I’ve got a really interesting topic that so many people make mistakes. It’s absolutely crucial if you’re in a business, in a company, starting your business, building your business. I’ll refer to it as listening to the customer.
Everybody talks about listening to the customer, but why do so many companies and people get it wrong? Many companies, even very large ones, have no idea where their markets are, or who is in the market, or who might be leaving the market; who might be entering the market. Sometimes it’s just utter ignorance, sometimes the market has changed and they’re not keeping up with it.
Think in terms of the auto industry. Back in the, say, 70s and before, there were really three companies here, and while there were those three companies, they were sort not really even competing very heavily; it was more what advertisements they had on TV, and traditions and loyalty to the different companies. Something happened, something changed, the Japanese came in with quality products, they were different in many different ways – it changed the market, and they weren’t ready for it. Sometimes it’s an accident, and sometimes they just don’t have a complete picture.
Something that I had given in speeches in a couple of companies (the last time was at Microsoft, another time was all the way back when I worked at General Motors), and that was early on (well, in Microsoft it was much later), I was asked to talk to the people that were what they call the evangelists all over the world, and they had come in. What I started out with was letting them know: People and businesses don’t give a damn about your products! There were a few open mouths in the audience and there was not a peep in the room. What they care about is what your products can do for them. Can it solve the problem? That’s what you focus on. It sounds obvious, but when we have a product and we have engineers who are developers in whatever industry it is, that have developed and built new features. They’re more interested in showing people their features than what the features can do for the business.
A few different examples on this. First of all, we can go all the way back – there was a period of time with Chrysler, when it was in its financial difficulties, etc., it had terrible cars. I was inside Chrysler at the time, very often talking to key executives, and they basically just kept on saying: “We don’t have any good products.” They knew it themselves. I asked them: “Why are your customers buying them?” They said: “We don’t know. They’re terrible.” They literally admitted that. I picked their weakest, most horrible car, and I said: “If you’ve got over 100,000 people buying that car, why are they buying it? Find out why those people are buying it, and that’s what you advertise. You advertise what the people are buying it as their preference. That is your advantage.” “Advantage Chrysler,” that was the campaign. Many of you who are older probably remember it well. When I first brought it to Chrysler, they just said to me: “We don’t have any advantages.” It was because they didn’t know why their own customers were buying their products.
Keep in mind: You find a niche in something or you find a hole in somebody else’s product. That is they don’t understand why somebody is buying their product – you can position yourself and advertise through marketing to position yourself as the advantage. Also, inappropriate or ineffective customer focus affects loyalty.
When I was at Microsoft, one of the early things that I did. The training & certification areas were focusing on helping the developers from the different product groups, such as the database server, the operating system, Windows, or the mail server, etc. They wanted to help them showcase the new features. Again, remember what I said: Nobody cares about the features of your product; what they care about is what it can do for them. It’s the same thing when you get into training. What I introduced was: What is the purpose and benefit of that training? You want those people who are taking those courses to become heroes, and love working with your software and products. Their career becomes embedded with your solutions.
What we did was refocus the training and certification towards the idea that people, instead of learning to introduce or teach a couple of benefits of a new database server or the advancements of the database server in the current year, they would instead show them how to become a web developer, or database administrator, or systems administrator. As those things were being done, those people were getting that career and being successful in those careers because they would solve the problems of the companies for those issues that they had. That is, they would build better applications for their own company, they would be solid applications, they would be recognized, and of course their career was completely embedded with Microsoft products. That’s a solution that’s a winner for everybody. If you make the person learning a winner, and the company that implements that solution a winner – you don’t have to worry as much about selling your product.
Other areas: Incorrect targeting, incorrect marketing. There was a product that actually was just as good as GoToMeeting that Microsoft had in the early 2000s—2002-2003—that it had built and developed. It would be embedded and free, basically, to customers because it would be part of Office or the Windows system. What happened? What failed? It was the targeting, the presentation of that product. They tried to sell it as: “Look at how much money you will save on travel expenses, not having to have all these people fly in for a meeting.” That sounds good and that was the thought that they had within that group at Microsoft, but what about the customer – what was important to them? If they’re flying people in from all over the world for a meeting that they consider important and special, they don’t really care so much about the money because they’re bringing people in quickly. Why? Because they need the immediacy of a decision. Well, they didn’t do it that way. They tried to position it as a money-saving venture. What was important, clearly, to those customers was not the saving of money; they weren’t looking for cheap airfare or no airfare. They were looking to the value of making a decision fast.
