Friday, February 12, 2010

How to not lose value across the great marketing divide. Be the customer.

Even I joined in on the Umbrella Drinks
Marketers, are you writing an informative blog for your social savvy readers? Wrong. Are you gaining followers on Twitter to help your sales efforts? Wrong again. In business, information technology (IT) people and those associated with IT often fall into that same trap of thinking that the application they run turns out value that their customer wants.

Heck, even marketing guys think “I’m using Twitter, and people want me to tweet.” Or I’m running a web site and people want me to put more stuff on my web site. Start running your business and stop micro-managing the processes. I was raised on a Kansas farm and we don't make friends with the cows. We have to get them to market and make a living.

This management malfeasance can scale up to the position of CIO of a large corporation where the thinking goes that because they provide an infrastructure for cloud computing, that they are doing a great job keeping up with technology. What if the CEO thinks you are off your rocker because you spent your entire budget wiring up boxes with flashing lights that don’t get him any more sales? He’s your customer and he’s right. When you start thinking or being the customer, you'll get it right.

This is the fourth of five posts covering economic value through the help and guidance of Information Technology Infrastructure Library. Past posts included:
The last post in this value series to be published will be
  • The view from your customers optimizes sales. Learn the value.
The divide

There’s a great divide between what a customer says that want and what will make them happy. No person really knows what will make them happy until they experience it. A web site designer who listens to their client when they say that they want a site just like Google will go through months of development trying to capture and index millions of pieces of data in order to please the client. But the client isn’t happy because the user interface isn’t as simple as the Google interface and they don’t care about the entire world of web data. The client described a feature but they really wanted the benefit of a simple to use web page helping them leave work earlier.

One way to get around the client’s spoken request for a feature and get to the real benefit they seek is to do some sort of root cause analysis. One of the best ways to do that is something that is ironically amusing due to recent news reports of Toyota’s devastating recalls on faulty systems including brakes or accelerators on almost all their cars. Toyota introduced the Five Whys to get to a more basic understanding of optimization on the manufacturing floor. If you keep asking why long enough, you get down to a very basic cause and five whys seemed like a good number. I suppose the failure in the massive Toyota recalls this last week is either in the failure to do the questioning or in the follow-through to learn and apply a remedy. Someone was hiding their head in the sand. Time for some retroactive whys.

Features vs. benefits

You’ve heard that people buy the sizzle and not the steak. They want a ¼” hole and not a fancy power drill. They want the benefits and not the features. But our computer infested world has nothing but features written all over it. It’s no wonder that when we try to sum up what a web site is about we start listing the JavaScript features and the impressive graphics used in the background. Go figure out why Craigslist is as popular as eBay and you’ll see where benefits trump features. Automobile buyers think about extra options. But the best sales people push benefits.

Making people happy is all about economics and the academic definition of value. It’s not the product, it’s what the product does for them. And for many business students who leave their economics behind, that’s as far as we get before they start to tally up the dollar signs and head down the ROI road into the mean profit-hungry corporate monster that met with major resistance as those fellows started suffering financial heart attacks. Just like a diet rich in fatty foods, it tastes just as good when you start as it does right before that heart attack, so you generally don’t notice if you don’t want to guarantee a healthy life beyond the next few minutes. Corporations stuck on profit put blinders on that caused them to miss industry shifts and either have to play catch up or fail entirely. Those students should have paid more attention to their dismal professors of economics.

More than price

Are you still telling people about the great quality, service and reliability that your product or service has? Stop. These are just the attributes of your service. Customers want to know how it plays out in the end for them. You don’t make a sale on the bullet points of the box. You make the sale on an emotional tie to a future benefit.

Does the guy get the girl and I become a millionaire? Or do they just "need" a 2.5TB Gigabit Ethernet 10/100/1000 RAID 5 drive?  There’s a good reason simple marketers show geeks using HappyBits software with girls hanging off their arms. Does the product/service manage your customer base so well that people are delighted with your customer service? Or it is just a piece of .NET software using the latest REST web architecture? Show those happy smiling customers flocking around a new data server and you got a sale.

Tell the customer what the benefits are and make it real to them. Their reality isn’t based on a list of summarized facts. Customers have to understand it in their terms which is the way they see it in their future. “Picture yourself on a white sand beach, exotic cold drink with an umbrella in it beside you because you chose our network storage solution...”

If you asked an average customer about how they’ve been talked to about quality they’d say that everyone talks up quality. But see what they buy and it’s rarely based on the sales trinity of price, quality, and delivery speed. It’s based on the value that they perceive through their expectations of what it can do for them.

Economists, real economists who look past the price, call this level of expected happiness their reference value and it can be vague or not. It can be based on the first contact where you tell them about the product, the continued dialog with the customer, or prior experience with other providers of the same service. Prospect theory in economics covers this in more abstruse detail but it’s based more on common sense than charts and graphs.

The marketing mindset

Increasing value begins with the questions from the customers’ perspectives. ITIL talks about a marketing mindset which means to just be sympathetic to your customer. It starts by asking the following questions:
  • What is our business?
  • Who is our customer?
  • What does the customer value?
  • Who depends on our services?
  • How do they use our services?
  • Why are they valuable to them?
I’d rather frame that in the customers’ minds and ask the questions as if you were the customer.
  • What kind of products do they carry now and might carry later?
  • Do I feel comfortable buying from them?
  • Do I think I could use their product?
  • Could I do without their product?
  • Where can I use these products?
  • What do I say to my wife that makes sense about why I bought this?
Let’s put these questions in a different light. Say you are a social blogger. Now how do you find out if you have value? Try these questions about your blog service:
  • What is my area of expertise?
  • What area of knowledge should I be learning?
  • What person would I want to read this stuff?
  • Why would the reader finish reading my blog?
  • Why would the reader come back to read my next blog?
  • In what kinds of activities would my reader remember my blog?
  • What parts would they comment on, retweet, or tell someone else about?
You aren't really writing a blog, you're providing solutions to readers' problems. You aren't really gaining Twitter followers, you're building trust for your brand. As soon as you become a fixture in the mind of your customer, you will start to get results from those customers. The value that you find there will eventually be built into your product if you are paying attention. That value will then translate to a better service, a better mousetrap, or a better blog.

Image by Matt & Becky via Flickr
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