So, you’ve decided to begin a new market research project.  You’ve got your email database that you’ll send the questions to and you’ve opened up your market research provider’s survey builder to create the survey.  You may have done it dozens of times before; that is, begun a research project knowing that what you’ll get back is a group of conclusions about your group and segments of your group, which may be by any combination of demographic criteria.

When you’re done with the research and analysis, you’ll have a team meeting, report on the results and maybe test a few changes in your marketing or sales plan.  Sorry, that’s not good enough.

Here’s a test to see if you’re getting your money’s worth:

1. Does your research platform automatically append every response to the respondent’s email in your database?
2. Can you convert zips to cities, states, regions, or countries with one click?
3. Does it enable you to ask and analyze responses to open-ended questions, without limit?
4. Can you see all the language that was used by respondents to open-ended questions by simply clicking on a word?
5. Can you convert words into phrases and segment your database based on emotions, frustrations or perceptions?
6. Can you convert word clouds into bar charts with one click?
   
7. Can you create a lexicon of common words or phrases that your database uses?
8. Can you send your questions out to any number of people, 10,000, 100,000, 1 million without an upcharge?
9. Can you ask the same database some questions tomorrow and then ask a different set of questions next month without an additional charge?
10. Can you create and analyze segments based on any combination of closed- or open-ended responses?
11. Can you save segments and know that they’ll automatically build as you add new people to your database?
12. Can you create a segment to ask clarifying questions or send them an email tailored to their frustrations, needs or opinions, all within the same platform?

If your answer is “no” to any of the above, you’re not getting your money’s worth. Take a look at Oomiji because this platform was built to do all of the above.  Oomiji is an end-to-end solution that enables you to build your customer database, query them with research, which can be closed- or open-ended, segment them by any criteria and respond to them any way you want.  One Oomiji client made this observation, “If database acquisition, market research, CRM and email marketing had a baby, its name would be Oomiji.”

In its full application, Oomiji is a customer engagement tool because it enables you to learn what your customers are thinking, acknowledge their comments and then respond to them based on what they’ve told you.  If you think about it, that’s just how we build relationships when talking to each other 1:1.  It makes sense and while you’re at it, you get a pretty amazing research tool that gives you more than your money’s worth.

You can learn more about Oomiji at oomiji.com or watch an intro video here.

Tags: Analysis, Append Data, Corporate Myopia, CRM, Customer engagement, Customers, Database, Demographics, email marketing, end-to-end solution, lexicon, market research, Marketing, Oomiji, Open-ended questions, Outcomes, Respondents, segment, segmentation

It’s hard to estimate the damage done to United Airline’s brand from yesterday’s “incident” on one of its flights from Chicago.  (I’m tempted to describe it in more Draconian terms but there’s more than enough social media for that.)  First, there’s the proliferation of the multiple videos that have now been seen by tens of millions of Americans.  Second, that the man so violently ejected was Chinese has created a whirlwind of social media among many millions in China.  (Anyone for a flight from Beijing to LA?  I hear there are seats available.)  Finally, for today at least, is the tone-deaf response of United’s CEO, Oscar Munoz in which his use of the non-word, “re-accommodate” is getting its own share of Internet derisiveness.  Wow!  What a mess!

If you think this will all pass, consider this:  Today’s drop in United stock has already cost the airline about $600 million.  What a waste of brand equity!  So, let’s assume Mr. Munoz calls you up and asks, “What should we do?”  We can expect the usual mea culpas, compensations to people on that flight and perhaps some people will lose their jobs.  But that won’t stem the long-term damage so here’s a proactive plan to retrieve that lost brand equity.

1. Send an email to all your customers worldwide. Apologize, but do more than that.  Ask them to answer a few questions that will help you ensure not only that this never takes place again but show United how it can improve its service to all its customers.  As to what questions should be asked, here are a few:

•  How did hearing about or viewing the incident make you feel?

•  How do you think an overbooked situation should be handled?

•  What is the most frustrating thing about flying from purchasing tickets to arriving at your destination?

•  How has this incident effected your willingness to recommend United to others?

Just those four questions – that’s all you need to ask.  They’re all that anybody cares about so don’t muck it up with marketing speak or other meaningless questions.

They are open-ended questions and they should remain that way because people will see that you really are interested in their opinions.  Yes, responses to open-ended questions can be difficult to analyze but don’t worry we have a solution (albeit self-serving) for you there.

