The most proactive CMOs are trying to understand individuals as well as markets. From a value-driven perspective, this is particularly important because value is the net positive experience customers gain in interacting with a company and using its products and services. It has many dimensions. Sets of desirable experiences vary from individual to individual because everyone’s circumstances are different.In order to improve, you need to understand what types of experiences your intended customers are having and what types they want to have. Market research reports and sales analyses can only show customers in aggregate, offering little insight into what individual customers need or desire.
A recent Global CMO Study by IBM reinforced this point. They concluded one reason most organizations struggle to get the customer insights they need is that they still focus on understanding markets rather than individuals. New social media sources have the potential to help companies discover what individual customers want. Blogs, consumer reviews and third-part reviews disclose what discrete customers are seeking. They provide a rich source of information about customer sentiment, with context, that can help companies more accurately predict demand patterns and gain crucial insights into how customers and influencers think and behave.
Unfortunately, the study reports that relatively few CMOs are exploiting the full power of the digital grapevine. Only 26 percent are tracking blogs, only 42 percent are tracking third-party reviews and only 48 percent are tracking consumer reviews. One explanation is the tools, processes and metrics these companies use are not designed to capture and evaluate the unstructured data produced by social platforms.
I’m not arguing you drop the practice of market research and focus only on individuals. Studying the market and individuals in that market both have their place in your inbound marketing activities. After all, you must provide value to a sufficient number of individuals to survive and grow as a business.
What you can do?
- You need to enable employees to engage with customers.
- Find the wikis, forums and digital communities where your customers gather digitally.
- Use Google Alerts and similar automated tools to help identify references to your company, its products and services.
- Assign employees to monitor and interact with the relevant social media in your industry and segment.
- In assessing feedback, consider if the speaker is representative of your target market and if the feedback is indicative of a trend or if it’s an isolated case.
- Define a way to capture, store, analyze and share the descriptions of positive and negative experiences your intended customers are having so everyone can benefit from these insights.
Most likely, your customers are digitally sharing their positive and negative experiences in using your products and your services. You can ignore it or you can listen and learn how to improve those experiences in order to increase the value your offer your customers. The choice is yours.
In my last two blog posts, I described how an unfortunate series of negative experiences in setting up a trial subscription to a digital newspaper overshadowed the high quality of the newspaper itself. It’s a good example of how value is defined by the sum of the experiences and is not exclusively related to the features of the product itself.
I thought I was ready to put this frustrating situation behind me. As I reported earlier, I decided not to renew the trial subscription. So I carefully counted the days of the trial period and made sure I cancelled prior to its conclusion so I wouldn’t be billed for any additional service. The trial ended on a Tuesday so I cancelle on the day before, Monday.
Guess what. When my next credit card statement arrived, I had been charged for another month of service at the regular rate. This was frustrating for three reasons; first I had cancelled prior to the period for which they were trying to charge me; second, the charge was $35 for one month which is significantly more than the $0.99 I paid for my 90-day trial; and third I had received an email confirming I had cancelled the subscription so I was not reading the digital paper for which they were charging.
After I counted to 10 and took a couple of deep breaths to calm down, I called customer service to correct this obvious mistake. There I learned that the billing occurred on a Saturday, three days before my trial subscription ended and two days before I cancelled. I politely explained this was inconsistent with the terms of the trial and that I had cancelled prior to its conclusion. Although courteous in tone, the customer service rep did not seem at all sympathetic and explained that the billing cycle is on Saturdays and that’s when I was billed. After a couple of slow and detailed attempts to explain why this was not logical, I was told there was nothing he could do to remedy the situation.
So I resorted to my previous tactic of sending an email to the VP of Customer Service and carefully pleaded my case. To his credit, I received a response within12 hours which included an apology and a complete refund for erroneous charge.
Now I think this trying journey is finally over. It was infuriating but reinforced two valuable lessons. Value is the sum of the experiences you have and there is a strong emotional element in assessing the way you are treated. These can overshadow the benefits of an innovative and unique product.
In my blog post last week, I described the difficulties I had starting an 8-week trial digital subscription to a newspaper. I explained why I had to call customer support seven times for a total of close to two hours on the phone and write to a VP of Customer Service to correct an erroneous double billing. There are some lessons to be learned so I’ll offer my suggestions as to what would have made this a more positive customer experience.
Be clear. When giving customer choices, be very clear about what is included in each option so they can make an informed decision the first time and won’t have to try to change it later. In this case, it was not obvious they offered a free reader that would only work with some levels of access.
