Creating outstanding customer value

I read The Age of Engage by Denise Shiffman last July. I continue to refer to it (more pages have my underlines and notes than don’t) and think I’ll give it another read-through because in the past year I’ve seen through experience how spot-on Denise is.

Here’s what resonated most with me. In the “live web”, control has shifted from sellers to consumers .. and that makes customers value and acquire products differently.

This is obvious to newer age consumers and producers (see Grown Up Digital by Don Tapscott) but I think many companies, though willing, don’t know what to do. This book is the place to start.

HOW THIS BOOK HELPED ME ..

Perspective - gave me a sense of the entire Live Web landscape
Framework - gave me a model based on the new Live Web values
Players - tons of example companies and products that were new to me
Notes - well-referenced launchpad to more reading

It’s a terrific read for companies who still market to and serve customers in the traditional way, and would be a good early read in any strategic marketing or business program curriculum.

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• Six-Part Primer on Understanding Statistics in the News - BBC
• Product Management Belongs in the Marketing Organization - Marketada
• Sometimes Listening to Your Customers is “Stupid.” - Rocket Watcher
• 5 step process for customer base segmentation - Cybaea
• The biggest lie in business - Profit
• It’s Not Only About Price at Wal-Mart - NewYorkTimes
• Data Visualization Is Reinventing Online Storytelling - AdvertisingAge
• New Alternatives for Influencing Customer Behavior - HarvardBusiness
• Wominomics - ChurchoftheCustomer
• Social vs. Networking - FutureLab
• Redefine What You Are Really Offering This Customer - UnitedBit
• Another Kind of Value Proposition - JohnCaddell
• Dan Ariely on Cheating - TED
• How to Understand Risk in 13 Clicks - BBC
• The next step in open innovation McKinseyQuarterly

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I was working in my office at about 3pm and was restless, so decided to take my work down to the local Yaletown Brewing pub .. who by the way did a light, one-week reno that made a big difference. It’s now much more my kinda place and I will return  (kudos to MJG on implementing minor changes that make a BIG impact in a neighbourhood where the Joneses rule).  

Lots of TV screens (ugh) but not intrusive as compared to some places . Being of the TV generation, I’m naturally drawn to them. I noticed three things (in my defense, these are sports channels I rarely see):

• “Best car for the money” - tagline on a Toyota ad. When was the last time you saw the grubby “money” word in a tagline? If you search on it you will see it’s a leading hook line for automobile reviewers. Smart of Toyota to just say it plain. If not now, when?
   
• Coca Cola with a blue background. Okay .. but I was a little disappointed.
   
• Ellen DeGeneres a new CoverGirl. 

Safe back home now.

Here’s a short and light Harvard Business post: Innovate Like Chris Rock.

As an experimental innovator, Chris “conducts thousands of small experiments”. He tries out new material at a small club in New Jersey. Some jokes fall flat, some sort of work, a few get a good laugh.

It’s just hard to predict where the laughs will come from. And that’s the whole point. The desired outcome is a laugh. It doesn’t really matter what works. Try them out to see what sparks - there’s just not that much invested in each one yet.

SOUND FAMILIAR?

Have a look at how very early-stage consumer Internet product companies get funded these days. Like comedy, it’s just too hard to predict what will work so investors make “small investments” into many potential desired outcomes - whatever they may be. There are more money rounds, but much smaller and only if progress is demonstrated at each step. To investors it’s a risk distribution game. To the entrepreneurs, I don’t think much has changed - they may operate on the cloud to keep costs low, but I see them still putting their time and hearts into it.

ONE BIG DIFFERENCE - CHRIS ROCK EXPERIMENTS WITH PAYING CUSTOMERS

Chris Rock pitches his material to people who pay to have a laugh, and he gets rewarded with early, honest feedback. He finds out right away from his paying customers what works, what can work, and what will never work. True prototyping.

Surprisingly, the challenge for some consumer Internet product companies is that at the very early stage they don’t yet know who they will be collecting the money from: consumers , integrators, advertisers, etc. 