2. Send every person who answers those questions a thank-you email.

3. Analyze the responses and create needs-based segmentations from the feelings and frustrations that are expressed. While you’re at it, create a lexicon of words that respondents used.  (Here’s the self-serving part.)  Oomiji can do all that.

4. Create a separate response for each major segment. Compose an email of what you heard, what you learned and that you’ll respond to them again in a few weeks with all the changes you’ll make.  (Oomiji can do that for you too because we append every single sentence to their email address.)

5. Make some real changes that help solve all the problems you learned about. By asking open-ended questions, you’ll hear some things you didn’t expect.  We’ve found that’s true for every client we’ve ever worked for.

6. Write the respondents again and let them know the changes you’re making. Send each segment all the changes but put the ones most meaningful to them at the top.

7. In a couple of months, ask them if they’ve seen any changes and their responses. Thank them again.  You might even reward them because ultimately, it’s the answer to the last question above about their willingness to recommend United that counts.

8. Repeat this process regularly and make sure you dispense with corporate speak and open yourselves up to active listening, acknowledging and responding. That’s the Oomiji pattern and it works.

Will this get United’s $600 million back?  We believe it will and they’ll reap the bonus of creating a better airline at the same time.

You can learn more about Oomiji at oomiji.com or watch our intro video here.

Tags: Americans, Assumptions, brand equity, Corporate Myopia, Customers, dragging passenger, Leadership, Marketing, Mistakes, Oomiji, open-ended research, Oscar Munoz, Outcomes, Situation Analysis, Social Media, U.S. Marketplace, United Airlines, United CEO

It’s been some time since I’ve written on this blog.  That’s because I’ve started a new one at my new company, Oomiji.  Check it out at oomiji.com.  I’ll repost many of the blog posts from Oomiji here but some will also appear here that you won’t find on Oomiji, such as my upcoming holiday cartoon (a monumental challenge this year).

I’ve been thinking a lot about this Carl Sagan quote lately as I’ve watched several well-conceived businesses fall by the wayside, others make what may become terminal errors and, our recent election.  Thousands of small businesses decline or fail every year.  In just the past five years, AT&T, Alcoa, Bank of America, Hewlett Packard, and Kraft Foods have all fallen from the Dow 30.  And, of course, the can’t-lose, first-woman president who would ride to victory on a female, Hispanic, black, college-educated coalition didn’t.

Just the other day, Warren Buffet was quoted as saying about Wells Fargo, “Cultures shift.  You can turn it for the better or worse by your own actions.”  About the election, I’ve heard that Hillary Clinton lost because of racism, sexism, anti-intellectualism and as many other “-isms” that you could name.  To all of those, I say, “No, it’s more basic than that.  She simply didn’t listen.”  She didn’t listen to the shifting cultures all around her, not only to those who worked against her but to those who voted for her or supported her but weren’t motivated enough to come out and vote.

In an earlier iteration of Oomiji in 2004, we were asked by the Howard Dean presidential campaign to give them some insights on why his Internet fund raising was drying up.  His was the first campaign to raise massive amounts of money in small gifts over the Internet.  The answer was pretty simple then too.  Supporters told us that all Dean’s campaign did was ask for money, again and again.  They never asked for opinions from the people who gave.  Politics teaches some good lessons about business because much it is laid bare before the public.

There are a lot of ways to listen to your customers and constituencies.  We built Oomiji as both a listening and segmentation tool, so you can converse with people, divide them into segments and send targeted communications that are tailored to their needs, perceptions or frustrations.  It’s a way of monitoring and understanding how cultures are shifting and how to address people who are caught at any point in the shift.

You can participate in an example of how Oomiji works by taking our short survey on Customer Engagement, two words that get bandied about by people who may not fully recognize their implications.  If you take the survey, we’ll send you a summary of what people said and that way, we can all listen to see if we detect some helpful insights into our own businesses.

The oft quoted admonition, “What we’ve got here is failure to communicate,” was told to Paul Newman in the mulit-Oscar nominated Cool Hand Luke back in 1967.  Yet, despite nearly 50 years that have passed, communication is still our greatest failure.

Tags: Carl Sagan, Communication, Corporate Myopia, Culture, Customer engagement, Customers, Democrats and business, Leadership, Mistakes, Outcomes, Politicians, Republicans, Warren Buffet, Winning

There are many reasons companies lose customers but, in the end, they all come down to a lack of customer engagement or advocacy. When engagement drops to a point where customers begin saying this company makes their lives difficult rather than easy, it’s only a matter of time until they go elsewhere. The difficult part for managers hoping to stop the flow is that customer loss is usually a trickle and rarely a cascade. It can be difficult to detect and harder to understand the problem or how to fix it. This is particularly true for consumer facing B2C businesses.  B2B companies usually have client managers whose job is to stay on top of things, but the same rules apply and results can take place.

