Why What Customers Want Has Changed (Maybe Forever)

It’s a tricky thing these days to try to figure out what customers want and what keeps them coming back to you. Here are four thoughts based on what I’ve been seeing recently:

· Sometimes “Good” is Good Enough: we got so comfortable with ‘excellence’ and ‘superior’ and other adjectives that define our value proposition; then the world fell off a cliff in 2007/2008. If you have taken your customers’ collective pulse lately, you might be surprised to find out that “good” is fine and that loading them up with features and benefits they might think are nice but won’t pay for, shrinks your bottom line. This is Southwest Airline's strategy and it seems to be working really well for them.

· Customers Want to Buy: Customers are so smart and informed. By the time they contact you or you do a sales call, they’ve already been online, searched Twitter and Google and asked their friends on Facebook about you and several of your competitors (yes, even B2B). They’ve got their shortlist and if you’re not on it, bludgeoning them with a sales pitch, drip emails or telemarketing calls won’t work. They want to buy; not be sold to.

· Faster.Better.Cheaper or Way Cool (or what?) Who are your customers and why do they buy from you? Instead of segments, try developing personas for major customer types. It is eye-opening when you think about customers as people with names, jobs, etc. Tailoring marketing messages and channels for personas is more effective because it's more personal and training front line staff is easier as well.

· Don’t Skimp on the Experience: Customers still want to have an experience that matches their expectations. Using personas can help define what those expectations are and once you know them, you can decide whether this is a customer group you can profitably handle or whether you should target personas that are a better fit with your existing business.

Are you looking at customers with fresh eyes? Are they account numbers or do they have personas?

Values Matter: Is Your Compass Pointing to True North?

I read an interview the other day with the CEO of a major retailer who talked extensively about the impact of the company's values, called Foundation Principles, on how the company is run. I consult with clients on strategy, so I'm interested in companies that 1) have actually thought about their Values; 2) have articulated them; and 3) lead by them. Values can be the compass that guides business decisions, large and small and in my view are necessary precursors of a well designed strategy.

There are seven Foundation Principles according to the web site and each one is articulated in detail. It is interesting that the CEO blogs on the site, so at some level, he models the Leadership=Communication Principle. Job postings on Careerbuilder.com described the company history and its Principles, a departure from the usual list of job requirements. That seemed to follow the 1=3 Principle whereby one great hire is better than 3 good ones. The posting would attract those who feel a fit with the culture.

There are a lot of leaders who truly believe that their companies are run according to established values so I decided to do some research to find out if employee and customer comments mirror the Principles. Customer comments and reviews that I found were full of high praise and good reviews so the Principles of Creating Mutually Beneficial Relationships and an "Air of Excitement" seemed to be part of the customer experience. Then I looked for employee feedback and found quite a few recent ones that unfortunately were not all positive. On a 5-point scale, employees rated the company a 3.1 and gave the CEO a 47% approval rating. Why the disconnect with the other data?

Extreme views generally get posted but as there were as many 5's as 2's, the scores were not negatively skewed. Not one negative comment was about pay. Many mentioned a new scheduling system; others talked about their manager or losing a benefit or lack of a career path. They talked about how things "used to be". It's easy to dismiss disgruntled employees' rants except that sometimes, they are leading indicators of something amiss internally. Unhappy employees today; unhappy customers next week.

The funny thing about values is that when you talk about them, institutionalize them and use them as key differentiators, people tend to take them seriously. Especially employees and customers. They think you'll really do what you say. This company's values don't need to change. That's the point of values: they are enduring. They guide and are the foundation of culture, strategy and engagement. They are a bulwark against lapses of judgment. A couple of thoughts:

• Listen to your employees. Let them talk and be involved. If they are involved in a dialogue internally, it's less likely they will be ranting externally.
• Walk the talk. At all levels. Middle managers are accountable, too.
• Clear, credible communication. Communicate the tough decisions in a way that employees understand the "why".
• When your employees describe your values as "Kool-Aid", it's time to take a long look at your culture. It could be broken and that is hard to fix on the fly.

Is your company built on a foundation of values? Can your customers sense them in their interactions with your employees? Do your employees believe that your values are more than a plaque on a wall?

