Category Archives: Value Propositions

A ‘Value’ Mindset is at the Heart of Customer Centricity

Value is the core concept of customer centricity

Andrew Kakabadse, Professor of Governance and Leadership at Henley Business School, UK, carried out in-depth interviews with leaders in more than 100 private and public organizations around the world to identify what is required for organizations and leaders to be successful. He came to the conclusion that the starting point for any successful organization or individual must be ‘value’. 

He says; “The insights from my research have a deceptive but refreshing air of simplicity: success is about delivering value and this is best and most reliably achieved through engaging with people, markets and data and then gathering evidence on that reality and making decisions accordingly.”

This research supports the notion that being customer-centric requires the creation and delivery of superior value to our customers. This ‘value’ mindset must prevail throughout the entire organization. Kakabadse found that ‘diversity of thinking’ is a key element in the creation of value. This enables, through teamwork and collaboration, a blending of ideas and viewpoints that results in innovative new products, services and processes that add value for customers. This should be supported by evidence – that is, feedback from and contributions by customers.

The Virgin Group has a mantra that says; “there is always another way.” This cultural norm encourages new ideas, differences of viewpoint.

IDEO’s core business is based on building new products using a diversity of viewpoints during their design thinking process. At IDEO they suggest there are three elements: inspiration, ideation and implementation. In their words: “Inspiration is the problem or opportunity that motivates the search for solutions. Ideation is the process of generating, developing, and testing ideas. Implementation is the path that leads from the project stage into people’s lives.”

When this approach to value is applied to building a customer-centric organization it galvanizes the change required to sustainably create and deliver superior value for customers. But it must become part of the customer culture.

You can find out more in The Customer Culture Imperative: A Leader’s Guide to Driving Superior performance.

How DollarShaveClub.com created a disruptive customer experience

If you think about what’s happening in the men’s shaving razor market it’s a little like a cold war era arms race. Each year more and more blades are added to the humble razor. The giants of the industry Gillette and Schick continue to add more and more features to their products but are they creating more value?

Michael Dublin from DollarShaveClub.com doesn’t think so. In a mere 12 months he has built an online subscription based razor business with more than three hundred thousand customers.

How? Michael recognized three major pain points for men when it comes to buying shaving equipment. Firstly razors are expensive! and they keep going up in price. Rather than getting more for less consumers are getting more for more…. Secondly the experience of buying a razor is far less than ideal (to put it politely). Razors a usually locked behind a plastic cage at the back of a Walgreens store and it take 20 minutes to get someone back there to let them out! Finally who really needs 5 blades? How close a shave do men really need?

How about a world where razors are bought online at low cost and sent to you each month – a just in time subscription model. Not only that but they are provided by a company with a sense of humor, that doesn’t take things too seriously (apart from disrupting the existing business models).

A great value proposition is worthless if no one knows about it so to overcome the inherent challenge facing any new business or new idea, Michael developed a video to communicate what dollarshaveclub.com is all about…

While it certainly is not a video that will appeal to everyone, it does a great job of speaking directly to his target audience – men fed up with spending a fortune just to keep up with the latest shaving technologies.

How knowing your customers improves your ability to communicate

Stop shouting at your customers

It may sound obvious but the better you know who your customers are and what their preferences are the better your chances of finding them without having to SHOUT!

How do you get the attention of your potential customers?

What media do your customers prefer to use to get information on the problems you can solve? With the ever expanding universe of media options how do you decide where to invest? Let your customers make the decisions for you.

Where do they spend time online? Where do they network? How do they learn more about their profession? Who are they influenced by?

Finding out more about your customer’s preferences is crucial to making the right investment decisions. However choosing the right media vehicles (mouth pieces) is only half of the journey. What you have to say to customers when you find them is even more important.

What insight do you have about customers that can demonstrate you know them perhaps better than they know themselves?

Being an Ironman triathlete one of my favorite examples of this comes from the following Cliff Bar commercial which shows what its like to be a “triathlete”

This super creative 30 second tv spot really speaks to the target customer. It says we know who you are and how you feel, it is a great example of connecting with customers on an emotional level.

Was it successful? Only Cliff Bar have the actual data on that but as a customer its something I love to talk with other triathletes about. The impact of the message also means that Cliff Bar is always top of mind when it comes to selecting or recommended sports nutritional products to others.

Which company ads or messages really stand out for you?

What you do screams so loud I can’t hear what you say

Actions are more powerful than words

Actions are more powerful than words

Customers are smart, they recognize pretty quickly if the messages you and your company are sending match up with reality.

