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Improve Customer Experience (#cx) to Accelerates Sales

Posted by Tom Smith on Tue, Aug, 26, 2014 @ 10:08 AM

customer experience

 

 

 

 

 

 

 

 

 

In a white paper, "The Business Impact of Customer Experience 2011," Forrester showed the potential results of an improved customer experience in 11 industries.

 

The research was conducted among 7,728 US consumers about their interactions with brands in a range of different industries.  The data was used to model the effect that providing an improved customer experience may have on companies in 11 industries.

 

Analysis showed a high positive correlation between customer experience and loyalty with people willing to buy from the company again (R2 = 0.66), likelihood to recommend the company (0.70) and likelihood to defect (-0.40).

 

The strong correlation between customer experience and loyalty means that companies with higher customer experience scores tend to have more customers who:

  • Will buy from them again;
     
  • Will not take their business elsewhere; and,
     
  • Will recommend their products or services to a friend.

 

All of this generates more revenue.  In fact, here is how much incremental revenue Forrester projects for each industry based on their projections:

  1. Wireless service providers = $1,574 million
     
  2. Hotels = $1,068 million
     
  3. Airlines = $784 million
     
  4. Insurance providers = $260 million
     
  5. Credit card providers = $245 million
     
  6. Banks = $217 million
     
  7. Investment firms = $149 million
     
  8. TV service providers = $81 million
     
  9. Health plans = $70 million
     
  10. Internet service providers = $70 million
     
  11. Retailers = $27 million

 

I worked on a customer satisfaction measurement and improvement program for a wireless service provider several years ago.  By reducing churn by 29% we saved $16.2 million in potentially lost revenue.

 

Companies I've consulted with most recently, are more concerned with generating sales than increasing customer satisfaction, maintaining renewal rates and reducing churn.

 

They are adding to their sales team and doing nothing for their current customers.

 

While these companies are owned by private equity companies, your would think the private equity firms would see the value in having satisfied customers since they spend more, buy more frequently are are more likely to share their positive experience with family, friends and colleagues in person and with followers via social media.

 

Why do companies spend more money to generate new leads and customers than they do providing an outstanding customer experience and adopting a "customers for life" philosophy?

 

How much are you investing to provide a better customer experience?

 

How does the ROI of providing a better customer experience compare to the ROI of the rest of your marketing efforts?

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Tags: customers for life, accelerate sales performance, customer satisfaction, improve customer experience to accelerate sales

Positioning Your Brand to Accelerate Sales

Posted by Tom Smith on Wed, Aug, 28, 2013 @ 06:08 AM

Positioning the battle for your mind resized 600

 

The fourth, and final, element of the brand platform I will address in this series of posts is stategic positioning.

Al Reis and Jack Trout wrote Positioning: The Battle for Your Mind in 1981.

The premise of the book is as important today as it was then.

What makes your product or service different and better?

If you cannot find a way to differentiate yourself in the market, get out.

What is positioning?  A competitive tool with which a marketer:

  • Distinguishes a brand within a competitive frame of reference.
  • Registers its benefits and associations as a competitive point of difference.
  • Appeals to the wants and needs of a worthwhile target market.
  • The long-term positive differentiation of the brand from its competitors that is meaningful to consumers.
How do you know if it's meaningful to consumers?  Ask them.  What you think is meaningful, or why they buy, may not be the real reason why.  You will not know until you ask.
My favorite example of strategic positioning is Volvo automobiles.  Their "official" positioning statement is, "Volvo is the automobile that provides peace-of-mind to drivers concerned about the safety of themselves and their passengers."
Volvo did such a good job of "owning" this position that it carried over to the Volvo (Heavy) Truck brand.
I will also assert that if Volvo ever built a sports car that looked and performed like a Ferrari, it would first be recognized as a "safe" sports car.
I had the opportunity to work on Glaxo's initial branding campaign in the early-1990's.  During this time, pharmaceutical companies were getting skewered in the media for being greedy and more interested in making money and extending patents than helping patients.
Instead of positioning Glaxo as a pharmaceutical company, we positioned them as a research and development company committed to finding cures.
Today is it more critical than ever for you to establish your strategic positioning and monitor what consumers are saying about your brand.
If you fail to position your brand, your customers will do it for you.
If you fail to live up to your strategic position, fail to deliver on your brand promise, the consumer will call you out in social media.
That's why it's important to keep you finger on the pulse of your target audience and customers -- especially your loyal customers and raving fans. They're the ones that will verify or villify your positioning and your brand.
What other brands are well positioned and whose positioning is verified by the marketplace?
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Tags: accelerate sales performance, alignment, consistent messaging, strategic positioning

Identify, and Live, Core Values to Accelerate Sales

Posted by Tom Smith on Tue, Aug, 27, 2013 @ 06:08 AM

core values accelerate sales

 

The third element of the brand platform are core values.

