Monthly Archives: April 2012

WHY AREN’T YOUR CUSTOMERS DRINKING YOUR KOOL-AID?

You’d be hard-pressed to find someone who’s going to describe today’s economic marketplace as anything but temperamental.  The natural inclination is to take a defensive hunker-down mentality, downsize, and play it safe. The truth is, however, you should be looking at things (especially your customers) quite differently.

Most businesses look at their customers from the inside-out based on what they want to deliver. (In other words, you’ve created your own Kool-Aid and you’re drinking it, so your customers should too, right?)  But customers see any business from the opposite perspective, from the outside-in.

Let’s take these two views apart for a moment.

Inside-Out thinking begins by asking, “What are we good at? What are our capabilities and products? How can we use our resources more efficiently?” This thinking limits the company’s business opportunities because it means the company is less sensitive to how the customer is interfacing with the market. They’ve slipped into thinking it’s “all about us and what we sell.” Inside-Out companies are surprised by poor sales results.  They don’t feel threatened when a new competitor enters the market. They’re out of touch with what value they really bring – or don’t bring – to their customers, or what their customers think of them compared to competitors.  In short, their mindset is “Here are our products and services and this is how we help you.” The problem with this approach is that it relies on your customers having to work to find a place for your solutions in their lives.

Alternatively, companies that think Outside-In focus on the customers’ point-of-view.  They stand in the customer’s shoes and view everything the company does through the customer’s eyes. They depend on marketing to increase the conversation they have with their customers which in turn allows them to seize on business-building opportunities. They ask their customers what their upcoming needs are and then figure out how to give it to them. By shifting the focus so significantly, they open up a much broader set of opportunities. These companies don’t wait around for change to happen but rather they create change by seeing their world through their customers’ eyes, allowing them to more quickly meet the customers’ needs.

The first tablet PC's were designed based on the manufacturer's point-of-view; Apple's iPad was designed from the consumers'.

A perfect demonstration of the difference is tablet computing.  Tablets have been around for years, fundamentally as flat computers…in search of markets who need them.  Apple, on the other hand, looked at how consumers use the Internet, music, photos and video content, and came up with a convenient form factor that is, in essence, an Internet devise, not a computer.  The rest, as they say, is history.  That’s Outside-In thinking at its best.

So what’s this all mean? Well, fundamentally, if you’re not stepping out of your comfort zone and taking a hard, honest look at your business and its products through your customers’ (and non-customers’) eyes, you’re putting a lid on your growth.  If you’re not communicating to your customers on their terms, they simply won’t care. Having an Outside-In attitude ensures that your company delivers the value buyers actually understand and appreciate. Conversely, the old phrase “if you keep doing what you’ve been doing, you’ll keep getting the results you’ve been getting” has never been more true.

Don’t waste a perfectly good recession

Alright, business hasn’t turned around as quickly as you’d like – or as quickly as anyone would like.  So your customers aren’t throwing their spending money at you any more than you’re shelling out dollars to hire additional staff, add new locations or expand your advertising reach.

Instead, if you’re like most companies, you’re continuing to be as parsimonious with your spending and investing as good business judgment dictates, right?  That means you’re more focused on sales than on marketing, since marketing means spending money whereas sales means making money, right again?

Many businesses have grown their sales force while decimating their marketing departments.  They’ve turned from brand-building  to such “instant gratification” sales-based marketing strategies as direct response and SEO.  At the same time, they’re making price the deciding factor.

What could possibly be wrong with that?

So let me propose two basic flaws in that kind of approach.

First, the further away from image and brand marketing you move, the less the customer is predisposed to buy from you regardless of price, since your brand is no longer the top-of-mind preferred choice.  That means A) you have to wait until the customer is ready to buy and not a second before, and B) you are now set up for trading exclusively on price since your value proposition has taken a distant back seat…and there’s always a competitor who will come along with a cheaper product or service.

The second strategic flaw is that you’re now doing exactly what your competition is doing, hunkering down and playing the DR/sales/price game at precisely the time advertising rates are the most affordable they’ve ever been.  Today, you can negotiate the most advantageous ad programs and one-up your competition with strong visibility while they’re still virtually invisible.

The opposing argument might be that in this sucky economy consumers are more price-focused than brand focused. And yet…

Why is it that sales of Apple’s iPad, an absolutely non-necessary (but really great) product, are booming?  With each new iteration of the iPad, a $600 – $800 purchase, there are lines of anxious shoppers waiting outside the Apple Store.  Simply, Apple presents a fantastic value proposition in its advertising that has nothing to do with price.  The Apple brand and the iPad experience are king. Their strategy is so successful that in 2011, Apple sold more iPads in its last quarter than HP sold desktop computers all year!

The true job of advertising and marketing is to establish a consumer’s desire in advance of asking for the order. Without this first stage, building desire and brand equity, the selling process is exponentially more difficult. Any wonder why the sales cycle for most businesses has doubled or even tripled over the past few years as marketing budgets have been cut?

This is nothing new.  In fact, the business publisher McGraw Hill addressed this very issue in a brilliant ad that ran in the early 1960s.  In essence, the ad demonstrated that without marketing laying the foundation of understanding and desire prior to the sale, the barrier is significant.

So you’ve been given a gift, as it were, in the form of a recession.  From a marketing perspective, your competitors are asleep at the wheel, and you can afford marketing visibility as you never have before.  Here’s your chance to let them suffer the recession while you profit from it.  How will you handle the opportunity?

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