You say you are customer focused but then you communicate poorly, deliver a product that doesn’t work and then I can’t get hold of you when I need a solution.

Unfortunately this is still a common refrain for many customers. This lowers customer expectations so much that companies that just get it right really stand out. Wow! you did what you said you would and it solved my problem……what a great experience!

Virgin is a company that really recognizes how to manage expectations.  This allows them not only to do what they said they would do but go the extra mile and surprise customers. This approach to exceeding customer expectations in turn creates more value and leaves their competition in the dust.

Here is Sir Richard Branson discussing how Virgin delivers on this approach:

“Doing things better doesn’t have to cost more – all it takes is a little creativity and attention to hiring, training and management…… rather than providing rules or scripts, you should ask them [employees] to treat the customer as they themselves would like to be treated – which is surely the highest standard”

Even if your strategy is not to focus on customer service as a differentiator ensuring your actions align with your words is crucial.

Ryanair don’t pretent to promise an outstanding customer experience, in fact in many ways it appears they go out of their way to treat customers poorly. They do however deliver on their fundamental promise “fly cheaper”.

The real problems come when companies over promise and under deliver. Do this consistently and customer trust erodes quickly.

Are your actions aligned with your promises?

Yesterday’s customers

Adam Hartung recently wrote about the costs involved in essentially defending the status quo. In the below chart it clearly shows Microsoft investing significant R&D funds and getting little return.

Chart from Business Insider:

RD cost MSFT and others 2009

In our world view this is clearly a case of a inwardly focused culture that has lost touch with the market and its customer base. The only way to grow is to attract more customers, sell existing customers more or provide more value you can capture with higher prices. It appears that Microsoft is continuing to serve yesterday’s customers, when there was really only once choice for office productivity software. As markets have opened up, Microsoft has been left behind relying on its old formula for success.

Now there is no question  the investments Microsoft has made has ensured the survival of its core business to date. But the question remains where is it heading? With the shift to the cloud and free applications and services online and the rise of streamlined coding and simplified products (think 37signals) how much value can be added to word processing, number crunching and presentation software?

Clearly its time to do something different but can it unlock the shackles of its corporate culture and connect with the next generation of customers?

Driving increased customer focus using “Conditions of Satisfaction”

Last week we had our first webinar in the Market-Driven Leadership series and I was honored to host Jeffrey Hayzlett the former Chief Marketing Officer of Eastman Kodak.

One of the topics raised from his new book, “The Mirror Test” was the idea of “Conditions of Satisfaction”. The idea is to drive change and improvements in organizational performance by establishing the critical elements a company must deliver on to satisfy customers. Once these are established they can be used to rally people around delivering.

Jeff shared his experience during a recent McDonalds drive through where he was asked to wait to the side for his order. This action was a clear break in the McDonalds conditions of satisfaction. Many customers go to McDonalds because they are busy, they need fast service and want to get their food and get on their way. Every time McDonalds fails this test they fail to deliver on their conditions of satisfaction…

It is a nice model for thinking about how as marketers we can rally the organization around its purpose and really deliver on it.

If you are interested in seeing the full recorded webinar click here.

Gaining customer insight through pain point mapping

Today’s technology is enabling increasing opportunities to gain insight into how consumers use products and where they can run into problems or “pain points”.

One of the finalists in a recent contest by Knowledge@Wharton has developed a tool that allows consumers to register their pain points online. An excerpt from the article is below:

“With their module, consumers can log entries around the clock, 365 days a year on a website about what their “pain points” are. The site is organized by sectors and sub-sectors, such as retail banking or mobile phone services. A site administrator filters all the pain points, which are then tagged and mapped to identify trends in customer dissatisfaction. Only the consumer and site administrator have access to this information and eliminates the bias inherent in conventional, time-consuming methods used to gauge customer satisfaction, such as surveys or focus groups, says Dhargalkar.

The software’s inventors tested the module for more than two years with a group of 500 students. They collected 54,561 pain points and tagged 229 unique ones.

Some pain points are already being addressed as a result of the module, says Dhargalkar. For example, a student has invented a software patch for mobile phones that magnifies fonts for senior citizens. Another has thought up an insurance product to cover unborn children, which some insurers are considering.”

Social media and new technologies are enabling customer insights to be developed in ever faster more efficient ways. Many leading companies have quickly switched on to similar methods for gaining insight more to come next post…..