more likely to talk about how you're helping them do so. Cisco, for example, was well known for doing this as it was building a position of dominance in the 1990s. Find such customers in your industry — and hire them.

Also look for individual customers who are on the leading edge and who, impatient for the functionality that they need from suppliers, are making their own modifications to your products. Most industries have such customers, and using straightforward networking tools they can fairly readily be found. Indeed, in today's connected world where an increasing number of products have software, it's even easier as hackers will get into the software to make modifications. Even Apple — notoriously closed to any independent vendors wanting to modify their platform — has embraced this trend by allowing apps on its devices today. (These now number in the hundreds of thousands. Try to imagine an iPhone without them.) In your industry, find such "lead user" customers who are making modifications, and hire them.

They want to perform services for your other customers.

Companies are unlocking tremendous new value from customers by, in effect, turning over the jobs they once assumed they had to do (and pay for) to their customers (who do them for free). This includes software firms whose more knowledgeable customers provide support services to other users, or technology firms whose "hacker" customers modify the products they buy, make them substantially better, and share their work with other customers and potential buyers.

This is an area of great creativity, as Frances Frei and Anne Morriss have shown. The "car sharing" firm, Zipcar, for example, is mounting an impressive challenge to the rental car industry. By having customers return cars to an agreed location, gassed up and clean, they eliminate the hassle of having to go to a car rental location, wait in line, and deal with hidden charges. All the next customer has to do is show up with his Zipcar card, swipe it across the windshield, and the door opens ready for him to drive it off.

These days, if all your customers are doing to build your business is paying you money, you're leaving a lot of value on the table.

Creating Customer Defenders

Posted by Bill Lee on October 18, 2012 at 01:23 PM

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."