Speak with one voice. If possible, inform everyone that communicates with customers about all special offers and programs so they can speak knowledgably and confidently. It undermines the credibility of the company when one of its representatives is surprised by an offer they know nothing about. The customer expects the customer service agent to be representing the whole company and to know what offers are available.
Offer one-stop shopping. Empower customer service agents to offer all specials, not just some of them. As a potential subscriber, I expect the company to make it easy for me to do business with them. I shouldn’t have to search around the company for the best deal.
Empower your representatives. Customer service agents should be given the authority to correct small and obvious problems on the spot. In my case, I had been double billed for a single subscription. Instead of hiding behind a feeble “it’s not our policy to offer refunds on trial subscriptions”, I would have been favorably impressed with an instant credit and an apology. The few pennies the company saves by maintaining tight control over what their agents are allowed to approve is minor compared to the loss of good from inflexibility.
Fix problems the first time. It took me four calls to four different customer service agents to uncover the fact that the shared subscription I tried to set up hadn’t been confirmed by the recipient. First, the computer system should have made this problem obvious and second, it should have been one of the first things the agent checked when troubleshooting a subscription that wasn’t working. On-going training and the sharing of the most common problems should be available to all customer service agents dealing with customers.
As a customer evaluating a potential relationship with a company, I expect clear information, well-informed and empowered representatives that can offer me all the options and when there’s a problem, diagnose and resolve the issues quickly. Of course, the quality of the product is a major factor but you can see from this example, the poor treatment overshadowed a good product.
Does your company put as much effort into ensuring a positive set of customer experiences as you do in developing a quality
If you extend a short-term introductory offer to encourage prospects to become regular customers, both the product and the service should be exceptional. Here’s a personal experience where the product was great but the service left much to be desired. This week I’ll describe my treatment as a customer. Next week I’ll offer some recommendations on what would have made it a higher value set of experiences.
I received a promotional email from a well-known newspaper offering a huge discount on an 8-week trial digital subscription. Having a positive impression of the paper, I thought I’d try it. The trial price was the same for all three levels of access; computer + mobile, computer + tablet, or all access. Since I don’t have a tablet, I opted for the first choice. Later I learned a
specially formatted reader that runs on laptops requires one of the options that support the tablet. No problem I thought, I’ll just call Customer Support and have them change my trial subscription to the all access. This shouldn’t be a problem because the trial price was the same for all options.
This is when it became a little challenging. The Customer Service Rep listened to my situation and agreed to switch my trial subscription from computer + mobile to all access. This was quick and easy. Only when I reviewed the confirming e-mail did I notice that the trial period was now 4 weeks, not the previous 8 weeks. So I called Customer Support back.
After over half an hour explaining the circumstances and checking with her supervisor, I was told they were not aware of any 8-week trial offer and could only offer me the 4-week period. When I politely explained I didn’t want the trial period to be cut in half just because they weren’t aware of it, she suggested I cancel the current 4-week all access subscription and resubscribe
for the 8-week all access subscription using the link from the initial email. She assured me I would not get billed for two subscriptions. Guess what happened?
When I received my credit card statement, there were two charges; one for the 8-week all access trial and one for the 4-week all access trial. I called Customer Support for assistance in correcting the erroneous billing. I was politely informed it was against their policy to offer refunds on trial subscriptions so there was nothing they could do. My calm, logical explanation that this was not a refund but correcting a double-billing had no impact. So I wrote the VP of Customer Service politely explaining the situation. I received a prompt reply with an apology and a credit for the second charge that should have been cancelled.
A few days later, I learned I could share my all access subscription with a relative. I entered the necessary information on my account page and discovered after a reasonable amount of time the connection was not working. On my first call to Customer Service, I was told their computer system was down and they couldn’t help me. The next day, my second call was met with puzzlement as to why it wasn’t working but was told their computer system was down and they couldn’t help me again. My third call on the following day resulted in the suggestion to delete the connection and try to reestablish it. This didn’t work either.
On my fourth call on the fourth day, I was informed the person I was to share my subscription with hadn’t completed the confirmation procedure of which we were never notified. The Customer Service Rep volunteered to complete the confirmation so the connection could be completed.
To summarize, in order to change my subscription from one level of access to another and set up a shared subscription, I had to call customer support seven times for a total of close to two hours on the phone and write to a VP of Customer Service to correct an erroneous double billing.
Next week I’ll comment on how I’d like to be treated as a customer and make some recommendations to companies which will improve the experience they offer their customers.
