Yelp just scares the crap out of me.  For those of you who are unfamiliar, Yelp is a service where you can rate anything from the local bicycle shop to your CPA.  From Zagat to Trip Advisor, satisfaction ratings on the internet are in vogue. On eBay, potential buyers have three criteria, item, price, and supplier rating.

Imagine the ramifications.  How long will it be before your product or service is rated on the Internet by consumers or professional buyers?  The trend speaks to a need to get ahead of the curve and acquire real time, unfiltered feedback from customers.

All clients tell me they listen to their customers but their approach varies dramatically. Many are reliant on salespeople to do the listening for them. During the downturn and a period of massive discounting, many salespeople have become more tactical and often lack the consultative selling skills required to diagnose and synthesize customer problems.  Having the salesperson as the sole lifeline to the customer is like having the fox in the hen house; it is not as if many salespeople will self report eroding customer relationships when they may be the cause or at least a contributor.

While much has been written about customer satisfaction, many of the most common approaches are impractical for the small and mid-market business.  Electronic surveys are impersonal and yield poor results.  Snail mail surveys (sometimes with a spif or prize) get poor response rates and feel so 90’s.

We often complete client satisfaction and perception audits for clients as a pre-curser for strategic planning.  By far, live phone surveys are the most effective method, as they provide instant, unfiltered feedback and the ability to ask follow-up questions that garner more specific commentary.

While live surveys are more expensive than the other types of survey tools, client satisfaction seems like an endeavor worthy of investment.  Ultimately, the real value of such surveys is the problems you discover and the responses to open ended questions which can be the source of innovation. We never advocate an “annual” survey because you could wait up to a year to uncover customer issues.

Of course client satisfaction is not the end game. It is customer loyalty that is nirvana and is much more difficult to measure. The book “The Ultimate Question” points out that there is one question that is the best predictor of loyalty and ultimately profitability. The question is “how likely are you to refer a friend or colleague” as referring a product or service meets a higher standard than just being satisfied with it.

Like many things, survey tools may be imperfect but querying customers on their attitudes about your company is always better than no feedback at all. “Hey, hey, hey, that’s what I say!”

If you were amused by last week’s post regarding the management acumen of Jerry Garcia (no, that is not an ice cream flavor), this week’s post will really rock your world.  It seems that Jerry was not to be outdone by David Lee Roth, the eccentric front man for Van Halen.

As Dan and Chip Heath (of Made to Stick fame) tell in last month’s Fast Company, Roth chronicles a provision in the standard Van Halen performance contract that a bowl of M&M’s would be provided back stage, with “no brown ones” included. Upon arrival at a new venue, Roth would immediately search the M&M’s to insure the brown ones had been removed (the agreement called for a cancelation of the show should they be present).

 It seems that Roth was using brown M&M’s as a predicative indicator. “Guaranteed you’re going to arrive at a technical error” quips Roth (in his new book) meaning that he used the brown M&M’s as an indicator of whether the venue’s management had read the agreement and were attentive to detail. Given the complexity of Van Halen’s massive production, he viewed brown M&M’s as a symbolism for work quality and in regard to setup of the band’s equipment, he wasn’t taking any chances.

The only way to insure service or work quality is to monitor such indicators. In my experience, world class operators are always masters at measurement. Quality programs such as TQM (total quality management), Lean Manufacturing and Six Sigma are rooted in such predictive measures of quality. Whether you are making widgets, or running a service firm, quality comes down to managing finite details.

Having strong quality standards may not be much of a differentiator any more, but it is certainly the cost of admission in most businesses. Buyers just have too many choices, and they will not accept quality that is subpar.

Businesses are well advised to have quality metrics that are measured in real time and made very public. Service errors need to be corrected almost as quickly as they are made.

What is your brown M&M?

I thought I had seen it all until a Business Week article last week entitled “What a long strange business plan it’s been”.  As it turns out, the Grateful Dead was quite a commercial enterprise. The band was highly profitable, had a Board of Directors, and a successful merchandising division whose lawyers protected its intellectual property.  Was Jerry Garcia a better businessman than the average Joe?

The real lesson here is the level of engagement that the band had with “deadheads,” the iconic fans that would travel the country to take acid and watch 5 hour concerts. “The Dead” had a phone bank announcing new shows and preferred seating for their best fans, a bizarre form of psychedelic CRM. This makes me wonder, if The Grateful Dead, who probably didn’t know what city they were in half the time could run a business with this level of sophistication, shouldn’t all businesses be capable of this level of structure?

