Customer World

Know the value of your customers

Geoffery Colvin has written a book Angel Customers and Demon Customers. He has some nice point of view on these kinds of customers:

In our experience across a wide range of industries, companies typically find that the best 20 percent of their customers account for 150 percent of total profits! The worst 20 percent typically lose money equal to 75 percent of profits, while the remaining 60 percent of customers account for the rest. Knowing which customers are angels and which are demons presents an enormous opportunity.

Once you know the true profitability of your customers, you can figure out the reasons behind the numbers. For your unprofitable customers, you'll have to face the reality that you're not offering them a compelling value proposition - a way of meeting their needs so well that they'll reward you with handsome profitability. You'll have to devise new, better, value propositions for them, which our experience shows you can probably do. As a result, you'll start to turn those unprofitable customers into profitable ones, which typically creates a substantial swing in the business's overall profitability.

In the end, you may find that a small percentage of customers just cannot be made profitable. By the time you've figured out who they are, you'll understand very well why they probably aren't worth keeping.”

Have you found yours?

Thro' Brand Autopsy

Home or work - Rules are the same!

Read an extremely good article in ET friday last. Written by Verne Harnish, he says:

What is the underlying handful of fundamentals that drive everything else that’s important in business? What is still fundamental today in building a successful firm that hasn’t changed for over a hundred years? Tom Meredith, former CFO of Dell Computer, and I were discussing how the fundamentals that create a great business are the same as those for parenting great kids.

Anyone with children will recognise the fundamentals as:

• Have a handful of rules
• Repeat yourself a lot
• Act consistent with those rules (which is why you better have only a few rules)

Further, he also quotes from Rockefeller’s leadership and management principles:

Priorities - Does the organisation have objective Top five priorities for the year and the quarter (the month, if growing over 100% annually) and a clear Top one priority along with an appropriate theme? Does everyone in the organisation have their own handful of priorities that align with the company’s priorities?

Data - Does the organisation have sufficient data on a daily and weekly basis to provide insight into how the organisation is running and what the market is demanding? Does everyone in the organisation have at least one key daily or weekly metric driving his or her performance?

Rhythm - Does the organisation have an effective rhythm of daily, weekly, monthly, quarterly, and annual meetings to maintain alignment and drive accountability? Are the meetings well run and useful?

How to stay relevant when consumer habits change - Learning from libraries

Seattle times has a great article on how  some libraries have adapted to changing consumer lifestyles and technology innovations that have been happening around them. The web has literally changed the way information has become available and shared by consumers. Some libraries have therefore morphed to become

• Community Hubs
• A place for new experiences - study rooms, a place to meet & socialize, little eating area etc.
• A place for multimedia experiences -  check emails, watch videos, DVDs & CD entertainment

The article reports:

Those who can't afford the Internet at home come to the Bellevue Library to use one of the 108 computers available. "In a society where we're worried about the digital divide, libraries can level the playing field," Eisenberg said. "There's a shift from academics to the library being a form of entertainment," said Barbra Barkus, who has worked at the Bellevue Library for more than 27 years.

There are some great lessons here for brands and marketers!

Mobile Literature

Richard Taylor writes in BBC News:

Two-thirds of Japan's population - about 80 million people - are using their mobiles in ways which would make the rest of us gasp in astonishment.

In Japan, another string has been recently been added to the mobile bow with the launch of electronic books and comics specifically for phones.Today there are a number of sites, where for a subscription of $10 to 15 (£5.70 to £8.70) a month you can download every genre imaginable to your heart's content. Bandai Networks is one of the largest publishing outfits in this brave new world. They have their own steadily growing mobile site, with 20,000 users subscribing to a catalogue of 400 plus titles.

Mobile literature

The books are proving such a hit that Bandai is hiring authors to train others would-be writers in the art of mobile literature. One established novelist told me the new medium is creating a new form of expression.

And perhaps more importantly, it is reversing the younger generation's apathy towards reading.

