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noreply@blogger.com (Jason Steed) — Tue, 16 Mar 2010 20:54:00 +0000

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Customer Advisory Board: The Business Lifeline

noreply@blogger.com (Jason Steed) — Thu, 22 Oct 2009 17:16:00 +0000

The fundamental shift from shareholder to stakeholder is the new guiding principle behind successful and failing businesses. Whether a virtual process or a structured program, a Customer Advisory Board is a company's conduit to product development, company branding, and business profits. And for industries from Technology to Brick & Mortar, it's a process that can and must be put into place immediately.

The smartest people in your company cannot answer industry trends, business drivers, customer issues, and market opportunities as well as customers and prospects can. Organizations who listen to the right people—then act swiftly on that feedback—are building relevant products and gaining market share. Note the term "right people," revealing that some customers are just as capable of providing poor, misinformed or short-sighted advice. What, then, determines a qualified or informed customer? A common assumption is to start with the biggest spenders in your database. A word of caution: Cash cows are not always your strongest advocates. In fact, your "best" customers might be slow spenders, or might never have purchased anything from you. Consider yourself. Are you quick to spend money, even with a company you trust?

In addition to trust, what other qualities signal strong customer advisory candidates? Good board members are influential, informed, inquisitive, critically-minded, and loyal. Your customer advisory board is loyal to their community of friends, not to you or your products. If you can provide them with tools to serve their community then you've earned a customer for life. More importantly, you've earned qualified referral business. I also mentioned "critical." You will greatly benefit from customers who call you out when you blunder, or who challenge you on a flawed policy change. These individuals are invested in you and your service offering.

Unlike a generic target audience or demographic, you should choose people whom you know, and who know you. You only need to assemble a few for each major category of products or services. These are spokespeople for your business, your products, your staff, and your company vision. They have the ability to manage your company's brand. Sound a bit risky? This is today's and tomorrow's marketing reality.

What do you do with your Advisory Board? For starters, you don't inundate them with obligations. A quick casual conversation will yield more valuable insight than any online survey. Many sophisticated surveys only provide answers to "your" questions, when in fact they may not be the right questions to start with. Don't forget that their loyalty is with their peers and internal support groups. Following these types of conversations is more powerful than direct conversations with them. How do you follow these conversations? Provide them with a place to talk with like-minded individuals, or join their online communities. Social media makes meaningful conversations extremely accessible. Unlike eavesdropping, your customers WANT to be heard. They hope that their opinions and insights matter enough to grab the attention of somebody who's in a position to bring those changes to light.

ACTION ITEMS
Ask your customers whom they want to interface with in your organization. Involve as many as possible, but organize feedback so that it gets consolidated and acted upon. Set up an online community, or utilize existing social media channels to follow pertinent conversations.

CASE STUDY
If you own an iPhone, you'll understand this principle more fully. Apple spent more time with their street-smart customers than in researching the competition and employing leading technology minds. The iPhone is not merely an upgrade to smartphone technology. It's a tool for anticipating the needs of its users, i.e. the number of seconds it pauses before auto-filling a word, or user-defined suggestions from common misspellings, or its programmed "wiggle room" for irregular human-touch commands. Unlike the competition, the technology doesn't run ahead of hand-eye coordination. iPhone technology is built to be a conversation with its user. This is customer feedback in action.

Marketing Makeover for CEOs

noreply@blogger.com (Jason Steed) — Mon, 31 Aug 2009 16:28:00 +0000

POWER TO THE PEOPLE!
As consumers, we're starting to recognize our influence in the market. In fact we're getting quite good at essentially telling CEOs and management how to do their job. As though we own stock in the companies and products we patronize, we're pushing hard for customization, convenience, and 1-on-1 attention.

Indeed, consumer power is quite liberating...until we turn the tables. As a business owner, manager, or service provider, you're certainly feeling the pressure in your own business to deliver the impossible to a fickle, often spoiled audience. We're all acutely aware of the squeeze on development and distribution resources, yet customer demands are showing no mercy. And now, thanks to social media, your customers can recklessly commandeer your brand and messaging. What brought about the customer revolution of 2009? And what you can do about it?

