Thursday 28 April 2011

A place for everything; and everything in its place

I’ve always wanted to be the sort of person who could honestly say things like “a place for everything – and everything in its place!” It is so organised, so logical and so likely that you could actually find things again. Even though our desire for order and organisation is strong, the tendency to be disorganised is ever present – at least with me.

One of my favourite quotes is from Gustave Flaubert – the French author of Madame Bovary. “Be regular and orderly in your life, so that you may be violent and original in your work.”

As the complexity of our work increases, so the need for order increases. As the complexity of the problems we wish to solve, so the need for organisation increases. As the number of people we involve in our endeavours, so the need for regular orderliness increases. When this order is missing, so unproductive thrashing increases.

I was talking to someone yesterday about an interesting (and far from straightforward) business problem. As we talked and I tried to understand their approach, it became clear that one issue was having information in different places. Whilst the system we were discussing was in constant use, other information was in other places and getting no attention. I wouldn’t go so far as to say the information was lost – but another few months, or years and it may well be lost. Or at least forgotten about so it will be of no use.

So it seems that both my grandfather and Flaubert were right. Whilst Flaubert is known for his scrupulous devotion to his art and style, he is also known as being one of our greatest ever novelists. He was certainly violent and original in his work - which is not bad for such a short life.

Wednesday 20 April 2011

Customer delight .. and customer dismay

Thinking about being customer focused has made me a lot more aware of how some companies behave and a few recent examples seem noteworthy.

Just a few days ago, I wrote to company that assists me when my car breaks down to enquire whether their service has VAT on it or not. There is no mention of it on the invoice, but I assumed it must. A few other folk had wondered too and posted things on the internet. One such person had a reply saying that a VAT invoice would cost him £15. He was outraged and complained vigorously. I sent a polite email enquiring about a VAT invoice. They informed me that it would cost £15 for a VAT invoice, but made no mention of whether there was VAT on their service. There isn’t. It would have been easier (and shown some thought for the customer) to just say so. I don’t think that is customer-focused; to the point of being obstreperous. It’s a good job their roadside manner is so superb.

On the plus side, I recently had my hair done at a new salon. On the morning of the appointment they called me. O-oh I thought. My heart sank as I envisaged the stylist being ill, or changing the day, or the usual reasons that hairdressers call. No. It was none of those reasons. As my appointment was at lunch time they wanted to know if I wanted a complimentary sandwich. I was literally speechless for a moment or two. I then recovered and said “Yes please – a salmon one”. How customer focused are they? They totally understand the stresses of their customers getting their hair done in the lunch hour. I was one delighted customer - who is telling ALL her friends!

Then today I had reason to return a bottle of booze to my local supermarket. They are part of a company which prides itself on not selling more expensive than the competition. And advertises the fact. When I pointed out that another supermarket was selling it for £5 less (I’m not making this up) they said – "that doesn’t apply to us!" Not – “we will make sure we check it out”. Or, “thank you for telling us”. But with a solemn face – “that doesn’t apply to us”. I’ll be watching their prices a lot more carefully in future.

Now “the customer is always right” doesn’t mean that the customer IS always right. Many customers belly-ache about bad service but still go back. Perhaps because the product is so good or perhaps because they have no choice. But when a company comes along with a good product, and little ways of delighting their customers, the customer switches without a backwards glance.

These instances show something of these companies attitude to their customers. Funnily enough the hairdresser is expanding, taking over the city-centre premises next door, and taking on more staff. Coincidence? Maybe. But there again, maybe not.

Tuesday 19 April 2011

How Customer Focused are you?

We all like to think that our businesses are customer-centric, just as we are all convinced we are good drivers. Yet the numbers of dissatisfied customers, like the number of accidents on the roads, points to the story being a little different

Customers are always right; they are the ones with the budget, the choice and a world full of connected information. And because their choices determine the success of our businesses, it pays to focus on what the customer wants. And needs. And is prepared to pay for.