Too Loyal to Fail: 4 Ways to Inspire Customers

Ray's Candy Store stands on the corner of Avenue A and Seventh Street in New York City. It's an all night slice of life on the east side of Greenwich Village that for the past 37 years has delivered all kinds of food 24/7 -- essential if you've ever lived in Manhattan.

For the past few weeks, customers have been helping out at the store, running deliveries and staging two fund-raisers to help the owner, Ray Alvarez, pay overdue bills. Other customers are helping to sort out an insurance issue by providing the labor to install a necessary piece of equipment so he can continue to provide his Belgian fries, a staple of his operation.

Ray Alvarez has built up a huge store of social capital in his neighborhood. At a time when some businesses are "too big to fail", others struggle to survive. Businesses of all sizes should stake stock of their own stores of social capital if they are going to enjoy the kind of customer loyalty today that will fuel growth. Ray Alvarez's tale holds lessons for all of us who run a business, no matter what size it is.

Know Your Customers (And Let Them Know You): Nothing makes us buy more and tell people about it than companies who make us feel special. When people feel a business knows them, it creates an important emotional connection. Customers buy from companies they've researched (so feel they know), have heard about or have experienced. How are you connecting with customers? Are they part of a larger community you've created for them? Are you using social media to be part of a networked customer base? It's much more than slotting buyers into marketing segments.

Give Customers an Experience They Can't Get Anywhere Else: What experience do your customers expect from you? Does your culture support an experience your customers deserve? Ray's delivers any time of the day or night and has created an oasis of old New York in a neighborhood taken over by expensive wine bars and chain coffee shops.

Customers' Memories Are Long; Don't Forget It! The adults who now are rallying to preserve Ray's Candy Store were the children and teenagers who remembered getting a break from the owner when they didn't have the money to pay for their orders. What memories of your company do you create for your customers?

Don't Squander Your Social Capital: Over the years, Ray has employed people from the neighborhood and they've stayed for decades. His customers describe his store as "an icon of our childhood" and think of him as a friend. Even Ray's landlord, who could have attracted another trendy retail outlet to his building, is working with his tenant to ensure that the store remains part of the fabric of the neighborhood.

Social capital is a currency that is easily devalued by the memory of poor experiences and a sense of buying from a company that acts too big to care.

How are you creating memories, networks and connections for your customers? Do you really know them? Do they really know you?

Skies Are Friendlier When People Are Engaged

I read a good article the other day by Mila D'Antonio called The Strategy That Fuels Customer Engagement. The article outlined so clearly how a good company can stumble and recover with a laser-like focus on the five key areas of any business: Strategy, Leadership, Culture and Employee and Customer Engagement. And, what JetBlue discovered along the way has added to its understanding of the direct and quantifiable impact of these elements on business results.

When a company blunders, as JetBlue did on Valentine's Day 2007 at JFK Airport in New York, when thousands of passengers were stranded for hours aboard planes, one course of action that has become popular is to not respond to the incident at all or respond only if pressed and, if at all possible, pass the blame to someone else. Instead, JetBlue took responsibility and created its Passenger Bills of Rights. Its founder and CEO paid the ultimate price with his job. But, dig a little deeper, as the article outlined, and you'll discover that JetBlue took a systematic view of the problems and, rather than engage in a short-term PR exercise, overhauled the way employees and customers viewed the company, for the long-term.


JetBlue's strategy is to differentiate itself through a customer-and employee-centric culture. Leadership would not tolerate any declines in employee or customer perceptions of the airline as a good place to work or a good flying experience. The changes started with a plan for improving employee engagement results as the thinking was, if the company improved those metrics, customers would receive great experiences (what we call the Spillover Effect).


What the JetBlue executives learned was:

• Engagement is highly correlated with the liklihood that an employee would recommend JetBlue as a good place to work.



• JetBlue's revenues are closely tied to engagement so small improvements in key driver metrics generate big results.



• Key drivers of crewmember engagement are pride/personal commitment, brand, crew leaders, executive leadership, team/people and work environment.



• These six dimensions of engagement are now mapped to revenue growth and shareholder value.

• Listening to employees in terms of what they like about JetBlue and their jobs has resulted in many cost-saving ideas and efficiencies.



• Data gathering is only part of the story. Real insight comes from taking the right qualitative and quantitative approach, including linking behaviors and outcomes to hard results like shareholder value and growth targets.