One of the certainties of marketing and product management is everyone has a suggestion about what you should be doing. People love to give you advice about what features you could add to your product. Account managers will likely refer to their latest challenging sales situation and mention the feature that would have sealed the deal. Engineering usually has a long list of possible enhancements the technology makes possible. Upper management may offer a suggestion or make demands based on feedback from a favorite major customer.
On the outbound side, there’s usually no shortage of ideas about how you should be describing your product. It seems like everyone is ready to offer a pithy phrase, a topic for a blog article or an idea for a new sales tool that would help the number of orders skyrocket.
It’s been my experience that the vast majority of these contributions have merit. They come from intelligent, experienced people who want the company and the product to succeed. The problems are you rapidly collect more ideas than you could ever implement given finite resources and many are offered in solitary without a broader context. Unless the contributor is directly involved in product planning, they probably aren’t aware of your product roadmaps or platform strategy. In some cases, their product idea many not be consistent with what your research shows are your targeted customers’ highest priority, unmet outcomes. Communication ideas, while catchy in isolation, may not be consistent with the corporate brand, the messaging strategy, the customer value proposition or the product positioning. Experts will tell you that consistency and repetition are keys to effective communication.
Naming a product may be one of the best examples. Everyone seems to think it’s great fun to play the “name game” and send you emails with creative and clever names. In one example, I had the wife of the Chairman of the Board, call me with name ideas she came up with for the company’s next generation product. And don’t get me started on internal “design a logo” contests.
So what’s a person to do? You can’t just ignore these submissions because people deserve to be listened to and their ideas acknowledged and considered. Even if the suggestion isn’t aligned with your product or messaging strategy, it is another data point that may point to a future trend or an area for future consideration. On the other hand, you shouldn’t blindly implement the
suggestion based on who screams the loudest, who has a senior title, or who offered the most recent idea.
The people filtering and selecting from all these suggestions should be the ones who have the big picture, the master plan for where the products, the messages and the desired user experiences are headed. In most cases, this is the Product Manager or the Product Marketing Manager. For product planning, the Product Manager knows what the whole product needs to look like,
the competitive strategy, and how the product family is evolving. The Product Marketing Manager contributed to the messaging strategy based on what the research shows the targeted customer values and what messages will resonate with them.
These people need to demonstrate experience and business judgment to select the ideas that best support the strategies. They need to have a steady hand on the tiller so the team senses continuity and steady progress, not a change in direction and a new priority every other week. Because these individuals usually have little authority, they must manage by the influence derived from data, analysis and strategy.
Do you have an example of how ideas are collected from a wide range of sources and are filtered down to the most appropriate ones?
How much money will I save by using your product? How much more revenue will I gain by using your product? In other words, show me the ROI. Ideally, a well-prepared company would have a couple of responses. One might be an ROI calculator in which after completing a spreadsheet with numbers representative of your company’s operation, you are presented with a prediction of cost savings or revenue gains. The other may be a well-documented case study explaining the benefits a company gained by using the vendor’s product. It seems straight-forward enough but there are several challenges. These are the difficulty in measuring the ROI, skepticism about the evidence and the broader definition of value.
Few companies have measured the “before” so you have something to compare to when you measure the “after”. It’s also hard to control all the variables in the real world so you can attribute all gains to the new product being tested. Many companies will not allow you to measure their operations due to privacy concerns or even if they do, may not grant you permission to go public with the information. Once I was lucky enough to participate in a carefully controlled experiment with the last generation product and the new generation product working right next to each other on an assembly line. The improved throughput was significant and the resulting case study was a powerful sales tool. But in my experience, this situation is very rare.
Even if you are fortunate enough to run such an experiment, there is some natural skepticism. After all, your company is trying to put the best light on your product. Case studies are viewed as special cases where the results were cherry picked. ROI calculators are often seen as biased and rigged to make the solution being evaluated look good. Even if the results are seen as impressive, some executives believe their situation is different or unique and therefore the conclusion and positive results may not carry over their operation.
Finally, as we’ve explained in other blog posts, the value one gains from using a product extends far beyond the production gains. It includes reducing risks, gaining benefits sooner, and the experiences of working with the company supplying the product.
So what can you do when someone asks you to “show me the ROI”? If possible, conduct a carefully controlled experiment that is as objective as possible. Use a third-party to conduct and publish the case study. If available, use industry standard benchmarks so prospects can make apples-to-apples comparisons between products. Keep in mind all the dimensions of value and emphasize the other areas of the total user experience you do differently and better than any alternative. Positive references from loyal customers will carry much more weight than a simple ROI calculator spreadsheet.
