I teach a services marketing class at university and today we were discussing Lovelock’s flower analogy where the core service is surrounded by supplementary petals. Someone asked what was more important – the core or supplementary elements of a service?

Of course, the obvious answer is that it’s the whole flower that has the value. Without the petals the core itself is not that attractive. Yes you have to deliver on your core service but it is often the way you arrange the supplementary elements that delivers true value for your customers.

It’s not so much what those supplementary elements are, but the different combinations of them that can personalise the brand experience for individual customers.

Looking for a competitive advantage? Why not experiment with different combinations of petals. You could come up with something new just by thinking differently about what you have.

Philip Dennett

Georgia Flight, writing on Bnet, profiles 7 successful intrapreneurs. Here I list the key lessons they learnt – food for some revolutionary thinking perhaps?

1. Kodak: Successful ideas leverage the company’s strengths; the best ones fill a real customer need.
2. Toyota: If you hit a corporate roadblock, ask yourself: Will an altered plan garner equally good results?
3. Yahoo: Just because you had the idea doesn’t mean you’ll be put in charge – and that may be best for you and your brainchild.
4. Wal-Mart: Just because you didn’t come up with the idea, doesn’t mean you can’t lead the project; those who interact directly with customers are often best at feature development.
5. Caribou Coffee: When approval is stalled, keep refining your idea and make it better.
6. iRobot: Never underestimate the power of a well-earned reputation; enlist mentors when you need to learn new skills like management.
7. Gateway: Don’t lean too hard on past means of production when creating a totally new project.

Philip Dennett

Most successful organisations have a strong culture and Intel is no exception. Under CEO, Andy Grove, Intel grew 4500% in a little over 10 years in the 90’s– a key part of that success was Andy’s belief that the heart of an organisation is its middle management. Middle management? – I hear you say. Aren’t we trying to cut back on them?

According to biographer, Richard Tedlow, Andy believed that “If you’ve got bright middle management willing to—and this is another part of Intel culture—constructively confront you and your suppositions and your assumptions and the suppositions and the assumptions of the whole firm, you’ve got eyes and ears all over the country, all over the world, that give you a competitive edge.”

In other words, keep close to the people who are close to the customer.

Tedlow summarises the essence of Intel culture as:

• constructive confrontation,
• disagree and then commit,
• knowledge power not position power,
• put common sense on a pedestal,
• let chaos reign and reign in chaos.

Put these ideas to work in your organisation and live them – and maybe, just maybe, great things will happen!

To read an interview with Richard Tedlow about his book click here.

Philip Dennett

Chris Anderson in talking about today’s over-communicated world makes an interesting suggestion: Every abundance creates a new scarcity. For instance:

* An abundance of information can create a scarcity of context
* An abundance of choice can create a scarcity of advice
* An abundance of content can create a scarcity of time
* An abundance of people competing for your attention can create a scarcity of reputational ways to choose among them.

His examples above create an opportunity to do some revolutionarythinking. Rather than worrying about the abundances in your marketplace, focus instead on the corresponding scarcity. If your potential customers are spoiled for choice – can you think of ways to provide a “roadmap”? It could be the only thing stopping them from finding you.

Philip Dennett

If you’re like me and think that only nerds and kids (ok and bloggers!) spend hours each day trolling the web – then think again.

According to a DoubleClick Performics survey, mothers are increasingly grabbing their mice to search the Internet frequently and in lengthy sessions. More than one-third of those studied spend three or more hours online daily. To find out more about their search activity in a range of vertical categories click here.

Meanwhile I’m firing up Dreamweaver and checking the tags on all my websites. Its been too long since I reviewed what search strings people are using and matching them to my tags and also relevant terms on the page. In fact the last time I did it I ended up with a new client just by showing the popularity of his brand in search string of visitors to my mototorq magazine site.

Philip Dennett

I often get asked about segmentation, particularly with B2B clients. While each database is different and the segmentation needs of each client are different, I usually get the discussion going by asking them if they can identify 3 types of customer: Allies, Bystanders, and Bandits.

