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How Customer Centric Is Your Company?

by Michael Webb | Comments (0)
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Companies everywhere claim they are "customer centric." Yet are they really?

What characteristics would a truly customer centric company have?

My friend Jim Ninivaggi of The Maremma Group pointed out recently that most companies that claim to be customer centric really aren't much different than everyone else. He's right.

That got me thinking. What, specifically, would be the characteristics of a company if it could really truly be designed by customers? To answer the question, you have to put yourself in your customer role and express what you really want.

Here is the list I came up with:

1. There When You Need Them, Yet Not Bugging You
2. Synchronize with the Customer's Buying Process
3. Accountability for Customer Perception of Value
4. Providing What Customers Really Want

After you read these, I'd be curious to learn what you might add!

There When You Need Them, Yet Not Bugging You

How easy is it for your ideal prospects to find your company when they need to? For many companies this is more than half of the battle. Most businesses are lousy at getting attention, because they don't really understand what is on their customer's minds. Instead, their marketing promotions blather about themselves and their products, like a boring person at a party.

Truly customer centric companies use direct marketing techniques to go where their customers are with interesting and provocative offers. They do it by researching the market carefully and by systematically testing every promotion and campaign. They use permission-based methods, such as newsletters and free E-mail courses, to nurture relationships, educate their prospects, and be on their mind when the time is right.

For example, Ruth P. Stevens of eMarketing Strategy (www.ruthstevens.com) writes about Berendsen Textile, a Danish company that was suffering from declining sales of its hygiene products to industrial and institutional customers. They developed a promotional mailing that included a cute "germ ball" character made of foam rubber, followed up a week later with a test kit to help prospects measure the level of microorganisms on the ball, plus a reply card and a 3-month free trial offer. The campaign received attention by walking a humorous fine line between informative and offensive. The result was that 42% of recipients agreed to a meeting with the company's salespeople, and revenue per sales rep increased 74% over the prior year.

Synchronize with the Customer's Buying Process

One of the biggest mistakes companies make is trying to get customers to do things they are not yet ready to do. If your salespeople are armed with little more than instructions to go get orders today, don't be surprised when customers complain they only hear from salespeople when they want to make a sale!

Hugh Macfarlane (www.mathmarketing.com), author of "The Leaky Funnel," calls it "jumping out from behind a rock" to make a sale instead of developing a relationship so you can be there at the right time. And, the truth is that being there at the right time seems expensive and hard to do. You can't blame companies for trying to spend fewer resources to get business.

Yet process improvement is all about getting more value out of a business while putting less into it. And the key concept that unlocks this power in sales and marketing is the recognition that value is created when customers take actions. Hugh Macfarlane calls the actions customers take "the Buyer's Journey," and they enable you to synchronize with the customer to ensure your investment in communications and selling time synchronizes with the customer's readiness to act.

For example, I recently worked with a manufacturer of medical devices who was trying to improve predictability and productivity of its salespeople. There were many examples throughout their organization where synchronizing with customers enabled them to ratchet up their performance.

In one case they had been promoting new products via banner ads without many results. We helped them change the ads to offer a whitepaper that would help prospects understand more about how to solve the problems the new product was designed to address. Hundreds of people began opting in to receive the whitepaper, which clarified the problem for them, provided various ways of solving it, and showcased the benefits of the new product. The leads produced by this campaign were far more qualified than any generated by previous campaigns.

In another case, we interviewed their customers to ask how they began to realize they needed to look for replacement equipment, a process that sometimes took years. There were many different scenarios, but in each case the buyers had to prepare a business case to present to the hospital administrator. They were clearly uncomfortable with this part of their job, since it only came around once or twice in their careers. We asked them if they would be interested in templates and ROI models to help make their case. Their eyes widened as they said, "That would be very useful … could you provide such a thing?"

When we presented this to the sales force, the reaction was pretty much unanimous. Some salespeople had been doing this sort of thing informally for years, spending their own time reinventing approaches to the problem. If the marketing department were to provide such a tool it would be a great way to earn trust and respect at a time when prospects needed their help.

Truly customer centric companies worry about helping their customers at every stage of their Buyer's Journey, not just the one where money changes hands. Ironically, this enables them to reduce their cost of sales dramatically, because they can measure the value created by the actions customers take.

Accountability for Customer Perception of Value

Selling as a profession has been progressing along an arc that has but one ultimate destination. That destination isn't selling "solutions" or selling to senior level managers or selling via web pages instead of people, although some of those things can help.

The ultimate destination of professional selling is accountability for the customer's perception of value. Far from the old "take their money and run," this means a salesperson does not try to sell things unless they are sure the customer will be better off in the end and that the customer will recognize it.

To some ears this sounds awfully high minded and impractical. Those are the same kinds of companies that don't conduct customer satisfaction surveys because they don't really want to know what customers think!

If your company's reputation is looking out for your customer's interests, you have a competitive advantage. This is true in any arena where services and intellectual property are involved, such as in commodity industries, where companies attempt to add value by wrapping their products in services and support systems. Needless to say, as the complexity of products and services increases, the customer's felt need for others to look out for them increases exponentially.

Christopher W. L. Hart provides many great examples of this way of thinking in his book, "Extraordinary Guarantees: A New Way to Build Quality Throughout Your Company & Ensure Satisfaction for Your Customers" (May 1993). It is a fact that most of the time the cost of fulfilling claims on your warranty or guarantee is far less than the additional revenue they create by lowering the risk customers perceive in doing business with you. And, if claims against them are high, shouldn't you be solving that problem pretty quickly?

Truly customer centric companies worry about ensuring that their customers actually receive the value they were looking for. They go out of their way to uncover customer's problems and solve them.

Providing What Customers Really Want

Robert Middleton (www.actionplan.com) said recently, "Marketing is easy because it's really about educating people about the results you produce …"

Wow! What a great way to describe the part of marketing that helps customers want what you have to offer. Prospects and customers don't care about your product or how your company does things. They only care about the results they themselves will be able to get and the emotional and financial benefits that follow!

People who go to professional conferences love to hear about case studies of what really happened when someone tried an idea or strategy. They hate it when the speaker provides a sales pitch instead of evidence and true life stories.

Consider two sales letters side by side, both making the same points and the same offer. One is loaded with evidence and data to support it. Minus those, the other can only offer empty promises and generalizations. Prospects and customers want facts, evidence, and data to support the value story. Those communications will beat out traditional sales pitches any day.

Product development is thought to be about features and technologies and project management. Yet if companies put in one tenth of the effort into what kind of help customers want and need when they are trying to solve their problems (i.e., along their Buyer's Journey), their return on product development efforts would skyrocket.

When I work with my clients, one of the first things we do is Voice of the Customer work to gather facts and data about their customer's Buyer's Journey and the value they have actually achieved through the client's products and services. People are always surprised by the amount of vitally important information and insights they gain as a result. Even if they have done Voice of the Customer work previously, it was always relegated to some detailed product analysis or was done after the fact to justify some decision that has already been made.

Yet, if you are truly customer centric, you will work to get the people in your firm to consciously seek the truth about how your customers perceive your value.

Although changing the culture and the processes to accomplish this will perhaps cause some minor short-term pain, the rewards of such a mature and fact-based approach are well worth it.

Michael J. Webb
July 25, 2007

 

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