Managers & Leaders

I’m biased when it comes to the kind of customers I want to work with. I prefer leaders to managers.

There’s nothing wrong with managers. Many of my clients are. But as I get older, and I’m almost grown up, it’s becoming more important to me “how” I work with customers. And I prefer working with leaders.

For sales purposes, it’s helpful to recognize which trait is stronger within each customer. Helps us understand and present our solution more persuasively.

Think about the types of questions you’d ask of a manager versus a leader. Talk to their dominant trait and you’ll get their attention faster and get more valuable information in return.

Gazillions of books have been written about managers and leaders. I’ve even read a few. But I can’t keep all that in my head while I’m working. So here’s a brief list I’ve come up with to identify customers by:

Managers

• Minimize costs & risk
• Puts results first
• Seek command & control of employees & customers
• Knows the rules & colors within the lines
• Focuses on present fiscal month/quarter/year
• Oriented towards tactics
• Holds people accountable & delivers consequences on failure
• Follow organization’s culture & values

Leaders

• Put people first, knows results follow
• Articulates meaningful vision that employees & customers willingly contribute to
• Knows the rules and gets things done inside & outside the system
• Faces the future, empowering groups to deliver in the present
• Willing to take educated gambles
• Invests in higher returns (willing to spend for multiples in return)
• Leads others to generate numbers (revenues, profits, retention, loyalty)
• Holds people accountable & uses failure as part of learning
• Are true to strong guiding principles all the time, especially when running against the organization’s beliefs

Can you spot the Leaders from Managers?

Technorati tags: sales, managers, leaders

Add comment February 26th, 2007

Customer Experience is the New Brand

In Quicksand Words & Phrases I wrote about marketing terms that were so overused and empty they turn customers away. “Brand” unfortunately is in that group too. For different reasons. Its meaning has evolved, but it’s public persona hasn’t. It has too much baggage.

“Brand” used to be Madison Avenue, TV commercials, print ads and Darren Stevens (if you’re my age). It used to be logos, taglines, fonts and colors. It was outbound advertising pitched at customers.

But some marketing people aren’t so dumb. They recognized customers respond to experiences that are fulfilling and satisfying. Experiences associated with products and services. Build the experience and customers will come - and stay.

Voila! “Customer Experience” is the new “brand”.

What is the “Customer Experience”?
My friends Lynn and Joe at Parker LePla define “brand” as the sum total of all experiences a customer has with your company. I’m swapping “customer experience” for “brand” because of the baggage.

And customers experience your company in many ways beyond your tradeshow booth or logo. Here’s a short list to think about:

• The manner in which your on-site staff interact with customers & each other (this is huge for service contractors)
• Your operator’s friendliness & helpfulness when customers call in
• Accuracy, timeliness & readability of your invoices
• The manner & speed in which you resolve customer conflicts
• Interruptions your suppliers may make delivering to customers’ sites
• The usefulness of your web site to customers

3 Examples of Customer Experience

Although the following are consumer businesses, you get the idea.

Starbucks‘ European coffehouse experience is welcoming, attractive and makes you want to return. It’s created by many things. All intentional, all aimed at creating Starbucks’ desired customer experience. Contributors are:

• Store architecture & signage
• Training of cashiers & baristas
• In-store layout & furniture
• Additional non-coffee items to buy

Nordstrom’s tuxeoded piano players are well known. But some time ago Nordstrom quit providing them. I don’t know why, maybe to lower costs.

The uproar from customers soon had Nordstrom bring the pianos and players back, and quickly.

Although piano players don’t sell clothes, they’re an important part of the Nordstrom’s customer experience. One of the emotional reasons for customers’ loyalty.

Krispy Kreme knows their customers. They’ve developed “Hot Doughnut Machine” technology to bring the “hot doughnut experience” to more people.

They call it “Doughnut Theater”. What else is there to say? You can watch creation take place. They even have a neon sign that lights up at the very moment their glazed doughnuts are coming out of the oven. So customers can watch for it and then pull in to buy.

How Do Customers Experience Your Company?

