It all comes down to one thing: what is valuable to your customers?
I was browsing through McKinsey Quarterly this evening and came across this report on Maintaining Customer Experience from December 2008.
I quote… ‘How can consumer businesses make necessary investments in service while facing the pressure on revenues and costs? Our review of the companies with the best customer service records in ten industries suggests that one key is to minimize wasteful spending while learning to invest in the drivers of satisfaction. Specifically, companies should challenge their beliefs about service and test those beliefs analytically. Many will discover that long-held, but seldom-reviewed, assertions about what customers really want are wrong.
Sophisticated companies that figure out what matters most to customers, eliminate the investments that don’t matter, and finance the ones that do, will thrive—and may find themselves, when the economy returns to normal, with fewer competitors.’
I have a moment of deja vu here. Isn’t that what I posted on here yesterday?
The role now of all purveyors of goods and services is to find out what those [customer] values are and to adjust to provision of them accordingly. Those companies that cannot fulfil the values of its customers will fall by the wayside. Those that can and do, will thrive. Whether in nature or in business, the fittest survive and the weakest do not.
One of the most rewarding things about the work we do at The Best Organisation is the ability to show clients where they can save money and get a better return on their ROI, by understanding what is important to their customers, i.e. those ‘drivers of satisfaction’. It’s also rewarding to know that the authors of that McKinsey report (Adam Braff and John C DeVine) are singing from our hymn sheet too.
Welcome Barack Obama. A new age has begun.
Today was the historic inauguration of Barack Obama as the new US president. I watched it on TV along with millions around the world. I am sure I am not the only one that felt a new energy and a new hope emanate around the man, even though his inaugral speech was tough and realistic. We do face huge challenges in our individual and collective economies at a personal and global level, and these challenges are necessary to sweep away an unsustainable way of living. But as Obama said in his speech, ‘Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished.’
And we still have values, needs and desires to be fulfilled. Our values may change but nevertheless we will still seek to fulfil them. The role now of all purveyors of goods and services is to find out what those values are and to adjust to provision of them accordingly. Those companies that cannot fulfil the values of its customers will fall by the wayside. Those that can and do, will thrive. Whether in nature or in business, the fittest survive and the weakest do not. We might like to think we can buck that trend, but we have yet to prove that we can.
Obama was elected because he fulfilled the values of the nation: for change, for freedom, for ’hope over fear, unity of purpose over conflict and discord….(And) an end to the petty grievances and false promises, the recriminations and worn out dogmas, that for far too long have strangled our politics.’
As businesses, if we want that kind of success, and that kind of loyalty (and we can have it, companies can still grow in recession), then we have to become very certain of the customer values that we are aiming to fulfil.
Why is it so hard to talk to women?
Men may still be the higher wage earners in most households, but women are the main holders of the purse strings, deciding what to cut back on, how much to save, and what to spend the hard-earned cash on. From techno-gadgets to the weekly shop, home decor to utility bills, women are the decision-makers (even when they let the men think that they are).
Belinda Parmar of Lady Geeks reckons the tech brands could be missing out on £0.5 billion in revenue by not marketing to women. ‘Ask any family who was in charge of buying the Christmas gifts, and you’ll find out its women not men. Women are not only buying technology for themselves, but as the Chief Household Officer, are buying for kids, husband, gran and friends. Women are in charge of the house, but more importantly are in charge of the living room (see battle for the living room) where much of the technology lives: PVR, console, HD TV…. ‘
Yet marketers seem to find it so difficult to talk to women? Is it because there are more male marketers? Is it because women are so complex? Is it that the marketing world just hasn’t learned women-speak? Or is it something else?
Perhaps the gender dynamics model developed by Pauline Crawford and Alana Mitchell can throw some light on the matter. ‘Not all women are the same, yet they are all ‘female’. Likewise with men; they do not all behave the same yet they are ‘male’. We all have within us mixture of masculine and feminine characteristics, preferences, and behaviours.
While having a female body means women have unique body parts and cycles, some women may be more ‘male’ in their thinking, decision making and in their logical responses, while many females portray the classic all female traits of nurturing, sensitivity and intuitive reasoning. Likewise within men, some may be more ‘female’ in their thinking preferences, emotional reactions, and actions and still be male through and through!’
A mere conversation about cars and handbags with Pauline and my colleague Di, bore this out. Pauline (the more masculine thinker of the three of us) wants great performance in her car and pure practicality in her handbag. Di (more feminine thinking) wants comfort and reliability in her car and a soft, squishy handbag. I (sitting in the middle ground) went for beauty and quirkiness in both, with scant regard for practicality, performance, comfort or reliability!