But how do we know whether we are customer focused? Or whether our business is customer focused? What metrics determine our ability to focus on what the customer wants? As always in business, actions speak louder than words:
  • Customer lifetime value (rather than one year, or the typical but arbitrary three years)

  • Revenue by product/service (if they don’t like it, they won’t buy)

  • Repeat purchases (you might get ‘em once, but dreadful service or lousy products don’t create fans who come back time and time again)

  • Number of complaints & number of customers won back from problems

  • Number of recommendations

  • Number of unsolicited letters of delight

  • Time since last purchase

  • Time since last meaningful discussion
Metrics are arguably the most difficult part of defining how to implement a customer-focused strategy. Metrics define the strategy because they are what people focus on when trying to do a good job.

What do you think defines a business that is truly customer focused? What would you measure if you were CEO of Barclays bank, Coca-Cola or the Virgin empire?

Tuesday 5 April 2011

Is social media suited to marketing?

Are we heading for a social media implosion? Will businesses begin to question whether the social media emperor has indeed got any clothes on? History has an uncanny knack of repeating itself, and social media is beginning to show some of the hallmarks ….

Back in the 1990’s the internet created the dot-com bubble, which blind-sighted many otherwise rational business people. Now the social media revolution is changing the rules and vast numbers of business people are trying to figure out its potential. Social media specialists and experts are springing up everywhere (well, mostly on social media sites … ) with a zealot-like passion to teach other business people how to get more and more followers.

As marketing guru Philip Kotler points out “companies that focus inward become blind to seismic changes in markets, competition, distribution, media and technology that are occurring outside”. So the rapid growth of sites such as Twitter, FaceBook and others cannot be ignored, even though this particular change leaves us far from clear about how it fits into our marketing plans.

Yet there must be many who wonder whether we are not heading for another heady crash.
“Marketing is the business that identifies unfulfilled needs and wants, defines and measures their magnitude, determines which target markets the organisation can best serve ….. and calls upon everyone in the organization to ‘think and serve the customer’ ”. (Kotler)
In other words, marketing is about understanding what customers want. It’s not about the number of followers, or even the number of people who read your (or my) blog. He goes on to say:
“marketing is not the art of selling what you make. It is the art of identifying and understanding customer needs and creating solutions that deliver satisfaction …“

Going back to basics when all around you are making it complicated has many advantages. One wonders (out loud if you write a blog) whether the dot-com crash, the banking crisis, and many other fiascos would have happened if anyone had an eye on the basics.

Twitter, Facebook and blogging have all quickened the pace at which we can communicate by enabling us to “talk” to more people more of the time. Like the internet itself, and the printed page before it, social media found an unfulfilled need, and satisfied it with aplomb.

However, unless the many businesses that populate these sites can figure out how to tune in to their customers and listen to them, satisfying their own customers’ needs and wants well be as difficult as ever. They may well find their thousands of followers are worth about the same as tulip bulbs.

Perhaps then social media will revert to its origins – being social.

It is likely that social media will mature over time – satisfying both social and business needs. But it will take time, and a more sophisticated approach - and in the meantime the rush to find gold amongst a million “get rich quick” schemes might seem a little hasty. I also wonder why people who don’t even speak my language (or I don’t speak theirs) are following me. Life is full of mysteries.

Monday 4 April 2011

Look “inside” your data to improve your marketing

Do you store customer data in a computer system? Do you store information about purchases? Gathering and storing customer information in a database is now “business as usual” for most organisations.

But once you’ve got the information, what should be done with it?

Using it for marketing is an obvious candidate. Emails, letters, and phone calls can all be done more efficiently once your data is in one place. But this is only part of the answer. Whilst this is a terrific time saver, all that has happened is that manual processes have been digitized. Your database has enabled your marketing communications to be processed more quickly: not more intelligently.

To gain real competitive advantage from customer databases, you need to look “inside” the data. The key to creating more profitable marketing programs is analysing customer data (sometimes from several systems) to understand patterns of behaviour, and profitability. Why? Because when you work from real world data, you are faced with real world problems and real world opportunities. Instead of dreaming up marketing ideas with fragmented and anecdotal evidence of customer preferences, real customer data grounds your thinking, and challenges it.

The old saying “the customer is always right” holds a lot of water when it comes to data. Looking at what customers actually do, rather than what you’d like them to do, or what your business plan says they should do, moves marketing closer to the customers’ needs and wants. Once your thinking is aligned with customers’ needs and wants, marketing communications become more relevant and more meaningful to customers. Which kinda helps.

Analysing customer data should be a starting point for marketing planning, not an afterthought.