It’s true that general inertia can keep dissatisfied customers patronizing companies they dislike for a long time. It can often seem too difficult or time-consuming to change your service supplier. The hurdles presented in front of change require time to find a new supplier and leave your old one. But inertia only forestalls the loss. It never prevents it because neglect feeds upon itself to a point where customers can feel forced to look elsewhere.

Here are a couple of personal examples: one large one preceded our supplier change and one small that validated it. In this case, the industry is banking and companies, such as banks, that are pressured by both small margins and ample regulation are particularly vulnerable.

For many years, my wife and I banked at HSBC. When we made the decision to go to HSBC, we were somewhat concerned about whether we would get lost in such a large company. It’s the 25^th largest bank in the world. But they had a branch only a few blocks away from our home and offices around the world, which could accommodate much of my work, which is outside the U.S.

The bank immediately provided financing for our home in New York and a vacation home in Maine. The branch personnel were always accommodating and all was good for a period of several years. Then, HSBC began to make changes and from an outside view, it seemed they were outsourcing many of their in-house services to cut costs. Service bureaus began to answer phone calls or deal with problems, many of which were not connected to each other. There was no single view of the customer. Decisions moved further away from the branch to be centralized by policy makers who were guided by lawyers. The bank would probably blame government regulation but part of succeeding in business is maintaining excellent customer relations regardless of what is thrown at you from the outside. The old saying, “Don’t make your problems into your customer’s problems” always holds true.

One day about five years ago, the local mortgage officer, always accommodating, called to say that we could refinance our mortgages at lower rates and reduce our monthly payments – a good example of trying to make things easier for the customer. There was some documentation, he said, but that it would be easy because he would shepherd it through. So we filled out the application, paid the documentation fees, authorized appraisals, credit reports and income checks. Then, came the bad news. We had been declined. It made no sense to our local mortgage officer. We had never missed a payment, had near perfect credit scores and growing businesses. Additionally, the bank had all our personal and business accounts, personal and business loans and investments. They owned us.

But then he said, “Let me see if I can get my managers to overrule the underwriter.” That sounded odd to me and it turned out that the bank had farmed out its underwriting to a third-party firm that specializes in credit analysis, or more correctly, they had computers that specialized in credit analysis. He called his boss and I called his bosses boss, all to no avail. I spoke to the underwriter who told me that we didn’t fit their formulas because we owned small businesses that couldn’t be counted on to continue to grow. I reminded her that the bank already had our loans so it wasn’t as if turning us down was going to do anything. She said, “I wouldn’t have approved you last time either.”

To make a long story short, we finally got the refinanced loans approved but only because we refused to let it die and kept pushing the decision up to the highest levels we could find in New York. It was painful and not only took much of our time to make our case but also that of our local loan officer, so in the end the bank’s cost to make the loan was higher and it also took time away from us to devote to other areas, maybe like making more money to satisfy the underwriter.

(Now, I should add that we’re not financial slouches and I’m not looking for sympathy. Remember, customer alienation is the point and there are millions of small business people just like us all across the country.)

For us, the experience was the coup de grace in our relationship with HSBC. We decided that we would leave them at the first opportune time. Several years later, we did after rearranging some of our finances. The irony was that as soon as we did, HSBC desperately wanted us to stay. But all of the equity that their local branch personnel had built by being so accommodating had melted away and we had crossed the line from engagement to alienation.

That’s the big example that caused them to lose us as customers and while I’m using my own examples, I’ve heard similar stories among many of our friends who also are small business people. (Years earlier when I had that conversation with the underwriter, I asked her if she would have been happier if I was a manager at Chrysler corporation making several hundred thousand dollars a year. “Of course,” she replied. And I then said, “But Chrysler went bankrupt and I might have lost my job.” The conversation simply went downhill from there.)

So, we’re now at a point where we’ve changed banks but still are unwinding things with HSBC. They still have the mortgage on our home in Maine and a checking account from which they are automatically receiving the monthly payment. However, we noticed that they’re continuing to send the monthly bill to our old address, so we called to have them change the address. Simple enough.

They wouldn’t do it unless I wrote them a letter to inform them. “But you’ve verified that I am who I say I am with six questions I answered correctly. Why won’t you take the information over the phone, or online? Why are you forcing me to sit down and write you a letter?”