For companies who do have a clear pricing/monetization plan, the remaining challenge is finding authentic, potentially paying customers to validate the market before they have committed too much. As per this incremental funding model, the investors won’t care much in the first few rounds. That very early go/no go decision burden has been shifted to the entrepreneurs.

How will they get early, honest feedback? It’s a problem.

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Photo credit stijnbokhove  -  thanks!

Gary Vaynerchuk’s get-with-the-program take: the value of each viewer/user/customer is NOT THE SAME!  

Well worth viewing on just about every level. Read the comments to his blog post to see how the whole choir ‘gets it’ .  

• Freemium Business Model - TylerBlain
• Telling Customers to Not Purchase Your Products - Harvard Business
• How companies make good decisions - McKinsey Quarterly
• Confused Grocers and Won Customers with Canned Pancakes - Fast Company
• Evan Williams: How Twitter’s spectacular growth driven by unexpected uses - TED
• Thoughts on the marketing Ps - WebInkNow
• The panhandler’s secret- Seth Godin
• Three things you need if you want more customers - Seth Godin
• When Having No Competition is a Problem - RocketWatcher
• Dieter Rams and His 10 Design Commandment - FutureLab
• How Google and P&G Approach New Customers, New Markets - Harvard Business
• The 7 new truths about your customers - Canadian Business
• Being Rational About Emotions in Customer Service - FredZimny’s Blog
• Amazon CEO Jeff Bezos explains Customer Experience - Cust Exper Labs
• What am I learning at the Sales 2.0 Conference? - Jill Konrath
• Ten Reasons Your Brochure Gets No Sales - Fix Your Broken Marketing

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When companies create their first product, they tend to make a few simplifying assumptions without realizing it. They assume the product will:

1 be used as they designed it,
2 be used only by intended users,
3 solve problem as it looks today

And it makes perfect sense to do that.

YOUR FIRST OPPORTUNITY ISN’T ALWAYS WHERE YOU END UP

However, it’s often the case that companies later find product break-throughs in areas they didn’t plan for. The Nalge Company’s mission is to produce lab equipment but when its indestructible Nalgene lab bottles were discovered by outdoors enthusiests then later students, new unintended uses by unexpected customer groups appeared.

Unsolicited new markets are welcome, but more typically companies must proactively seek out new opportunities on their own. As a product matures its growth declines. Answering the question, “what other problems can we solve for our customers” leads them to the creation of new high-growth products.

ENVISIONING FOLLOW-ON OPPORTUNITIES AHEAD OF TIME

It’s easy to imagine the benefits to the company of seeing follow-on opportunities earlier: (1) a clear view of future products gives more time to plan and market them, (2) future product use scenarios can impact current product design in a positive way, and (3) early provisional solutions to customer problems give a framework for discussions with customers.

Product designers ‘saturate the design space‘ through techniques that flush out more design possibilities. Technique is the operative word here - without a technique designers fall into their familiar design patterns. Wouldn’t it be great to have a simple technique for allowing product strategists to similarly ‘saturate the problem space‘?

ENTER VALUE SCENARIO RESEARCH

I recently read research about Value Scenarios. For citations, please see the ‘About the Original Research’ section at the bottom of this document. The documents are a great read for anyone in technology who influences design.

The research includes a technique for envisioning the effects of new technologies so that environmental, psychological and ethical problems can be avoided. Its goal is to help technology designers and policy makers imagine a much wider range of impacts of their technology before time and money is invested.

The technique is based on ‘value scenarios’, a design approach created by the authors that extends scenario-based design (SBD) practices. Central to SBD are ’scenarios’ which are simple narrative descriptions of user problems that product managers create to communicate customer needs to the product development group. They don’t provide solutions, but they do illustrate possible nuances of the problem.

Here’s an example of a simple problem scenario:

Carl Counselor shares school pickup and dropoff duties with his wife. Sometimes his daughter becomes ill at school and needs a ride home, and sometimes his wife needs Carl to cover pickup for her. He needs to know promptly (with 15 minutes) if something comes up so he can make arrangements. As a counselor, Carl can’t have a cell phone ringing during his sessions so needs to be alerted without his client being aware of it. This problem is worrisome for both Carl and his wife and he is desperate to find a solution.