Read more

Putting customer second

Here's a lovely post from Tom Peters:

"..if you really want to "put the customer first," put the people who serve the customer "more first." "

He refers to a good book that one might want to read on this - The customer comes second

Laws of lifetime learning & growth

Great customer management is about building a culture of commitment, learning, passion and an unsatiable need to collaborate. Here are some laws that all of us should practice, if we want to build a focussed customer-centric organization. These  laws are from a book called Lifetime Growth.

Always make your future bigger than your past.

"Approach your past with this attitude, and you will have an insatiable desire for even better, more enjoyable experiences."

Always make your learning greater than your experience. "Experience alone is no guarantee of lifetime growth. But continually transform you experiences into new lessons, and you will make each day of your life a source of growth."

Always make your contribution bigger than your reward.

"The one sure guarantee that rewards will continually increase is not to think too much about them. Instead, continue making an even greater contribution – by helping others eliminate their dangers, capture their opportunities, and maximize their strengths."

Always make your performance greater than your applause.

"If you become more skillful and useful, you will receive greater applause from an expanding audience. This can be intoxicating, and the temptation will be to start organizing your life around other people’s recognition and praise. You’ll keep repeating what got you the applause in the first place – rather than moving on to something new, better, and different. The applause will become more important to you than your improved performance."

Always make your gratitude greater than your success.

"Continually acknowledge others’ contributions, and you will automatically create room in your mind and in the world for much greater success."

Always make your enjoyment greater than your effort.

"Finding ways to get more and more enjoyment from your activities is one way to ensure continued growth."

Always make your cooperation greater than your status.

"Working with others and creating opportunities for increased cooperation makes greater things possible in our lives and in the world."

Always make your confidence greater than your comfort.

"Many successful people start off life as dreamers and risk-takers, but the moment they become successful, they start seeking greater security and comfort as their main goal. This attitude puts them to sleep motivationally, and they lose the confidence that made them so successful."

Always make your purpose greater than your money.

"Money as an end, become as growth stopper. Having a purpose that is greater than yourself will give you a constant impetus to strive. Purpose gives life meaning and helps us direct and focus our talents and efforts."

Always make your questions bigger than your answers.

" … all growth lies in the territory of the unknown. What we already know is in the past. What we have yet to discover is the future. Always make your questions bigger than your answers and you’ll keep drawing yourself into a bigger future with new possibilities."

thro' Brand Autopsy

How will google change a customer's life?

Business 2.0 carries a very interesting point of view from scientists, consultants, former google employees, tech visionaries on what google's future is. Here' are some excerpts:

Scenario 1 (Circa 2025): Google Is The Media

Google TV, Google Mobile and the rise of e-paper create the perfect storm.

Since viewers had to enter their Google IDs--the same ones they used for Gmail and other premium services--the company had already compiled a rich history of their searching and surfing habits.[3] If you spent a lot of time looking at cars on eBay, for example, you'd be shown automotive ads the next time you watched Google TV. Between 70 and 80 percent of the revenue from each ad went to the content provider, just as it had on the Web.

Scenario 2 (Circa 2015): Google is the Internet

Free wi-fi, a faster version of the Web, the Gbrowser, and the cube transform the technology landscape and our language.

Besides, few consumers are complaining. Nobody who remembers the horrific customer service and roaming charges of the old telecoms wants to give up their Google phone. And 2010's Google Cube[4]--a tiny server that was distributed as freely and as widely as those CDs that AOL used to give away--became the one indispensable item in every home, running the TV, stereo, thermostat, and, for less adventurous cooks, even the oven. Among the younger generation, that has given rise to yet another new phrase: Did you google dinner yet?

Scenario 3 (Circa 2020): Google is Dead

The once-mighty search engine falls prey to privacy intrusion, optimizers and Microsoft.

When the quality of search slipped, so did Google's advertising business. The market for online ads turned out to be far softer than anyone--except Microsoft CEO Steve Ballmer--had predicted. Ballmer's smartest move, in 2008, was to buy a company called Snap.com. On Google, an advertiser paid anytime a user clicked on its ad. With Snap, the advertiser paid only if the user did something useful after clicking, like buying a product or filling out a survey.

