Customer centricity is well over a decade old. Companies have gotten better at tracking customer information, incorporating customer input into product design, and identifying customer needs in their sales and marketing messages. Despite these advances, the most frequent complaint by decision-makers involved in complex purchases is that vendors don’t listen, don’t understand their problems, and don’t convincingly articulate value.
Something is obviously missing from all that customer-centric activity.
Just about every discussion of being customer centric focuses on “understanding customer needs”. Unfortunately, most vendors focus on their customers’ needs, but not on the way their customers do business. That may sound like a subtle difference. It’s not. A focus on needs often misses the context for those needs. That’s important, because the context, not the need, determines value.
Let me repeat that. The CONTEXT, not the need, determines value.
Only by focusing on needs in context can you be truly, uniquely relevant. To become more relevant and valuable to customers (and grow revenue), find the needs that matter most now within the context of your customer’s internal and external business situation, and to which you can add the greatest value. Then sell and fulfill your offering in the way best suited to the customer’s way of doing business.
The highly popular Net Promoter Scoring (NPS) customer satisfaction measure (originally created by Bain & Co.) has gained broad adoption in the last five years. Customers’ likelihood to recommend you to others is a great measure of their satisfaction and loyalty. Unfortunately, Net Promoter Scoring limits visibility and can lead your customer satisfaction initiatives astray.
There are two key issues with traditional NPS:
1. It asks customers to predict their own behavior. The standard NPS question is, “Would you recommend us?” Many companies have found that customers say they WOULD recommend, but over half of those that say they would, don’t.
2. A Net Promoter Score is not actionable alone. Simply knowing how much customers expect to recommend you doesn’t provide clues as to how to improve their loyalty and word of mouth.
Despite these drawbacks, the core concept of NPS is an important one: Happy customers create new business. The key to leveraging this concept is to tweak NPS to ask more actionable questions, and then incorporate it into a broader customer intelligence effort.
Read more in my recent Beyond NPS brief...
by Lilia Shirman on June 30, 2009
in Sales
I’m amazed how often I ask enterprise sales reps about how the product they just sold will be used, and they don’t know!
Understanding the use-case for your product is essential to making the sale. If your sales reps can’t answer the following questions, then they don’t understand the customer and they can’t be relevant nor articulate your value and uniqueness.
Why is the customer purchasing?
What initiatives, objectives, or pressures is the company responding to via this and related purchases and actions? What’s at stake for each participant in the purchase decision?
How will the product be used?
Which business processes will it be involved in? Who will the users be? How will it change people’s day-to-day jobs? What performance and business metrics will it impact? How will it change your customer’s customers’ experiences?
What’s the context?
What other systems, processes, and business areas will your product interact with? What else is going on within the company that will determine the value of what you’re selling?
I hate hate hate pricing my consulting work. There is always a tension between the value it brings to the client (which gurus like Alan Weiss will tell you is the only thing that matters), the reality of the client’s budget, the amount of effort and expertise required, internal company politics, etc.
So even before reading the article about a coffee shop that does not post prices, I had tried handing the pricing reigns to clients by asking some version of, “What do you think this work should cost, given the value you expect it will bring?”
Results? Some clients did not want to name a number, and I ended up pricing the project as usual. Some DID name a price: always higher than I would have quoted. The difference: Clients who were comfortable naming a price already knew me and had worked with my firm before. It seems letting your customer set the price may be a great model when:
1. The customer is well-informed about the product and its value, or can become informed easily and quickly as in the case of the coffee shop. (This is the basis for free trials: Assume the customer will assign little or no value when first encountering a product. Depend on familiarity leading customers to agree with you on price.)
2. The customer has had some exposure to competing products and prices, and has a basis for comparing the relative worth of your product vs. the others.
3. The customer has a relationship with you, even if only a momentary one (note in the video that the cafe owner describes people “looking him in the eye and stating what they think is fair”)
Share your thoughts on if and when letting customers set the price is the right thing to do.
Given that segmentation is the cornerstone of marketing, I am often surprised at how little of it B-to-B companies actually do. Company size and geography are often the only criteria for segmentation, with industry being a distant third. There are other ways to slice and dice. A few ideas:
1. Look at customer characteristics such as tolerance for risk, speed of technology adoption, core business driver (are they technology-driven, customer-driven, supply-chain driven, etc.) – some may be much more likely to buy from you than others.
2. Separate customers with different levels of familiarity and experience with your company and products – your objectives and sales approach will be very different.
3. Split companies up by specific situations, business processes, or use-cases that are common to an industry or a business models. The solutions and services you offer them will vary drastically.
4. Define audiences based on their roles and responsibilities within an organization or within the decision-making process. Also consider segmenting by organization structure and culture – highly hierarchical, process-focused companies need a different sale then flat and agile organizations.