THE RECESSION FACTOR
Consider the general events of the last 12 months: Companies have downsized to the hilt in order to streamline their operations. Customers are still expecting the same level of service from companies now scrambling to cover the operations of previously staffed positions. Even companies who've retained their best, smartest people are realizing that brains alone cannot replace customer relationships once in place. It's always good to trim the fat, but many from sales teams and customer service were the ones on the ground level nurturing customer relationships.

THE SOCIAL MEDIA FACTOR
Regardless of your company size or industry, people are talking right now about you or your competitors. A good endorsement can speed up the sales cycle and drive new and healthy business. Negative talk (regardless how falsified) will spread exponentially¹. Customers want to be heard; not just by their sympathizers, but by you. They know that if they can get your attention, you're in a position to bring about real results. But here's the catch: Customers want to hear back from you; not from your "people" or your PR firm. Not from customer service. And certainly not from a data sheet or white paper.

GROUND-FLOOR MAKEOVER
Take heart. You're good with people. And if somebody's going to talk about your products, who better qualified than you! You're still the good guy, and highly influential. And, to look good and sound genuine, here are a few marketing makeover tips to add to your arsenal:

Listen to the chatter. It's all around, on tools such as Twitter, LinkedIn, Digg, Facebook, and others. Other resources include blogs, forums, and search engines. Plus, technology lets you quickly sift through the most meaningful stuff.

Internalize feedback from your most valuable customers (this may include dissatisfied customers)². Remember, there are big business costs to pleasing everyone.

Come down to the ground floor. There's a better view from down here of the things that really matter to your audience.

Find your voice. Be candid and approachable. This builds a healthy culture within your organization and drives genuine customer feedback.

Evolve. Give your most valuable customers a say in product development and service offerings. If you can do this, and do it better than your competition, you'll earn true customer loyalty—a powerful ally in today's economy.

1. Satisfied Customers Tell Three Friends, Angry Customers Tell 3,000: Running a Business in Today's Consumer-Driven World
2. Customer Database: Think "Better," not "More."

Customers as Benchmarks

noreply@blogger.com (Jason Steed) — Tue, 14 Jul 2009 18:55:00 +0000

Once you've identified the top people within your customer database, create a “benchmark” based either on your best advocate, or possibly a combination or hybrid of the top few. Here’s how this constructed “benchmark” can empower your organization and influence your sales and marketing efforts. We’ll begin building entire campaigns around that particular benchmark. We’re going to market to “one benchmark,” whether we’re finding, sending out email newsletters, putting together online events, expanding product lines, whatever the campaign. And the more characteristics we can identify about our benchmark, the more effectively we’ll market, and the more receptive our audience will be. If you have more than one product division or audience type, you’ll naturally have more than one benchmark. Maybe Benchmark #1 spends little time with us but buys more expensive products. Maybe Benchmark #2 represents your local audience, doesn’t spend a lot of money, but always connected with others, giving us insight into best product benefits. Maybe Benchmark #3 is a prime candidate for your lower price point product line.

Let’s list client attributes of each of your benchmarks. Sales cycle (how long does it take for them to buy?) Much more easily answered when we’re talking about a real person. Much more vague are answers to these questions when we generalize our audience (60/40 male female sku, age 18-49). Attitudes, Pruchases, Demographics, Experiences, and so on.

With your benchmarks defined, we can plug any of them into any part of the sales cycle, defining them as a Lead, or a Prospect, a New Acquisition, and a Loyal Customer. Here’s a representation of the sales cycle…the process that each lead takes in becoming a customer, and beyond that, becoming a loyal customer through multiple points of sale over their lifetime. Of course, along the sales cycle there are multiple points of attrition, based on their experience throughout the process. To reduce attrition, we target the right offer to the right person at the right time. Timing has a great deal to do with the phases of the sales cycle. In an “Awareness” campaign, our aim is to do exactly what’s implied…to help make them aware of a solution to a need that they have. We’re not using sales closing tactics, we’re not “committing” them at this phase. Just making them aware of a solution. So, I believe it’s Denise Hopkins, Vice President of Product Development at Experian, she talks about “look-alike modeling” as a strategy for prospect messaging. She mentions that it produces 2 to 3 times the typical response rates.

Let’s take a closer look at 2 benchmarks, we’ll call them Brianna and Davis. Of course, each benchmark has a list of defining characteristics, derived from our best advocates.