Rarely does it come down to strictly a numbers game. Some say you make the decision based on emotion and you then find a way to justify it using logic and evidence. So create a positive emotion by emphasizing the potential for a very positive total user experience and then supplement that with some quantitative evidence to close the deal.
At a company I worked at years ago, I was asked to be the liaison between our business unit and a special interest group (SIG) in our company’s users’ group. My main responsibility was being the main point of contact for the SIG’s officers in case they needed any support or information. The benefit to me was direct contact with users of the product for which I was the Product Manager. This offered great potential because as I’ve pointed out in other posts, there’s nothing more valuable than getting first hand feedback from users about their experience in using my product.
My introduction to the SIG officers at the users’ group event was polite but reserved. They offered generic praise for my product at the meeting and had few negative things to say. I thought it would be a nice gesture to take them out to dinner because they were visiting from out of state. That evening, the tone of the conversation changed. They were less guarded, laughed a little,
and started to point out a few things about my product that could be improved.
Throughout the year, we exchanged emails discussing product issues and I helped them out the best I could. At the next users’ group meeting, the communication was much more open. At dinner that evening, which became a regular occasion, I started to hear for the first time what they really thought. They were more comfortable in sharing their genuine opinions about my product, both pro and con. They talked about my competition and the kind of support they were getting from us. I started to get insights into their “total user experience” that I hadn’t heard from them before. It was a real eye opener.
The lesson I learned was how important the relationship is to the quantity and quality of the communication between two people. If a stranger walks up to you on the street and starts asking you questions, you’re probably going to be very guarded and reserved in your answers, assuming you’re willing to talk to that person at all. But if a good friend asks for your impressions
and opinions on a subject, you’re much more likely to open up and convey both information and emotion.
It goes the same for business. You can conduct an internet survey or perform a phone interview but unless you know the person, you need to understand the depth and quality of the information will be suspect. On the other hand, if you have a
long-time relationship with a customer based on a trust that has been earned by honest communication and satisfied commitments, you will have access to the important information, such as, what works well, what let them down, what they
worry about, and how things are changing. Isn’t this the kind of information you need to plan for the future?
What business are you in? Don’t overthink the question. Go with your initial thought, not the way you think you should answer. Many will define their business by the products they build. For example, “We’re in the accounting software business.” Others will define their business by the customer problem they solve. “We help our customers effectively manage their assets.” The way you answer is a good indicator of whether your business perspective is product centric or customer centric.
Peter Drucker, one of my business heroes, said the purpose of a business is to attract, retain, and profitably grow customers. I’m going to focus on the grow part of the definition. The term that’s often applied is earning customer loyalty. Going academic for a minute, Kotler and Keller in their book Marketing Management
define it as a deeply held commitment to re-buy or
re-patronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior.
At the risk of being overly simplistic, here are the basic differences. A product centric view means you build a product, you sell the product, and then you sell more products to others. A customer centric view means you understand a need in your target market, then you deliver a superior set of user experiences to the target customers in that market.
There are significant differences in these two views. A customer centric view is broader in scope. It’s not just the code that’s installed on the server; it encompasses a wide range of interactions between the customer and the company over a longer period of time. Product centric companies view the competition as directly comparable products, while customer centric
companies consider alternative experiences. For example, Borders could have focused on Barnes and Noble with a product centric view or on Amazon and its Kindle as an alternative experience their customers may select.
For a product centric company the critical time frame is from the qualified lead to closing the order. The relationship is two-sided. We sell. You buy. We give you product. You give us money. The measurements focus on revenues and margins. The customer centric company considers from the initial contact with the prospect throughout the usage of the initial product and its predecessors. The relationship is a partnership in jointly solving a problem. The measures focus on customer retention, customer satisfaction and lifetime value.
What signs should you look for to see how your company behaves in the continuum of these two views? Here are a few questions to ask yourself.
- What is the quantity and quality of communication with your installed base?
- How much do you personalize and customize the information to provide the type of content they want, when they want it and in the form that they want it?
- How good are you at meeting post-sales commitments?
- Do you carefully manage detailed information about individual customers and all customer touch points?
There are least three advantages to having a higher degree of customer loyalty and value orientation. The first is financial. Studies show that it costs 5X or more as much money to obtain a new customer than to retain an existing customer. Keeping customer acquisition costs down certainly helps the bottom line. Second, loyal customers serve as references which can increase sales success rates and shorten sales cycles. In the exploding world of social media, positive and negative reviews are shared faster and carry more weight than ever before. Last but not least, are the market insights that can be gained by working closely with loyal customers. You will be able to recognize incipient needs and market trends earlier than your competition providing a an important business advantage.
