The 10 Rules of Customer Centricity

I was reading Bruce Temkin’s report, The 6 laws of customer experience, which has a number of similarities with an article I wrote for 1 to 1 Magazine published in January, so I decided to post the full article here: 

The 10 Rules of Customer Centricity

Build long-term relationships and business success by acting in the customer’s best interest.

Many companies claim customer centricity in their list of company values, in their organizational tenets, or in their mission statement. Being customer centric is not easy. Use these 10 rules to assess your organization’s customer centricity:

1. Co-create with customers. Involve customers in the design, test, and ongoing improvement of your products with tools like advisory boards, customer design meetings, and beta programs. Don’t focus on features and specs; instead focus on how you are helping customers get a specific job done. At Threadless, for example, customers design, vote on, and order shirts before they are produced. Starbucks captures customer ideas and feedback via

2. Incent your sales team to be customer centric.  Most sales teams get bonuses based on quarterly or monthly sales and profitability, yet satisfaction and loyalty are the leading indicators for future profitability and long-term success. At leading companies, customer satisfaction is measured twice a year and the results directly impact executive compensation.

3. Empower front-line employees. Ritz-Carlton hotel employees at all levels are empowered to spend up to $2,000 per guest to do whatever needs to be done to make customers happy.

4. Happy employees = happy customers. Simple, but true. A company that values employees is a company where people enjoy working and, therefore, they do a good job.

5. Your customers are not assets, they are your reason to be.  Peter Drucker said the purpose of the organization is to create a customer. The relationship you build with customers is, therefore, the foundation for success. Are you trying to extract as much money from customers or are you building relationships? Are you charging “convenience fees” that generate what Fred Reicheld calls bad profits like car rental companies that charge outrageous prices for gas? Kimpton Hotels’ loyalty program members are delightfully surprised by getting $10 worth of mini-bar items for free.

6. Contact Us. Really. Go to your website and measure how long it takes you to find your organization’s contact information: a real email and phone number. Pretend to be a customer to learn your response times via email and your toll-free number. At customer-centric companies people answer the phone within seconds, executives answer customer calls directly, and they publish names, phone numbers, and email addresses on their site.

7. Listen to customers proactively.  You can do this the old-fashion way via customer service reports that feed product development, customer surveys, and other tools. Today companies are also required to listen – and respond – to the social web: Twitter, blogs, Facebook, etc. Beyond listening, you must empower people to respond and to fix problems. Do you have the processes to capture, organize, prioritize, and act on what you are hearing?

8. Focus on the customer experience. Get in your customer’s shoes. Pretend to be a customer to understand their end-to-end experience and what goes on in their mind at each step. Executives at a courier company went through the experience of actually shipping a product and tracking it to delivery. Software product managers go to customer’s homes to witness their experience from installing to using to troubleshooting the product.

9. Customer orientation. This means putting the customers’ needs first. The customer is not always right, but you really need to focus on making them happy. I owned a computer store in the 1980s. A customer walked in ready to buy a new computer because the old one was very slow. I suggested buying more memory, which solved the problem. The customer was blown away that I offered an inexpensive product when he was ready to buy a new computer. Not only was he my customer for life, buying multiple computers and accessories, he also referred lots of business to me and we became great friends.

10. Make money from your customers. Making money from customers is OK. They will gladly give their money to a company they value. Ritz Carlton estimates customer lifetime value at over $1 million – what is yours? An unhappy customer will probably tell a dozen people about their bad experience. Acquiring a new customer usually costs $300 or more. It is a better business proposition to keep your customers happy and make money from them over time by building a long-term relationship, not a transactional one that ends at the cash register.

Truly embracing customer centricity requires transforming the organization. The book The Discipline of Market Leaders suggests that organizations align behind one of three core disciplines: operational excellence (think McDonald’s), product leadership (think Apple) or customer intimacy (think Nordstrom). The “chosen” discipline defines the company strategy and culture and therefore the chances for success. Embracing customer centricity presents an incredible opportunity for differentiation, becoming a source for competitive advantage.

The question no one is asking

Can you Build a Community?

I have had the privilege of working with online communities for over 10 years. In the technology world, online communities -mainly forums- are a fundamental part of how people learn, share and help each other with technical questions.

As companies evolve their thinking about how how to leverage social media, CMOs are realizing social media is not a strategy, but a tool to support a strategy. This was one of the central points for my Web 2.0 presentation almost a year ago. The freedom that social media strategists enjoyed to experiment (and spend) without any ROI measurment is coming to an end. As Mike Svatel told me yesterday, pageviews don’t make payroll. Continue reading “The question no one is asking”

7 Steps to a Successful Trade Show

It seems every good marketing plan needs to include industry event participation to be complete. Sometimes we go to trade shows to leads, sometimes because “you have to be visible” and sometimes because we went last year so we signed up for this year as well. Yet , in my humble opinion most marketers do a poor job at events.