Scenario 4 (Circa 2105): Google is God

Human consciousness gets stored, upgraded and networked.

By 2020, They-Who-Were-Google had digitized and indexed every book, article, movie, TV show, and song ever created. By 2060, They could tell you the IP address and GPS location of every wireless smart chip (now bred into the DNA of every person, animal, and organic building on earth). Their psychographic profiles of users' search needs bore little resemblance to the primitive cookies from which they descended. If a man lost his dog, the Google engine could guide him back to the point where he and the dog parted ways, and instruct the dog to do the same via smart chip. They had built a complete database of human desire, accurate in any given moment.

Read more

Co-creating research with help from customers!

Johnnie Moore writes:

I'm reading John Seddon's book on quality management, I want you to cheat!. It challenges conventional ideas of managing quality through service guarantees and measurements.

He contrasts two approaches to using customer feedback. One bank employed a firm of consultants to do "mystery shopping" in its branches, leading to staff discontent at notions of spying by "experts".

A Canadian bank took a different approach: they invited a large number of their customers to take part in a program. They would write a letter to their local branch manager after each visit, reporting their experience. They discovered that different branches had different types of customer, so they were able to respond flexibly to the feedback.

I personally think if we can get customers to "partner" this process, it will yield results that third-party researchers can never hope to deliver. It will be more actionable, insightful and provide us with a few directions that can go a long way in building 'credible relationships' with customers.

One page at a time!

With its new Amazon Pages service, Amazon.com Inc. plans to let customers buy portions of a book -- even just one page -- for online viewing. A second program, Amazon Upgrade, will offer full online access when a traditional text is purchased.

For Amazon Pages, Bezos said, the cost for most books would be a few cents per page, although readers would probably be charged more for specialized reference works. Under Amazon Upgrade, anybody purchasing a paper book could also look at the entire text online, at any time, for a small additional charge, Bezos said. For instance, a $20 book might cost an extra $1.99. Copyright holders would determine whether the pages could be printed or downloaded. ''We feel strongly that copyright holders get to make these decisions," Bezos said.

thro' CMO, boston globe

3Ds of customer experience

Harvard Business School Working Knowledge has an interesting article on this topic:

Call it the dominance trap: The larger a company's market share, the greater the risk it will take its customers for granted. As the money flows in, management begins confusing customer profitability with customer loyalty, never realizing that the most lucrative buyers may also be the angriest and most alienated.

A recent Bain & Company survey reveals just how commonly companies misread the market. We surveyed 362 firms and found that 80 percent believed they delivered a "superior experience" to their customers. But when we asked customers about their own perceptions, we found that they rated only 8 percent of companies as truly delivering a superior experience. Clearly, it's easy for leading companies to assume they're keeping customers happy; it's quite another thing to achieve that kind of customer devotion.

So what sets the elite 8 percent apart? We found that they take a distinctively broad view of the customer experience. Unlike most companies, which reflexively turn to product or service design to improve customer satisfaction, the leaders pursue three imperatives simultaneously:

1. They design the right offers and experiences for the right customers.
2. They deliver these propositions by focusing the entire company on them with an emphasis on cross-functional collaboration.
3. They develop their capabilities to please customers again and again—by such means as revamping the planning process, training people in how to create new customer propositions, and establishing direct accountability for the customer experience.

Read more here

Ready for the transition from information age to conceptual age?

Read Daniel Pink's interview today on this subject. Inspiring to read. Here's my take on the same topic.

1. Hire more right brained people. They bring empathy, artistry, big picture thinking to a business. It makes a huge difference to the culture, attitude and the working environment of a company.
2. Right brained people do things because they love what they do.
3. Right brained people don't carry Got-To-do lists. Rather, they carry Want-To-do lists. Invariably, they find the time to do it.
4. Doing a job for just an economic need is long gone. Do it if you love it. If you don't love it, anyway you will lose the job, as you will make a mess of it.
5. Finding employees, associates, vendors or anybody who represents the company directly or indirectly with intrinsic motivation is critical. As you outsource more, this will be the biggest challenge for companies. It will make a significant difference to customer experience.

Via Guerrilla Consulting