What my suggestion was… And yes, it wasn’t taken, but what my suggestion was: Instead talk and present to them how their decision could be improved. That is, imagine instead of coming in and bringing all these people in, you’re able to say: “We’re going to have a meeting in one hour,” they don’t even have to wait two days. “In one hour we’re going to have a meeting,” and then during the meeting they have their discussions. They have their improvements that they’re thinking they’re going to make, and then they turn around and say: “Okay, we’re going to meet back here again in three more hours or the next morning.” So, any follow-ups are immediately taken care of as well, instead of having to chalk up those follow-ups to telephone calls later on; they can have just another meeting. That’s the importance of improving the meeting, improving the speed of the meeting, and improving the follow-ups of the meeting. It was much more crucial to them, quite apparently, because they weren’t ever looking for just reducing their costs. As a matter of fact, that was not even under their consideration when they pull people in from all over the world or all over the country.
When you’re positioning your product, what do you have to do, particularly if you’re new and there could be close substitutes or things that would be complete alternatives? One of the great ones more recently where I was fortunate enough to be involved, and did some of the positioning and strategy for the Lexus division of Toyota. When I was doing that the idea was you can’t really pit yourself directly against a BMW, or a Mercedes, or a Jaguar. You have to position yourself so that people might think or compare within themselves to that, and then position the product message as something that they would think is feasible. They already loved the quality of the Japanese cars in Toyota, etc., Honda—but we’re talking about Toyota here—that wasn’t the question. The question wasn’t: Can they? But: How do they match up? Mercedes had the reputation, was around forever, as was BMW. Jaguar, people weren’t buying that for quality; they were buying that for that classic design. That’s what it was, because the quality really wasn’t there. There were jokes about the Jaguar.
They were positioning themselves towards the Mercedes, so they had the look, subtly, like a Mercedes, but they would never mention Mercedes. Yet, their messaging was: “The relentless pursuit of perfection.” Implications – obvious; statements – none. They were able to position themselves as an alternative and for something that would be easy for people to move up in from the Toyota franchise into the Lexus franchise.
It’s not always about money. In some cases, there are things that you can do or don’t do that have an influence. You have to be financially astute in any business, that’s one of the biggest problems people have in failure, but you have to know what the market is willing to pay for and how it is perceived in the market, how the customer perceives it. An example of it, this is an older example from about 10 years ago, there was one or two airlines, I think of one right off hand, that was thinking we should eliminate, and did eliminate all the black olives in salads. They were serving on planes but they said that nobody was eating them. There were probably not very many people eating them. The fact was they looked at it as a savings thing, but then when they put out the salads without any black olive, there was no color in there. It was just a green, mostly iceberg lettuce thing just sitting there with a bunch of sauce put on it and that was it. How much did that black olive cost and how did it make the salad look? They never considered that. They only considered the purchase or non-purchase.
Another example to build loyalty… While a lot of airlines out there are turning around, and every time somebody wants to change their flight, they’re hitting them for $150 or so fee as a change fee, even their very elite members. I fly a lot on Alaska Airlines, I want to change a flight, they take that fee, whatever the cost of that trip was, no fees whatsoever, that entire cost of that trip just goes into what’s called “my wallet,” and on some other flight later on I can fly and use that money. What does that do? Gets tremendous loyalty. They’re not trying to drag out every penny on me, and at the same time, their planes are packed. Now they’re doing this for elite flyers. So what’s happening? The elite flyers are the influencers, which is another category, another topic, but they’re the influencers on other people. Who do you fly with, and how do you talk about the airline you’re with? The elite flyers are influencing other people in purchasing seats on airplanes, so they’re treating them extremely well. That’s the idea. It’s not just what they spend; it’s how they influence other buyers.
Thank you so much for being with me here today. I realize I went on for quite a lot here, but I think this is so important to help and enable you to think from another perspective in listening to the customer. We’ll get into a couple more episodes that are related to this, because you can’t have a successful business if you can’t not only understand how your product is positioned amongst customers, but can’t understand what the customer is thinking. What is the customer’s perspective? Thank you very much for listening.