Introduction
Declining prices and margins. Decaying sales. Unprofitable
customers. Lackluster market performance. Does your company
suffer from these maladies? The solution to these may not
be spending more money on advertising, replacing the VP of
sales and the rest of the sales force, or further cutting
costs. No, the answer may lie somewhere else
entirely—and if recognized and addressed, may resolve
all of these symptoms.
The problem may actually lie in the way that your products
and services are designed, developed, delivered, and
refined. Who drives these activities? Is it Engineering?
Management? Support? Sales? If the customer is not in the
driver's seat, your revenues, profits, and even your
company may be at risk.
The problem may well lie in the fact that companies don't
understand their customers—what they need, want, and
most especially, what they are willing to pay for. Without
this understanding, companies do not know what
products/services to offer, or how to market and sell to
prospects.
The only way to guarantee increased revenues, stronger,
longer, and more profitable customer relationships is to
center strategic decision'making on actionable customer
insight.
1.1 Symptoms
Some of the symptoms that companies face that are operating
without sufficient customer insight include:
* Declining margins and prices—Price and margin are
excellent measures of a company's ability to make its value
proposition successful in the market. Too many companies do
not recognize when the market no longer values its
offerings and resort to price cuts or other margin-cutting
promotions
* Decaying Sales—A company out of synch with changed
customer needs will suffer as sales decay. When customers
are harder to find and sales are more difficult the reason
is often than a company has not driven customer knowledge
far enough into the company processes. Adapting everything
a company does from product development to core metrics of
business health to customer value is a key strategy to
reinvigorate a company's economic engine.
* Unprofitable Customers—Often companies, particular
those that have been successful, do not know what a good
customer looks like. Many companies grew in different
economic times by taking the business 'came in the door'
but have not yet invested in insight about what kind of
customers are good ones.
* Lackluster product/service performance—Lack of
market adoption clearly means the product or service missed
the mark and does not adequately solve customer pain.
Customer knowledge needs to pervade a company's management
of its innovation in product, markets, and business
extension. Every company has to be alert to opportunity in
these areas because growth is a broad based
challenge—simply doing one thing very well is no
longer enough.
* Most companies have only two communications channels with
customers: sales and complaints. Both of these are
important—companies need to sell and customers need
ways to seek redress—but neither tells a company what
the customer needs to make them successful. To ensure
success, you must continuously deliver what you know your
customers and prospects need, want, and are willing to pay
for.
There are four steps to success in this process:
1. Proactively Listen to Customers in an Organized,
Meaningful Fashion
2. Make Customer Data Actionable
3. Drive Customer'valued Change Throughout the Organization
4. Measure Effects of the Change
The first step is critical for the success of the remaining
three.
2. Customer Insight Conduits™
The fastest way to overcome the problems described above
and gain real insight into what customers need and want is
by establishing Customer Insight Conduits™These
Conduits help bridge the gap between company capabilities
and market or customer needs.
Customer Insight Conduits™ are defined as channels
through which information passes primarily from customers
and the marketplace to a function within the company that
is able to make data actionable and drive customer-valued
change throughout the organization. These conduits provide
an early-warning system for problems. As problems are
recognized, the Conduits serve as a diagnostic tool to help
fully understand issues and determine the efficacy of
solutions. In addition, the Conduits are a measurement
vehicle to assess overall customer value and other metrics.
Customer Insight Conduits are an early-warning system,
diagnostic tool, and a measurement vehicle.
2.1 Examples
* Customer advisory boards—Ensure that these are
composed of economic buyers of your products/services from
an appropriate sampling of the customer base. Some
companies rotate the membership every 1-2 years to ensure
fresh insight
* Technical advisory boards—These should be comprised
of the "use buyers", or those who are actually going to be
using your products or taking advantage of your services.
From these, you obtain valuable, on-the-street insight
helpful to develop/refine products.
* Customer conferences are actually sales conferences where
companies roll out their new products, hoping to convince
customers to upgrade. Garland Hall, the Chief Customer
Advocate of webMethods, a company that provides enterprise
integration software to major companies, uses customer
conferences to gather customer insight and further cement
customer relations. webMethods invites customers to present
ways in which they are using webMethods' products, share
insights and issues with product managers, etc.
* Guest Customers—webMethods uses "Guest Customers",
where customers present info on themselves and how they are
using products to groups within the company who don't
normally have customer contact (i.e., accounting,
operations, etc.)
* Product or service "proving grounds"—LL Bean
invites outdoor guides to a special weekend escape where
they try out new products and give focused and even harsh
feedback.
* Host/Monitor chatrooms and discussion
boards—Mercury Interactive's VP of Services, Patrick
Saeger, does an excellent job of gleaning ideas and
identifying problems through the company's product
discussion forums. Significant "thought leaders" can be
identified and used to gather insight and ultimately
champion products and services.
* Customer Hall of Fame—Laurie Long, the Sr. Director
of Customer Success at Unica organizes a Hall of Fame to
reward customers for innovative use of their products.
Winners are chosen after review of applications by outside
analyst community. This offers the customer recognition
from the vendor, other customers, and from the analyst
community.
* On-site assistance for a day—Companies with a
strong service/consulting component should send an
engineer, consultant or other appropriate person to a
customers' site for a day to simply help them gain the full
benefit of your product/service. They can glean huge
amounts of insight in doing so.
* Sales and support channels—Send the sales people
out to find answers to specific questions. Have the support
or call center representatives poll their callers with a
1-2 question survey. Leverage these channels to gain
answers to specific questions as part of an overall
information gathering effort.
These are only a handful of Customer Insight
Channels™ that could be leveraged as a key component
to help gather customer data that is then converted to
insight, made actionable, and used to drive strategic,
customer-centric change throughout the organization.
3. Conclusion
The only way to overcome the maladies discussed previously
is by listening to customers, making insight actionable,
effecting change, and measuring change. Using Customer
Insight Conduits™, companies can gain critical
insight and when made actionable can:
* Develop successful products and services
* Differentiate from competitors effectively
* Improve prices and margins
* Attract & retain more profitable customers
* Identify & implement appropriate success metrics and
incentives
----------------------------------------------------
Curtis N. Bingham, President of The Predictive Consulting
Group, helps organizations dramatically increase customer
acquisition, retention, & profitability. For more
information about his new Customer Experience Audit,
Customer Strategy, or Chief Customer Officers, visit his
website at http://www.predictiveconsulting.com or his blog
at http://www.curtisbingham.com .
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