Provocative Customer Experience Stats

Here is some great sales and marketing ammunition for you on the hot topic of Customer Experience. If you have a business or sell/market to large enterprises, then you definitely want to check out this collection of eight statistics that illustrate just how important an excellent customer experience is to the bottom line. Paul Gillin has thoughtfully pulled together some thought-provoking source material in this blog post, which you can use in conversations with your clients. See the chart below for just one example and then read his article – it will be 5-10 minutes well spent.

From Paul Gillin Blog Post – click on image to link to article

His stats remind me of one of my favorite clients, The Verde Group, which specializes in how to turn customer dissatisfaction into profits and revenue growth. It’s done research that says something like 13% of a company’s revenue is typically at risk at any given time due to customer dissatisfaction, meaning it could evaporate like that (be sure to add the dramatic finger snap :). And like one of Gillen’s stats, Verde has data demonstrating that proactive efforts to turn dissatisfaction around can lead to higher profits and revenue from those same customers. Verde also knows through its research that dissatisfaction is statistically much more predictive of what a customer will do than satisfaction. Pretty interesting stuff. Here’s more from them on that topic. I just love their work.

Sources like these provide great fodder for your sales and marketing outreach to large enterprises. Go get ’em, tiger!

From CNN: How TED Got Famous

Source: cnn.com

Anyone involved in spreading ideas can learn a lesson from this terrific cnn.com article, “How TED Got Famous.” It talks about how the TED Conference exploded its influence and brand awareness by essentially giving away its intellectual property. Or perhaps I should say, “sharing it freely.” It started offering free, online access to videos of talks given at its conferences and then doubled the price of its conferences, only to sell out a year in advance.

If that sounds completely counterintuitive to you, read the article. Notice the statistics. Ask yourself how many people knew what a “TED talk” was 10 years ago vs. now.

TED has become the GO-TO in its space.

A natural inclination with thought leadership and content marketing efforts is to hold back, particularly for organizations that market intangibles and/or expertise. They fear that if they give away their ideas, talk freely about their methodologies, or teach people how to fish, then they won’t be needed. Why would anyone buy what I’m giving away for free? Well, you’d be surprised. Think of your thought leadership efforts as free samples. For the people who need what you’re selling, they are going to read/watch your material and want to know more. And guess what? Even if you teach them to fish, you’d be surprised at how few people have the time to fish and would just as soon hire someone to fish for them. When they read about your unique style of fishing and why it’s more effective, and when that resonates with them, they’ll call you in.

Yes, some people will read your book and white papers or watch your online videos and never call you in. But they were probably never buyer candidates for your services anyway. However, they could become evangelists for you or send your material to someone who is. Yes, competitors could get their hands on your material, but if what you do is unique enough, they won’t be able to duplicate you on the basis of what you’ve published. They won’t be able to execute like you do.

Who can learn from this? How about content marketers, technology entrepreneurs, enterprise solution marketers, anyone selling to the C-suite, universities grappling with the perceived threat of online learning, other educators, and professional services organizations, for a start?

Reco: Steve Blank’s Customer Development Methodology

Many people in the tech entrepreneurship community, particularly in Silicon Valley, already know about and follow Steve Blank. But many in the enterprise solutions arena may not, even though you have likely heard of one of his home runs as a serial entrepreneur, Epiphany, Inc. This was an enterprise software company that saw its heyday during the dot com boom. Its success ensured that Steve will never have to worry about paying the mortgage. I’ve come to know Steve through our mutual involvement in the Stanford Technology Ventures Program.

Over the years, Steve developed some observations about the differences between product development and sales at a startup vs. an established company. He developed a methodology around this called Customer Development and began to teach it as a class at UC Berkeley. He eventually wrote his class notes up as a book in The Four Steps to the Epiphany. Most recently, he has teamed with Eric Ries, a former student, to promote the Lean Startup movement, which incorporates much of Steve’s customer development methodology. In fact, here is a quick overview of the methodology in Eric’s blog. A key component of the methodology in developing a new offering is to iterate in conjunction with conversations with prospective customers. Also, think of the development stage as a search. And know that it’s going to be a little sloppy and seemingly inefficient.

What does this have to do with enterprise solutions sales and marketing, you ask? Lots. Working with a large solution provider and trying to package and take to market an innovative, complex offering a few years ago, I realized that the same, seemingly sloppy and iterative process we were going through mirrored what Steve advocates in his methodology. There were people in the company who were uncomfortable with what they perceived as inefficiency, but only because they were unfamiliar with the Customer Development methodology.

At the high end – with complex business solutions aimed at senior executives – often you are offering something quite new to the market. You are trying to lead companies into new ways of doing things that address not only their immediate business issues but prepare them for the future. These solutions are often quite innovative and new, even within your own company. In other words, the conditions, both internally and externally, are similar to those of many startups. So we have a lot to learn from what makes startups sink or swim.

Here is an 8-minute snippet of Steve talking about why he saw a need for the Customer Development methodology and providing an overview.

 

To go deeper, here is a 20-minute mini-lecture.

If you are in sales management, solution or product development, or marketing, I do recommend that you learn about his methodology and subscribe to his blog. You may also want to read the book.