Here are my 7 suggestions to make your trade show participation a success.

1. Define a Strategy – Why are you going to the event in the first place? Are you there for awareness? to drive leads? to engage with press and analysts? defining a very specific and clear goal is the first step to a successful event. Think about the number of leads you will get in relation to the total costs for exhibiting (booth, travel, opportunity cost, etc.), the right conclusion may be not to be at an event.

2. Refine your Value Proposition – Have you ever walked a show floor? think about how you scan booths as you walk by. Most people probably spend two or three seconds reading the signage on a booth before deciding if it is something they are interested in – otherwise they will continue walking and scanning. Next time you go to a trade show study how people walk by the aisles.

This means you have about 8 words to tell people why should they stop and talk to you. You have one chance to get their attention. I find it amusing how bad we marketers are at this: most booths have meaningless slogans like “High Performance Digital Solutions” – what does it mean? what exactly do you sell?  why should I care? You could play bulls##t bingo walking a trade show.

3. Focus – Attract the right people. Surely you have studies the event prospectus and you know what kind of people will be attending. From here, based on your strategy, you need to decide what titles/roles and company profiles you want to talk to. We are too quick to think in terms of booth visitors, coming up with ever more creative giveaways. Handing out t-shirts will surely keep your booth busy, but will it attract the type of people you want? Would the qualified buyer you wanted to talk to walk by because your team was too busy handing out t-shirts to everyone?

4. Time Management For most companies, the goal of trade show participation is to generate leads. This means three things: first, qualify every visitor to your booth. Second, spend as little time as possible with non-qualified leads: be courteous, hand out a datasheet or a giveaway if they request one and move on. Third, spend quality time with qualified leads but not too long: once you know the lead is a viable prospect, you have provided valuable information to increase their interest and captured their contact information, it is probably smart to move on to the next customer. There will be more time later to continue the conversation with this customer, do an in-depth demo or needs assessment. Of course, you need to use your judgement based on your product and buying process, customer interest and how busy your booth is.

5. Ask, don’t tellGood sales people listen 70% of the time. Do the math: you only need to speak 30% of the time. Most booth staff are too quick to jump into a sales pitch and a demo as soon as someone walks by. After qualifying a person ask them why they stopped, what problems they are trying to solve, what solutions they have considered, how much they know about your company and your product and what specific questions they have. This will accomplish a couple things: first, you will come across as more genuinely interested in helping the customer; second, you will know enough to tailor your presentation or demo to the specific needs of the customer; and third, it will save them from spending 5 minutes listening to a pitch that makes no sense at all.

6. Follow Up. Marketers do a terrible job at following up on trade show leads. Often, what happens after a trade show is that a spreadsheet with names and contact info is sent to the sales team or to the telemarketing team where they go to a black hole. If you involve sales from step 1 when you are defining your strategy, you should have a follow-up strategy and plan weeks before the event. At the very least send each prospect an email thanking them for attending, providing useful resources and contact information. Tink about creative ways to engage customers in the form of a poll, a free analysis, a white paper, or some other high-value material.

7. Learn.  Trade shows are great opportunities to learn about the market, trends, your competition, and above all  to learn about customers. Often times, the most valuable conversations I have had at an event have been during lunch or dinner when I go to the main meal room and seat at a table with 9 customers or industry peers that I had not met before. Yet, most booth people miss this opportunity: as soon as booth duty is over they have lunch together as a pack. Make the most of every opportunity to meet customers. Some times, I seat at more than one table during lunch to maximize my opportunities to learn – and to have an extra dessert :-)

Have fun at your next event!


The Online Marketer’s Quest for Web Effectiveness

Online marketers, like most other professionals, are expected to do more with less – especially in challenging  economic times. Onlinemarketers are trying to find out how to increase Web site and campaign effectiveness, which can be measured in terms of unique visitors, click-throughs or leads. Marketers in eCommerce companies have a bit more focused goals, focusing on conversions and average order value, often acheved via up-selling and cross-selling.

Key to meeting these objectives is to ensure people visiting your Web site or receive email communications from your company are presented with the most useful information and the most powerful offers for them. In this quest of finding the best message, the best offer, the best banner ad, marketers have tried a number of different tools from personalization to analytics to a/b testing. It is easy to get too exited about these tools, but at the end of the day, it is critical to understand these are only tools to improve relevance.

