My finicky cat teaches me a lesson in marketing. I have had many cats in my life, and have learned to interpret their unspoken (and “spoken”) language pretty well. My wife gets a laugh our of my verbalization of what the cats are thinking, and I’m honest about it – the cats supply the material via their sounds and body language and I just express it in words. Every morning my wife gets up and gives the cats some canned food, and it’s an “important ritual”, especially for our nervous Persian cat Chloe. At 6:30AM Chloe paces the floor and bed impatiently, walking on us, bumping us with her head and sometimes poking my wife’s sleeping face with a fluffy paw. (Remember: Dogs have owners but cats have staff!) As we arise Chloe alternately sits in the bedroom doorway and paces up and down the hall, waiting for that expected move toward the kitchen where the food is. Looking at this cat haughtily surveying us from the doorway, I said to my wife the first words I could think of that expressed the cat’s thoughts: “If I want it, you’re late“. My wife burst out laughing, but I instantly realized that this illustrates a key principle of successful marketing.
If your customers want something, you should already have it for them. If you don’t have it your competitors probably will, and you could suffer loss of market share and revenues. How can you do that? The way to success is to know your customers and their needs SO well that you can have solutions ready for them before they ask for them. As the cat illustrates, “If I want it, you’re late.” Let me expand on that.
Intimate knowledge of your customer is indispensable. Just as the cat knows my wife’s habits extremely well, you should know your customers’ needs, wants, and habits intimately. It is only with this kind of closeness to the customer that you can develop products they may not know they need, allowing you to be first to market and potentially a big winner over your competitors. You can build trust in your customer base that will have them saying “I trust these people and they’ve done so much for me in the past that I don’t need to shop around. Even if their prices aren’t the lowest, their service more than makes up for it.”
Don’t get caught “cat-napping”. Past success does not ensure future success. The inevitable question in business is “what have you done for me lately?”, meaning today or the past week or month. Leaning on your laurels from the last sale you made is like being the hare in the story of the tortoise and the hare – the hare takes a nap, thinking he is safely in the lead, as the slow, steady turtle passes him and finishes the race first. Don’t be the hare. Instead be the extremely attentive cat. I can guarantee you there is no way my wife is leaving the bedroom, let alone making her way to the kitchen, without Chloe the cat right next to her, mewing, purring, and being cute while bumping her ankles to remind her that it is “kitty treat time”. To be the leader in your market segment you must be just as in touch with and attentive to your customers, constantly giving them incentives to feed you detailed information about their needs and their use of your products, and constantly collecting, analyzing, and using the information. If you handle and use it well, the information you gain can fuel product development efforts that will leave your competitors scrambling to catch up, and as long as you keep rapidly innovating in close association with your customers (including prospective customers and customers of new, alternative applications of your product) your competitors will be unable to catch up with you.
It doesn’t matter what your product or service is. These principles apply to any business. If you’re not staying extremely close to your customers and constantly innovating to be the first to provide them what they need, even before they fully realize they need it, you’re at risk. You should be identifying new, prospective customers by watching what people do with your current product, especially looking for uses that you didn’t plan for, and by watching people who use products or services with even a faint similarity to what you provide. You need to be gathering intelligence all the time, and thinking creatively to identify your next opportunities. If you’re a marketing manager you should have your research and development people keeping up with customer input gained through sales, customer service, and other channels, and constantly developing new product and service ideas with potential to benefit your customers. Analyzing customer input and then pursuing and refining new ideas, even wacky ones, should be constant. You may have great sales, manufacturing, and distribution systems, but they’re no good without ever-improving products that will constantly reinvigorate your customer base.
“But I’m a mass marketer – how can I stay in touch with customers?” So you make a product that gets distributed in huge quantities to the public, and you’re not sure how to keep up with that? I was once told that Hewlett-Packard’s printer division had (and still may have) an engineering facility combined with a product museum, where they could attract customers and prospective customers to see and try out their product lines. In the next room were offices for design engineers, who were encouraged to spend time guiding people through the museum next door, helping them try out the latest products, and interacting with them as they did so. This was a great way to not only observe customer use of the product, but to capture customer questions and anecdotes about printer use, good and bad, and to observe their use in detail and record it on video for further analysis. Smart companies have systems to collect and compile customer communications of all types and analyze them for input to the development process. If you are a General Foods selling a bulk product like Cheerios, for example, you can still collect not only customer complaints, but customer communications of every kind, and analyze them for input to the product development process. Your employees can also contribute to and improve the quality of the information constantly from their daily observations outside the workplace.
Never discount serendipity! Many successful products were spawned via a combination of luck and open-minded, creative thinking. Even the janitor might look over your shoulder and say “what’s that?” about something that, once reconsidered, could open up entirely new ideas your customers will want. The product developer who poo poo’s such inputs is failing to understand something important: Tomorrow’s big ideas almost always seem crazy today. An off-hand comment, silly idea, or seemingly clueless question can often open new avenues to profitable products and services, once analyzed objectively and with an open mind. Customers don’t always know what they need, but they can tell you about their problems, presenting you with important opportunities for innovation. Beyond that, you can cultivate healthy relationships with customers that keep the communications flowing and result in new and better product ideas they will want. Like the cat’s purring and ankle rubbing, you want your involvement to be perceived as friendly, attractive, and comforting, and a basis for contributing to the customer’s success.
Are non-customers “on your radar screen?” They should be. If you know of potential customers who are fulfilling their needs without using your product (or using competitors’ products) you need to learn what they ARE doing and find ways to make your product better address their needs. Creatively searching for such opportunities should be an important part of your product development system.