What about your company? What examples of activities demonstrate an interest growing loyal customers and what benefits have you seen as a result?
Many companies speak glowingly of being driven by making customers successful, providing a superior customer experience or creating raving fans. Do you want to know what really drives your company? Reviewing your mission statement or reading the positioning on your web site won’t tell you. These may describe what your company aspires to or how your company would like people to think of it. What really drives your company is found in observing behavior from a management standpoint and one of the best places to do that is in your quarterly reviews.
The agenda and attendees of the meeting, the depth of discussion and the resulting action items are good indicators of the perspective that really drives your company. What questions does the CEO ask? What data is presented and what topics are only argued on opinions? If you spend a lot of time on new product definition and project schedules, you’re probably product
driven. You’re sales driven if the majority of the time is spent reviewing the sales funnel and planning actions to close specific orders. Close attention to productivity, inventory and supply chain issues points to being production driven. If you are driven by delivering profitable value, important topics will be customer satisfaction measures, customer retention and loyalty, delivering a
whole product, alternatives customers may consider, and improving the total customer experience.
All of these topics, i.e. products, sales, operations and value, should be covered to some degree. The true test is which ones get the highest priority and the most energy. Conversely, which topic gets a cursory review or worse yet gets bumped if you run out of time? So the next time you’ve completed a quarterly review, ask yourself, based on the behavior observed in the meeting, what’s driving your company?
As a company begins the transition from an inside-out, product perspective to an outside-in, customer perspective, someone inevitably suggests “Let’s go talk to the customers to see what they want”. This is a major step because it acknowledges the importance of understanding the customer’s point of view. The next step is to determine what information to collect and how to
collect it. I’ll describe five levels of customer research and as you would guess, there is a trade-off between ease of execution and usefulness in understanding the potential to create profitable value.
The first level is what I call confirming your ideas. Usually a favorite customer is asked “Wouldn’t you like it if we added this feature to the product?” It’s quick and easy to ask and can be done in-person, by phone or using an Internet survey. The problem is it’s a closed question you don’t learn much from it. The customer is biased to agree because there’s no perceived cost to him/her. In reality, this type of question really isn’t research; it’s just collecting data to justify an idea. Unfortunately, you‘d be surprised how often this is the only type of research used for product planning.
The next level is more open-ended but still very product focused. It’s usually asked in one of two forms; “What features should we puy in our next product?” or “What new product would you like us to build?” These questions result in a long list of potential features or products that you can debate and prioritize back at the office with engineering. The challenge is customers aren’t in the business of designing products and they really don’t do a very good job of it. For an in-depth discussion of the pitfalls of letting customers define your product direction, I’ll refer you to Clayton Christensen’s excellent book The Innovator’s Dilemma.
The third level of customer understanding illustrates an important shift in perspective. It now moves away from your product and toward understanding the customer’s problem or desired outcomes. A typical interview would start with a simple “Tell me about the problems you have in trying to …” Then a series of probing questions drill down into the real heart of the issue. This line of thought has great potential but there are a couple of challenges. First, customers may or may not be able to articulate their problems. Second, it’s difficult to collect, analyze and communicate this type of information to the engineering team so they can work on innovative solutions to what they learned from the research.
The fourth level moves from a direct one-on-one dialog to observation. There are a number of techniques such as shadowing that can be used to learn about the customer’s experience. The strength of shadowing lies in anticipating people’s sub-conscious and future needs which are difficult to obtain using the early methods.
The fifth level is becoming the customer. Putting yourself in their position and trying to do what they have to do. You can imagine this is the most insightful and offers the potential for the deepest understanding. Your role changes from interviewer of levels one through three and observer in level four to participant in level five. Granted, this isn’t always possible. You can’t for example, become an
airlines pilot or a brain surgeon for a day. Another challenge is in order to understand the total user experience you have to go beyond just the operational. For a software product this can include evaluating, buying, installing, learning, getting support and all the other interactions with the product and the company. This covers a wide range of activities over a long period of time.
The further you progress down the levels, the greater insight you’ll have into what customer’s value, the sum of resulting experiences. Another way to think of it is evolving from what product should we build, or what feature should we add, to what set of positive experiences can we provide.
How far have you progressed on this path and what have you learned by gaining a deeper understanding of the customer?