Prior to the internet and growth of social media, I don't think companies gave their core values a lot of thought.

However, today you better walk your talk or risk getting called out on social media.

What are core values?  My definition is, the unwavering principles that guide how we conduct business, make and sell products, and especially, how we develop and maintain relationships with customers and prospects.

What do you need to consider when developing your core values?

  • What values do we have now?
  • What should we keep?
  • What are we not that we would like to be?
  • What are functional?
  • What are emotional?
McDonald's core values are: quality, value, service and cleanliness.  Pretty generic. It would be interesting to know how well their employees know, and agree, with these values.
Tony Hsieh built Zappos around 10 core values that employees live by and the company constantly reinforces internally and with customers:
  1. Deliver "WOW" through service.
  2. Embrace and drive change.
  3. Create fun and a little weirdness.
  4. Be adventurous, creative and open-minded.
  5. Pursue growth and meaning.
  6. Build open and honest relationships with communication.
  7. Build a positive team and family spirit.
  8. Do more with less.
  9. Be passionate and determined.
  10. Be humble.
A lot of companies have core values but don't "walk the talk." Their values sound more like what you'd find in the boilerplate of a press release or the "About Us" page of a website.
You might learn about them on day 1 or orientation but after that, it's just a meaningless plaque on the wall of the lobby.
Zappos believes in having core values employees can commit to. Zappos hires and fires employees based on their core values.
If you're willing to do that, you can build a company culture in line with the brand you want to build. You can empower your employees to be brand ambassadors inside and outside the office.
What other firms do you know, or work with, that are "walking the talk" with regards to their core values?
Tomorrow I'll cover strategic positioning.
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Tags: accelerate sales performance, alignment, integrated marketing, core values, brand platform

Improve Your Company's Vision to Accelerate Sales

Posted by Tom Smith on Fri, Aug, 23, 2013 @ 06:08 AM

Improve your company's vision

 

 

This is the second of several posts on the elements of a brand platform with "Vision" being the first thing to tackle.

Does your company have a vision statement?

Do you and your employees know what it is and what it means?

About half of the companies with whom I've worked have had a vision statement -- 90% of those were vacuous. As a result, there was no common agreement about what it meant and what everyone was working for.

The other half did not understand the value having a vision statement would provide.

Why does a company need a vision?

  • Most companies operate in a highly dynamic market.
  • A fundamental principle of a company being successful in a dynamic market is to specify the desired end-state at some future time, and work back to see how to get there.
  • The "vision" is the desired end-state the company would like to achieve in the future.
The vision statement is the first element of the brand platform that ensures everyone is working towards the same "end state."
What exactly is a vision?
  • A description of something in the future, in terms of the essence of what it should become.
  • A realistic, credible and attractive aspiration for the company or brand.
  • A condition that's better than the condition that now exists.
  • A sense of the possible, not the probable (if it's probable, you're not thinking sufficiently far into the future).
  • Something that is aspirational, but attainable.
  • A visualization of the destination.
  • Unique to the company and the marketplace.
It is NOT a tag line.
Here are three famous examples:
  1. Henry Ford: "To build a car his own workers could afford to buy."
  2. NASA: "Be first to put a man on the moon."
  3. Coca-Cola: "To put a Coke within arm's reach of everyone on the planet."
In the 1960's reporters were doing a story on NASA interviewing various employees.  For filler, a reporter and camera man (person) asked a janitor what his job was as NASA.  He proudly responded, "It's my job to help put a man on the moon."  Beautiful!
Do you and your employees know what their job is?
Have you asked them?  If not, I suggest you do.  You might determine that your vision statement is lacking.
An effective vision statement will get everyone in the organization in alignment, regardless of their department.
I'd love to hear about effective vision statements that have resonated with you.
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Tags: accelerate sales performance, alignment, vision, employee empowerment

Case Study: Insights From Sales Can Accelerate Sales Dramatically

Posted by Tom Smith on Fri, Aug, 02, 2013 @ 06:08 AM

Insights help accelerate sales

 

The V.P. of sales for Farm Bureau Insurance wanted to know why his 880 agents weren't coming anywhere near meeting their annual sales goals of Blue Cross and Blue Shield (BCBS) health insurance.

