Roy's Blog: February 2010

February 27, 2010

Why research markets and not learn about customers?

A critical component of magic marketing is customer learning: the continuous process of developing a deep understanding of the customers you have chosen to SERVE.

It’s an organic capability to be developed in your own organization rather than one which can be outsourced to another firm.

Why? Because you nurture and retain the things that will distinguish your organization from the competitive hordes, and customer learning is one of these “things”.

Customer learning

People often ask me what the difference is between customer leaning and market research.

Here is a comparison…

Market Research:
- evaluates the market periodically
- can be outsourced to an external firm
- is viewed as a study
- takes a snapshot of a customer at a point in time-
- takes a narrow view of the customer
- describes the ‘average’ customer
- knows little about each individual studied
- uses few segmentation variables

Customer Learning:
- is an ongoing process
- engages all employees
- is considered a core competency of the organization
- looks at the customer continually
- looks a the customer holistically
- seeks to understand very small groups of customers
- targets knowledge on individuals rather than the ‘average’ person
- uses many segmentation variables to obtain robust information on many unique customer groups

The bottom line is that there is a role for market research, but it won’t get you a competitive advantage in your market.

Invest time and energy in building a customer learning capability in your organization and you will be handsomely rewarded.

Cheers,
Roy

Check out my BE DiFFERENT or be dead Book Series

  • Posted 2.27.10 at 01:00 pm by Roy Osing
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February 18, 2010

It’s really about ME and brilliant marketers get it

Traditional marketing has been self-absorbed in the notion of market segmentation.

The segmentation objective is to identify market clusters that exhibit similar characteristics in terms of common variables such as demographics, lifestyle, political and buying preferences, product usage behavior and so on.

Once a segment with similar appropriate attributes has been identified the marketing role is to develop programs to exploit the revenue opportunity in each segment.

The assumption made in the marketing program is that each person in the segment “looks the same” in some respect.

The “average” person becomes the target and there will be sales hits when an individual actually does behave like the average and there will be sales misses when they don’t look like the average person at all.

Nothing wrong with the Marketing 101 approach. But it doesn’t reflect the reality of today’s customer.

Consider the following aspects of BE DiFFERENT market segmentation that sets it apart from the commonly-used methodology.

- it is considered as a strategic exercise asking the question “How should I segment the market to expose as many opportunities as I can?” Common segmentation variables such as demograhics and geographics are given mild attention only: the focus is on determining the appropriate variable that will unlock the growth key for the organization.

- it is a process driven by the intent to find differences in customer clusters in order to expose as many customer clusters as possible. The axiom followed is that opportunity comes from differences NOT similarities, and that the greater the number of clusters defined the more intelligence you have on every person in the cluster AND the better the ability to match a product or service with their specific needs.

- it tries to define as many different customer clusters as possible. he probability of making a sale increases due to the fact that you are better able to match your offering with the more precise needs. wants and desires of the individuals in each cluster.

- Finally, BE DiFFERENT segmentation is a continuous process of going deeper and deeper into a customer cluster. Obtaining more and more information on the individuals in the cluster. Looking for differences until you are nose-to-nose with an individual. If you have one million customers, the result would be one million “segments of 1”.

What are the implications of a million clusters of 1?
- you would BE DiFFERENT as few would undertake the journey
- you would have deep intimate knowledge of each of your customers
- your sales potential would be off the charts
- you would outperform your competition
- your customers would love you - matching your solutions exactly to their needs
- you would thrive
- AND you would survive any unpredictable body blows you might suffer in an ever changing world.

All because you choose to change the way you look at market segmentation.

Final word. Its not really about achieving “ME” segments. Its about putting in place a marketing philosophy to treat segmentation as a continuous learning process of driving our knowledge-gathering down to the individual.

If you define 1000,000 clusters of 10 are you on track?