What is particularly interesting from the viewpoint of how to talk to women is that the language you use will vary depending on where on the masculine/feminine scale your female audience sits. So you’d need to have that knowledge as a fundamental pillar to your marketing strategy. Pointless trying sell a performance car to the Di’s of this world or a squishy handbag to the Pauline’s. But get the targetting and the language right and you are onto a winner!
In addition, your female buyers will have placed your product or brand in a specific context in their lives, they will have certain criteria relating to that context and they will have a whole other set of unconscious thought processes that drive their actual buying behaviours at the point of purchase.
It would be pretty good to know all these things before you start lavishing spending this year’s severely cut budgets. It would definitely make a difference to your ROI.
Our predictions for 2009
We’ve been walking our talk recently and checking in with our customers to be sure we understand what is of real value to them. It has been quite illuminating and very, very useful. It is helping us shape our business direction, our marketing and sales activity and the way in which we communicate. It has helped us define the language of our customers and enabled us to speak it more fluently.
And this is what we have given our customers that is so valuable to them:
A much deeper understanding of what is really important to their customers (what really makes them buy that brand) - creating a brand personality that they struggle to develop in any other way
A lexicon of their customers’ language which they can apply across all media (from TV ads to pack design and merchandising to shop layouts) and from which they can write much better creative briefs
The training to make sure they can speak their bespoke customers’ language fluently and that there is common understanding within the whole team
Additional rich, new and illuminating insights that are both strategic and action oriented
Customer-driven business knowledge that can be executed immediately
Presentations/debriefs/workshops they actually enjoy and stay awake throughout
For a long time we have been banging this drum that the key to successful sales and marketing is speaking the customers’ language and developing dialogue with customers in their language not yours. The companies that do that have seen phenomenal results - e.g 155% sales uplift from one TV ad, a store refurbishment that cost one tenth of the usual spend, a way above target increase in transaction value, redirection of a training budget giving a significantly better ROI, a product saved from bombing by a subtle shift in pack ingredients.
So our prediction for 2009 is this. Those companies that actively seek to learn and fluently speak their customers’ language and to understand their unique brand personality, will thrive and flourish even in this gloomy economic climate. Those companies that insist on shouting louder and more slowly at their customers in the company’s language will at best survive and at worst go down the pan.
Every business regardless of size lives or dies on cashflow. The key to good cashflow is customers putting their hands in their pockets. They are much more willing to do that for brands that they value and that speak their language.
Here’s to a very prosperous 2009.
Ad recall - has it any relevance?
Marketing magazine’s weekly Adwatch Bulletin has just landed in my inbox, listing recent ads with the highest recall http://www.brandrepublic.com/marketing/AdWatch/. As I read through the list, I couldn’t helping wondering…so what? So what if the Argos ad has the highest recall. What interests me is what happened next. What did the viewers feel compelled to do as a result of that ad? What action did they take? Did they feel compelled to get off their sofa and reach for the Argos catalogue - or better still go to their local store or onto the internet and starting buying stuff?
I sometimes wonder if we are asking sufficiently penetrating questions in these surveys. It’s very nice to know that your ad is remembered. But wouldn’t you like to know that your ad caused a storming of the checkouts? Recall is irrelevant if the ad didn’t trigger an action and a consequence.
We’re all in business to keep the money flowing between us. As we are seeing in this current economic crisis - if the money don’t flow, we all grind to a halt. So perhaps we should introduce a new measure of advertising effectiveness: ‘to what extent did the ad compel you to reach into your pocket and spend its contents on that product or brand?’ Being top of that list would really be something to celebrate!
What has John Sergeant and customer knowledge in common? Everything!
We’ve watched with growing interest and amazement this week as the storm in a teacup over John Sergeant’s less than twinkling toes, has become a maelstrom of media activity. While the BBC could not have planned a better PR campaign for getting Strictly Come Dancing splashed across the news (even Newsnight devoted a 10 minute piece to it on Wednesday - the day Sergeant announced his retirement from the show), does it hide an underlying issue? On the ‘other side’ ITV are having a similar but much less public conundrum on the X Factor, where the public vote is saving the underdog at the expense of the better performers.
Where the decisions over who stays and who goes are made by public vote, it is a very clear indicator of customers’ preference. But what is the real motivation? Do the TV companies truly understand what internal emotional levers are being pulled when their customers feel compelled to pick up that phone and vote? Since the BBC had to shut down the Strictly message boards last night because of the overwhelming number of people posting their comments on this week’s revelations, we rather suspect that they don’t!