I interviewed 20 of his agents to understand how they identified leads, scheduled appointments, conducted sales presentations and what they, and their customers, thought about BCBS health insurance.

To verify there was no additional learning from the 860 other agents, I conducted an online survey asking the same questions I asked in the one-on-one interviews.  

The findings were consistent; however, the depth of insights from the one-on-one's was significantly greater than the online survey.  The ability to ask follow-up questions is invaluable for obtaining insights.

What I learned was:

  • Agents only scheduled one hour for a sales presentation to their clients.
  • In that hour, they sold auto insurance, homeowners insurance and life insurance, they rarely had time to mention health insurance.
  • Agents recieved a greater commission for selling Farm Bureau auto, home and life insurance than they did selling BCBS health insurance.
  • Agents, and their customers, thought BCBS health insurance was the best available.
  • Farm Bureau has an office on a major thoroughfare in every county in the state.
  • One agent would not meet with prospects in their living room, instead he suggested they sit around the kitchen table to ensure he could see both the husband and the wife at the same time.
The V.P. of Sales was surprised and pleased by the number and depth of insights the one-on-one's provided.  
However, he was most pleased with the results of the recommended solution to his problem.
I recommended that Farm Bureau buy an A-frame sign to set out in front of each office every morning.  The sign had the BCBS logo with the words "sold here" above the Farm Bureau logo.  
Both companies were so well known and respected, nothing more was needed.
After spending about $60,000 on A-frame signs, Farm Bureau met its 12-month BCBS health care sales goals in less than three months.
The signs let Farm Bureau customers and prospects know they sold BCBS health insurance.  They also reminded Farm Bureau agents to mention BCBS health insurance as they were walking out of their office.
While the respondents to your research may not provide the answer to your specific question, their thoughts and insights will help you uncover the solution.
How do you use insights to accelerate sales?
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Tags: dialogue, accelerate sales performance, one-on-one interviews provide consumer insights

5 Keys to Selling Services versus Products

Posted by Tom Smith on Wed, Jul, 17, 2013 @ 06:07 AM

5 Keys to selling services versus products

 

To increase profits, stabilize revenue and provide an annuity stream, many product-development companies are seeing the benefits of providing services.

Following are five key findings from B2B executives in product-development firms that are providing services:

 

  1. Listen to the customer.  This is critical and difficult for a product-oriented company to do.  Let the customer tell you what their needs and pain points are before you start talking.  Learn what the issues are around service and determine if you/your firm are truly prepared to solve them.
  2. Co-create solutions.  Based on customer needs, you may need to create custom solutions and services.  This will vary by customer and the price you charge will vary based on the value you are providing the customer.  The more feedback you get from the customer throughout the process, the more you can refine you solutions and services to ensure you have a satisfied customer that provides repeat business and referrals.
  3. Build relationships with decision-makers.  You need to develop a rapport with c-level executives.  Ultimately, these are the people who will determine the length of your relationship.
  4. Price services flexibly to ensure profitability.  One example of creative pricing is performance-based compensation.  If you agree that your service will help your customer reduce the overall operating expense of your equipment by 30 percent, agree to take 50 percent of the savings as your compensation.  You can end up making more in the long-run and establishing a more trusting relationship with your client.
  5. Make changes in your organization's culture.  Focusing on service versus product is such a cultural change, you may need to set up a separate business unit, or even organization, to create the service business and ensure it has the proper long-term view of the customer relationship and commitment to providing an exceptional customer experience.

Has your business evolved from being product-focused to providing services as well?

Should it?

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Tags: accelerate sales performance, customer satisfaction, customer retention, keys to selling services versus products

Think Twice Before Cutting Prices to Accelerate Sales

Posted by Tom Smith on Mon, Jul, 15, 2013 @ 18:07 PM

 

Price cuts hurt margins

It is unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot -- it can’t be done.