To contrast, where SBD scenarios focus on solving a current problem with an intended user (persona), value scenarios project into the future along four dimensions:

stakeholders - indirect as well as direct user impacts,
time - now vs points in the future,
value implications -  positive and subversive use, and
pervasiveness -  initial vs widespread use.

ADAPTING THE TECHNIQUE FOR OPPORTUNITY DISCOVERY

What excited me about the research is that I see how this technique created for adversity prevention could be adapted for opportunity discovery. That is, use the technique to get companies thinking about opportunities in their problem space before they are in the field, and before business conditions force them to. Specifically, the technique can jolt companies out of their initial ‘our app rocks’ mentality to give them a wide and deeper view of their problem space.

I’m curious to hear from anyone who does or knows of work along these lines, and and will pursue it more myself.

ABOUT THE ORIGINAL RESEARCH

Value Scenarios: A technique for Envisioning Systemic Effects of New Technologies
(Lisa P. Nathan, Predrag V. Klasnja, Batya Friedman: University of Washington)

Envisioning Systemic Effects on Persons and Society Throughout Interactive System Design
(Lisa P. Nathan, Batya Friedman, Predrag Klasnja, Shaun K. Kane, Jessica K. Miller: University of Washington)

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Photo credit (bottles) - drummerguy8706

• Long term value of customer loyalty - Training Marketer
• Scents, Names, Recall, and Imagination - Roger Dooley
• Are Those Leads Really Sales Ready? - Rocket Watcher
• The rational marketer (and the irrational customer) - Seth Godin
• What is loyalty - The Brookside Group
• Define and Quantify Customer Value - Fredzimny’s Blog
• Measure Customer Value the Customer’s Way - Customer Think
• Why won’t customer buy your product - Fix Your Broken Marketing
• Encouragement for innovators - MIT Sloan
• Hilarious - “Crapiest Generation of Spoiled Idiots” - Paul Kedrosky
• New tech start-ups can rise from the economy’s ashes - USA Today
• Questions about Questions (great links to visual thinking) - FutureLab
• The Shopper of Tomorrow: Trading Down - Knowledge@Wharton
• Value isn’t a subtractive process - Adaptive Path
• What to Say to Customers - HarvardBusiness
• Top 5 Lies That Marketing Tells Sales - BNET Insight
• Steeling their courage (heart-warming story) - Boston Globe
• Twitter creator Jack Dorsey - LA Times
• Hal Varian on how the Web challenges managers - McKinsley Quarterly

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I remember the first time I saw a big splashy, downtown RBC Financial Group centre. I was just looking to deposit some cheques and wondered if I should go in and ask where the bank for regular folks was. 

I’m guessing this branch in Kitsilano Vancouver just got so tired of answering the question “Is this a bank?” that they put up the band-aid sign “Yes!  We Are Full Service.”

They should put up another sign:  

HELP WANTED: User experience expert  to ask people if we look like the type of place they’d come to to give us their money.

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Thanks to Aaron over at the Marketing Ninja blog, here’s a terrific post about an old problem that I’m sure continues to plague early-stage technology companies. 

Read Aaron’s post  —>   The Danger of Letting Early Adopters Influence Product Development

Whether you are market-driven or not, the reality is that there is often friction between product managers, product designers, subject matter experts, user experience designers and developers about what features to develop.

If that’s the case in your company, this would be a great piece to distribute among your team as a nice reminder of the basics that have drven the industry for the past ten years. Some companies are well past this and onto more advanced voice-of-the-customer (or ODI) work but I’m guessing many companies would be well served by this.

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Photo credit - jvc

• 4 Biggest Reasons for Inter-gen Team Conflict (T Erickson) - HarvardBus.org
• Simplicity: The Next Big Thing (Rosabeth Moss Kanter) - HarvardBus.org
• Value Scenarios in SAP Business Suite 7 (Kathleen Lau) - IT World Canada
• Not Who Customers Are, It’s How They Behave (P Merholz) - HarvardBus.org
• 5 CMO Steps to Customer-Centricity - Marketing & Strategy Innovation Blog
• Real marketing done before product created - Steve Johnson
• Does your Website Suck? (slide deck) - iPerceptions
• Can You Tell Me What You Do? - Rocket Watcher
• Secret to Start-Up Success: Save Customers Money - NYTimes.com
• Portland Ten: Incubating 10 $1 Million startups by 2010 - Techvibes Blog
• More Tech Start-Ups Call It Quits - WSJ.com

Help - I’m stuck

We’ve all been there: we need to get an important report or email done by the end of the day and just can’t get started.

