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Posts tagged with Customers

How do companies lose customers?

Posted on July 23, 2015 by 2 Comments

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 inertiasupplier 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 25th 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.

problemsBut 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?”

consequences2“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.


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Best Practices in Customer Engagement

Posted on July 21, 2014 by Leave a comment

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:



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Share your comments on customer engagement

Posted on June 26, 2014 by Leave a comment

“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?

Screen Shot 2014-06-26 at 3.00.36 PMWe’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.




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Strategy? Why do we need that?

Posted on November 21, 2013 by 10 Comments

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.

5year copy copySomething 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.


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Where does good strategy begin?

Posted on November 11, 2013 by 1 Comment

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? Ad campaign #1
  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. Ad campaign #2
  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.


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Dancing on Michael Porter’s grave

Posted on January 15, 2013 by 3 Comments

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.


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3 social media/research enhancements you’ve never seen before

Posted on October 25, 2012 by 3 Comments

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.


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2 contrasting days in America

Posted on October 13, 2012 by Leave a comment

It has been several days now that we watched the Vice Presidential debate and have been subjected to a discussion that’s more about whose demeanor and facial expressions have been better than about their policies.

Depending on from which side you see things, President Obama has either brought the economy back to a place where it can now recover or he’s brought us to a Leninist-Marxist precipice.  Governor Romney is either the biggest liar that has ever run for president or he is just the man we need to help America get back to its revolutionary roots.  It’s that extreme and it’s that myopic.  We’re losing sight of the big picture.

Yesterday, I attended the annual shareholders’ conference for The Baron Funds, a group of mutual funds led by Ron Baron who believes that it’s the quality of people who make great companies and that investing in them is a long-term bet on America.  The event is held each year at New York’s magnificent Lincoln Center. 4,000 shareholders attended.

During the morning, you get to listen to presentations from CEO’s of companies the funds have invested in.  Then at lunch, various entertainers perform in one of the many auditoriums at the Center.  Yesterday, the choices were British rock singer Joss Stone, Broadway star Kristin Chenowith, or jazz stylist Harry Connick Jr.  After returning from lunch, the senior analysts from each of the Baron Funds engages in a panel discussion about the past year’s performance and how they pick stocks.  When this ends, there’s a musical performance from a big name headliner.  In the past, it has been people like Rod Stewart, Bon Jovi, Elton John and others who you’d pay a lot of money to see elsewhere.  Yesterday, the headliner was Celine Dion – more on Celine later.

I don’t know if Ron Baron chose the CEO’s who made their morning presentations to make a point about the country’s economic stewardship.  I want to believe he did.  Here’s a brief encapsulation:

  • David Rubenstein, Co-Founder & Co-CEO of The Carlyle Group showed a different set of values for private equity firms than we’ve seen during the past year from Governor Romney’s turn at Bain.  From its start in 1987, Carlyle now manages $160 billion in investments with the goal of supporting good companies that create jobs and prosper for their shareholders AND employees.  For all his success, Rubenstein exhibited an amazing self-deprecating sense of humor and stressed the importance of giving back to America.  He has put his money where his mouth is by joining Warren Buffet in giving his fortune away.  What came across more than anything is that good values build great companies.  By the way, he said he has no problem with the regulations imposed by Dodd-Frank, which some politicians want to remove.
  • Steven Spinner, CEO of United Natural Foods was a little more meat and potatoes in his presentation…well actually, more tofu and bulghur… but he expressed a need to be more conscious about our environment and both the chemicals we put into our environment and our bodies.  The company is now the largest distributor in the U.S. and Canada of natural and organic foods and has become a $4.5 billion company with 65,000 sku’s and 23,000 customers.  Healthy foods raise our awareness of our environment and build successful businesses – quite a contrast to the right wing preaching that the government (and in particular, Michelle Obama) is trying to force feed us healthy foods we don’t like.
  • Robert Katz, CEO of Vail Resorts showed how a sizable business ($1 billion +) dependent on nature can prosper when it focuses both on good environmental stewardship and helping people enjoy all the recreational possibilities that enables.  What’s interesting is that they don’t own the land their resorts sit on.  They lease it from the National Forest Service, and have to work with the Service to show they are deserving of both permits and leases – a great example of how government helps improve our lives, supports business and is worth the investment we all make in it.
  • Frank Coyne, CEO of Verisk Analytics is all about Big Data.  This company dominates the insurance risk assessment business.  I have no idea of his political leanings (or most of the others for that matter) but he’s a former Marine who grew up in a lower middle class family from Scranton, PA.  There was not a trace of ego in his presentation.  He is clearly an American success story who rose from the middle – no trickle down there.
  • Kevin Plank, Founder and CEO of Under Armour, a $2 billion company that began in his basement in 1996, told an amazing story of how his experience as a college football player took him on a search to find better performance athletic clothing.  He displayed optimism, competitiveness and personal charm in telling his success story.  There was not a hint of dismay in his approach to the future.
  • Rich Barton, Co-Founder & Executive Chairman of Zillow, Inc. was the moderator of the analysts’ presentation so he wasn’t really focused on his or his company’s story.  However, he founded both online travel giant, Expedia, and Zillow, an online real estate search site.  He’s another American success story who displayed extraordinary optimism.

The last presentation of the day came from Ron Baron, CEO of Baron Capital Group.  Baron founded the funds in 1982.  Today his enormous success has made him a billionaire.  I’ve never met the man but in every conference I’ve attended, he always stresses his middle-class roots in New Jersey, his optimism about American business and his belief in America.  He doesn’t hesitate to mix patriotism into business.  As in past years, Broadway star Kelly O’Hara came out to sing America The Beautiful as everyone sang along.  This year, there was an additional treat of Kristin Chenowith singing the national anthem.  She raised the roof and 4,000 hearts with it.  (That girl has pipes!)

Baron gave his outlook on the economy, the stock market and reminded us why a long-term investment philosophy in good people who build great companies pays off .  He praised Federal Reserve Bank Chairman, Ben Bernanke for his stewardship of the economy to a smattering of applause.  He showed how the stock market has climbed 60% since the days of doom and gloom four years ago to wild cheers.

Then, came the part that left me stunned.  He noted that we’re soon to have an election between President Barack Obama — maybe 20% of the audience applauded — and Mitt Romney to loud, enthusiastic applause that drowned out anything that had preceded it.  It left me wondering whether anybody had been paying attention all day.  The contrast to private equity investing with the Romney approach from David Rubenstein ‘s Carlyle Group couldn’t have been clearer.  Protection of our food sources and environment have helped businesses succeed, not fail due to over-bearing government regulation.  The economy never fell off the cliff.  Businesses and the stock market prospered and now they’re cheering for an uncertain change that promises to strip away a lot of the government support and regulation that has contributed to both success and fairness?  I don’t get it.

I grew up in a family that was firmly Democratic, although I believe I am more fiscally conservative than my parents.  While I live in New York, I continue to vote in Maine where I still own property.  There, like many Mainers, I’ve settled into a mode of independence, voting for moderate Republicans like Bill Cohen and Olympia Snowe, independents like Angus King and Democrats like George Mitchell.  The contrasts to me this year couldn’t be clearer.  While I’ve lost some of my love for President Obama, I think he provides a healthier direction for America.  We have serious problems to fix but I don’t believe those will come from cutting everything except defense and frankly, I have a problem with disingenuousness.  Neither party can claim sainthood in this regard but I saw Romney claim himself as “severely conservative”, heard his campaign manager say they could just take out the “etch a sketch” and remodel him once the Republican nomination was secure and now he’s transformed himself into a moderate.  It reminds me of that famous Lincoln quote:  “You can fool some of the people all of the time, and all of the people some of the time but you can’t fool all of the people all of the time.”