If you deal with the lowest bidder, it is well to add something for the risk you run. And if you do that, you will have enough to pay for something better. — John Ruskin (1819-1900)

Symptoms of Pricing Problems

You know you have a pricing problem when:

  1. Sales incentives or compensation is based on sales rather than profit margin. A sales rep can hurt profits while giving in on price and not be penalized significantly for doing so.
  2. Your costs of goods are rising as a percent of total sales. Your margins are eroding.
  3. You are making price changes across the board. We saw this with the run-up in gas prices and airlines and package delivery companies adding fuel surcharges.
  4. You are using cost-plus pricing.

Different Ways to Think About Price

  • It’s what you think your product is worth to a particular consumer at a particular point in time.
  • It’s the customer’s least favorite part of buying.
  • It’s a marketing expense to you, the seller.
  • It’s the only marketing tool that directly affects both the top and bottom lines of your profit and loss statement.
  • It’s the easiest marketing tool for your competition to copy.
  • It’s a marketing tool that represents everything about your product – especially affecting quality and value perceptions.
  • Price + Perception = Value. Value is what consumers want.

Why Cutting Price to Gain Sales or Share Does Not Work

There are several pricing models. One thing they all have in common is that they show you will have to lose a lot more market share by not reducing your price, or by raising your price, than you will make up for in lost margin, or gain in added margin.

Here’s a simple mathematical example:

Let’s assume you’re selling a widget for $100 and making 10 percent ($10) and you decide to reduce your price to meet your competition to $95. All of a sudden, you’ve reduced your margin to five percent ($5) – a 50 percent reduction in margin!

You will have to more than double your market share, or sales, to make up for what you’ve just given up in margin. I know of very few price inelastic industries where this is an effective strategy.

Think very long and hard before you ever reduce the price of your product or service.

I urge clients to determine the highest price they can charge and still make the sale. This requires knowing your customers and knowing your competition. It’s also very helpful to know what your customers think of your competition -- that's where the consumer insights come in.

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Tags: accelerate sales performance, improve customer experience to accelerate sales, earn your customers trust

Are You Getting Insights From Analytics?

Posted by Tom Smith on Wed, Jul, 10, 2013 @ 06:07 AM

 Are you geting insights from analytics

 

I was surprised at the findings revealed by Dr. Christine Moorman, director of The CMO Survey.

The results of the most recent survey showed a decline in the number of projects in which companies use marketing analytics that are available and/or requested. According to CMOs surveyed, they report a 30% usage rate. This number is down from 37% a year ago.

"Big data" has been the rage for the past few years. CMOs recently reported that the percent of their marketing budgets devoted to big data will increase from 6% to 10%.

So while more is being spent on, and written about, "big data," less of it is being used.

Recently in a LinkedIn discussion group, "Chief Marketing Officer Network," someone posed the question, "Do you think 'big data' actually baffles most marketers?"

I think Dr. Brian Monger hit the nail on the head when he said, "I think 'big data' baffles a lot of folks. It's why you not only need a good analyst to do the numbers, but an even better insight person to work with the analyst and the numbers."

I know there are several graduate programs in business analytics; however, I don't know that these programs teach people how to look for "insights" in analytics.

I had the pleasure of working on Procter & Gamble, Richardson-Vicks and Warner Lambert business early in my career. We received Nielsen data every two months on sales, market share and distribution by channel (food, drug and mass merchandiser).

There were also quarterly spending reports from MRI and other sources.

While some might not call this "big data," my understanding is that it came from SAS and there was certainly enough to run single and multi-variable regression analyses that enabled me to determine: 

  • The price differential at which Bounce Fabric Softener would lose share to generics.
  • The negative correlation between Wondra Hand & Body Lotion's brand development index (BDI) and average relative humidity.
  • The positive correlation between advertising spending and Rolaids' sales.

Subsequently I worked on Wachovia Bank for five years which fielded quarterly research to determine top-of-mind awareness, market share and switching preference. The availability of this data enabled me to show the positive correlation between switching preference and emotional versus rational advertising.

Most recently I was the director of marketing for the U.S. subsidiary of an Ireland-based manufacturer of wastewater treatment systems. When I joined the firm, there was a great deal of concern over the decline in sales since 2009.