It got me thinking about something I often notice when editing someone’s written work. When we together try to improve the writing of an awkward section, it just gets worse. Exasperated, the author finally looks up from the page and SAYS “look, here’s the thing ..”. What she SAYS reasonates immediately - it’s much more direct and heartfelt (often with words completey different than the ones written). We then scramble to write it down before it slips away.

It strikes me that what we say is often more direct than what we write

How can we then start by talking instead of writing?  We could of course dictate the piece, but I think we’re really just writing aloud when we do that.

So I cooked up a way to trick us into a situation that we are all familiar with - having to give a quick verbal update to someone who we can’t say no to, our boss.

What inspired me to do this was that my friend Terry casually commented this week in an email that she was stuck with a writing task. With some improvements, here’s what I wrote back. She got back to me a few hours later with “Done!!! It was just what I needed!!!“.

So I thought I would share it with you. I haven’t tried it yet. If you try it, please let me know if it helped.

Simple Technique to Trick Yourself into Using your Spoken Words

Step 1:  Pretend your boss walked into your office and said “I’ve got 5 seconds, what are your top three points”.  Write down what you said right now.

Step 2:  Boss to you: “Sounds good. Let’s see what everyone else thinks. Come into my office in 15 minutes to tell me and the team about it.” Write up what you would SAY about those three points (not what you would write, what you would say). You only have 15 minutes to do this.

Step 3:  Pat yourself on the back. If the above managed to get your adrenelin going, you now have the most critical things done:

  (1)  the important information,
  (2)  in your own words.

Step 4:  Now write your report but only add what’s necessary to support what you’ve SAID above (remember: everything else is unimportant).

Hope it helps.   Tom

Photo credit  tomsaint11.  Thanks!

Product value advice from furniture maker Wendell Castle. I found it nicely framed on Vancouver textile artist Heather Cameron’s True Stitches blog (her original post). 

1. If you are in love with an idea, you are no judge of its beauty or value.  
2. It is difficult to see the whole picture when you are inside the frame. 
3. After learning the tricks of the trade, don’t think you know the trade. 
4. We see and apprehend what we already know.
5. The dog that stays on the porch will find no bones.
6. Never state a problem to yourself in the terms it was brought to you.
7. If it’s offbeat or surprising then it’s probably useful.
8. If you do not expect the unexpected, you will not find it.
9. Don’t get too serious.
10. If you hit the bullseye everytime, then the target is probably too near.

That’s it!

• Smart Growth Manifesto  - Harvard Business
• Economics of Giving it Away (Chris Anderson) - Wall Street Journal
• Profits = Revenus Minus Costs (Fred Wilson) - A VC
• Turning Prospects into Customers (Carol Aubitz) -  Excelsior Marketing
• Business Trasformation Is Simple (Idris Mootee) - FutureLab
• Involve Customers in Design Decisions (Rita McGrath) - Harvard Business
• Customer Experience-Driven Business (Peter Merholz) - Harvard Business
• 1981 clip about online news delivery (Kate Rutter) - Adaptive Path Blog
• In Praise of Marketing (.. it’s not all deception) (John Quelch) - HBS WK
• How to Interview your Customers (Kristin Zhivago) - Pragmatic Marketing
• Google Eye-tracking study - Google Blog

Ok, I just couldn’t resist doing a quick post after seeing Seth Godin’s post  Which comes first, the product or the marketing.

In it is a clip from the a Mad Men TV program episode referencing the Kodak Carousel. If you don’t follow the show, you won’t get the subtext of why Don Draper is in the photos of his presentation (but that’s not important).  