Let’s get real……..
The Times reported today that official interest rates were slashed yesterday by one and a half points to 3 percent leaving base rates at their lowest level since 1954.
The International Monetary Fund are also warning that next year would be Britain’s toughest since 1991 and predicted that the economy would shrink by 1.3 per cent – the biggest fall in GDP since 1991. This would leave Britain by far the worst performer among the world’s leading industrial countries. It also factored in a global recession for the first time, saying that the world’s developed economies as a whole were headed for their first full-year contraction since the Second World War.
This has to be the most conclusive indication so far that that it is time to change the way that we think about marketing expenditure.
The smart companies will already be saying that this is exactly the time when we should be holding our nerve and continuining to spend at the same level, if not higher to protect market share. But what if we now start to take our thinking rather than our budgets to the next level?
As Einstein said we can’t solve problems at the same level of thinking at which they were created!
No longer can we afford to spend marketing budgets hoping that it will have the desired effect. Our thinking and language need to change so that we are focussing on getting the best possible return on investment and are really certain that that the investment is being made in the right place to give the best possible customer leverage.
Knowing how to get this customer leverage comes firstly from making sure that we have extracted all that we can from customer information that already exists, only gathering more customer information where there are clear gaps in our knowledge. Then by looking at all customer information sources from a key leverage points perspective, we can start building a map of what the customer is focussing on and identifying what they will be prepared to invest in.
This perspective shift has to be coupled with being brave enough to admit that some areas of past investment have not been working hard enough and that these investments need to be cut to enable more investment to be made in areas that will deliver better returns.
Given the choice, which will be the better levers for you to pull?
Do your customers want to be hugged or educated?
Do they want deals or directions?
Do they want freedom to choose or reassurance?
Do they want evolution or revolution?
Deciding which customer levers to pull requires not only the skill to be able look where others have looked and see what others have not seen but to also to know with certainty what effect pulling them will have!
The days of hopin’ and wishin’ and prayin’ are over. We now need customer insight that will deliver this level of certainty, because it is based on fact not hypotheses, behaviour not opinions, experience not projections and is intrinsically linked to the bottom line.
As marketers we need to get a clear perspective on the real world of the customer as they see it , hear it, feel it and spend money in it to make sure that their interest doesn’t fall to an all time low!
It is indeed a question of behaviour!
Hats off to Mark Ritson in this week’s Marketing magazine for banging the same drum that we have been banging since the mid 1990’s. He writes that ‘focusing on what consumers do, not what they say they do, is key to building effective strategies.’ Actually we go one stage further - focus on what the customer is focusing on and then seek to understand what is driving them to focus on that. Therein lies the key to their behaviour and the success of your strategies.
Ritson also says ‘I have umpteen war stories of focus group findings and opinion surveys that sent me and my client in the wrong direction from the consumer behaviour we were trying to predict’.
We also have plenty of experience of clients going down the wrong track and then asking us for help in getting back on the right one. The problem is, as Ritson points out, customers do not do what they say they will do. But they will repeat behaviours that they have done in the past - in fact they are programmed to do so! So the answer is to model what they have already done. That way you get a much better predictor of how they will behave in the future.
Truly impactful customer modelling and mapping that gets to the heart of the customer, their focus and their behaviour, is an art. It is not done to the customer, it is extracted from them. Rather like taking a blank canvas and enabling the customer to paint their real story upon it. It’s not about prediction based on opinions, attitudes or hypotheses. It is about future behaviour projection based on mapping actual behaviour in the past.
You see, there are certain drivers of behaviour and motivation that we all display in the different contexts of our lives. Knowing which ones are in play in a specific context is crucial to understanding how we are likely to behave when we are in that context again.
Let’s just look at an example. Marketing cites New Coke as famous failed prediction. ‘In 1985, Coca-Cola ran more than 200,000 blind taste tests on its new Coke formula. When results revealed that a majority preferred the new taste to traditional Coke and Pepsi, the company launched the new formula. The public hated it. Research had failed to account for the difference between blind product tests and real brand loyalty.’
The problem was not that the research got the wrong answer - the problem was that it did not ask the right question. It did not ask whether Coke customers were motivated by trying new and different products (even within the brand) or by sticking to the same old favourite they loved. Had they asked that question, they would have known that customers would not accept a ‘new’ replacement Coke, even if they preferred the taste. They might have accepted it though, if it was marketed as the same old Coke they knew and loved, just with a slightly improved taste. It might have been a whole different story - or maybe the same story with an improved ending - for Coca-Cola. Note how they have succeeded with brand extension (Diet Coke, Diet with Lemon etc) -but these are additions not replacements.