The reply came from a supervisor as the first customer service person agreed with me and gave up in frustration. “I’m sorry,” he said. “We can only do what HSBC management tells us to do.”

I thought about his wording for a moment. (It pays to have had a mother who was an English teacher.) “Excuse me, you said “HSBC management”. Aren’t you HSBC management?”

“Technically, no. I’m with a third-party service bureau that has to follow the procedures given to us by HSBC. I agree with you but there is nothing I can do. You have to write a letter,” he said with an air of resignation and defeat.

So, I thanked him and ended the call and thought again about the axiom, “Don’t make your problems into your customer’s problems.” It was validation for our decision to leave and find a new bank.

How bad can things get when you alienate customers? I’m not advocating that any bank’s customers leave. That was the right decision for us. It may not be for others. However, I am advocating that companies use every opportunity to determine whether their customers are engaged or alienated and why, and if so, what can they do about it. In our CRM (customer relationship management) system world, customers have become a series of transactions that we evaluate with formulas and predict with algorithms. I would argue that the transactions are consequences of their relationships with the companies and brands they use. This makes it essential for companies to devote more resources to both monitoring and measuring those relationships, and doing what they can to improve them.

The same is true internally. Employees are the brand personified. Months into our banking change, I called to speak to an executive at our old bank who had been helpful. I got her assistant who was working on the problem and said what we wanted to do could be done, but wasn’t easy. “Why isn’t anything at that bank easy?” I asked.

“Tell me about it, “ she replied.  As the lobsterman, who lives down the road from me in Maine likes to comment, “Nuff said.”

I’d love to hear your comments or stories  about successful customer engagement or, conversely,  alienation.

Tags: banks, Corporate Myopia, CRM, Customer alienation, Customer engagement, Customer relations, Customers, HSBC, Outcomes

In my previous blog post, I invited readers to take a survey about customer engagement.  More than 200 people have taken the survey and you still can.  Simply click the link:  http://surveydirectlink.com/survey/?name=engagement.

We’ve received some very thoughtful comments from people defining what customer engagement is, how companies do it wrong and best practices for doing it right.  In a few weeks, we’ll close the survey and then publish a summary so that you can read what people wrote.  If you take the survey, you’ll automatically receive the executive report.  But even if you don’t take it and you watched Karen Trudell’s Abundance of Gratitude interview series, you can receive the report.

If you’d like to register for Karen’s interview series, go to http://www.sweetperfection.org/abundance-of-gratitude

Again, if you’d like to take the customer engagement survey while it’s still open, go to this link:  http://surveydirectlink.com/survey/?name=engagement.

(BTW, if you’re using an older version of MS Explorer, you may have some issues with the survey working properly but if you simply take it on Chrome, Firefox or Safari, you’ll breeze through it.  It’s very short.)

To receive an executive summary of the survey results, just enter your email address here:

Tags: Brand Building, brand loyalty, Customer engagement, Customers, Engagement, gratitude, market research, Outcomes, Survey

“Engagement” has become a buzzword in business these days.  Everyone is asking whether they are “engaged” with their customers.  But what does “engagement” mean both to people who are in business and to their customers? Do you think you are “engaged” with the companies you buy from?  (e.g. Anybody out there in love with their bank?)  How do they think they are engaging you to build brand loyalty?

We’ve posted a short survey online and if you’d like to take it, you can simply click on the image to the left or click this link:  http://surveydirectlink.com/survey/?name=engagement.  There are only five substantive questions and you can write as much or as little as you’d like.  So far, we’ve received more than 100 responses and the subject seems to have touched a hot button with many.  If you like the survey, please send it on to others that you think have something to say about this topic.  When we close the survey, we’ll post a summary of what people have said and the best practices they recommend.  I hope it will become a good tool to use in developing customer engagement, however you define it, and  brand loyalty for your business

P.S.  If you’ve worked with different programs or programmers, you know that MS Explorer often presents some challenges from the other three major browsers (Chrome, Firefox, Safari).  Explorer uses a different programming protocol and we’ve found that some survey respondents are having no problem with it and others are.  If the survey doesn’t work for you on Explorer, please give it a try on one of the other browsers.

Tags: Brand Building, brand loyalty, Customer engagement, Customers, Engagement, Outcomes, Survey

I went to a wine event today in New York for the Bordeaux wine region.  While there, I asked the representative of one of the wineries, “What’s your strategy for the U.S.?”  She responded, “Strategy?  Why do we need that?”  I gave her some reasons but the conversation didn’t go very far.