In the end, just like Ron Baron says and practices, it’s about people and their values.  Not only do good people build great companies but they also build great countries.  I left the conference a little dismayed at the shareholders’ reaction to the election but still optimistic about the long-term.  To that, I can thank Ron Baron for this annual event.

This brings me to Celine Dion.  I’m not a fan and never have been.  She’s too kitschy for me.  Yes, she’s talented and a professional song stylist who’s benefited from great writers but in one song, Kristin Chenowith blew her away.   After all the great rock stars I’ve seen at this event, I was surprised at her appearance.  “Las Vegas East”, Ron Baron called it.  It certainly was.  Her big band, violins, lots of costume changes and a self-aggrandizing video were all on display.  Like so many other successes — only in America.

I thought of staying for a few songs and then leaving but then I thought of my daughter.  She’s a fledgling comedy writer in LA and she loves Celine.  She’s dreamed of going to Las Vegas to see her and has even asked me to foot the bill for the $250 ticket.  You can imagine how far that went.  But as Celine came on, I texted her knowing that she would be excited.  It was only the texting banter between us that kept me there for the duration.

Here it is:

So the afternoon entertainment is Celine.


Here she is:

You are breaking my heart.


Tell me everything!  WHAT IS SHE WEARING?  How many costome changes?  How many times is she fake crying?  AHHHHH

Is she amazing????  OF COURSE SHE IS!!!!

I guess because I own $30K of Baron Funds.  I wish you were here.  She’s too sappy for me.  I don’t know how long I can last.

OMG omggggggg!!!  Just revel in it.

Oh, here come all the big hits!  “I’m your lady” oooh la la


Imagine her an alien from a special planet where the wind is always billowing her hair and dresses!

A lot of eyebrow action and the motions.  WAIT!  We have violins!  It’s a costume change!


This is so unfair.

We’re waiting with bated breath.  Maybe she went out to pee.

Slinky, black and silver.

It’s cabaret time.

She’s magnificent!

I’ll record Titanic if she goes there.


She tucks her 3 little ones into bed and there’s video to prove it.

Stop it.

I think I’m going to throw up.

Me too.

It’s “Beauty & The Beast” time.

Oh, I love that one.  This is so unfair, it hurts.

I feel your pain.

It’s another costume change.

What will it be?  There’s James Bond music.


No, she just went to pee.  She’s singing “Goldfinger.”

A medley of 007 songs.  She’s got her fist in the air.  The audience is in a state of rapture.

Now, she’s patting her hip and swaying.  This Québécois lady knows how to have a good time.

She sure does.

This all sounds glorious!

A little piece of heaven.

I’ve run out of responses.

I’m just really jealous.

It’s “All by myself” now.  I know how she feels.  Carla left to go to a meeting.  So sad.

Double fist pounding on her chest.  Serious stuff.

Now, she’s singing “Spinning Wheel”.  Am I back in college?

Costume change!

This is amazing.  Never forget how amazing she is.

Elvis is in the building!

Here we go:  I’m sinking.  There’s an iceberg and the ship is going down.  I’m recording this.

It’s over.  I’m exhausted.

Holy crap!  Me too.

The Baron Funds Annual Conference is one of my favorite days of the year.  I am reminded of why I am in business and what I tell my clients through my consulting business.  I’m entertained in this incredible city and my belief in America is always restored.  This year, it also provided some fun with my daughter.  Is there anything better?


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10 ways to make your customer database work harder

Posted on September 18, 2012 by 2 Comments

It has become a standard part of every organization’s marketing plan to have a database of customer emails.  Millions of companies and institutions are sending out email newsletters, promotions and solicitations everyday, both for consumers and the trade.  You’re probably receiving many of them yourself and if you’re anything like me, you probably delete all but a few as soon as you see them land in your email box.  More often than not, these are emails from companies you know or may even have requested information from.  The others end up in your junk folder.