By looking at sales and housing permits by month for the past 12 years, I was able to show a 95.6% positive correlation between housing permits and sales of their peat-fiber biofilter.

While this didn't increase sales, it certainly explained the decline. This year, coincidently, sales are back up, along with new home permits.

With all of the data collected and available today, the ability to show positive and negative correlations, and to model future outcomes, is infinite.

However, you need to know what to look for. What insights do you want to get?

I recommend creating hypotheses about what is, or is not, driving customer behavior, sales, market share, or what ever else you want to know about your business.

Once you have created the hypotheses, you can then perform the data analysis to prove or disprove your hypotheses. The results of this analysis are insights.

What questions can data answer for you?

Let me know if I can serve as an insight person to help you find those answers.

 

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Tags: insights from analytics accelerate sales, consumer insights, accelerate sales performance

Empower Employees to Accelerate Sales

Posted by Tom Smith on Wed, Jul, 03, 2013 @ 06:07 AM

Empowered employees accelerate sales

I just ran across notes I took from a webinar where David Leinconi was talking about his new book 5 Elements of a Dysfuntional Team.

Given all I read about the percentage of engaged employees (29%), not fully engaged (45%) and actively disengaged (26%), I believe we as business owners, leaders and managers need to address this discrepancy to improve our business and our customers' experience, thereby accelerating sales.

The success of your business correlates with the level of empowerment, and engagement, of your employees.

The five elements of a dysfuntional team are:

1. Absense of trust

2. Fear of conflict

3. Lack of commitment

4. Avoidance of accountability

5. Inattention to results

Any of these elements are problematic. If you have more than one, you have big problems. Talk to your employees about each of these -- on-one-on and in small groups.

Address them by ensuring that you and your management team are:

1. Good listeners

2. Perceptive and empathetic

3. Open communicators

4. Calm

5. Genuinely concerned about the well-being, health and growth of your employees

Learn who your engaged employees are and give them more responsibility.  They will help your business grow by building stronger customer relationships, increasing productivity and helping engage more of the "not fully engaged."

Learn who your disengaged employees are and get rid of them. They are costing you business, hurting your relationships with customers and poisoining your organization. Don't forget, these could be your members of your team who, it turns out, aren't good managers that employees trust.

There are too many great workers looking for a place where they can make a meaningful contribution to tolerate disengaged workers.

Remember that your employees are just like everyone else, "they don't care how much you know until they know how much you care"  . . . about them.

Need help talkinng to your team to determine who's fully engaged, not fully engaged or disengaged?  Call me and I'll help you empower your employees to accelerate sales.

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Tags: accelerate sales performance, one-on-one interviews provide consumer insights, empowered employees, customer bonding programs

Consumer Insights Accelerate Sales in Industrial Paper

Posted by Tom Smith on Tue, Jun, 25, 2013 @ 06:06 AM

Consumer insights accelerate sales of industrial paper

 

This is my favorite, "real life" example of consumer insights "saving the day" in a way that analytics never would uncover.

Our client was successfully selling a paper wipe to the do-it-yourself (DIY) segment of the home improvement industry.

Given the success among DIYers, our client wanted to market their paper wipe to the industrial segment as well -- to replace the red shop rag.

We conducted in-depth mini-focus groups with users of the red shop rag. 

During these groups, our goal was to determine users’ emotional link to the red shop rag. 

Well into the groups, at least 60 minutes, we were able to track these users’ emotional link back to when they were children helping their fathers work on their cars or other projects around the house. 

It turns out the red shop rag was a badge of respect, honor and accomplishment for people who work on production lines. The red shop rag was proudly tucked in workers' back pockets for easy access -- always on call.

When the rags were delivered from the cleaning company to the production floor, the workers would rush to get an arm-load to put in their personal locker to ensure they'd never be without one.

Given the intensity of the findings, rather than marketing the paper wipes as a replacement for the red shop rag, we recommended that they be marketed as something to use to clean up “real messes” in order to preserve the workers' red shop rags.

Imagine how much money could have been wasted trying to replace a product whose users had such an emotional attachment to the product we were proposing to replace!

We could have probably convinced purchasing that the paper wipes were more cost efficient, but it would have led to a revolt by the workers.

Do you have examples consumer insights that have prevented you from going in the wrong direction?

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Tags: emotional connection to the brand, consumer insights, accelerate sales performance