More great stuff from the folks at the Wharton Customer Analytics Initiative (WCAI).
Yesterday, Wharton Professor Peter Fader released a new book entitled Customer Centricity. I had the privilege of reviewing a pre-release copy of the book and was struck by some really interesting and insightful points that Peter highlights in it.
Did you realize that some of the greatest brands in business history- Starbucks, Nordstrom and yes, even Apple have a long way to go in terms of optimizing the value of their customers?
Shocking right? But Peter makes a compelling case that some of the most successful (and valuable) companies still have room to grow in terms of deepening their understanding of their existing customers and using this information to create custom offerings that strengthen ties and add to the value of the customer relationships that these companies already have.
Did you know that oversimplification of how you classify customers has significant consequences in terms of the effort/investment that you should be making to make your most important customers happy?
There is a great discussion (and a specific example on the wireless industry) in the book about how an oversimplified view of customer churn can cause companies to overlook and under-invest in some of their most important relationships.
Did you know that analysis of customer value could represent an entirely new way of evaluating investment choices?
In the book, Peter introduces the idea of customer equity (the combined lifetime value of all of its customers) as an increasingly accepted metric for considering the value of certain types of firms. While challenging to execute, Peter points out that this may be an approach that is far more tangible and quantifiable than other measures such as brand equity.
These are but a few of the topics that he compellingly covers in this book. Peter is quick to point out that his ideas on customer centricity are more applicable to certain types of companies, but if you are a part of an entity that has large numbers of customers, sells services on a subscription basis (SaaS providers- are you listening?), has the ability to create custom offers, or is interested in investing in companies that have these characteristics, then this book lots to offer. I would highly recommend it.
For more information on the book and how to get it, click here.
Interesting tidbit from WSJ this morning on B2B marketing:
Pay attention to out of office replies- they may contain useful information on contacts and other stakeholders in decision making process. One B2B marketer points out that this technique accounts for 6% of his new business.
Same article has some stats on the “typical” business email box (created by Radicati Group). It points to the fact that nearly 20% emails are spam. No clear definition of what spam is in this study, but my guess is that if you include all opt-in mail lists, this percentage is much, much higher.
Implications for marketers revolve around building meaningful and relevant content and being able to track and monitor what is relevant to your audience. It also highlights the importance of branding, which I have blogged about here.
Link to WSJ article is here.
You’ve done your homework on the prospect- checked them out on Linked in, looked at their Facebook profile, checked out what they have had to say on Twitter, maybe even confirmed that they are not on a predator database. Now you are ready to meet. After all of this effort to find the perfect mate, would you not want to look your best before you go?
Pretty basic right? And yet I am continually shocked by how poorly many B2B firms approach the initial sales meeting. Over the past 6 months, I have had exposure to half a dozen firms (primarily SaaS companies) who finally get to their first meeting and then create questions about competence, trust, and capability based on what and how they present.
Whether it is the quality of the pitch materials, quality of the demo, or knowledge of the personnel involved on the call I have seen lots of failure points that severely hamper a selling organization’s ability to build an ongoing dialogue with a customer.
Specifically, here is a sampling what I am talking about:
- Presentations- Why do so many people insist on sticking with slides they have prepared for a pitch? If the slides are not facilitating productive conversation with your client, ditch them.
- Unrehearsed demos- Why should you ever have problems doing a demo? Presenters should know the capabilities and potential failure points of their applications inside and out. If they don’t, you’ve got the wrong people.
- Webex technology failures- You would think that people know how to create back up plans for this type of contingency. I have seen it happen more that I care to mention and have seen how clients react to this most basic failure. Have a contingency plan.
- Mismatch of skills/knowledge- I have seen situations where customers are more knowledgeable about technologies/processes than those on the sales team. Make the extra call/email to get a sense for who will be in the room and what they will be interested in and bring the folks on your team who can address the issues. Don’t save follow up for another meeting- you might not get it.
I originally hesitated on writing this post for fear of restating the obvious, but the last demo I participated on was too much for me to bear. Too many people wasting time and money out there!
Implications- If you are a sales or marketing leader, routinely involve yourself in that first customer contact from time to time and ensure that your firm is putting its best foot forward. Have you recently checked to make sure the basics are covered? Consider all the investment that has gone into getting just the opportunity to talk to that one prospect. Start off creating your perfect match with the right impression and for heaven sake, clean up before you go!
Long sales cycles. How many of those of us who have sold enterprise software before have had to deal with this problem? To be sure it’s a challenge that many IT companies face when peddling their wares to clients (and a big challenge for startups that want to sell to enterprise http://wp.me/p1hDJ1-1A). But is it something we as business development professionals just accept and live with? Should we all just crawl back into our respective caves and hibernate until our clients thaw out? After all, what influence could we possibly have on how fast an organization can move?
Over the years I have been developing some thoughts on this based on the experience of the companies that I have worked for and advised, and I believe that in fact there are ways for companies to influence faster decisions, open new market segments and raise awareness by thinking beyond their core customers and looking to the various constituents in their respective supply and distribution chains to provide value. It’s a concept that I am calling “network based selling” which I try and describe in more detail below.
I came across this concept while serving on the board of a company that sold compliance solutions for the insurance industry. Due to the regulatory morass that is the nightmare of the insurance industry, there was this massively complicated paper-based process that involved insurance companies, regulatory bodies and the independent and captive agents that sold insurance policies to end customers. The company I served was formed to take these processes to the digital age. It began by creating a platform for state governments then moved to manage licensing processes with agents, then moved to serve insurance companies.
What is interesting in this case was the momentum and selling inertia that this company was able to gain with the most intractable customers (can it get any slower in IT than government and insurance companies?) because of the fact that it had strong penetration within constituents in the insurance regulatory/distribution chain. Agents liked the company because it had a fairly seamless way to deal with regulators in each state. Insurance companies liked having access to multiple states and thousands of agents. As we bulked up the number of agents and insurance companies we served, we got more attention from state regulators.
The important point here is this. You can accelerate the speed and ease with which companies make decisions about your solutions if you engage other constituents in your client’s ecosystem. Think carefully about your prospective customers’ upstream and downstream constituents- their customers- their suppliers. Is there anything that your company or your solution can do to provide these entities with value? Do these constituents represent potentially new markets for growth? Because if you do build traction in these markets that comprise the “network” of your core clients constituents, you’ll be sure to garner more attention and likely deliver more value for the companies you seek to serve.
I’ll blog more about this concept of “network-based selling” and provide more examples of companies who do this effectively. I’ll also present some ideas on how/where I think this concept can be used more effectively ( e.g., Enterprise Purchase to Pay industry), but my point here is to introduce the topic to my blog and return to it with future posts, examples and content.
Happy selling (in shorter cycles).