Discovering the point of greatest leverage to influence the customer to repeat their behaviour in your favour, is the intuitive art within the art of customer mapping. As the old story goes, the value is not in how hard you tap the pipe, it’s in knowing precisely where to tap. You can’t know where to tap, if you don’t know your customer’s map!
Insight and creativity do mix
In the recent edition of Research (October 2008), the magazine of the Market Research Society, Anna Cliffe, head of research at Brahm, asks can researchers and advertising creatives ever get on? She writes ‘Developing and evaluating advertising creative has long been one of the most exciting and controversial areas of research. The relationship between research and advertising agencies has traditionally been one of wariness, if not outright hostility. Research can be seen as stifling to the creative process, with adverts developed ‘by committee’ and preventing creative expression.’
Cliffe goes on to discuss what she believes researchers bring to the creative process, and whether they should research the creative work as well as provide the insight for it. ‘Is there a case for the researcher - who should know the consumer better than anyone - being an integral part of the creative process, and then to evaluate the resulting campaign, being so much closer to where the campaign came from?’
We have some views on this too. If the research work has truly done its job and provided the best insight into the customer’s sensory and emotional motivation to buy, then the creative brief should flow easily from it. If the creative team are worth their salt and have that best brief, they should be able to produce an ad that scores a direct hit on those sensory and emotional hot buttons (and there should be no need for ‘meddling’ by anyone, which seems to be the creatives’ greatest beef).
Then the researchers, who provided these insights, should be able to research the creative work objectively and with an open mind - where the only decision is which creative treatment scored the strongest hit.
Perhaps some reference to the previous post on The Power of Instinct also comes into play. Seasoned researchers, who understand the creative process and have developed their instinct and wisdom through their experience, should be able to objectively ad test without ‘meddling’. And their understanding of the customer’s perspective should be a positive bonus rather than a bain to the creative team.
Perhaps the potential ‘meddling’ is more down to a lack of understanding of the customer’s real focus and their decision-drivers (by all involved) than the researcher’s lack of understanding of the creative process.
The power of instinct
In his book, Blink; The Power of Thinking without Thinking, Malcolm Gladwell tells the story of a statue, bought by the Getty Museum in the 1980’s. The statue was offered to the Museum for just under $10 million. It was an extraordinary find, being an almost perfectly preserved piece when other statues of its ilk had been recovered badly damaged or in fragments from grave sites or archaeological digs.
The Getty had the origins of the piece checked thoroughly by legal experts, scientists and geologists. Their analysis concluded that the statue was authentic. The reactions of art experts, however, upon seeing the statue for the first time, ranged from feeling ‘cold’ to feeling a ‘wave of intuitive repulsion’. They felt the statue was a fake and they were right.
Gladwell suggests in his book that when you develop an expertise in a particular area, your instinctive or intuitive reactions are based on your collective years of experiences that enable you to make rapid calculations unconsciously. You no longer have to think through every scenario in your mind, those stored experiences in your body do the work for you and present you with an apparently instinctive or intuitive answer.
Sometimes we can blind our instincts with science, and we can always find evidence to support a particular view if we go looking for it. More often than not traditional research methods take us down the wrong track because we are looking for evidence not experiences.
Far more effective in understanding how consumers make their decisions and why they behave as they do, is to throw out all assumptions and instead ask masterful questions that enable them to talk about their experiences in that context. The consumer is the absolute expert on their own buying behaviours and if you allow them to reveal that expertise, the information you get is priceless.
Asking the best questions to elicit that consumer experience also requires a certain expertise; an expertise developed through years of questioning and listening practise. Only through active listening can you know the next best question to ask. And that, like the art experts, becomes instinctive and intuitive.
Experts in consumer behaviour have listened to so many stories and so many experiences, that they just know the real from the fake, the key and critical behavioural drivers from the red herrings. They know because they feel it, whether it a wave of repulsion or sense of certainty.
This begs the questions:
Are we training our young researchers to hone their instincts or just their assumptions?
Are we valuing the wisdom and instinct of experienced researchers or is their wisdom being lost in the race for ever-new techniques that baffle us with even more science?
And are we completely missing the trick by not sufficiently tapping the innate expertise of the customer in knowing their own buying instincts?