When I returned to my office, I got an email from the Pew Research Center titled “Experts rank the top 10 global trends.”  When I clicked on the link, I found a report from the World Economic Forum on the 10 most important global trends based on a poll of 1,592 leaders from academia, business, government and non-profits.  Here’s the list:

1. Rising societal tensions in the Middle East and North Africa
2. Widening income disparities
3. Persistent structural unemployment
4. Intensifying cyber threats
5. Inaction on climate change
6. Diminishing confidence in economic policies
7. A lack of values in leadership
8. The expanding middle class in Asia
9. The growing importance of megacities
10. The rapid spread of misinformation

So what do these trends have to do with something as everyday as buying a bottle of wine?  Plenty.

It’s great that a provider of any product or service believes theirs is the best but neither consumers nor b2b markets think in linear terms.  Every decision is made in relation to another.  If I’m nervous about the state of the world, that will effect how I make decisions, and what and when I buy.  If I’m an importer or distributor and concerned about unemployment and the impact of economic policies, I may want to hedge my bets with tighter inventory control.  As people focus on the macro trends that affect us all, how companies approach the environment, social responsibility and their own governance (ESG) effects our perceptions of their brands.  It goes on and on whether you’re a consumer or corporation (remember, somebody once said, “Corporations are people, my friend.”)

If you don’t have a strategy that helps you wind your way through this maze or a brand with values that reassure consumers and customers, you’re dead in the water and it won’t matter how many fancy events, e-newsletters or facebook followers you have.

Something else was interesting to me at today’s Bordeaux event.  As I went around and asked people about their wines and what makes their winery better than the rest (to which there were a lot of blank stares), nobody asked any questions about me, about my tastes, concerns, or needs.  They may as well have been Enomatic wine dispensers with an information rack underneath.  Most handed me a sheet of paper about their wines in answer to my questions anyway.

There was neither strategy present nor any attempt at customer engagement.  I imagine the woman who asked me why her company needs strategy poured a lot of wine today.  At the same time, it wouldn’t surprise me if at the end of the day, she moaned about some of the trends on the list and how they were making life more complicated.  That’s too bad.  Strategy is the direction that helps us wind our way through and around those trends and we all give our loyalty to those that help us do that.

FutureShift asks a lot of questions and listens carefully so that brands and strategy resonate with customers to increase their engagement and loyalty.  It works.

Tags: Asia, Assumptions, Bordeaux, Bordeaux wine tasting, brand loyalty, climate change, Corporate Myopia, Corporations are people, Customer engagement, Customers, cyber threats, economic policies, Enomatic, ESG, facebook, futureshift, Global Trends, income disparities, Individualists, Leadership, linear thinking, Marketing, megacities, middle class, Middle East, misinformation, Mitt Romney, my friend., North Africa, Outcomes, Positioning, relational thinking, Rising social tensions, Situation Analysis, Strategy, structural unemployment, Trade Associations, U.S. Marketplace, Values, Winning, World Economic Forum

There’s always a rush these days to get plans into action.  Action is what we value, just as we’re always looking for someone who “can hit the ground running”.  But what if they’re running in the wrong direction?  And how do you know in which direction to run?

The answer to that mistakenly comes in businesses doing what they’ve always been doing and whenever possible just running faster.  In the accelerated competitive environment of New York City, we’ve become accustomed to stores, restaurants, professional services and even hospitals suddenly disappearing.  These businesses failed even though they worked harder and ran faster than anyone around them.  Why did they fail?

Most likely, they never asked their customers whether the direction they were going, the products and services they were offering or the benefits they perceived internally met customer needs.  It’s the rare manager or entrepreneur who can intuit what the market is looking for.  Otherwise, there would be a lot more people like Steve Jobs around.  Businesses have to get feedback from their customers and understand how to match their offerings with what customers are seeking.

Not surprisingly, customers often see product plusses and minuses in completely different terms than the companies selling them.  The best advertising campaign in the world won’t convince customers that they should be seeking something different.  We’re just not in that linear world of the 1950s and 60s when we could be told what detergents make our clothing cleaner and then march in lockstep to the store to buy them.