More About Customer Experience
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Technorati tags: branding, service, customers

Add comment February 19th, 2007

The Grand Disconnect

Once upon a time (last year) in a land far, far away (which looked a lot like ours) there was a contractor named Herbert (who reminded me of you). He was hard working and intelligent.

Herbert believed contracts were won through relationships. So he spent a lot of time building them.

Clive was Herbert’s prospective customer. Herbert liked Clive because of the 1 million square foot campus Clive managed.

Clive liked Herbert for the lunches and dinners Herbert paid for.

During their time together Herbert learned a lot about Clive. Herbert learned what worried Clive at work. He learned how the contracted service impacted Clive’s business. Herbert also heard about improvements Clive wanted to create within his department.

At last, the stars aligned and Clive put the multi-million dollar contract out to bid. Herbert was ecstatic.

However, because of the contract’s size, Clive’s purchasing deparment dropped the cone of silence around Clive. No contractor could talk to Clive while the bid was out.

Herbert didn’t mind. He knew Clive. He’d gotten on the bid list. He was going to produce the mother of all proposals.

So he went to work. He pulled out his best prior proposal. The one that secured his last big contract.

Herbert answered every question in Clive’s Request for Proposal. He used his best answers from the past.

When he was done, he sat back and watched with pride as the FedEx man struggled with the twelve copies of the 165-page, 11-pound proposals.

Time passed. The decision was made. And Herbert’s firm wasn’t selected.

Herbert was devastated. He was crushed. He was deconstructed at the molecular level. Clive, after all, was Herbert’s friend. They’d broken bread together. They were close.

After a period of mourning, Herbert felt he could control the bitterness in his voice. He called Clive to find out why he wasn’t chosen.

Clive told him if the decision was up to him alone, of course he would’ve chosen Herbert. But the dollars involved were too big. And Clive couldn’t jeoporadize his job or mortgage by selecting on relationship alone.

After a long silence, Clive asked Herbert “Why didn’t you use the information I’d given you? Why didn’t your proposal address the specific issues I told you about?”

“Then I could’ve pointed out to the other decision makers that your offer would solve our problems. That you had proposed a specific plan to get it done”.

Herbert learned a painful lesson from Clive. That relationships are important. But become worthless if customer-specific knowledge doesn’t make it into the proposal.

How are you avoiding the Contractor’s Grand Disconnect?

Add comment February 12th, 2007

2nd Impressions Count Too!

I’ve been calling consulting prospects. Talking with operators made me think about your customers and prospects. When they first call you. Reminded me of the old saying:

“There’s never a second chance to make a first impression”.

But the second impression counts too.

When customers and prospects call in, your operators subtly shape their expectations. Here are impressions your operators create about your company:

• Professional -or- Mom & Pop
• Customers are King -or- Customers are Interruptions
• Caring about Individuals -or- You’re #62750495
• Great Workplace = Great Contractor -or- Job from Hell = Lousy Service

Web Site = First Impression

Customers and prospects get contractors’ phone numbers from web pages, business cards, brochures or ads.

Then they visit contractors’ web sites to learn more.

Then they call your office.

Operator’s Handling of Call = Second Impression

Funny how incoming call etiquette is poor now everyone is on the web. EXAMPLE:

1. A customer calls with a small issue.
2. They’re not upset about it.
3. They reach your operator.
4. In sending the call through she’s unfriendly, says the wrong words.
5. Or, she says the right things, but in the wrong way.
6. Doesn’t take much to change a customer’s attitude.
7. Now a little issue is a problem. Personally, I’d rather deal with little issues.

Lessons Learned Calling Companies

Operator’s Poor Choice of Words

• “Gimme a minute”
• “Slow down”
• “Huh? What’d you say?”

