Marketing Blagger

I’m a big believer that a good marketing organisation is one that puts the customers at the heart of its business. What I mean by this is when decision making is focussed on meeting the customers needs and wants, rather than that of the board or MD. But how to you measure your levels of customer focus?

A great place to start is to look at your communications. How much do you talk about your company and the services you provide, compared to how you understand and can meet the needs of your customers. For example, consider the following two examples:

1. Bean Counter & Co Accountants was established over 20 years ago to provide auditing and tax advice services. Our management team has experience working with small businesses from various industry sectors.

and

2. Bean Counter & Co Accountants can help you to reduce your tax liability. Our experienced audit team can help your small business to save costs and improve profitability.

Which of these is more focussed on the customers needs? Which do you think is more likely to attract attention?

If you want to find out whether your communications are customer focussed or self obssesed, then you should try the We We Monitor at http://www.grokdotcom.com/2007/03/25/how-to-measure-your-we-we/. Here you can analyse your website to find out if you are cusrtomer focussed or We We focussed.

Whilst this is not a comprehensive review of your communications, it’s certainly an interesrting start. I must congratulate Bryan Eisenberg of Future Now for putting this together.

A recent article in the UK’s weekly ‘Marketing’ journal discusses how big businesses are changing their approach to measuring customer loyalty. T-Mobile, American Express, General Electric, Allianz and more, are increasingly measuring customer loyalty using the Net Promoter Score (NPS) from management consultancy Bain & Co. Put simply, the NPS identifies the percentage of customers that are likely to recommend a brand or company and uses this as a predictor for future growth.

Marketing’s writer suggests this approach to measuring customer loyalty recognises “the power of word of mouth” in marketing. For all of us small businesses this is particularly true - it’s likely a good percentage of your customers, especially at start-up, come from friends, family and other customer referrals.

So what does this mean for you? Putting it simply, if you work on increasing the number of referrals / recommendations you receive, the more likely you are to achieve long term growth. It’s hardly rocket science. However, it does get interesting if you try to apply this to your business. The way to achieve this is something like:

1) Ask every customer to rate how likely they are to recommend your business on a scale of 0-10 (0 being not at all, 10 being highly likely). The top scorers are called promoters, the low scorers detractors.

2) Calculate the percentage score by subtracting the detractors from the promoters. If you have more promoters then you’ll have a positive score, if you have more detractors, you will have a negative score (and an awful lot of work to do).

3) Measure the percentage change between two periods, so for example over a year or two.

4) Identify what you need to do to improve your NPS. This might be done by team brainstorming, or more likely calling any detractors and asking why they had a negative experience. It’s likely that by examining every touch point a customer has with your company, you can easily identify areas for improvement.

5) Create a plan of action for implementing improvements.

6) Measure the impact of your action plan based on changes in your NPS.

I very much like the idea of the Net Promoter Score. The market research industry claims this is dumbing down customer research, but for small businesses it’s a simple tool for what can often be an expensive process. If you use this measure, it’s likely you’ll be doing much more than many of your competitors.

Remember, marketing is all about putting the customer at the heart of your business. What better way to measure if you are doing this well than by understanding how many of your customers are willing to recommend you.

While howls of protest over poor customer service continue to fill the air, there remain some businesses that manage to consistently deliver superior customer service year in and year out. These are the places where turbo-charged employees pursue customer delight with a passion, places that ignite a flashpoint of contagious enthusiasm in employees and customers alike. Foremost among the lessons to be learned from such flashpoint businesses are the blunders to avoid—those fatal mistakes that trip up just about everybody else.

First Blunder: making customer service a training issue.

Businesses of all kinds invest huge amounts in training programs that do not—and simply cannot—work. The function of such training is to identify the behaviors workers are supposed to engage in, and then coax, bully, or legislate these behaviors into the workplace. At best, this is almost always a recipe for conduct that feels mechanized and insincere; at worst, it intensifies worker resentment and cynicism.

Instead of dictating what workers should be doing to delight customers, the better approach is to give workers opportunities to brainstorm their own ideas for delivering delight. Management’s role then becomes to help employees implement these ideas, and to allow workers to savor the motivational effect of the positive feedback that ensues from delighted customers. This level of employee ownership and involvement is a key cultural characteristic of virtually all flashpoint businesses.

Second Blunder: blaming poor service on employee demotivation.

Businesses looking for ways to motivate their workers are almost always looking in the wrong places. Employee cynicism is the direct product of an organization’s visible preoccupation with self-interest above all else—a purely internal focus. The focus in flashpoint businesses is directed outward, toward the interests of customers and the community at large. This shift in cultural focus changes the way the business operates at all levels.