Of course, businesses don’t always listen to their customers because internal beliefs are so strong as to refuse to change their strategy to meet customer needs.  Here are three examples to consider:

1. Several years ago, we were asked by the Chilean Pisco industry to provide a strategy that would open up the U.S. market for them.  If you don’t know Pisco, it’s an eau de vie, somewhat like a refined grappa, that’s made in Chile and Peru.  Our research found that bartenders believed it made most vodka-based cocktails more interesting and one of our key strategic recommendations (futureshiftpisco.com) was to unleash the creativity of bartenders with a series of tactical programs that would challenge them to develop great Pisco-based cocktails that their customers would love. But Chile is a country where perfection in planning is highly valued and established.  That works when building bridges, tunnels and skyscrapers, of which you’ll see many in Santiago these days but not when variable decisions are involved as with bartenders and their customers.  The Chilean Pisco industry decided to design several “perfect cocktails” that they could then promote in the U.S.  The result?  Peruvian producers who gained a better understanding of the U.S. bartender now dominate the market.  There’s still time for Chile to adapt as Pisco still is not well known in the U.S.   They simply have to acknowledge that their customers have more power than they do.  Easy, right? 
2. While we’re on Chile, let’s move to technology.  This time the Chilean technology industry told us they wanted to sell their growing tech industry to U.S. companies.  Chile had already achieved tremendous success in establishing itself as a successful place to locate an offshore tech center.  Now, they wanted to have a presence inside the U.S. to provide SaaS and enterprise integration products. Again, we spoke to prospective customers for these talented Chilean companies and were told that if they could establish partnerships with Chilean companies in Latin America, a piece of their U.S. business would likely follow.  (FutureshiftChileIT.com)In other words, help us in your territory and then we’ll reward you in ours.  U.S. companies wanted to understand the Chilean miracle and how it had become an export powerhouse. But just as with Pisco, the forces that worked internally in Chile were too strong to persuade them to adopt a market-oriented strategy in the U.S.  Six Chilean IT companies came to the U.S. trying to sell their services based on low prices.  But why go to a company thousands of miles just for low prices when that can be found down the road?  Today, there is only a small amount of programming work going to Chilean companies, as talented as they are. 
3. Most recently, we conducted a research and strategy project for the Maine lobster industry.  Following 200+ interviews, there were a number of findings in that report that showed how Maine lobster possesses attributes to restaurant and hotel chefs that were not being considered within the industry.  There is ample opportunity for the Maine industry to differentiate its brand from all competitors.  However, lobstering is a traditional industry and change does not come easily.  Like the two Chilean examples, internal beliefs in Maine are strong.  Most lobstermen are focused on their first transaction with a dealer when they bring their catch to the dock.  The needs of restaurant and hotel chefs can be perceived as a distant concept and there is little patience for the time it takes to raise the foodservice market’s demand.  The local dealer and summer tourist who loves to sit at the water’s edge, even though they both pay rock bottom price, is more concrete.  It’s been that way for more than a hundred years so change, despite market feedback, isn’t easy.  There’s cause to remain optimistic but it remains to be seen whether Maine’s lobster industry adapts.

In each of the above cases, the right strategy began with listening to customers.  That helped set a direction for the industry to go.  But at that point, industry members often put up obstacles to change.  After all, it’s far more difficult to do something new than the things you’ve been doing for dozens of years, even though they may not be working.

FutureShift develops brands and rebranding programs by understanding how customer decisions can increase engagement and loyalty.

Tags: Action, Advertising, bartenders, Change, chefs, Chile, cocktails, Corporate Myopia, Creativity, Customers, Direction, futureshift, Information Technology, IT, Latin America, Leadership, lobstermen, Maine, Maine Lobster, Marketing, Mistakes, New York, Outcomes, Peru, Pisco, Positioning, SaaS, Situation Analysis, Steve Jobs, Strategy, Tactics, technology, Trade Associations, U.S. Marketplace, Winning

No, Michael Porter is not dead.  Only the consulting firm that he co-founded in 1983 is gone.  Today, the global accounting giant, Deloitte, announced that it had completed its acquisition of Monitor, which had filed for bankruptcy this past November.  As reported in The Economist last November 14th, the once proud firm, “was able to compete with the likes of much bigger McKinsey, the Boston Consulting Group and Bain.”

No mention was made in the announcement of what role Porter might play in the newly formed division of Deloitte but he remains a highly regarded professor at the Harvard Business School.

Businesses come and go all the time and acquisitions are a daily occurrence.  What is of note here is that Monitor was founded by a man acclaimed as one of the great business strategists of the past century, and more importantly by his principles, best known as “Porter’s Five Forces”.  Under the guidance of the Five Forces framework and Porter’s fame, Monitor’s legions of consultants found millions of dollars of billable work among foreign governments, multi-national corporations and commodity boards.  That work began to dwindle in 2008 when Monitor had to seek a series of loans from its partners and venture capital firms in order to stay afloat.