Customer Database: Think "Better," not "More."

noreply@blogger.com (Jason Steed) — Thu, 04 Jun 2009 19:05:00 +0000

More customers can mean higher overhead. Sure, but who would turn away more customers, no matter what the cost? The keyword is "cost." Better customers recognize your value ahead of price. A witty example is shown in this Vendor/Client YouTube Video.

THE PROS AND CONS OF "YEAH, WE CAN DO THAT"
Who's in the mode of turning away work these days? You'd be hard pressed to find highly finicky service providers in just about any business market. Whatever your service offering, and however thin you're spreading your services is for you and your clients to decide. But always ask the question, "What's the value of modifying your service?" With high adaptability comes empowerment; more specifically, "client empowerment." What will clients do with your custom-made proposal? Are you earning an ongoing relationship though initial "heavy lifting?" If so, your efforts will certainly pay off in the long run. But if you're creating a precedent for letting your clients name your terms, you'll be quickly underserved—and in due time, so will they."

VALUE IN A BUSINESS TRANSACTION
So, ask the question again, but put it under a new light: "Yeah, I can see the value in that." Does the "value" in each case offer benefits to both you and your customer (and their customers, in a B2B realm)? High value doesn't equate to high or low expense. We have it in our heads that "2 for 1 value" means "twice as valuable." Value is based on the ripple effect of an exchange. And ripples travel in all directions. If cost is the biggest factor in the heads of your clients, there's likely no mutual value in the arrangement (none or negative ripple effect).

Commoditized mindsets work primarily in one direction and lack the vision to see longer-term value. The principle of equal value exchange has a direct cause and effect: The higher the commodity factor, the lower the value factor. This is not to say that expensive things have intrinsic value (commodity defined). Rather, a relationship-driven mindset sees both short- and long-term benefits of a valuable product or service.

Characteristics of Relationship-Driven Clients

noreply@blogger.com (Jason Steed) — Thu, 14 May 2009 17:21:00 +0000

Here's a checklist for evaluating and prioritizing relationship-driven clients. A smart rating system applies to every company database, revealing only the marketing campaigns that matter. It's tempting to jump to conclusions in building your Client Personality Profile. Keep in mind a few "myth busters" on Loyalty Marketing:

YOUR BEST CLIENTS...

Your best clients are not always your biggest spenders
Clients are most valuable not because they are your cash cows (though a profitable side of beef is always nice) rather because they're with you for the long haul, they help you in tooling your best message, and most importantly, they help corral new business to increase profits.

Your best clients might never have purchased anything from you.
That's right. Some of your biggest customer assets might just be prospects. Remember, the value of a client is calculated not only on the revenue they create, but also on revenues from referrals. It's an exponentially powerful formula.

Your best clients don't like to be "sold to."
You never earn the "right to sell" to a customer. When they sense you're selling to them, they'll feel like a project or statistic (even the most loyal of them). If you want a loyal client, throw the traditional sales tactics out the window and stay genuine.

Your best clients aren't always the first to respond to offers.
Don't tag your best customers based upon quickest response times. This approach is fundamentally flawed because it mocks the intelligence of a healthy client who makes informed, methodical decisions. Consider yourself as a client—are you the quickest to make a decision or a purchase?

Your best clients aren't easy to locate in your Web stats.
Test it yourself. Are your best customers showing up at the top of your Web stats? Is Web page "duration" an indicator of piqued interest? Or just as easily an indication of "being lost on the page" or "breaking to nuke a frozen burrito?" Stats have their place in any sound marketing campaign, but they're not the strongest indicator.

Your best clients aren't compelled by pricepoints.
This should come as a relief, since nobody wins at the commoditization game (somebody's always cheaper). In addition, bottomless pricepoints attract flighty commodity-driven customers. Value-driven customers are accustomed to paying what something is worth—your job is to show them the value of that something.

Your best clients can't be found in a predictible demographic.
This fact sometimes creates resistence, because "demographic profiling" is easy to measure. Keep it in the cards, but use it in a supporting role to much more potent "behavior profiling" strategies.

Your best clients differ from each other in their sales cycles.
It should come as no surprise that your customers (even your best customers) are all at a different point in their purchase decisions. Additionally, sales cycles differ greatly in length. All of this amounts to an exercise in "good listening." Don't pitch the "closer" to your elite list all at once, instead offer multiple offers for multiple points of engagement. To restate, "loyal customer" doesn't mean "please take my money."