We should at least aspire to have fans half as loyal. It appears that the deadheads would do just about anything to consume the product (I am talking about the music) time and time again. What can you do in your business to create raving fans? There are stories of how no two shows were ever the same which would suggest that the band relished the element of surprise. Fans never knew what would come next, and that was a big part of their fascination.

Business should find ways to do the unexpected for customers, like send a Thanksgiving card or an In-N-Out truck to their location. It wouldn’t surprise me if Jerry Garcia did the unexpected and showed up on stage some day.

I am often asked if organizations should include Facebook postings and other social media in their marketing plan. For those of you interested in a precise answer, here it goes: it depends.

Newspaper revenue has fallen off a cliff (down 40% by 2003) while magazines have not fared much better (down 20%). Television ad revenue is down 15%, this year alone.  Meanwhile, online media is growing at a 7% clip suggesting that as a whole, total spending on marketing is undergoing a precipitous drop.

According to Kiplinger, targeted campaigns will reap 75% of all marketing spending by 2013. Marketers, armed with the ability to regurgitate millions of data points such as age, gender, location, income and household size will find ways to market online to very specific audiences.

In these cases, social media will provide an inexpensive method for targeting specific customers.  In the interim, most of us are just spewing on social networking sites with little return. There is certainly room for consumables to be marketed through social media. A recent study published in the Harvard Business Review showed a significant lift in the popularity of certain products and services when Facebook  and Twitter are used to mold the consumers’ opinions, including the use of online coupons and the like.

Yet for now, it is hard to imagine a professional services firm (for example) using such sites for anything more than impressing their younger colleagues. LinkedIn is by far the most useful site for professional networking, yet few people take the time to mine their database beyond their existing relationships (which seems redundant and far from the point).

My conclusion is that if your primary audience is B2B, the focus of internet marketing should be search engine optimization, blogs, and LinkedIn. I have many of my B2B contacts on Facebook, but it is a slippery slope (some have even verbalized their preference not to have any business interactions on Facebook). It can be hard to mix business with pleasure, and Facebook certainly presents the opportunity for the horse to get out of the yard.

Combinations of internet marketing activities can be very powerful, such as linking Facebook, Twitter and LinkedIn posts to your blog. Some have gone as far as outsourcing to marketing professionals that do nothing more than ghost for a business on the internet.

I may be old school in this regard, but I think for most of us that money would be better spent trying to orchestrate meetings with people our own age who will be more impressed with what we have to say in person than how clever my Tweet is this week.

As a champion of value creation, I wanted to vomit on Black Friday.  As abhorrent as the massive discounting was, it did serve as a reminder that customer expectations are always a moving target.  For retailers, the bar has been lowered to staying open all night and giving product away at cost.

 For those of us who seek value by providing better service, we must push the envelope with equal fervor. The service you provide is not defined by you or your competitors, but by Lexus, FedEx and Nordstrom. Customers have come to expect extraordinary service on their terms: quickly and efficiently.   Every interaction with a customer offers what one SAS executive refers to as a “moment of truth”. In a single transaction, an organization can have dozens of such moments with a customer.

 Every company should do a “touch point audit” at least a couple of times a year and assess every potential customer “touch”.  To complete such an audit, create a checklist of touch points such as web, email, phone system, reception, customer service,  invoices, packing slips, etc. that represent the opportunity to disappoint or delight your customers. We have all been to voice mail hell, had a customer service call mismanaged or used information on a website that was no longer valid.

 It is useful to have a 3^rd party conduct such audits. Another approach is to conduct customer interviews, peer to peer.  I once had a client send their CFO to meet with a client’s CFO only to find out that invoices were poorly labeled and confusing.  By making some minor adjustments to the design of the invoice, my client improved receivable cycle time with the client by 5 days.  The CFO may not seem like an important person in the value chain, but casting your net wide within clients is an important selling strategy, especially when every nickel is being scrutinized.  The point here is that today’s marketer must take the time to evaluate every conceivable moment of truth and design systems and processes that optimize (my favorite word) the customer experience.