Right Words, Wrong Tone

• This is subtext: “I’m saying what I have to but I don’t give a rip about you”

Generalizations (politically incorrect) about Regional Differences

• Brooklyn tone sounds brusque to genteel South, or West for that matter

IVR (Interactive Voice Response)

• “Press 1 if you were born on a Monday
• “Press 2 if your SS# ends in an even number”
• “Press 3 if you’ve realized there are no humans here to answer your call”

On Hold

• Muzak is death
• Local radio is OK
• Custom audio ads best (avoid voice-over talent from used car ads)

Don’t Fire the Operators - It’s Your Fault

When you accept the fact that operators impact customers and revenue, you’ll train, reward and QC their work.

Recommend a script for operators. And mystery shopping for you to check your incoming call etiquette. Make sure they’re creating the type of 2nd impression you want.

What Impression are You Making?

Add comment February 7th, 2007

Market Pricing’s Gravitational Pull

We know things exist, even if we’ve never seen them. We feel their effects. That’s how market pricing works.

If we understand forces that weigh on us, we can use tactical pricing towards our business strategy.

When customers buy services in a market they soon get a feel for what the going rate is.

Smart customers use market pricing as a guideline. A point from which to move their expectations up or down to match their situation. Market pricing’s gravity pulls customers expectations in line.

The rub is that customers’ market pricing comes -(drum roll)- from contractors.

We Are Not Alone

A contractor’s pricing is in a marketplace with competitors’ pricing. We fling our pricing into the RFP hat when a bid goes out. We change it from bid to bid to fit the opportunity, the facility, the customer, the geographic market - and our needs.

To make matters worse not all contractors price by the same rules. Remember falling down in disbelief when you heard a contracted price and you knew it was below labor costs? Ah, that’s another story.

Defining Market Pricing

In every marketplace there’s a range of prices that customers have bought. Customers don’t buy the same service at the same price from different contractors. There’s always variation.

It’s Variation in Pricing that Counts

There are always customers buying services at the high-end of the price range. Typically, this isn’t a large crowd.

And there are always customers buying at the low end. This is a bigger crowd.

But by far the biggest crowd is made up of customers buying services in the middle price range.

This bell-curve distribution of customers’ purchase prices is “market pricing”. Gravity is strongest here.

In some markets, there may only be cents separating the high from the middle from the low. Customers know this. That’s what counts.

Customers Don’t Buy Outside the Market

Contractors’ pricing can’t be double the market. No service differentiators justify customers paying that high a premium. At least no one’s found one to date. If they had, it would be copied immediately. And then become the norm.

Since contractors’ pricing must be in the market range, where in the range should it be?

Eating at the Premium End

There are (+) and (-) for eating at the premium end. It makes sense contractors want the high end, the (+) are very tempting. Here are a few (+)s & (-)s:

(+) Higher Profit Margins:

* Allows paying higher wages for better skills, training & more service

* Put more $s in contractors’ pockets at the end of the day

(+) Customers are:

* More likely to value your service - they’ll spend more to get more

* Less likely to bid out on a whim - your service is important to their business

* More demanding in a good way - force innovations, which can be used with other customers

* Great potential references - deliver first & they’ll sell for you

(-) Fewer customers buy at the top end - not enough revenue for contractors to live

(-) Greater sales effort needed to win - customers buy value solutions

Living in the Middle

The benefits in the middle aren’t as exciting as at the premium end. But they can make a sound business strategy into a solid business.

(+) Many opportunities for revenue growth

(+) Higher revenues lowers % of fixed G&A costs - new revenue doesn’t add G&A

(+) Easier to replace than premium end - securing replacements isn’t life threatening

(-) Sales effort can be as great as premimum-end

At the Bottom

It’s not risky to have some, but too many eats away stomach lining.

(+) Easier & faster sale - customers willing to overlook contractors’ shortcomings

(+) Large volume available - customers in survival mode are easy pickings for aggressive contractors

(-) If you’re not lowest, you’re out - 2nd lowest doesn’t get it (think WalMart)

(-) No room for costing mistakes - get it right, or pay the customer to serve them

(-) Customers turnover frequently - your contacts & contracts replaced for lowest price

How Does Your Market Pricing’s Gravity Feel?

You weighed down by gravity defying pricing? Share your stories about market pricing. Especially ones that defy gravity. Post your stories here.

Add comment February 1st, 2007