ABSOLUTELY! Keep on segmenting…

Cheers,
Roy
Check out my BE DiFFERENT or be dead Book Series

Other marketing articles you might like…
BE DiFFERENT #marketing practice: create packages of value
BE DiFFERENT #marketing practice: discover customer “secrets”
BE DiFFERENT #marketing practice: institutionalize customer learning

  • Posted 2.18.10 at 03:54 pm by Roy Osing
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February 15, 2010

How can you WOW! on the outside if you can’t on the inside?

Absolutely true.

If the service provided among employee groups sucks, service to external customers will follow suit.

Employees need to WOW! one another if they in turn are to be able to WOW! a customer.

Organizations are a mosaic of customer - supplier relationships. Marketing serves Sales; Engineering serves Marketing and Marketing/Sales/Administrative functions serve the Customer Service Organization.

If external customers are to be dazzled, the delivery process needs to operate seamlessly and all delivery units in the organization need to dazzle each other; providing their piece of the service delivery chain and going the extra mile for their internal customer.

If one link in the chain fails then the chain breaks and the external customer is ‘de-dazzled’. If on the other hand every link not only plays their expected part but also goes the extra mile for their internal customers, the service provided to the external customer will most likely blow them away.

How do you know what level of service quality is being provided?

Constant measurement of the service quality provided to customers must be done; the use of Customer Report Cards should be prevalent. Service stories should be told. And service heroes should be honored.

We need, however, to take this a step further and apply the Report Card process to measure internal service quality. Sales should rate the level of service Marketing provides them and Marketing should rate Engineering. Every internal customer-supplier relationship needs to fall scrutiny to dazzle measurement.

Its really not that difficult to do and it doesn’t have to be complicated.

Pick six deliverables Sales expects from Marketing, for example, and have Sales rate on a 1-5 scale how effectively and consistently Marketing delivers each.

Have monthly joint review meetings to discuss the results and strike action plans to address any shortfalls.

Include internal service quality in the bonus compensation plan. I assure you that if part of Marketing’s bonus is based on the Report Card from Sales, the marketing folks will definitely pat attention to Sale’s needs, wants and desires.

The payoff: the service delivery process gets better and better over time; internal customers get dazzled.

And, the external customer both reaps the rewards of having a delightful service experience and returns the favor with continued loyalty.

Cheers,
Roy

Check out my BE DiFFERENT or be dead Book Series

  • Posted 2.15.10 at 03:31 pm by Roy Osing
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February 12, 2010

How to “breathe life” into your service vision

It’s all very well to say that you intend to compete and WIN by providing unmatched customer service, but exactly what does it mean?

What does it look like when your strategic intent is being successfully executed in the field?

What behaviors do you witness? What customer feedback do you get? What service quality metrics are relevant?

Your service strategy is the call to action for how you intend to deliver the ultimate in serving customers.

It is intended to “breathe life” into your service vision by specifying the exact deliverables you will produce and the results you expect. It is the promise, if you will, you intend to deliver on in the service world.

image

Lack of a service strategy clouds the issue. People are not clear on how to behave, on the results expected and on the measurements that are relevant.

Your service strategy should reflects two components:

1. Core Service - the basic good or service you produce, without which your business doesn’t exist…. WHAT a person GETS when they do business with you.

2. Service Experience - the experience they enjoy when they are in touch with you…. HOW they FEEL when they do business with you; when they consume your core service.

Here’s and example of a service strategy my team developed for a business organization I lead:

“We are easy to do business with. We care.
We provide and support innovative quality solutions.
We make promises and always keep them.f we fall short of our strategy, RECOVERY will be our #1 priority”

Core service elements are covered - solutions are provided (not products); promises are kept.

The Service Experience is addressed - a caring attitude is expected; Recovery is invoked when a mistake is made; systems and processes are created to make it easy for people to transact business.

Workshop this strategy with all teams in the organization. Define their required behaviors. Define the appropriate measurements. Bake it into their performance plan and bonus compensation.

You will see your service vision come to life!

Cheers,
Roy
Check out my BE DiFFERENT or be dead Book Series

  • Posted 2.12.10 at 12:24 pm by Roy Osing
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