 One source of innovation and strategic advantage is to take emerging technologies from other industries and apply them to your business.  In the 90’s, Dell was amongst the first companies to offer email confirmation and real time tracking of shipments.  As the technology spread, customers came to expect such a level of service for online shipments of everything from flowers to wine.  If you are not moving forward with richer customer experiences, service improvements and automation, you are likely falling behind.

The spasm of the global economy over the last year has completely recalibrated the customer- vendor relationship.   In order for suppliers to fend off commoditization in a difficult operating environment, sales professionals must be adept at renegotiating their relationship with customers.

Purchasing decisions have become more transparent, and in many cases, the primary buying contacts of the past have become irrelevant. The $100k decision that was made previously by a Director is now being made by a Vice President.  At a time when vendors face greater risks with customers, there are opportunities to deepen relationships and have more strategic conversations with decision makers.

In fact, offering up a senior level meeting to discuss providing more value or “reducing the total cost of ownership” is compelling for the customer, and opens doors for the supplier.   Such meetings often serve as a lever to identify latent customer needs that can be converted into improvements that create a more synergistic and sustainable business relationship. The downsizing of the workforce provides significant opportunity for vendors who can effectively replace internal functions that are being neglected, or outsourced.

Effective sales people who utilize consultative style selling techniques are adept at discovering customer needs that they cannot effectively articulate.  During the dot com bust, I held a senior position for a national gourmet food supplier.  One day I fielded a call from one of our Regional Managers who asked if I would take a senior level meeting with him at a major U.S. retailer for which our company had gained little traction. I agreed to fly to Minneapolis with him to try and reign in the elephant.

During the meeting, I asked the V.P. a series of fairly provocative questions such as “what are your corporate initiatives, how are you evaluated, etc.” They were not the type of questions that a supplier generally asks of a customer, and I remember the V.P. being amused and befuddled by some of the questions.  After about 45 minutes of discussion, I came to discover the real problem which was that the customer did not have the capacity (in the form of labor or expertise) to manage our category of products. I asked him “what if we could put someone in your office to manage the category for you?” I will never forget the customer’s response: “you mean you would do that for me?” We left the office with a multimillion dollar order at which time I had the Regional Manager buy me a really big steak. Consequently, we renegotiated our relationship and positioned ourselves to provide an innovative bundle of services in alignment with the client’s existing strategic initiatives.

In a world where headcount is being cut, vendors should not be thinking about how to cut prices, but how they can deliver more service.  The art of selling (and serving customers) is really about listening.  At a time when customer’s awareness of the value provided by supplier is heightened, there is a bounty of problems for vendors to solve.  Regardless of whether you are an insurance company or manufacturing widgets, senior managers need to be proactively meeting with decision makers to redefine their offer.

This is not a time to allow salespeople to own customer relationships exclusively. To do so emboldens them not to share critical customer insights that can reshape the service offering.  As business development slows, salespeople engage in more tactical thinking (such as cutting prices).  This market presents the opportunity to teach salespeople how to diagnose needs and to enable their organizations to provide more robust solutions.

After watching Lance Armstrong’s miraculous 3^rd place finish in the Tour de France, I read his book, “It’s Not About the Bike”, an inspirational read about his triumph over cancer.

I first became enthralled with him during a keynote I saw him give at a conference several years ago.  He told the story of his rise to prominence as the world’s premier cyclist.  Having had cancer spread throughout his body, he had brain surgery in an Indianapolis hospital where he had found one of the few doctors who thought he had a chance to live a productive life.

The day after the surgery, he was visited by his agent, one of his closest friends.  When the agent asked him how he was doing, Armstrong said he was incredible (I am paraphrasing).  The agent, befuddled by his state of mind fired back, “Lance, you almost died, how can you be so positive?”  “I am as low as you can go.  It can only get better from here.  I am going to reinvent myself,” said Armstrong.  And he did.  He went to the only race team that would have him and rebuilt the organization including the team, the equipment, the sponsors and training regimen from scratch.

The Tour de France (cycling 2200 miles through the Alps including several 7,000 foot mountains) is amongst the world’s most grueling sporting events.  Armstrong’s feat of winning seven Tour De France titles in a row may be the most incredible sports achievement of our lifetime. 

Many of us have our own mountains to climb, but we don’t have to wait until we hit rock bottom to do it.  We should be reinventing ourselves and our companies constantly.  Our clients expect it. Global hyper-competition requires it. To re-imagine your business requires the decline and focus of a world champion bike racer.  What will you reinvent today?