5 Key Questions to Get New Business Ideas Off the Ground

We all have great ideas, or work with people who do. How many of them actually go anywhere? Brainstorming is fun, coming up with new ideas is exciting. But to turn that fun and excitement into tangible products or business you need to answer some key questions to frame your idea and give it some structure or foundation to help it get off the ground.

I’ve had the privilege to work with some people who are exceptionally bright, visionary, idea-generation machines.  For some people this is a hobby.  My colleagues tell me I’m good at providing structure to their ideas, so here are the questions I ask, and help them answer:

1. What problem are you solving, or what possibility are you offering?
2. Why should your customers care? Why should you care?
3. What makes you unique, different, or memorable?
4. What skills, people, or services are you missing that prevent you from presenting a complete offering?
5. What is your business model? How do you make money?

Answering these questions will tell you if have, or don’t have, a viable business concept worth further exploration.  All five questions should be answered from the “customers” perspecitve and the need that is being filled.  Remember if your business doesn’t have customers, then you don’t have a business, you just have a hobby.

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Book Review – “Answering the Ultimate Question”

Since I have written in the past about Net Promoter Score (NPS) the publishers of this most recent book sent me a copy and it’s about time I posted my review.

There has been much criticism of NPS as a single measure of loyalty.  With most of the criticism centered around the disbelief that a single metric can be reliable, and the inability of others to reproduce the results from the original book.  With this recent work it looks as though the authors are more on the path of using NPS as a process for building a customer-centric business than as a single indicator of ability to grow.  The authors state “Net Promoter is a metric and way of doing business.”  So while the book answers some questions, it still leaves others unanswered.

Pro’s:

• It backs off from the single metric concept and offers a good framework or operating model for collecting, analyzing and acting on customer feedback.
• It provides several good options for understanding and segmenting customers and what to do with each segment. It also offers a good methodology for driving organizational change towards becoming a more customer-centric organization.
• It finally talks about multiple question surveys for gathering customer feedback.
• They urge caution when using NPS to impact employee compensation.

Con’s:

• It lists a major tenet as “linkage to financial outcomes” but doesn’t discuss or show how to really do that.  How does one prove that an improvement in financial performance is due to an increase in NPS?  They state that it does, but don’t show how to prove it.
• Their discussion around correlation, regression, and relative impact analysis without a detailed example is a major fault.  They tell you why it’s important, but it really falls short on implementation.
• Much of their discussion around customer-centricity is not all that new.

So if you are struggling with how to start on the path towards a customer-centric culture it’s a good read.  If your still hoping that asking one question will get you a loyal customer base, keep hoping my friends. It’s just not that easy.

How Your Digital Touch-Points are Harming Customer Relationships

I wrote a post a while ago about the problems your email subscribers are going through.  I see the problem has now spread to many digital touch points you have with customers.

Many of these touchpoints offer confusing,  unclear, or incorrect information that is damaging your customer relationships.  So let’s examine the patients, determine a diagnosis, and provide a cure.

The Exam

• A webinar invite from a “Marketing Company” that is offering a free trial webinar (they usually charge for their webinars).  The invite asks me to confirm participation, but there are no clear directions or a link to confirm.  The invite also has the incorrect time on the email invite, and then I find I can’t even logon to the webinar once I learn it is happening.  And they want me to pay the next time?
• A very popular blog that I subscribe to via an RSS feed aggregrator sends me a daily digest email that only shows a message that this popular blog has changed, while all other subscriptions show at least a portion of the latest post. Too much other content to read so I rarely click on the link to go read the blogpost.
• Clicking on the “Change My Email Address” link at the bottom of newsletters only offers the ability to cancel my subscription instead of change it. Fine, I’ll just unsubcribe then.
• Downloadable file names are meaningless and don’t help me remember the content or the business it came from. When cleaning my desktop it’s just easier to just drag it to the recycle bin.
• Social Media apps that I add to my profiles or pages are just too hard to use or don’t do what they claim. “Remove App” is very easy to click.
• Complex sign-up and security procedures for content that isn’t that important. Required fields such as date of birth and security questions for email newsletters just doesn’t make sense.  I’ll just move on to less secure content.