About 20% of these emails get opened but a much lower number are actually read — click through rates are about 5%.  Another way of saying that is 80% of these emails are never opened and 95% are never read.  When you think of it that way, you have to ask how you can improve?

At Futureshift, we have a different approach on how to make databases work harder and we put them to work for our clients.  Here are 10 tips for improving your database performance:

1.  Have a database strategy.

Think of it this way:  Would you advertise without an objective, creative strategy and message?  Database marketing is no different.  What do you want your database to do for you?  Who do you want to reach?  What do you know about them that tells you what they want to hear from you?  Do they all want to hear the same thing or should you segment them by interest or need and address them accordingly?  Think these things through and write a strategy that keeps your database use focused, disciplined and integrates it with your other marketing programs.  Otherwise, say hello to junk folders.

2.  Think of your database as a community.

If you think about databases as numbers of files and demographic fields, you’re working with an outdated framework.  Imagine that you’re the mayor of a town and each member of your database is a resident.  They live in separate areas that may have demographic and psychographic markers but more importantly, they have different needs.  Some areas may want better schools, some more security or different zoning.  Databases are no different.  They can be grouped by needs and then you can address your database members with just the information that they’re looking for.

3.  Don’t buy.  Build!

You can build your database more quickly by buying names from list brokers.  You also can alienate a lot of potential customers and get labeled as spam.  It’s better to build one by one, if necessary, even if you’re starting at zero.  There are a number of techniques that can raise awareness of your company and you’ll add prospective customers who actually are interested in learning more.  For one of our clients, we began at zero several years ago and now have 8,000 members of their trade and nearly 100,000 loyal consumers signed up.  Click-through and open rates are higher than industry averages and unsubscribes are lower.  The reason is that people want to be there.

4.  One size does not fit all

Perhaps the biggest mistake companies make with the information they send to their database members is that they send the same information to everyone.  That’s a fast way to increasing the number of unsubscribes.  People want information that pertains to their needs.  Email is similar to advertising in that you have only a few seconds to attract the reader’s attention.  It’s a quick trip to the delete key.  A singular approach, whether in e-newsletters, promotions or other announcements will speak to only one group.  Over the years, the amount of competition and market clutter has fragmented both trade and consumer markets.  You can think of it like cable TV.  We now have access to more than 1,000 channels with most focused on a specific area of programming to meet specific viewer needs (history, cooking, discovery, shopping, etc.) When programming doesn’t address needs, people change the channel…or they hit the delete key.

5. If you can only know one thing about your customers, know their frustrations.

A frustration is simply an unmet need.  If you can fulfill unmet needs, you’ll have a customer.  How do you learn what frustrates people about your product?  Ask.  Your first email to a prospective database member should be to ask questions about their frustrations and needs.  There are some easy ways to use either closed- or open-ended questions to do this.  Once you understand unmet needs, you’ll see that people can be moved into needs-based segments.  You’ll also learn that many of the demographic and psychographic markers you used to use are really not an accurate guide to predicting what customers and non-customers want to know.

6. Your job is to listen, not tell.

Most databases are used to broadcast information about companies and products, and the goal of most database acquisition programs is to build quantity rather than quality. The conventional wisdom goes that since conversion percentages run so low, you’ll need larger and larger databases so that very small number of customers will continue to grow.  But at the same time, you’re making yourself vulnerable to a competitor who is better at building database size than you and has more resources to offer incentives.  The old adage that it’s better to talk to people not at them is true with database marketing too.  Ask questions, find out what people need, and what they really want to hear from you.  We often ask “What is it about this product that companies tell you that is of no use to you?” and “What would you like to know that nobody has asked you in the past?”

7. Tell them what you heard.

Whether trade or consumer, the first question people ask is “What do other people like me think?”  B2B customers want to know how their peers are dealing with the same issues they have.  Consumers want to know how others, just like them, solved the same problems or used certain products.  This is why early chat rooms were immediately successful and led to the growth of social media.  After you ask your customers about their needs, report back to them on what you learned.  This says that you listened to them and that you have an understanding of who they are, how they are distinct and what they share with others like them.  It pays off.