The reality in most business settings is that employees are demotivated because they can’t deliver delight. The existing policies and procedures make it impossible. Instead of “fixing” their employees, flashpoint business set out to build a culture that unblocks them. Workers are encouraged to identify operational obstacles to customer delight, and participate in finding ways around them.

Third Blunder: using customer feedback to uncover what’s wrong.

Businesses often use surveys and other feedback mechanisms to get to the causes of customer problems and complaints. Employees come to dread these measurement and data-gathering efforts, since they so often lead to what feels like witch-hunts for employee scapegoats, formal exercises in finger-pointing and the assigning of blame. Flashpoint businesses use customer feedback very differently. In these organizations the object is to uncover everything that’s going right. Managers are forever on the lookout for “hero stories” - examples of employees going the extra mile to deliver delight. Such feedback becomes the basis for ongoing recognition and celebration. Employees see themselves as winners on a winning team, because in their workplace there’s always some new “win” being celebrated.

Fourth Blunder: reserving top recognition for splashy recoveries.

It happens all the time: something goes terribly wrong in a customer order or transaction, and a dedicated employee goes to tremendous lengths to make things right. The delighted customer brings this employee’s wonderful recovery to management’s attention, and the employee receives special recognition for his or her efforts. This is a blunder?

It is when such recoveries are the primary—if not the only—catalysts for employee recognition. In such a culture, foul-ups become almost a good thing from the workers’ point of view. By creating opportunities for splashy recoveries, foul-ups represent the only chance employees have to feel appreciated on the job. Attempts to correct operational problems won’t win much support if employees see these problems as their only opportunity to shine.

Flashpoint businesses celebrate splashy recoveries, of course—but they’re also careful to uncover and celebrate employee efforts to delight customers where no mistakes or problems were involved. This makes it easier to get workers participating in efforts to permanently eliminate the sources of problems at the systems level.

Fifth Blunder: competing on price.

It’s one of the most common (and most costly) mistakes in business. Price becomes the deciding factor in purchasing decisions only when everything else is equal—and everything else is almost never equal. Businesses compete on the perception of value, and this includes more than price. It’s shaped by the total customer experience—and aspects such as “helpfulness,” “friendliness,” and “the personal touch” often give the competitive advantage to businesses that actually charge slightly more for their basic goods and services.

Those businesses that deliver a superior total experience from the inside out (that is, as a product of a strongly customer-focused culture) are typically those that enjoy a long-term competitive advantage—along with virtual immunity from the kinds of headaches that plague everybody else.

Customer-focus consultant Paul Levesque’s latest book is Customer Service From The Inside Out Made Easy (Entrepreneur Press, 2006).

Today’s consumer is nothing like they were twenty years ago. They are much more skeptical, wealthy, better informed and in control. Yet, the advertising industry at large has not changed and is still using tactics similar to those used twenty years ago. This is leaving a huge disconnect between what consumers want and what they are getting. In either case I am sure you are wondering what this has to do with open source marketing… Well let me tell you.

Open source as a movement is designed to allow the majority to design and mold whatever they are interacting with. From software to encyclopedias open source is taking the world by storm. And mainstream consumers are falling for it.

Open source marketing is therefore the process of allowing consumers to interact with the brand, marketing materials, product and service and change its direction. In the past it was war, bombarding the consumer and their senses with constant messages… it was about commanding the market. Now consumers go out of their way to use technology to shelter themselves from old school brand bombardment. Tivo would be a great example. In addition, they are relying more on each other and on communities of like minded people brought together by the internet to make purchase decisions – the rating and review system on amazon.com would be an excellent example.

The bottom line is businesses both small and large had better begin building an open source plan and it incorporate it into their marketing plan, otherwise they may face extinction. Face it, consumers are no longer happy to sit back and be fed a brand and its values. They want access to the brand source and an invitation to co-create. And no matter what size your business, this is possible. If you are Joe’s pizza it could be as simple as inviting in some of your best customers to name and design the new pizza of the month, if you are a B2B service provider it could be allowing them to give their input on your services and then molding the service to their advice, if you are a large multinational corporation it could involve creating an online blog to allow consumer to talk about your latest product and make suggestions which are incorporated into the next production run.

At very least, you had better start asking them what they want and take them seriously. Survey them and utilize the information you get to shape your marketing plan, message, product or service. You must create some type of feedback loop and begin listening to what your customers want because they are certainly willing to tell you. Further you had better put your ear to the ground and begin listening to rumors and whispers in the market, check out the latest blog postings on topics pertaining to your industry. It could be as simple as asking them to submit pictures to be used in the next advertising campaign.

So my advice would be that if you don’t know what open source marketing is you had better learn. Get ready… It’s coming. You had better be prepared and give consumers access to your marketing source code.