I have no idea whether this is how the product name Carousel came about. And hey, it’s TV with some pretty expensive writing going on. The scene is interesting enough on a product value level, but I think there are some GREAT lessons in there for the presenters in all of us:

Why I liked it

• Notice how Don makes it VERY personal (that’s him in the slides).  
• Timing:  a slow pace. He really draws his audience in.
• The Setup:  Technology is a glittering lure. “New” creates an itch and the product is a calamine lotion, BUT there can be a deeper  bond with a product - “nostalgia”
• Analogy: the device is not a spaceship (new) it’s a time machine taking us forwards, ..backwards
• Images: emotive, nicely-paced, carried by just a few words 
• Emotional wording:  deeper bond, delicate, potent, twinge in your heart, ..
• No selling (even at the end)

As I said, “it’s TV” but I think with lots to teach us.

I read an interesting thing about decision-making today. It was in cognitive psychologist Gary Klein’s respected book Sources of Power - How People Make Decisions (The MIT Press, 1999). See bottom of post for my comments on and links to the book.

Klein tells the story of Peer Soelberg, instructor of a decision-making course at the MIT School of Management in the late 1960s. Soelberg taught his students a method known as the rational choice strategy:

1. Identify sets of options
2. Identify ways to evaluate the options
3. Assign weights to each evaluation dimension
4. Perform the rating for each option
5. Pick the option with the highest score

Soelberg then studied how his students made the decision to choose a job at the end of his course, fully expecting them to apply the rational choice strategy they just learned. Surprise! His students made a gut choice instead of a systematic one, even for this important decision and having just learned a good rational decision-making methodology. Instead of making the selection as the last step (based on score) they made it very early on then they compared other job offers with their favourite to justify their decision. Interestingly, they would even fudge the comparison or find other ways to favour their gut choice. Instead of making a decision, they were really constructing a justification.

We don’t formally apply the rational choice strategy in day-to-day decisions, and let’s be honest, who has really seen this in anything other than competitive bid evaluations. But I do wonder to what extent we justify (or fudge) our favourite as the best choice no matter what. Or are we fudging? Could it be that we just don’t give ourselves permission to add sociological dimensions to our criterion list. We might hide “How I’d feel with this job on my business card” or “how others would feel about me in this job”, or don’t give these and other emotional aspects enough weight when we should. They are clearly there and, in the case of buying decisions, we are realizing they have much bigger tipping power than we would previously allow.

About the book 

I picked up Sources of Power - How People Make Decisions (The MIT Press, 1999) after it was recommended by Steve Krug in his book Don’t Make Me Think (New Riders Publishing, 2006). Gary Klein is known for his naturalistic decision making work. The book is an influencer book with terrific stories. In book Blink (Back Bay Books, 2005) Malcolm Gladwell references Klein’s work, and Chip and Dan Heath pick up the story aspect in their Made to Stick (Random House, 2007). 

Here’s what a department manager once said after we pitched the stunning cost benefits of an email productivity solution for his team:

“Yes they’ll be more efficient but then they’ll just do more of it - I’d rather they didn’t do email at all.”  

A few years wiser, I have come to realize that productivity-focused people naturally assume that everyone else wants to be more productive too. They think it’s a matter of know-how and discipline (that’s what they offer), and that all their customers will enjoy a much-improved bottom line if only they tried their product or service.

Frankly I think most people don’t think or care that much about productivity, that marketers grossly overestimate the size of the perceived problem and, by extension, the size of their markets.

Don’t get me wrong - it’s still a big market. I’m just saying it’s a harder sell than you might naturally think. 

If productivity is hard, what’s an easier sell?

COMPLETELY REMOVE A CUSTOMER PAIN POINT WITHOUT INTRODUCING CHANGE

Suppose one of your customer’s recurring jobs involved several tasks. Here’s what you do:

• Find out which task causes the most pain
• Find out why it’s painful
• Find how bad the hurtin’ is (so you can put a value on your solution)
• Offer a product (or service) that performs the entire task perfectly
• Give them the exact words they can use to sell it to their manager

Don’t mess around with their job procedure, don’t offer to improve how they currently do the task, and don’t over complicate it — just do that one task and do it completely. Tell them “You don’t have to feel the pain of that task ever again, and you didn’t have to change a thing.”