8. Involvement = Loyalty

This is the payoff.  Build by asking, then listen, acknowledge and then ask again.  Stop giving a monologue to your customers and build a dialogue with them.  Do this enough and you’ll be able to get them to help you add qualified people to your database through friends and family or associates programs, join advisory boards or participate in regular feedback panels.  Over time, you can turn them into your brand ambassadors and expand your marketing reach.  Isn’t this the real goal of marketing?

Two other commonly misunderstood caveats need to be kept in mind:

9. Facebook likes are not a customer database.

Social media has its uses.  It’s a like a TV channel that goes out to the masses.  It can be great for raising awareness but it does not acquire an audience that you can always reach nor does it help you segment customer needs.  Social media is like shooting a shotgun and hoping you’ll hit your target.  They’re out there but you don’t know where they are nor when they’re paying attention to you.  Database marketing is a completely different marketing tactic and one is not a substitution for the other.

10. Using successive emails to qualify people.

Many companies capture emails from people who visit their websites.  Then they begin a series of successive emails and key future marketing based on which email garners a response.  However, it doesn’t work that way because customers don’t give you that many chances.  Keep in mind the environment in which your email is one of dozens or even hundreds your customers or prospects receive each day.  Your first email has to give them a reason to respond.  Draw them into a dialogue and then you can qualify them along the way.

Follow these ten tips and you’ll improve the performance of your database.  More importantly, you’ll get closer to your customers and create relationships that generate sales and referrals.  While I’m advocating asking a lot of questions of your database members, note that I didn’t mention market research once.   Market research will tell you what people think at a point in time and that information can be a good evaluative mechanism.  But this is about having a conversation and using some digital tools to allow you to engage your customers in very large numbers.  While we have our own proprietary tools for increasing customer involvement and loyalty, we can also help you do it on your own.  The important point is to stop looking at database marketing as a linear process and see it as a relational part of your marketing program.


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CRM Systems are a form of corporate myopia…but they don’t have to be

Posted on July 19, 2012 by 2 Comments

Investment management firms always warn that “past performance does not necessarily predict future results.”  It makes sense.  Just because an investment manager has hit it big in the past doesn’t mean that he or she will know when the next big rise or fall in the market will come.

So why doesn’t that same caveat go with Customer Relationship Management (CRM) systems?  Companies spend millions of dollars with companies like Oracle, SAP, Salesforce, Microsoft and many others (and what’s a small to medium size company to do when faced with the investment and difficult implementation?).  These systems work off of customer “touchpoints” to make relationships and customer management easier.  A “touchpoint” is any past interaction with a customer whether it is a sale where product purchase and customer demographics are acquired, a complaint, inquiry or field contact (assuming the field rep enters the information properly and accurately).

Have you ever gotten upset that you can’t understand the foreign accented customer center rep when you call to ask a question about your bill?  Some of us don’t care but others find it annoying.  It’s because the company using the CRM system didn’t note that your call should be routed to a U.S. based call center and decided it’s cheaper to have your call go to someone they’re paying only several dollars a day, customer satisfaction be damned.  CRM didn’t help there.

Or do you get annoyed when political campaigns send you two or three fund raising requests a day while never asking about your beliefs?   They use CRM too but the systems don’t gather your opinions and beliefs.  They only note where you live, how you voted last time, whether you gave before and possibly what type of car you drive and magazines you read so they can create a profile they believe is predictive.

How about coming home to find the post office has delivered four L.L.Bean catalogs?  Waste of paper?  Absolutely, but blame their CRM system for the confusion.  Amazon is quite sure that because you bought a book about wine, you’ll absolutely want to purchase a new wine cooler they’re carrying.  You may not have even noticed but their CRM system says you’re a prospect.  Millions of customers, sales, inquiries, complaints equals billions of data points so inaccurate interpretations, solicitations, mail and email deliveries are bound to happen, right?

