Posts tagged customer acquisition
The customer is the customer. Adapt or die.
Dec 14th
I’ve had a variety of sales jobs in my career and have dealt with some great people … and some world-class jerks. Not just difficult and demanding people, but unethical, bullying, liars at Fortune 100 companies.
One time, a powerful VP demanded that my company buy-back $1.2 million of our material due to a cosmetic issue that did not affect the performance of their end product. In fact, the defect would not even be visible to their consumer. It was a dicey situation. Yes, we were “out of specification,” but this was also going to be a painful financial hit for my company. It was like being ticketed for going 56 miles per hour in a 55 mph zone.
In the end, we paid an $850,000 claim for the products that were made from the defective material.
I later found out this VP secretly sold the defective products to his customer any way, simply adding our claim payment to his bottom line (and annual bonus payment) through some accounting jujitsu. My customer loved bragging about his cleverness to demonstrate the power he could wield over my company.
The dude was eventually fired for this type of behavior, but that did little to comfort me when I still had to work with him every day. And yet, I really had no choice but to take it or quit. This guy was personally responsible for the acquisition of $1.5 billion of my company’s products — at that time, 10 percent of my employer’s total revenue! I had a one-line job description: Don’t lose the account.
I knew that I would only be in the sales position for a few years at the most, so I decided to weather the storm and approach the challenge patiently and calmly, as long as my own ethics or any laws were not compromised.
I realized that the customer is NOT always right. But the customer is always the customer. I was the one who had to adapt to survive and compete.
Fortunately, this is an extreme example but the point is, we can’t always demand that a customer — even a really bad one – change to conform to our needs and processes. Only we can change to adopt to the customer’s needs … or, if it gets too bad, quit.
Understanding this wisdom is difficult but a key to success in a fiercely competitive world.
This story came to mind because last week we had a debate on {grow} about the customer demands for rapid online service, even from hotels, restaurants, and other providers who are on the “value” end of the product line. This is an unfortunate development but they really only have one choice: Figure out how to adapt to the customer service needs AND maintain a low cost structure. They’re not going to be able to dictate customer expectations and still compete in the long term.
I’m currently working with a supplier that is imposing new processes that will take up more of my time and dramatically hurt my cash flow. As a business partner, I want to cooperate and make the whole “system” better, but when I point out that their service levels are declining and the value of these new processes seems to be flowing in only in their direction, their response is defensive instead of responsive. And you know … they might be right and I might be wrong. I’m not perfect. But I’m still the customer.
They may get away with it for awhile if the switching costs are high, but in general the information flow of the web has dis-intermediated many traditional competitive hurdles. It’s easier than ever to find new suppliers for most goods.
In the end, all of us who have to compete for a living know we have just one true source of competitive advantage –
LISTEN to our customers more intently than our competitors,
DISCOVER un-met and under-served needs, and
RESPOND more rapidly and effectively.
That’s it. The customer is the customer. Adapt or die. Right?
LinkedIn: A goldmine of business opportunity
Feb 3rd
This is the third and final (for now) personal case study on how the social web delivers unexpected business benefits. This story features LinkedIn, a powerhouse generator of business connections.
Making connections
I’ve made some of my best business contacts through LinkedIn Group Q&A forums. One example is my relationship with Dr. Ben Hanna, now VP of Dex Interactive. In a casual response to one of my answers in a forum, he mentioned that he was documenting his company’s progress on social media marketing month by month. I thought this was fascinating and asked if I could feature him on {grow}. This led to a number of articles which remain some of the most popular posts I’ve done. Ben and I have continued to support each other on various web-related projects.
Human Resources 2.0
Second example of a business benefit: One of my customers was looking to hire a new technician with highly specialized skills. I suggested doing an advanced search on LinkedIn using the zip code (to narrow the location) and keywords indicating the skill set. He followed my advice, identified three viable candidates and he just hired one of them. I helped my customer with an important personnel issue in one 60-second phone call!
New customers
Another example led to a direct business opportunity. An account executive from GIS Planning read some of my answers on a LinkedIn Group Forum and became curious enough to click my icon, which took her to my website … which took her to my Twitter account … and my blog. Of course I had not connected to her directly at this point but that was about to change.
After a couple of months, she called me up out of the blue: “Mr. Schaefer, I’ve been reading your comments on LinkedIn, Twitter and your blog and I’m convinced you are the voice of marketing we need for or company. Can you take on a new account?”
Well, THAT was a nice surprise!
This led to subsequent phone calls with her executive leadership and it resulted in a business partnership with GIS Planning, an amazing company that produces software for economic development institutions. It pulled me into a whole new industry and allowed me to learn from some wonderful marketing pros. And, it has helped my bottom line, which is what this is all about, right?
So let’s see how this real-world experience relates to my formula for creating business benefits on the social web:
Connections + Meaningful content + Authentic helpfulness = Business benefits
- By being active on LinkedIn forums, I was building important new business connections. In the GIS case, I didn’t even realize it.
- The content Ben Hanna provided spurred dialogue and cooperation between us. Meaningful content in the form of LinkedIn Group answers provided enough value for GIS to take action to learn more about me. Meaningful content comes in many forms!