Possible Diagnosis

• There are no standards for customer communications.
• There are no quality checks of the content.
• There are no customer experience checkpoints or testing.

A Cure

• List all the different ways your business communicates or touches customers (blogs, downloads, email, RSS feeds, social media, website, webinars, etc).
• Determine the call to action for each touch point.  What do you want the customer to do at each touchpoint?
• Test each touchpoint and not just once – for quality, calls to action, and customer experience. Test them on a regular basis because a change in your website may impact any or all of the touchpoints you didn’t consider.
• When testing, do it from the customer’s perspective. Does it allow the customer to do what they want and what you want them to do?
• Here’s the key – don’t have those who created the touchpoint/process test it themselves. You are too close to it and will often miss critical issues. Have someone else test it who is not at all related to your department, or have trusted colleagues or friends outside your company test your process.

Hopefully this will prevent the spread of this disease, and keep your business and your customer relationship healthy.

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Why Social Media Won’t Work For Selling

While social media sites such as Facebook, LinkedIn, and Twitter grow at staggering rates, companies are struggling to find value in these social media sites.  Afterall, if this is where your customers hang out, surely you need to be there to sell to them.  Right?  Wrong!

If you’re approaching social media as a “way to sell” then you’ve got it all wrong.  Companies need to look at social media from their customer’s perspective, and see it as a “way to buy.”  Your customers are not using social media to be sold, they may, at times, use it as a source of information and support to help them buy.

Helping Your Customers Buy

1. Be relevant. First and foremost your social media presence should focus on being relevant to your customers.  Offering the information and products they want, when they want it, and how they want it.  It’s really about customer advocacy, which builds trust, and trust leads to longer and stronger customer relationships.  The number one issue for email unsubscribes is relevancy, and it would stand to reason that same issue will hold for all communication channels.
2. Set clear expectations. Using social media to help customers buy is all about expectations – setting them, and meeting or exceeding them.  Be sure you let customers know what type of information they’ll receive and how often;  and stick to those parameters.

Blending Push and Pull

By combining the push of messaging with the pull of information and interactions, social media can be used to help build customer relationships:

• Push – News & Events
• Push – Product Information & Promotions
• Pull – Customer Dialogue & Insight
• Pull – Customer Support (SalesForce.com Social Media Integration)

The “pull” activities are more resource intensive, but that is where trust and loyalty will really be earned.  Stop using social media to sell, instead find ways to use it to help customer’s buy.

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The Pepsi Challenge – Lessons Learned & How It Relates to Your Business

There is an excellent article in the most recent issue of Colloquy titled The Neuromancers.  It attempts to answer the question “Is there a buy button inside the human mind?”  The article looks at the Pepsi Challenge from 1975, where consumers showed a definite preference for Pepsi over Coke in the blind taste test.  Almost a decade later and with declining market share Coke launched New Coke in 1983, which is was an utter failure.  But if market share was declining, and New Coke’s taste was closer to the preferred Pepsi, why did it end in disaster for Coke?

Lesson Learned for Coke

According the Colloquy article, Coke underestimated the power of their decades of marketing.  What mattered to Coke loyalists was “their emotional connection to Coke as a quintisential American brand.”  Coke consumers attached more than just the taste of the Coke to their buying decision.  They attached the powerful images and memories associated with Coke campaigns over the years.

… subjects who knowingly preferred Coke were recalling, perhaps subconsciously, positive memories and impressions from Coke’s advertising campaigns. Most subjects said they preferred Coke; but given a blind choice, many of them actually preferred Pepsi.  Cultural influences have a strong influence on expressed behavioral preferences…”

According to Sergio Zyman, Coke’s CMO at the time, as detailed in Guerilla Marketing Research:

What went wrong?  The answer was embarassingly simple.  We did not know enough about our consumers.  We did not even know what motivated them to buy Coke in the first place… After the debacle, we reached out to consumers and found that they wanted more than taste when they made their purchase decision.  Drinking Coke enabled them to tap into the Coca-Cola experience, to be part of Coke’s history and to feel the continuity and stability of the brand…  As soon as we stared listening to them, consumers responded, increasing our sales from 9 billion to 15 billion a year.”

