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

This is the third of a series on Mistakes Countries Make and How They Can Get It Right.

Those immortal words were heard in millions of American homes every Sunday night, during the 1950’s and 60’s, as they were spoken by television impresario, Ed Sullivan on his weekly variety show.  His show was so popular that it was common for children and adults to mimic Sullivan’s nasal accent saying, “Tonight we have a really big show.” A “really big show” for Sullivan fans meant an extravaganza of music and theatrical variety.  It wasn’t Elvis Presley’s first television appearance but certainly was his most famous.  It’s where the Beatles were first seen by most Americans and where viewers were introduced to opera and ballet.  If it was big in entertainment, it was on Ed Sullivan.

The idea of the big show continued into business where today, the really big shows are the Consumer Electronics Show, National Housewares Show, MacWorld Expo and many more.  Large trade shows have become prolific in the U.S. and around the world to the point where they are almost a commodity.  Their cost for exhibitors has increased rapidly placing a premium on those shows where one can see a clear rate of return.

Yet, despite the high costs of trade shows, the idea of the “really big show” has morphed into private, branded trade shows and has become a part of many marketing programs from foreign industries.   It has become common for foreign governments to come to the U.S. and hold large private events for their industries such as food, wine, textiles, technology and more.  An event company and PR firms are hired, hotel and exhibit space secured, visitors and prospective buyers are recruited, foreign companies provided with exhibit space and dignitaries flown in to cut the ribbon or give a keynote speech.

The expectation is that the U.S. media will show up (they rarely do), give the event, its organizers and the foreign industry the right amount of fawning coverage in newspapers and magazines and that buyers will attend with their wallets at the ready.  To ensure the event’s success, the media from the home country is brought in, photos are taken, ribbons cut, speeches made and the event is widely proclaimed to be a grand success…except that it’s often not.

What can’t be seen from abroad is that Americans have become jaded by the extraordinary amount of marketing clutter in their lives.  Surveys have suggested that Americans are exposed to more than 1,500 marketing messages a day.  From the time they wake up until they turn their lights out at night, Americans are bombarded with radio, TV, print, Internet, outdoor, mail, email, phone and tradeshow messaging.  Of course, this takes place in other countries but it has been going on for more years in the U.S.  What foreign visitors most comment on when they visit the U.S. is the number of choices that one has during the day, whether shopping, viewing, listening or traveling.  It all adds up and the bottom line is that the only thing that makes a difference in our lives is the value of our relationships.

When there are so many modes of marketing, word-of-mouth from people we trust has so much more influence than anything else on what we buy and the decisions we make.  Just as we trust our personal friends, business relationships are what influence us in the end.  With all the decisions we have to make, and features and benefits to evaluate, it’s the value we place on relationships and the people who make recommendations to us that makes a difference.

The problem with the “really big show” is that relationships are begun there but not developed or solidified.  We use shows for looking, evaluating, asking and considering but rarely for buying.  When considering any product that has a high cost or a long-term evaluation or testing phase, shows, at best, serve as introductions.  It’s the work that takes place afterward that makes a difference.  Small events or conferences are often better than big ones because they allow prospective buyers to ask more questions and conduct a give-and-take with the seller.  Prospective buyers considering a foreign supplier want to know that both the individual they’re dealing with and their company isn’t going to be in the U.S. for only a week here and there.  They want a commitment to a relationship, to being involved for the long-term, to possible risk sharing or even partnership.

Trade associations and their government partners who have the mandate to promote industries, should consider:

• More small events are better than a few large ones.
• Teach your people to engage with Americans.  Too often foreign business visitors to the U.S. stay back and don’t approach Americans.  We like you to reach out to us.  In fact, events that are built around networking are likely to be more effective than those built around display.
• Events, big or small, will be more successful with both pre and post event follow-up programs.  Prospective sales are most often lost because of poor or slow follow-up.
• You should have an active online social media program that reaches out to prospective buyers.  You’ll know the difference when your social media site has far more Americans or customers on it than your domestic friends and associates.  It’s incredible how many companies and industries tout their facebook and linkedin pages that are filled with people from their own country.  Where are the buyers?  Who’s building relationships with who?  To what end?
• Remember that social media sites like facebook and linkedin are closed systems and have their limitations.  There are no lists to download nor will you have access to anybody’s email address.  At futureshift, we build private communities that support events but more importantly build and support relationships because members self-subscribe and willingly give you their private contact information.
• Rather than think about events, think about building communities.  Community members gain trust for each other and that’s what builds brand loyalty and sales.

So given all this, what made Ed Sullivan such a successful icon?  Sullivan spoke to American audiences in the 1950’s and 60’s when modern marketing was in its nascent stages.  He spoke to us every week, his way of building a relationship with us, and he always showed us things we had rarely seen before.  If you’re a modern day business version of Ed Sullivan, which probably means your name is Steve Jobs, go ahead have the “really big show”.  Otherwise, do something that makes sense and works in today’s U.S. marketplace.

Tags: Americans, Assumptions, Communities, Customers, Ed Sullivan, Events, futureshift, Governments, Marketing, Media, Social Media, Steve Jobs, Trade Associations, Trade Shows, U.S. Marketplace