Your best clients must feel like they're genuinely understood.
The value of a good client list boils down to the "truth" you can get from them in a mutual-respect environment. Companies are constantly adapting to changes, trends, supply, demand, economic factors, and more. As soon as you've lost a good client's respect, you've lost a resource for roadmapping profitable campaigns.

Your best clients want shortcuts, not "logins."
If you're looking for a customer who will "jump through hoops" then you'll likely be short-changed. In exchange for their loyal business, your best clients want no-strings-attached value in return. We're not talking about dumbing down customer privacy, rather avoiding the points of friction that will frustrate your clients or make them feel monitored. Web cookies can be a great upsell/resell tool, but be sure they're functioning as they should.

Your best clients want benefits, not features (nobody wants features).
Self-explanatory

Your best clients will always champion good referral programs.
We often think that people who like our products know intuitively how to point others through the right doors at the right time. Just as we train our sales staff on best elevator pitches, customers and prospects need similar tools. Make it easy for best clients to "sneeze" your products. Better yet, offer them a concrete incentive for doing so. Not even the best clients will do something for nothing. Give them something of value for being contagious.

Your best clients should help engineer your product offerings.
If you're strategizing about your next best marketing campaign in staff meeting, you're going about it all wrong. The whole basis for refining your customer base is to glean a qualified mouthpiece for your product offering. If your best customers aren't sharing their ideas with you, maybe you haven't invited them to a staff meeting lately.

Your best clients are innately loyal, and are not "turned into" loyal.
I like to save the best for last. I've seen a lot of dollars in research, technology, and "marketing speak" revolve around the idea of "converting" customers into loyal customers. This mentality defeats the whole process of growing the right customer segment, and letting the rest drop off the radar. The danger with the "no client left behind" approach is there's no clear-cut process for filtering your database, since all would wear the same number of stars on their foreheads. Innate loyalty in customers comes through only when company teams do their jobs right.

Every customer gets respected, but it's vital to focus on the right customers—your "evangelists." When you craft a message that speaks to your hand-picked crowd, that message will sift out your profitable clients from your loss leaders. Although I might concur that anybody can become a "loyal customer" if you wrok hard enough on them, but consider the costs: You'd be expending enormous resources and neglecting the clients who need you most—whom YOU need most.

Just a note, American Express took this idea to the extreme when they actually "paid" their riskier customer base to leave. How did that turn out? Google "AmEx pays customers to close accounts" to see some of the negative publicity. Source: Wall Street Journal

GETTING STARTED
To better illustrate the attitudes and activities of relationship-driven clients, I've posted a 5-minute demo.

Profiling and Promoting Your Best Clients

noreply@blogger.com (Jason Steed) — Tue, 21 Apr 2009 17:21:00 +0000

Who are your best customers? Profiling and promoting your most valuable customers is more important today than ever before...more important than a great product, a wizbang Web site, experienced management, or a solid brand. The fate of large and small companies today is determined by customer experiences, opinions, attitudes, relationships, and behaviors. Daunting as gathering this info may sound, you can earn top-of-mind awareness by defining great customers and delivering experiences instead of products. In fact, your most valuable customers will expect it.

YOUR DATABASE'S SWEET SPOT
Let's get started. Consider your current customer database. Based on customer value, it likely looks something like this. Clearly the majority of company growth comes from the top 20% of your database. To grow business, the old model says to throw more prospects into the sales funnel. Notice how ALL customer segments expand. Now notice how your infrastructure-sales, customer service and support-must match this growth, making your business top-heavy. If you're focused on business efficiency, you can really only afford to grow relationship-driven clients.

So, how can you grow the sweet spot? You can't simply neglect the loss-leaders because when they leave they'll take a chunk of your business with them...resulting in "loss-leader increase." In February 2009, American Express actually "paid" their "less valuable" customers to leave. Did that work? Google the keywords "amex pays customers to close accounts" to check out the negative press.