What is the lesson for your business?

Most business can’t afford the marketing budget of a Coke to build emotional attachements over generations.  What you should learn here is that your customers don’t buy for just one reason. There are many factors that go into the purchasing decision.  Price may be most important, or it may not.  Features, customer support, convenience, quality, and the overall customer experience also weigh in on the decision.  It will be different factors for different types of customers.

How do you know what is most important to customers?  Do what Sergio Zyman did and start listening to customers, watch their behavior, and don’t always rely on a blind, single-feature test.

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What’s the cost of NOT listening to customers?

A company goes through a change at the top.  The new CEO comes from a financial background.  The new CEO institutes cost-cutting measures (after all, it’s what they know).  One item cut, all the customer feedback mechanisms – that means print surveys, point-of-sales surveys, and online feedback.  The company saves some money on cutting those items, but at what expense?

Is it a real loss after all?

I’m sure most readers will say that if they stop listening to customers then how will they know what customers want, or what customers think about their products and services, and what behaviors customers are exhibiting?  All valid points and probably true.  But the company could use other measures to track customer behavior such as revenue, purchases by segment, calls to customer support, and sales staff feedback.

What is the hidden price paid?

Think about the message the CEO is sending to the staff.  “We used to gather feedback, now we don’t, so maybe we don’t really care about our customers?”  It just seems natural to most employees to listen to customers.  For those not on the front-lines how else will they know that state of customer relationships?  For those on the front-lines how will they know if their experience is consistent with other front-line employees?  I have seen employee morale at companies like this really take a hit.  This change in policy, and how the void will be filled needs a good explanation from the new CEO to keep everyone on-board.

I’m all for cost-cutting measures if they make sense.  A real business leader needs to be able to balance cost-cutting with customer-caring.  I’ve yet to see a business only cut it’s way to growth…

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Why Customer Feedback Fails

With it so easy to collect customer feedback these days you’d think most companies would have an excellent “read” on their customers.  Unfortunately, that doesn’t seem to be the case (in my consulting practice).  While the increase in customer contact points (a.ka. listening posts) such as blogs, social media sites, online communities, and word-of-mouth have increased the quantity of customer feedback, many companies struggle with what to do with all this feedback.

We can understand part of the problem by looking at the results from a study investigating company usage of customer feedback by Respond (now part of CDC), which showed that:

• 95% of companies collect feedback
• 45% alert their staff
• 35% use insights gained from the feedback
• 10% deploy a change or improve processes
• 5% tell customers they used their feedback

So what we have is a lot of activity (collecting feedback) but very little in the way of outputs (changes or improvements).  It is disappointing to see how few companies actually tell customers they used their feedback.  Maybe that is because they did so little with it.

So why so few outputs from customer feedback?

There are several reasons, and unfortunately none of them are as easy to solve as it was to collect the feedback in the first place.  Some reasons that come to mind are:

1. The feedback mechanisms are poorly designed at the outset and deliver very little in the way of actionable insights.  Referred to as drowning in data, but starving for information.  Often times multiple tools that collect data at different customer touch points are inconsistent in their language rendering the data confusing.  Useless information is collected that only adds complexity to the interpretation of the data.
2. There is no process outlining what to do with the data once it is collected.  There is no clear owner of the data, there is no accountability to make improvements based upon the feedback, and there is no mechanism to track improvements.
3. Probably the most important, is the company itself does not have a culture of valuing customer feedback. I once had a CEO tell me that if a customer contacts him directly that his processes have failed!  He did not want to talk to customers directly, and as a result he now had a significant customer relationship problem on his hands.  Part of a healthy customer-centric culture is having clearly understood mechanisms for integrating customer feedback into employee compensation programs.

None of these are easy fixes, but if you truly are a customer-centric company you need to put customer feedback at the heart of your business.  To make sure it all works, keep it simple, make it all consistent, and make it part of your culture.  To accomplish all that you need to do your best to be able to correlate changes in customer feedback (leading indicator) to changes in the way you measure your business (lagging indicator).  If you don’t, make sure there are plenty of flotation devices around so you don’t drown in your data.

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