Allies – these customers love us. They will have rated “totally satisfied” in your customer survey. But a word of warning – don’t ignore them (especially when something goes wrong) because they can easily change sides! Take note of what your Allies tell you is important – and make sure you keep doing it! Record specific likes/dislikes or needs for this group on your marketing database.
Your reps can routinely gather this information during sales calls. Put in place a “thank-you” reward program for Allies (as opposed to a volume based program). Even the small Ally (in volume terms) can be a valuable recommender of your products.

Bystanders – they are on our side for the moment (rated either “satisfied” or “neutral” in your customer survey), but they could go either way. For the Bystander – take a watching brief. Aim over time (and as resources permit) to at least get them to a “satisfied” state if they are neutral at the moment.

Bandits – these are the bad guys. They rated either “dissatisfied” or “highly dissatisfied” in your customer survey and will jump to your competition when it suits them. In the meantime they won’t hesitate to tell everyone they come in contact with that your company is no good! For the Bandit, firstly make sure you don’t have problems with your basic product or service; as this is the quickest way to ensure the Bandit will act against you. If you do have specific problems then fix them quickly. You don’t necessarily want to shoot all your Bandits, but you can divide them into sub-groups.
Those who, no matter what you do, are likely to cause you problems – “shoot” them. They will cause you more problems than they are worth in the long term.
Carl Sewell, the owner of an extremely profitable car dealership in Texas, says it doesn’t pay to deal with someone who doesn’t get on with you. Sewell always shoots the “bad guy” (read more about his fascinating story in Customers For Life; Doubleday Dell Publishing Inc; New York 1990).
Obviously, if there are other strategic reasons for keeping a client in the short term (eg. if they are your biggest client and you can’t survive without them) you will need to think carefully about timing.
Those who are only in the Bandit group because of a specific or long-standing problem – make it a priority to rectify the situation, because this is the group most likely to spread negative publicity about you.

I find the descriptive terms help people to visualise the type of customer we’re talking about. And are a useful place to start, when you are developing strategy.

Philip Dennett

The revolutionary thinking concept is about challenging your sacred cows and thinking differently. It must have been what Steve Jobs was thinking about at Apple when he rose from the Apple dead in 1997.

Apple was heading rapidly down the toilet, but now 10 years later it’s worth $105 billion, dominates the MP3 market and is now attacking the mobile phone market. Steve must have said to himself that they got where they were by following the rules of business engagement like everyone else – so why not do everything the opposite.?

According to Wired, Steve’s management style is autocratic. So much so that it is the opposite to everything you’ve been taught in business school:
• Be nice to your employees – hell no, whip them into producing their best work.
• Be a sharing caring company when it comes to releasing information – hell no, even employees often don’t know what’s going on, let alone the media.
• Don’t tie your proprietary software to proprietary hardware – hell no, it’s the whole Apple or nothing.
• Encourage outside development – hell no, if anyone wants to play with Apple they have to play by Steve’s rules (and they’re currently falling over themselves to do so).
• Research customers to find out what they want – hell no, give them what they want before they know it themselves.

The strategy has obviously worked – but why? According to Wired it’s because “By exerting unrelenting control over his employees, his image, and even his customers, Jobs exerts unrelenting control over his products and how they’re used. And in a consumer-focused tech industry, the products are what matter.”

That may be true but my take on it is it works for Steve because he is a charismatic visionary who sticks to strategy and has an unrelenting passion for what he does and he doesn’t accept second best.

So before you decide to play Steve’s game, make sure you can inspire people to the extent they thank you for treating them badly.

Philip Dennett

Recently, I took a week’s holiday on Queensland’s Sunshine Coast. We stayed at some holiday apartments (of reasonable quality) overlooking the beach. On arriving in our apartment, we found there was less than half a roll of toilet paper; enough dishwashing liquid for one wash; and one small soap each. The owners had presumed that everyone who came to the apartments did so on the basis of price (and that was the sole value driver in the relationship); and further more, if we had gone to the property down the road the situation would have been the same. Okay, so they have to be competitive in a very tight market; however if they used the OVE approach (optimal value exchange) they could have made us very satisfied (at no extra cost) and we would have become “allies”.
So, what could they have done?
On arrival, they could have given us a “welcome” note or card which explained the apartment philosophy (especially how it differs in service level to a hotel/motel) and offered to sell a pack of “emergency rations” to save us having to go to a supermarket and buy (relatively large) packets of washing powder etc.This wouldn’t have cost them anything; and, in fact they could make money on the ration packs at the same time as making us satisfied. If only they had understood that “convenience” was a value driver for us (and I would suspect, for quite a large number of their customers)!

