Roy's Blog: February 2011
February 28, 2011
Today, customers will leave you in a heartbeat for a better offer when value isn’t unique. Achieving a high level of customer loyalty is almost becoming the impossible dream. Organizations face the reality that, after investing heavily to acquire customers, those same customers will leave them in a heartbeat when a better offer comes along.
It wasn’t always like this. In the past, customers faced stronger barriers to exit when it came to switching suppliers. These barriers included such things as lack of information on competitive alternatives, fewer choices, monopoly supply and technology.
Customers today, however, find it relatively easy to change service providers; the risks of doing so are low as well.
This customer churn challenge for any organization is fuelled by:
- Greater technological compatibility enabling a customer to change suppliers without losing the basic functionality they have. Moving from one computer manufacturer to another, for example, has little risk associated with it in terms of not being able to run program applications that you regularly use or maintaining your data files in the new operating environment.
- Marketing programs offering strong economic incentives for a customer to change suppliers. The delight of telemarketers, you see these all the time. ‘Switch from company A for your service to us and receive three months free service’ is not an uncommon sales proposition, enticing people to consider competitive options. I find it interesting that few such propositions offer value-based reasons for switching. It’s all about price. If I come to you for three free month’s service today, what makes you think I won’t leave you in three months for the same or better offer? Furthermore, how do your existing loyal customers feel when they hear about your lower price incentive to entice others rather than to reward current Fans? Not a great message.
The solution? Focus on your Loyal Fans. Take care of them. Delight them. Give them something to talk about to others. Create memorable experiences for them. Take away any reason for them to even consider leaving you. Barriers to customer exit - put them in place.
February 21, 2011
If you’re not DiFFERENT, you’re dead. If you’re not ReMARKABLE, you’re invisible. If you’re an indistinguishable member of the competitive herd you go unnoticed. And the end is near.
The ONLY Statement is your way out.
Here are the critical five steps to achieve the ONLY position:
1. The WHO - Figure out the Fans you are going to serve. You can’t be all things to all people. You don’t have unlimited resources. You need to focus your efforts on those customers who love what you do and who have te potential to satisfy your financial growth goals.
2. The WHAT - What will you deliver to the WHO? You must deliver VALUE (it’s about what your customers receive, not what you produce), BE Relevant (you had better address the top wants and desires of the customers you are going after). and BE Unique (you must be the ONLY ones who do what you do).
3. The ONLY - Craft your ONLY Statement. “We are the only ones that….”. Deliver Relevant Unique VALUE to the WHO. Claim the ONLY position.
4. The TEST - Check with your frontline people and the WHO. Is your ONLY Statement Relevant (does it address the top wants of your target customers?) AND is it True (do you really deliver what you say you do?). Don’t get carried away with your own thinking. Do a reality check before pronouncing your ONLY to the world.
5. The ACTION - Develop an action plan to implement your ONLY. Test it for relevance and believability. Communicate it internally. Translate it into behaviors you expect people to exhibit every day. Include these behaviors into your Performance Management System to make it matter. Compensate folks on the ONLY behaviors. Decide on the critical few things you need to do in order to breathe life into your ONLY.
There you have it. The lens through which you can grow your organization on the back of Delivering Happiness (thanks Tony H.) to your Fans.
February 17, 2011
Your planning process must fit the realities organizations are confronted with these days. Volatility. Randomness. Chaos. Unpredictability. Relentless Change. Yet in spite of these dynamics, the traditional “Strategic Planning 101” model is still advocated by Educators and is used by most organizations. SWOTS, in-depth Issues Analysis, Predictability Modelling and Mathematical Assessment of Alternatives pervade the planning process. The objective seems to be to seek the last bit of perfection in the plan and then assume that it will be effectively executed as written.
BIG mistake. Nothing EVER turns out the way you planned. NOTHING. Nothing is EVER perfect (coveting the 100% solution is unproductive in any case).
The new planning model must BE FLEXIBLE. Must accommodate unexpected CHANGE. Must achieve RESULTS. Must generate ENTHUSIASM. Must scare the pants off the HERD.
Here are Three things you can do to to make your planning process more relevant:
1. Get your plan “just about right”. It will never be perfect so why bother? Get it directionally right. Don’t tie yourself down to an outcome based on “all things remaining equal” because they’re not.
2. EXECUTE flawlessly. Take your imperfect plan and BE Brilliant at executing it. Spend 80% of your time figuring out how to implement it and 20% determining it’s essence. It is a failure of leadership that plans fall short on execution.
3. LEARN and adjust on the run. Learn what’s working and not working through execution. And adjust your plan based on this learning. Build in a feedback lop so you get real time information on how well plan expectations are being achieved.
Get comfortable with the fact that your future is uncertain. Get comfortable with imprecision. With a bit of vagueness. With the fact that you CAN iterate yourself to success if you pay attention to your results and learn from them.
EXECUTION-DRIVEN Planning is what is needed to distinguish yourself from the competitive Herd. Take the step.
February 14, 2011
In today’s volatile environment, random external events challenge the traditional techniques used to manage them. Many businesses, however, still rely almost exclusively on traditional forecasting tools
and models to predict where they will be in the future, leaving little room for these unexpected events. Exclusive use of these tools to predict business outcomes could be a recipe for disaster.
You simply cannot assume that the future will be an extension of the past. To do so would suggest that past successes will determine future wins. In an all-things-remaining-equal environment you might
be able to get away with this. But the fact is that as a business looks forward in time, all things are not equal. The only thing we can count on is facing uncertainty at an accelerating pace with significant impact on our organizations.
I am not suggesting that predictive tools and methodologies do not play a valuable role in business. They do. They offer one version of an outcome. But that outcome may likely be wrong. We have all seen how unexpected forces in the market cause a predicted outcome to fall short of expectations.
Think of the trend line version of your future as a baseline view from which you need to be prepared to move when things start to go haywire. I admit that in the rarest of circumstances a random event may create a windfall for a company; when it does, rejoice. And then prepare yourself for a shock that will take you in the opposite direction.
Successful organizations understand the need to learn from the past and apply that learning to future scenarios. They also know that we can count on facing predictable uncertainty at an accelerating pace, causing organizational discontinuity. They must lead into an uncertain future by introducing new ideas, concepts and tools to prevent organizational mortality. Those that don’t, continue to toil on in the mistaken belief that the actions behind past successes will continue to work in the future.
This momentum management results in the demise of organizations. The issue is not whether it will happen, but when.