In the November issue of Forbes, contributor and business author, Steve Denning, uses his rapier-like writing skills to tear apart both Monitor and the philosophical approach behind it.  In other words, he does some dancing on Porter’s grave.  While the article is now two months old, it makes for compelling reading if you were a believer or doubter of Porter’s framework.  Put me in the latter camp.

I first read Porter’s seminal article in the Harvard Business Review, “How Competitive Forces Shape Strategy” in 1979. I was one year out of business school and a loan officer in a commercial bank.  My mantra was a phrase coined by another business guru, Peter Drucker, and known as “Managing by walking around.”  The idea is that by engaging with people both inside and outside an organization, managers can best understand how their companies, products and management styles are perceived, how they perform and what to do about them.  That’s a simple concept that one could explain in an elevator between the first and second floors.

It served me well then and has since as I’ve made the practice of engaging with both internal and external audiences to find the intersection between internal capabilities and external needs as the place to find the sweet spot for successful strategy.

Porter’s Five Forces, on the other hand, require a much longer elevator ride. The idea is that by managing a framework of five market forces, a company or industry could find sustainable competitive advantage.  “The state of competition in an industry depends on five basic forces…The collective strength of these forces determines the ultimate profit potential of an industry.”

I can’t say I fully understood it in 1979 and I can pretty much say the same today.  I looked at the model then as I do now and ask, “Why is the competition at the center?  Why not the customer?” Drucker taught that the only valid purpose of a business is to create a customer.  Yet, here was Porter, saying that it’s all about dominating the competition.

I had a memorable meeting at Monitor’s Cambridge headquarters in the early nineties.  At the time, I was doing some consulting for the government of Chile on export promotion, inbound investment and tourism development.  Monitor had built up a practice in consulting in these areas and proposed a partnership.  I felt this might add some prestige to the project.  At our meeting, one of their senior consultants explained how they would apply the discipline of the Five Forces to the project.  He drew lots of squares and circles on the board labeling them various types of competitive clusters and argued that it was winning against competing countries, not customer perceptions that would win the day for Chile.

I left there confused and unconvinced that the focus should be on “competitive clusters” rather than matching what Chile offered with customer needs.  If you spend your time focusing on rivalries, you’re losing time creating more innovation to meet growing market demands and before you know it, your competition will be your problem.  As the famous baseball pitcher, Satchel Paige, said,  “Don’t look back.  Something might be gaining on you.”

As Steve Denning notes about Monitor, “Its consultants were not people with deep experience in understanding what customers might want or what is involved in actually making things or delivering services in particular industries or how to innovate and create new value.”

Today, factors such as globalization, the Internet, and the growth of social media have heightened the importance of building strategy around customers.  Now that the world is flat, customers decide who wins in every industry and political arena.  As Denning ends his article, “Monitor was crushed by the single dominant force in today’s marketplace:  the customer.”

It’s hard to argue against the man who is one of the most cited scholars in economics and business and whose ideas are widely used by business and government leaders around the world.  But we are in a different time where the key is satisfying customer needs for innovation, whether they be in features, quality, service, or value.  Companies like Apple, Amazon, Fresh Direct, and Kayak are just a few of the examples of how our flattened world has given power to customers.

Our consulting approach is to put customers at the center and to understand their frustrations.  After all, a frustration is simply an unmet need.  Find the innovation to serve that need, erase the frustration and you’ll find a successful business — that’s a short speech in any elevator.

Tags: Amazon, Apple, Assumptions, Change, Chile, competitive clusters, Corporate Myopia, Customers, Deloitte, elevator speech, Five Forces, Forbes, Fresh Direct, futureshift, Governments, Harvard Business School, Kayak, Managing by walking around, Michael Porter, Monitor, Monitor Group, Outcomes, Peter Drucker, Porter's Five Forces, Positioning, Satchel Paige, Situation Analysis, Steve Denning, Strategy, Trade Associations, U.S. Marketplace, Winning

In the mad dash to build Facebook and LinkedIn communities, something has been missing.  Companies have been campaigning for as many Facebook “likes” as possible but now, they’re asking, “How do we know if our message is getting through?” and “Is there any way to tell whether (1) awareness is being raised; (2) brand loyalty is increasing; and, (3) social media is having an effect on sales?”