Philip Dennett

The relationship you have with customers is built, not just on your product or service, but the total experience the customer has with you. Ian MacMillan and Rita McGrath (Harvard Business Review, July-August 1997) coined the term “consumption chain” which maps a customer’s entire experience with your product. According to MacMillan and McGrath, mapping the Chain can uncover valuable opportunities for differentiation.
The authors pose a number of questions which relate to the different links along the chain. For example:
• What are they doing at each point along the chain; what else could they be doing; what problems do they encounter.
• Where are they at each point; where else could they be; where would they like to be.
• Who are they with; who influences the customer; how could you change either of those things to your advantage.
• When (day, night, time of week, time of year) are they at any point in the chain.
• How are their needs being addressed; do they have concerns; how else might you meet these needs.

Philip Dennett

Scott Cook, Chairman of Intuit (the very successful financial management software company), was reported in the Harvard Business Review as saying: “When you treat a customer so well that he or she goes out and tells five friends how great it is to own your product – that’s when you’re doing it right.”

Many companies view customer relationship management as a complex task managed by project teams and expensive software (and even then it often doesn’t produce results. What if you don’t have that luxury?

Try this list of ideas you can be working with now to help manage your customer/prospect relationships. All of them are easy to implement and won’t cost you much either!

1. Generate some form of systematic contact with customers (in addition to your normal sales contacts). Try using brief “benefits” reminder letters to reinforce to the customer that they have made the right purchase decision, together with an offer to assist them to get the most out of the product. Send the occasional unsolicited “love” letter just to remind the customer that you value their business.

2. Don’t be tempted to throw in a sales pitch with the relationship building techniques in item 1. Someone isn’t really going to believe you love them if you try and sell them something at the same time as you are trying to make them feel good about the relationship.

3. Communication is a two-way street – make it easier for clients to contact you and keep telling them how you would love to hear from them. Do you have 800 numbers on your ads or business cards?

4. When a customer contacts you, have a separate strategy for “information” requests and “problem” approaches. If a customer just wants information, then chances are you can automate the call to some degree (eg. flight arrival information); or you could minimize the number of people the customer has to go through (eg. the person who answers the phone can process a simple information request quickly instead of passing it to the product manager). However, if a customer is ringing with a problem, make sure they can talk to a person quickly and that that person has authority to take some action!

5. Make the offer to send “further information” on your advertising pieces. You will be surprised how the offer will open up a dialogue with some people. But make sure you respond to the request quickly and intelligently.

6. You want new customers right? But think about your objective carefully before you start a lead-generating campaign. Are you looking for suspects or prospects (ie. A quantity of names, or quality)? If you are after quality, then limit the responses by asking the prospect for much more information about themselves.

7. Offer people information pieces that are more than just straight sales brochures – if your offer has an “editorial” flavour it will have a higher perceived value. For example, you could offer a booklet entitled 5 Simple Tips for Hassle-free Potty Training, instead of just “write to us for more information on brand x nappies. Oh, and make sure the information supports the title (as well as including your sales pitch)!

8. Let prospects shortcut an information offer by adding a freephone or freefax number to your communications.

9. When you respond to a request, make sure you make it obvious on the outer envelope that it’s “requested information” – otherwise it might get mistaken for junk mail and be discarded unopened.

10.If you only do one thing right – make sure it is spelling the customer’s name correctly. Nothing makes people more crazy! Train your people (on the phone, and in data inputting) to take care and listen carefully and confirm they have the correct spelling while the client is on the phone. You would be surprised how weird even a simple name can be spelt.

11.Follow-up. People will rarely buy after the first exchange of information. Also include a further response advice in each info pack you send out to keep the dialogue open and to help qualify the prospect.

Philip Dennett