Not necessarily.  What if something like “forward-looking CRM” were available and affordable?  Imagine if companies or politicians asked you what your needs and frustrations are and once they knew, could use that information to tailor responses to you and provide better products, services and build their overall customer relationships.  Imagine politicians asking what his or her constituents believe – the massive Town Hall that Ross Perot used to rant about – and adjusting their positions to truly be representative of what voters are telling them.  Sound impossible?

It exists

Futureshift’s DirectLink™ system enables you to ask any group what they believe and why, what their needs are and why, and most importantly, what their frustrations are and why.  You can ask in an open-ended way questions that begin with “why”, “what” and “tell us about” and people write like they’ve never been asked these questions before.  Then, CALCAT™ software takes over and helps tag ideas and beliefs so that qualitative information can be shown quantitatively in bars and graphs just like people are used to.

Below is an example of how DirectLink™ can reveal more about customers.  The topic is wine but it could be any product or service.  The question in the chart below (“What one piece of information could a winery give you that you would find valuable when selecting a wine?”) was answered by 3,119 people and you can see the array of responses.

But now, let’s say you want to know more.  How did people write about some of their answers because you might want to refine the way you give them information.  So let’s say you select the response “Flavor/Tasting notes”.  You can click that response and then one button, called “Get Verbatims”, which instantly shows a screen like below.

Now, you can read how all of the respondents talked about “Flavor/Tasting notes” and you can see the descriptive language they use or even create word clouds so the most common terms stand out and then you’ll know what the customer’s lexicon is so you can know just what language to use to talk back to them.

Now, it gets more interesting because you’ll want to talk back to them in a way that is specifically tailored to their needs.  This group has indicated that they want better flavor and tasting notes from wine marketers.  What if you have something to say to them about this?  Is there a way you can reach them immediately?  Easy!  All you do is click the button at the side that says “Get Emails” and an email list of all the people who are looking for better flavor and tasting notes downloads to your computer, or for that matter, to your mobile device if you’re on the road.  Now, you can email them something specific to their needs.  This ease in immediate implementation makes it both practical and effective for small businesses to target market.

It gets better

Typically, with most products, marketers want to get more specific in regards to addressing consumer or customer beliefs.  They might have three, four or five variables they want to combine together and this can take days to obtain multi-variable analysis, let alone find the people behind those beliefs.  Not any more.  Multi-variable analysis and grabbing the people in that specific multi-variable segment is now instantaneous and automatic.

Above, four variables have been selected:  (1) women; (2) age 50 – 59; (3) want Flavor/Tasting notes; and (4) prefer to get recommendations from the sommelier.  Now, you can look at every question you’ve asked for that group or you can quickly download a list of email addresses for this refined segment so you can send them a message tailored to their needs.  The result is a personalized response tailored to your customer’s needs.  This creates more customer awareness, interest and loyalty because you’ve shown you’ve listened and are responsive, which is the point of CRM to begin with.  Perhaps of more note, however, is how easy it is to operate the system yourself without a bevy of expensive consultants descending to your business and drowning you with minutiae.

Making CRM work better

DirectLink™ can act as a “look-forward CRM” system for small to medium sized companies with databases of several hundred thousand.  Groups can be defined by a series of responses to questions and messaging can be tailored to the language they use, beliefs they hold or frustrations they’re holding.  In this way, marketing can address the current and future needs of consumers and customers and be truly predictive at a cost that makes it more approachable than those big CRM systems.  With larger databases, DirectLink™ information can be appended to databases to make those systems “needs-based” and ultimately more effective.

DirectLink™ and its underlying software platform, CALCAT©, are proprietary products owned by Futureshift, Inc.  DirectLink™ is fully functional for both English and Spanish speaking markets.  For more information Forward-Looking CRM, write strategy@futureshiftnow.com


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