They’re good questions to ask and now there is a way to answer them.  With a simple link on your social media page, you can gather comments and get key strategic questions answered by your social media network.  With our DirectLink™ software, you can ask them questions about their understanding of your brand, unmet needs and the information they’d really like to have from you.  They can be open-ended questions that allow people to write as much as they want and then you can apply these three new tools:

1. See what they’re writing in real time – as they write it!

Now, you can actually monitor what your community is saying about you and how they’re answering your questions.  Take a look at the example below for one of our clients that is a wine producer.  The question asked is “Please describe the qualities that you find in our wines that differentiate them from other wines at any given price level.” With one click on the button on the upper right that says “Get Verbatims”, everything written in answer to that question immediately appears.

And if you want to see all of the text responses quantified, you simply close the verbatims screen and bar charts appear showing how all of the answers have been categorized.

In other words, we’re quantifying qualitative information – conversational text – and enabling you to see the actual words behind the data.  It’s like listening in to hundreds of conversations about all the questions you want answered about your brand.

2. See the key words they use while they’re using them.

When considering the key needs among your customers to address, it helps to know their top-of-mind thoughts.  Word clouds can provide a quick look at what any customer group is saying about your brand.  With one click on the “Word Cloud” button, you’ll see your word cloud develop before your eyes.

DirectLink™ automatically throws out the meaningless words such as articles, pronouns and other common words that might improperly skew the response.  Still, there will be words you’ll see in the word cloud that get through the screening process but don’t provide insights.  DirectLink™ enables you to quickly toss out those words.  For answers to the same question as above, “Please describe the qualities that you find in our wines that differentiate them from other wines at any given price level.”, we tossed out seven additional words to get the picture above.  It’s as easy as clicking on the words you don’t want and the word cloud quickly reforms.

With this feature, you see the top-of-mind thoughts your customers have and the descriptive words they use.  Every product or service creates its own lexicon of words that both the trade and consumers use.  Now, you can see what those are and use them to talk to your customers.

3. Segment your customers instantly and respond immediately.

A common reaction to seeing what people say about you is to think “if only I could talk directly to these people about their beliefs.  Then, I could convince them.” Now, you can!

To the same question above, we wondered if the media that follows the wine and spirits industry might have different topics on their minds.  So, we quickly selected only the media respondents, clicked on the Word Cloud button and this picture appeared: 

Whereas the top-of-mind words used by the larger audience were “food, fruit, price, friendly, oak, aging”, the media has prominently added “complex” and “smooth”.  If we were to speak about these wines to a journalist then, we might stress both the complexity and smoothness of the wines as being key factors that make them so good with food.  It’s this type of parsing that can enable you to tailor your response to any particular trade or consumer group based on factors that you define.

Now, let’s go a step further because DirectLink™ makes a seamless connection between survey responses and direct marketing.

Among the DirectLink™ features on the control panel, you’ll see that there is another button on the upper right that says “Get Emails”.  Clicking this button immediately downloads an email list of only those people who responded to the question or multiple-questions you selected.  You can send them an email using the words they’ve used in response to your question that is specific to their ideas, perceptions and beliefs.

Who can use these 3 features that come with DirectLink™?

• Brand marketers trying to understand what people think about their products.
• Sales managers who want to improve and tailor their sales pitches.
• CEO’s who want to test a new strategy with their customers.
• HR managers who want to assess employee morale or improve internal services.
• Trade association managers who are seeking ways to raise awareness and open doors for their members.
• Foreign trade development officers who want to better understand what makes their country attractive.
• Tourism departments that want to know what will motivate consumers to visit.
• PR and ad agency account executives who want to know what’s on their client’s customers’ minds so they can address them in marketing communications.
• University and college administrators that want to understand and respond to student or alumni views.
• Non-profit development directors seeking the keys to increased fund raising.
• Political campaign managers who need to understand what voters want.

The list goes on and on.  All of the above have used DirectLink™ in the past and now these new features make it even more effective and faster.  We can make your social media programs more effective and improve the ROI of research or direct marketing programs.  If you’d like to know how DirectLink™ can help you and see an online demo, let us know.

Tags: Assumptions, CALCAT©, Change, Consumers, Corporate Myopia, CRM, Customers, Database, Demographics, DirectLink™, Forward-Looking CRM, Future Performance, futureshift, Marketing, Multi-variable, Multi-variate, Outcomes, Past Performance, Relationships, Social Media, Strategy, Winning