Market Selection Tip: Finding the Pot of Gold

If you want to ultimately become a Go-To for higher margins and growth, it helps to pick the right markets and positioning from the get go.

One of my clients is the Go-To in a particular dimension of the telecommunications industry, but you don’t have to look very far on the horizon to see that this market will mature soon. It’s time to pivot. So we are in the midst of a market analysis to figure out where to play next. Here is a simple diagram that’s guiding our efforts. On one hand, it seems really obvious. On the other hand, you’d be surprised at how few people use these three simple criteria as a way to evaluate potential market opportunities. The intersection of all three is, of course, the sweet spot – where you’ll find the pot of gold.

Your Strengths

Always start with what the company is good at, especially what it’s uniquely good at. Go ahead and do your usual SWOT analysis, but put a special emphasis on strengths that differentiate you and will give you competitive advantage. These will give you a running start and help you smoothly migrate from your current markets and offerings to the new ones you choose. They also help to keep you honest as you get tempted to jump into exciting emerging markets that just don’t make sense for your company.

Growth Markets With Active Spending

I could write a book on this topic alone, and many people have, but here is the two-paragraph version: Look past fads and analyze emerging, enduring trends. Look at growth markets related to the market you currently play in. What’s happening in those markets? What are their business imperatives and problems? What will help them succeed? Imagine the market segments as a map of countries and pick ones that share a border with your current market. Eliminate those that don’t value your areas of strength. Look for markets and opportunities where the barriers to entry are reasonably high, especially for companies without your particular strengths.

Be sure to zero in on ones where companies are actively spending, or at least will be spending by the time you are ready to go to market. This is key. It doesn’t matter how great your offering is if companies aren’t allocating budgets in that area. You’re just setting yourself up for a major uphill battle. (I’ve made this mistake myself and have the scars to prove it.) In fact, as you go out to the market to have conversations and bounce your strategy and prospective offerings off of potential customers, ask them outright if this is something they would have budget for during this fiscal year (or whenever you’d get to market). Where are the intersections between business needs/problems in these growth markets and your company’s strengths?

Competitive White Space

Now look at the competitive landscape. Where is no one else is playing? Which business problems in these markets is no one else addressing? Where are the gaps? Which companies out there are good complements to your company and potential offerings – who are the good potential partners?

Find the Intersection

Now look at where all three circles come together – a growth market with active spending and healthy barriers to entry that plays to your strengths and where there is little or no competition. That’s where you are going to find a nice pot of gold waiting for you. All you have to do now is craft products, solutions or other offerings that solve specific business problems and have a strong value/cost ratio.

Where Have You Been All My Life?

Upon reading my post from a few days ago, “The ‘I’ll Be Damned!’ Test,” my colleague at ProCom Consulting, Jim Warner (former President and CEO of telecom trade organization, TMForum), said his version of knowing you’ve got a great offering is when prospects react with, “Where have you been all my life?” Love it!

Take Free Stanford Course ONLINE – “Creativity: Music to My Ears”

Stanford, Warner music, some of your favorite recording artists, and creativity – what’s not not love about this upcoming, free online course – “Creativity: Music to My Ears”? My colleague and dear friend, Tina Seelig, will be teaching it, and she’s amazing (as validated by her winning the prestigious Gordon Prize in engineering for her innovations in teaching and education). You’ll have a blast.

It starts on April 2. To learn more, read this course description, where you’ll find information on how to sign up.

Here’s an excerpt from a brief article about the course:

Musical talent is not required to participate in the course – just an interest in exploring factors that influence creativity, such as reframing problems, challenging assumptions and working on creative teams. Music provides a universal context to put these skills into practice, which is where the legendary experience of Warner Music Group comes in.

“The music industry is in a state of constant evolution, and everyone involved – from artists to executives to technologists – must have the skills to both adapt to a rapidly shifting landscape and to forge exciting new creative paths,” Strang said. “Warner Music Group is honored to be collaborating with Stanford and Professor Seelig in this unique online course, which we hope will give students creative skills and real insight into how our business spearheads innovative commercial models and develops the next generation of extraordinary talent.”

Watch them talk about it here.

The “I’ll Be Damned!” Test

I was once the chief marketing officer for a company whose CEO who was both incredibly tough and incredibly brilliant. We were developing a type of technology offering that was very new in the market and in what the Lean Startup gang and my Stanford colleague and serial entrepreneur, Steve Blank, would call that sloppy, iterative “customer development phase” of evolution. This is that point at which there are lots of possible ways to position the offering in lots of possible markets, and you’re trying to figure out which will get you the most traction the most quickly.

The CEO told me, “I want our customers to hear about this and get so excited, they say to themselves, “Well, I’ll be damned! We have to have one of those!”

And I thought, “Yes!” That’s a brilliant acid test for whether you have something you’ll be able to sell, even before you get out there and start testing it with prospective customers. And certainly, once you do start taking it around, that’s the reaction you want or else you know you have more work to do. The closer you are to an “I’ll be damned!” reaction, the easier it’s going to be to make your numbers each quarter. More importantly, your margins will be higher, because business impact will matter more to the buyer than cost.

So ask yourself: What would it take to get my customers to react with a “Well, I’ll be damned!…”?