- When I was participating in the forums, I was genuinely offering help with no intent that I would get anything out of it. Similarly, I enjoy supporting Ben’s projects becuase I always learn something and I truly believe in his vision.
I believe this formula represents the core value of the social web — providing an opportunity to use your life’s blessings to connect to others in a meaningful way. We are living in a historic moment. We are the first generation to have access to free, instantaneous, global communication. If you use this gift well, the benefits can be astounding.
Don’t you agree?
This is the third installment of the unexpected benefits of the social web. You might enjoy these other articles:
Part 1: How to become a CMO in 10 tweets or less
Part 2: On Twitter, even casual connections can lead to business benefits
It worked for Zappos. It probably won’t work for you.
Jan 24th
Zappos* is a successful company with a well-publicized, aggressive employee use of social media. In fact, it may be the most famous social media model in all of blogdom. They have 13 blogs, 50,000 videos and their employees tweet like rabbits in heat. It’s worked for them and it’s a wonderful case study. I get it. But it’s probably the wrong model for most companies.
And here’s the point where the waves of Zappo-sniffing social media purists come crashing down on me. So be it. This is dangerous stuff.
It is relatively safe to blog and tweet about shoes. But in many companies, the risk of an all-employee social media free love policy will far outweigh the benefits. For many important companies all it will take is one Twitter-induced SEC violation, a leak of vital competitive information, or a national defense breach, and the hammer will come down on the use of social media forever. Policies are usually made to deal with the lowest common denominator.
Is this a leadership issue? Not necessarily. There are irresponsible people everywhere. There are disgruntled employees even in the best-managed companies. Where corruption can occur it will occur. Welcome to the human race.
So what’s the answer?
Under the following conditions, the Zappos model might be ideal:
- Company culture supports employee engagement
- Company leadership understands the model
- Customer base is active on the social web in a meaningful way
- Benefits outweigh risk of security breach
If just one of these conditions are not met, the free love policy cannot work.
That’s not to say that social media won’t work in some form with almost any company if there is appropriate training, role clarity, effective policy and boundaries. But you have to fit the tactics to the strategy — and the culture — just like any initiative.
A marketing leader has to make effective decisions based on what IS, not on what you WISH for. You can’t “will” a social media effort to work in your company just because it worked in the Zappos corporate culture.
For an excellent and thorough perspective on the need for effective and appropriate corporate social media policies, I recommend Kent Huffman’s recent post on the subject.
OK, your turn. Let ‘er rip!
*If you are unfamiliar with the Zappos social media model, Jeff Bullas has written wonderful case studies on this company:
The five questions small businesses need to ask about social media marketing
Jan 7th
I’d like to start with an excerpt from a a recent Gregg Morris post. This is an email from one of his associates, expressing frustration at an inability to convince small businesses to engage in social media marketing:
Social networking is making zero inroads into any of the businesses (SMBs) we have visited and interest in “mining” those networks is similarly zero. It’s not that they are rejected as future possibilities, but rather that SMBs haven’t time for it, since they sense the costs far exceed the benefits … The facts are the facts – SMBs are still the same as they always were: overworked, scratching for dollars, but now fighting even harder for market share. They are competing not just with local competition but also with online, distant suppliers and, of course, big box retailers.
To the point: Joe average – architect, restaurant owner, retail store – are not stupid, nor are they unaware of the need to handle their customers better. All I see … is the same, stupid Social CRM Expert-type of messaging. A bunch of esoteric bullshit skimming the surface of the problem, with no real solution offered. Everywhere I look, they all say the same thing: “You have to communicate with your customer…”, “you need to serve your customer…”, “you need to do this, that or the other…”. Lots of “you needs”, but few “here’s exactly how”
This little rant hit a chord for me because I teach a social media marketing class for small businesses and I constantly hear these same concerns.
There is a business cultural gap that is keeping many SMB’s from working this channel: Typical SMB ”advertising” is a hand-off. All the work is done by an ad agency and/or the advertising sales people. There is little personal time expenditure and the cost/benefit is usually easily measurable. Not so with social media marketing. There is more hands-on doing and the results may not be immediate.
When I consult with small businesses, I recognize that for many, the time commitments and demands of maintaining a consistent, effective presence seems overwhelming so I help them cut through the hype and FOCUS. I encourage them to consider five very practical questions:
1) Do I know enough about social media marketing to make the right decision for my business? Not knowing the possibilities would be the same disadvantage as operating a business without knowing such a thing as television advertising existed.
2) What is mybusiness strategy and how could a social toolkit align with my key initiatives?
3) Are my customers using the social web?
4) Are my competitors using this channel, and what are the competitive implications if I decide to participate or not? Could I create advantage by being an early adopter?
5) Do I have the resources, or can I acquire the resources, to conduct limited, focused experiments to see if working through the social web can provide a cost-benefit exceeding traditional advertising?
After my students walk through these questions, they usually conclude a) yes, this is something with a lot of potential and b) there are practical and manageable methods to approach this if I stay committed and focused.
Does this make sense to you? What is your experience with SMB’s and the social web right now?
{grow} community alert: Pete Mosely, a frequent contributor to {grow} has a new eBook out on promotion fundamentals which is a nice companion piece to this blog article.
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