Know the value of your products, both to your profitability and to your customer. Cost benefit analyses provide important understandings from both your and the customer’s perspective. Of course, in general every product should be profitable, so every new idea must undergo cost-benefit analysis both from your perspective and from the perspective of the customer. The latter analysis will help establish both an initial price (don’t forget to study your competitors and product substitutes as well) and your selling points: the value experienced by your customer.
Look for substitutes, not only for your own products but for others, some of which might not at first seem related to your offerings or core business. If customers are doing without your product or using a competitor’s product maybe your product isn’t useful enough, and maybe its functionality and value can be increased. If a customer prefers older means to your product, you should be asking: what’s not good enough about your product, and how can it provide more value? Is using it too complicated? Is something about it not intuitive enough? Is a particular substitute simply more economical? Watching what people are using instead of your product can be quite instructive.
Always remember that nothing about your product is sacred. Ideally your product will provide customers enough value that they won’t be able to justify NOT using it, but that might not be achieved with the current set of features, or perhaps they want something simpler and cheaper to address their core needs, and expensive bells and whistles (which can sometimes make a product less user-friendly) or a low value-for-cost perception is putting them off. The clues to a better understanding of both your product and your customers are available in the their use patterns and complaints, and you should be gathering data from them (like a CIA operative if necessary). Your success depends on it.
How do you get customers “in bed with you”? I have learned a good deal studying internet marketing. These days the path to success is paved with closer customer relationships, causing many companies to concentrate on attractive websites and social networking systems including Facebook and Twitter. Keeping your customers interested in communicating with you may mean giving them information and special perks. Making owner’s manuals, service manuals, specifications, and other information available on your website can draw customers there as well as improving the customer’s experience with your products. Contact frequency is important, too. You want to communicate with customers often, but not so often as to annoy them, and provide information of interest or perhaps even simple entertainment. The goal is to make customers look forward to your communications, even if it is only for entertainment value, and you need to keep the communications, like the relationship, fresh.
Customer service is of great importance to every business. When a customer has questions or complaints you want to show them that you respond to them quickly and effectively. Capturing customer input is also a key function for your customer service organization, and that input must be funneled quickly to product development for analysis and brainstorming, as well as carefully measured to provide a barometer for how well you are doing as a supplier. Remember that people will optimize that which is measured and publicized, so pick your organization’s metrics carefully as the right metrics can drive the organization to success.
Soliciting and using customer ideas has its wrinkles. This is a dicey area, legally, because some customers will want a piece of the profit pie if you use their idea. One solution is in setting up a binding agreement with them first, before they give you anything of value. Some companies use up-front disclaimers to make it known that providing the company an idea is also giving up all claims to it, but it isn’t clear to me whether that may put some of them off, or if it “holds water” in court. Having a good attorney familiar with such matters on retainer is essential. You should also find things that customers will accept in trade for their ideas, such as extra information, discounted training, or other incentives that are low-cost to you but high value to customers. Many people really just want recognition of their contributions, and this can present opportunities. Remember that most organizations limit employees accepting anything of material value, but a certificate of recognition or “Customer of the Month” program may work well.
Customer loyalty can yield big returns. The great business guru W. Edwards Deming taught that repeat customers are the key to business success. At best you want to have customers so loyal and happy with you that they will give you ideas for free just so they can use those ideas in your future product upgrades. You want them to feel that they are getting so much value from you that they truly want you to succeed. That means you must listen intently and consistently show them you are taking their comments seriously, especially in response to complaints. A fast and satisfactory response to complaints can turn unhappy customers into loyal customers, but it requires a concentrated effort.
Measure and chart customer satisfaction as well as sales and other financial data. Making customer satisfaction a key measure of your success will focus your organization on the right things and help build customer loyalty, and this needs to be established at every level: from the smile on the face of your employee when they answer the phone or greet the customer to the speedy and effective responses that solve the customers’ problems and fulfill their needs, and even to the behavior of your top managers. Your organization is no better than how it handles the toughest customers and most difficult complaints, though product attributes such as functionality, value, and quality are close behind.
Get close to your customers and involve them in mutual success. Your product should provide superior value from a superior organization, and your customers’ perception of this is a key to building loyalty and getting the marketing input you can use to stay ahead of their needs. Waiting for them to tell you what they need, however, isn’t good enough. Consider Chloe the cat – if your customers want something, you are already late! You are the expert on your products and services, and should be focused on consistently anticipating your customers’ needs and staying ahead of them, providing superior value. Essentially, if the customer succeeds and you’ve “done your homework”, so do you.
NOTE: This is not the same as “if we build it, they will come.” Many companies traditionally operated in the mode of letting their engineers and product designers come up with new ideas in a relative vacuüm, then offer the new products to customers in hopes that the customers would perceive their value and buy them. Needless to say, companies that operate that way today usually don’t have a robust market share.
In summary, leading in your markets means being close to your customers. Your product development people need to be intimate with customers and potential customers, and everyone in the organization needs to be constantly focused on building customer satisfaction and loyalty as well as finding new customers and product opportunities. If your product development group is in another building or city from the rest of the organization or there are impediments to communication between them and the rest of the organization you may be missing important opportunities. Product development isn’t just a department you give a fixed portion of the budget each year and expect them to go off and invent new products. Product development is your business’ life blood, and its the way you satisfy customers and keep your competitors guessing. Integrating product development into all aspects of your business is a great way to transform your firm into a market leader. Production and delivery, for instance, are important as part of the system of satisfying customers, but all that must be led by product development. Don’t “be late” or your customers will find better providers elsewhere, like your cat purring for handouts on a neighbor’s porch down the block, and you don’t want that!
Thanks for reading and please feel free to comment. — Tim