THE UPSIDE-DOWN SALES FUNNEL
When you direct all of your communication toward high-value clients, you optimize the source of your database-the sales funnel-by flipping it upside down. Marketing to high-value clients fills the funnel with like-minded prospects and customers because your funnel gets filled by the help of your most powerful sales force, your "customer advocates." Seth Godin, a prominent customer change agent, talks about flipping the sales funnel on its side as a metaphor for a megaphone...thereby empowering customers to endorse you and your product. It all boils down to a process of asking, listening, and then acting, creating a self-perpetuating feedback loop where customer behavior is analyzed and taken into account when designing the next communication.

CREATING A BENCHMARK
Let's get to the root of more revenue: Profiling the best clients in your business, then promoting them to status of "spokesperson." Your most valuable client is based not only on revenues they bring in, but more importantly, on revenues from referrals. For this reason, be sure you're also tracking referrals from PROSPECTS. Referral stats tell you who recognizes your product value and who's good at influencing others. Try this: Sort your database to look at contacts with the most referrals, then the dollar value of revenues from each of those accounts. You've just defined the Lifetime Value per Customer, or LVC.

Now, let's create a "Benchmark" or a persona with whom you'll qualify all outbound sales and marketing efforts. First, list the most meaningful attributes of your top 3 LVCs, including attitudes, behaviors, sales cycles, demographics, and purchases. It isn't important how similar each is to the other, rather how different each is from a commodity-driven customer. We call this the Boxxer Model, a tool for getting you well on your way to building valuable client relationships. Your Boxxer Benchmark will represent a raw lead, a prospect, an acquisition, or a loyal customer, depending on your campaign. Denise Hopkins, VP of Product Development at Experian, talks about "look-alike modeling" as a strategy for prospect messaging that produces 2 to 3 times the typical response rates. Now, evaluate every sales and marketing campaign using the parameters of your Benchmark.

PROMOTING YOUR RELATIONSHIPS
To make each campaign timely and appropriate, consider the stages of your typical sales cycle-ABCDE. For example, when building an Awareness campaign, how meaningful are the offers in your collateral for your Benchmark? Are you building an appropriate relationship within your finding pool? Remember, you can't marry them until you've courted them, and you can't court them unless they trust you. Tagging the ABCDE stages in your database will make your messaging more appropriate and genuine. Let's see how we might promote the following Benchmark through each phase of the sales cycle:

Here's an example of 2 Benchmarks based on database results sorted by combined revenue from self and referrals:

Brianna:
Ethnic-urban mix
Moderate income status
Benefits over features
Micro-business owner (Researcher, email receptive)
Early adopter (Convenience, image-oriented, risk-taker)
Trend-setter (Latest & greatest, celebrity testimonials, name-dropper)
Settles for knock-off of original

Davis:
Suburbian
Higher-income status (tightened purse strings)
Benefits over features
Quick financial decisions (loyal to firms with timely products)
Status symbol (Wants genuine only, not motivated by testimonials)
Non-patronization (averse to "promo hype" and stock photos)

We'll follow our Benchmark, Brianna, along the sales cycle:

In an Awareness campaign, invite Brianna to an online community through cross-linking or search marketing campaigns. Keep the subject matter light, timely, and fun. Encourage collaboration, and always provide an equal-value exchange for any registration.

In a Buy-in campaign, give away an e-book when Brianna subscribes to free outbound communication (newsletter). Once you're earned the right to talk to her, keep it genuine.

In a Commitment campaign, promote a lower price point product or service to get Brianna started. Can she customize it? Immediately encourage her feedback, good or bad, then internalize and act on that feedback. Avoid any implied "handoff" from sales to customer service.

Try this for a Dedication campaign: "Dear Brianna, as one of our most valued clients, you have been inducted into our Customer Advisory Board." Send an invitation and SHORT online survey.

In an Engagement campaign, find a "cause" or something that Brianna is passionate about. Facilitate an event that furthers her cause. Anything from coordinating an open house to positioning Brianna as a "guru" for her cause. The idea is to allow her to freely communicate within her exclusive social circle. If kept genuine, the return on investment will be far-reaching and long lasting.

GETTING STARTED
To flip your own sales funnel, start by taking a close look at your database. Profiling your highest-value clients will do away with vague marketing speak and drive memorable product messaging and collateral. Long-term client relationships will attract healthy business and bring speedy and measurable returns. To better illustrate flipped-funnel effects, view this self-running demo for promoting your high-value clients through the sales cycle.