5. This seems painfully obvious, but then again, its rarely done: Segment based on actual customer objectives. This one is difficult and takes account-specific research to determine who fits where. So we tend to just assume that all companies in an industry, experiencing the same pressures (you know, the slide that says “Increased competition, Decreasing customer loyalty / ease of switching, regulation and/or deregulation, growing complexity of IT environment..”) must have the same objectives. But in fact, some are looking to get bought, some want to grow internationally, some want to raise revenue from existing customers, while other are focused on boosting profitability.
Most companies also under-utilize the insights that segmentation provies. Next time we’ll explore the uses of segment characteristics in various parts of your organization.
Comment and share some innovative segmentation criteria you’ve seen used by BtoB companies.
I came across a great summary of an all-too-common problem on the MarketCulture blog. The article recommends that companies focus “on a demand that needs to be met (rather) than a tech that needs to be sold.” Well said!
Apple is a great example of what happens when a company switches from product to market focus. Apple started as a product-focused company. And almost disappeared, despite its loyal following among creative types. Its computers were easier to use and better designed, but the mass market who needed easy-to-use computers wasn’t there until later, by which time MS had introduced Windows, washing away Apple’s design superiority. While Apple was still focused on cool product design, MS wooed a broad community of application developers to meet the growing demand for specialized applications. The need was for a broad range of software functionality, and Apple missed that completely.
But Apple learned. When music sharing came along, launching wars between record labels and music enthusiasts, Apple saw the need, and designed around it. This time, Apple focused on the demand side, with savvy marketing and even more savvy ecosystem creation. Significantly, Apple didn’t give up its leading-edge product design competency in order to become market focused.
To all the entrepreneurs with great ideas, and the larger vendors touting product features: Spend time with customers to find out where they really will spend money. Then DO make “products so good they don’t need sales and marketing.” Then market and sell like crazy.
More ideas about how to transform traditional marketing tools into Marketing 2.0 vehicles.
3. Websites – Don’t hide customer feedback and support in a corner of your site. Place feature request and comment links right on product pages, so that customers can respond immediately to the content they see. Asking a question gets the customer more engaged than downloading a white paper. Involve product management and engineering in responding to the queries. It’s a great way to for them to touch the customers they otherwise rarely or never see. Post the most interesting questions and answers or turn them into additional content.
4. Press releases – What if your PR people became your customers’ and partners PR people? Lots of stories would best be told by someone other than a vendor. (And would be more likely to get picked up for coverage.) Build relationships with your customers’ and partners PR departments to understand how and where they want to be seen, and how talking about your relationship can help with that. Have your PR staff assist partners and customer with replying to PR opportunities.
5. Webinars – Yes, by now, this is a “traditional” marketing tool. But many companies tend to make webinars too one-directional. Use all the interactive tools (and the many webinar hosting services that offer them). Polls, chat, and Q&A are the common set. Use surveys both before and after your webinar. And don’t limit the surveys to questions about the webinar like the all too familiar “Did you find this useful?” Instead, ask questions that help you understand customers or that customers will be interested in too. The latter gives you an excuse for a follow-up contact that actually delivers value.
Have you tried these or other ways to engage customers in conversations? Share them in your comment!
Read More
Turn Marketing into Conversations – Part 1
Turn Marketing into Conversations – Part 3
by Lilia Shirman on January 27, 2009
in Solutions
Companies used to selling products struggle to shift to “solution selling”. There are lots of obstacles – product-oriented habits, the never-ending argument of “what’s a solution, anyway?” (more on that in a future post), sales reluctance to adopt new techniques, etc. Before we put the big strategy and sales kickoff program in place to “transform Sales”, however, lets first look upstream at marketing.
As any sales approach, solution selling starts with customer-relevant content, programs, and ultimately (we hope) leads. All supplied by marketing. In this case, by Solution Marketing. Understanding how its different from product marketing can pave the way to a smoother transition and solution selling success.
Solutions Marketing is about shifting your perspective and context. A solutions approach to marketing places your offerings within the context of the customers’ broader situation and needs. It starts with the customer and their desired outcomes, instead of with you and your products. (Note – their objective is NOT to buy a product.) Focusing on the customer’s broader context means solution marketing can encompass aspects of the customer’s needs that your own product or service may not solve. The value prop IS the customer’s desired outcome, not your product’s superiority.
Let’s be really clear – “Solution Selling” and “Solution Marketing” are not the same as actually selling and marketing solutions. They are approaches to how your customers become aware of, learn about, interact with, and commit to your business. They don’t require that you actually offer a complete solution – only that you understand the role you play in helping customers achieve their objectives.
Ultimately, solutions marketing must support solution selling. That means giving sales reps and channel partners the knowledge and tools they need to carry the customer-centric view through the entire sales process and beyond.