• Designing an engaged company is not an event or a rah-rah program but a systematic approach to questioning the status quo, learning and adapting in order to execute a successful strategy.

Leaders make mistakes; it's how you recover from them that people remember. The core elements of the business are interdependent and should be viewed that way because they impact your results in a big way.

What drives engagement at JetBlue isn't necessarily what drives engagement in your organization. What are your engagement drivers?

What is This Engagement Thing?

For about a year, I've been receiving Google Alerts with tags that contain the word 'engagement'. Sometimes the articles or blogs have useful information; sometimes they are just sales pitches.

Nevertheless, the concept of engagement in the workplace is fascinating because, for me, it's a "Duh" kind of idea. Isn't it common sense that when people are engaged in what they do, they perform better; they are more attached to the organization and they contribute at a higher level than less engaged people? Ah, but common sense isn't common practice.

We are complex creatures, we humans. We tend to be engaged by an idea or a cause that is meaningful, maybe bigger than ourselves and which enriches our lives. Unfortuately, in a lot of workplaces, work has been reduced to activities and tasks. Senior mangement may not even be recognized (see Undercover Boss) or is the sender of an occasional email. Financial performance is not shared or discussed widely and the company's Mission is engraved on a plaque in the lobby. Maybe it's time to connect the dots and see that for an employee to be engaged, the organization must be engaging. It's easier to see how the concept works in a model:

Vision and Mission: They are foundational elements of an engaged company. People know what you stand for and why you exist. Decisions are based on these elements and behaviors are driven by them.

Strategy: Engagement starts here. People see the "big picture" and hear about organizational strategy because it's part of everyday activity. They are part of something bigger than the jobs they are paid for and can see how their work fits in.

Leadership: Listens actively and communicates frequently. Leaders are trustworthy and believe evangelically about the potential of the company, the people who work there and the customers they serve.

Culture: The way things really get done in an organization; the stories and the rituals; the practices and the collective tone. If Strategy is the Head of the organizational body, Culture should be the Heart. Culture can deliver or derail any leader's strategy if it isn't designed to support it. Cultivating an engaging environment is a key priority.

Employees: The lifeblood, the true asset of every company. Most of us WANT to be engaged but our companies often don't give us sufficient reason. I agree with Dan Pink in his new book, Drive. People are motivated by Purpose, Autonomy and Mastery, assuming basic needs are met (Thank you, Abraham Maslow).

Customers: The reason we get up every day and go to work, remember? As Peter Drucker said so often, management is about knowing what your Purpose is, who your customers are and how you're going to make a profit. Designing an engaging customer experience is an Outside-In job.

So, engagement is not a slogan, a program or a one-time initiative. Connecting the organizational dots is what engagement is all about. What do you think?

Bold or Bewildered: Do You Have Momentum for Success in 2010?

I was in London for New Year's Eve, watching the fireworks over the Thames with Big Ben tolling and the London Eye outlined in brilliant colors. There was a palpable "something" that rippled through the crowd as we watched the end of one decade and the dawn of a new one. Maybe it was a sigh of relief or an inhale that signaled expectation. Did you feel it too?


I think what I experienced on January 1st was momentum: a sense of drive and energy to leave the past year and embark on the present. When I returned to the States, I did some mind mapping of the Economy, Consumers and Business Response. A great exercise. I recommend it.

So, based on the maps, I came up with quite a few root causes that drove my predictions for businesses in 2010. Here are a few in no particular order:

• Companies will be Bold or Bewildered.

• Customers will extract every penny of value from all purchases, especially discretionary ones.

• Bold companies will make growth decisions but not in a stupid way.

• There are two types of Bewildered companies: those that have many opportunties and/or are on the cusp of making quantum leaps and those that are stuck and don't know which way to go.

• Access to financial capital will continue to be limited.

• People are fed up with what they read and hear about Wall Street, government and less-than-stellar- leadership in both public and private sectors. Their emotions will drive significant changes in the way they think about all institutions.

• The temporary workforce is not just a cover story in BusinessWeek. I talked with a client recently who is already implementing a plan for a temporary workforce in a key functional area.

In future blogs, I'll be exploring these and other trends and how they impact our lives in and out of work.

I'd like to know from you: How are you creating success in 2010? What is your company doing to proactively respond to the shifting mood of the country? Do you have a strategy? What are some of your predictions for 2010?