Relevance is the key to Web site effectiveness. But how to make your messages more relevant? Most studies show Web site visitors have very limited patience: if they can’t find what they need in three clicks, they are gone. This means you have one or two chances to give each individual customer exactly what he or she is looking for: the product they want, the answer to the question they have, the information they need. This post aims to provide an overview of the tools available to increase relevance.

The first step is Analytics. You can’t improve what you can’t measure. Analytics can tell you how many people are visiting each page or consume each of the resources that you make available  on your site, what are the most common click-through paths, exit pages and many other useful data points. Unfortunately, most organizations don’t have the people or the time to properly study the analytics data to derive business insight and to act on this insight. maybe because it is hard to show ROI for these activities outside of media and online commerce.

One of my favorite phrases is “Your opinion (as a marketer), while interesting, is irrelevant“. No matter how smart you are, you can only guess what will be most attractive for your customers. therefore, one of the fundamental principles of marketing communications is to test everything. In this age it is inconceivable to run a banner ad without at least testing a few messages. Testing multiple messages takes very little effort and, in my experience, the results often surprise you. When testing 4 or 5 different banner ads, it is not uncommon to find a 5x difference in performance. The same applies to direct mail, email promotions, etc.

But testing banner ads and messages manually is very time consuming, although certainly worthwhile for large campaigns. This is where a/b testing comes in. A/B testing tools automate the process of presenting multiple offers to customers, sometimes based on a specific segment, reporting results in real time and adapting your site to use the message that proved to be most effective in tests.

MVT Testing take this concept further by testing multiple variables: message, color, position, offer, etc. – and all their possible permutations. MVTcan be incredibly powerful to fine-tune offers and promotions in any website. As good as they are, adoption of A/B and MVT tools has been very limited, mostly in eCommerce companies. As with analytics, resourcing is part of the problem.

A/B and MVT have their own challenges: First, it is still for the most part a manual process. Second, you could be testing all the wrong things – the process still requires someone to decide what messages or what elements to test. Last, these tools require some time to run (the more variables in play the longer it takes for MVT to produce statistically-valid results) and they are focused on past behavior.

This is where a new breed of tools come in: Content Recommendations, offered by companies like Vignette, Omniture, Loomia and others. While there are differences between how these products work, the fundamental premise is the same: to observe customer behavior, and to automatically determine what is the most relevant content, product or offer for a particular customer based on what similar customers have found to be useful.

A short story to illustrate: An architect builds an office complex with multiple buildings a parking garage, a cafeteria and other services.  The buildings open to the tenants but there are no concrete pathways between buildings, the architect has left all the open space covered in grass. After a few weeks, the paths that people take to go from one building to the other are clear from the wear in the grass. Over time, the grass is gone in these paths. The architect then paves thee paths with concrete. He did not try to guess which way people would walk. He observed and acted on actual behavior. Recommendation technologies pave the path between website visitors and the content they want.

Now a specific example: An online tax service is trying to make their website more useful. During tax season, many customers would go to their site and look for “Form 1099”. Traditional search tools would use a keyword-based algorithm to find the web pages and documents where the keyword “Form 1099” occurred more often. Instead, Recommendations technology observes that most visitors who type “form 1099” in the search box actually end up opening, downloading and printing a file called IRS1099-A.pdf and then spend some time in a page labeled “how to fill your tax return”, so it presents these two resources at the top of the search results, even though the keyword may not even appear i the actual page or file. This scenario is what is being called social search.

Another advantage of Recommendations is that it can adapt in almost real-time to changes. Imagine a celebrity appearing on TV on a Friday afternoon wearing some very chic aluminum sunglasses. Everyone who is watching the TV show wants to buy these sunglasses. The first visitors to your eCommerce site would have to navigate a bit to find the exact product, but after a few visitors buy the item, recommendations technology “paves” the way for other visitors, a process that could take minutes. Your analytics person or campaign marketer could be asleep or on vacation and recommendations technology has learned from customers  and adapted the site to show the now very hot item in the most prominent position.

As with any new technology, there are differences between the offerings from recommendation technology vendors. There are a couple key aspects to consider when evaluating them:

  • The observation technology – it can go from the very simple (clicks-based) to te very advanced (some measure over 30 heuristics).
  • The algorithm to determine what to recommend – some call it the wisdom of crowds engine
  • How similar visitors are grouped – behavioral segmentation and integration with your explicit profile data
  • Content database – how it is organized, categorized and updated as items become available or are retired
  • Presentation model – how the recommendations are integrated into your overall website experience

This is very exciting technology that is likely to produce big results for most web sites who implement the technology but more importantly for customers in general.