[ If you are an employee, find out what pains your manager, pick one you can handle and say "Don't worry, I'll take care of that." Then be sure to remind them at review time. ]

• Make your Service a “Got-to-have” Offer  - RainToday
• Segmentation one-pager - Steve Tobak
• Sage advice to those who love their own products - True Stitches
• Segmentation - easy way to get started - Rocket Watcher
• Breakthrough ideas for 2009 - Harvard Business Review
• Free/pls donate courseware from MIT - MIT Sloan School of Management
• BC Canada - Rocket Builders 2009 list - Ready to Rocket and Emerging
• Five Sketches Ideation Design method - Jerome Ryckborst
• Remoreseless bankers - not useful, will make you throw up - Economist
• Be aware of the like-mindedness of social media - Engage Daily Blog

I just started Buyology (Martin Lindstrom, 2008 Doubleday). I didn’t want to buy this book (the title seemed overreaching to me). Why did I? Now that I’m on page 85 I turn warily to the mustard yellow-coloured cover - did my subconscious have a role in this? Why yellow?

Ok I’m over it now .. and glad I bought the book. For neuromarketing, this is a fast-paced racing car of a book, and a great read (so far). 

Here’s the bit that got me wanting to blog right away:

“… In 1997, in preparation for the ban on tobacco advertising that was about to come into place in the United Kingdom, Silk Cut, a popular British Tobacco brand, began to position its logo against a background of purple silk in every add it ran. It didn’t take long for consumers to associate this plain swath of purple silk with the Silk Cut logo, and eventually with the brand itself. So when the advertising ban came into effect, and the logo was no longer permitted on ads or billboards, the company simply created highway billboards that didn’t say a word about Silk Cut or cigarettes but merely showcased logo-free swaths of purple silk.”

I think we can agree that this is the world of big, branded products where few have any say. And thankfully so. Who’d want to spend their workdays cooking up plans like this.

The point I want to make out of this is that we all buy products (and services) for reasons other than those listed on the box. Putting aside subconscious reasons for now (with all due respect for Mr. Lindstrom), what about the conscious ones? Even they are more nuanced than we think:  functional (what product does), personal (how it makes us feel), or social (how it makes others feel about us), as Anthony Ulwick puts it in his outcome-driven innovation methodology.

Nuanced or not, we can and should figure out why our customers buy (or don’t buy) our products now. One thing’s for sure: it’s way less costly than doing nothing, or worse - customer blind product reengineering - which is what some companies consider first when sales aren’t where they expect. 

This story makes a great point perfectly: find out what your customers value and do (at least) that.

Customer Service Alone is Not Enough (Karen Dillon) from HBR (Harvard Business) Review Editor’s Blog.

It’s a good example because great service and over-serving gets lots of press (such a nice break from the norm). However, I think you can also insert “something you think the customer values but the customer values not as much as you think” into the slot.

Buy this book

 Reality Check  by  Guy Kawasaki   (Portfolio, 2008). 

If I could have read this book ten years ago when we were founding our startup, you would have heard me saying “great advice - does not apply to us”, and “interesting .. unless you have a killer app”.   

Reading it now I’m practically rolling on the floor laughing. The book is hilarious, but only because there is now some distance between me and the mistakes we made. This book is a tell-all about important and useful stuff. We got a LOT right in our company, but we were WAY off on the really important stuff, .. the stuff you need to be able to say you were more than a “technological” success.

But it also comforts. It’s comforting to know everyone just wants win-win. And the best way to do that is to be open, humble, realistic, empathetic, direct, and to be yourself. Of course, you say, but we all get a little too caught up in the game and this book will help to give you perspective.

If you are a technology entrepreneur and you think you just might need to interact with the world (hint: probably you do), just buy this book - don’t wait for soft cover. It’s thick, but you’ll sail through it. Take it for what it is: a ton of tips from someone who knows.  

Questions

Do we say killer app any more? Take-away?  Sigh.

Does anyone else who has read it feel the same way?  Who feels it didn’t/doesn’t apply?  Who thinks it’s sage advice?