Three Types of Customer-Centric Strategies

What can you do to be more customer-centric?

First, let me share my definition of customer-centric: Solving specific customer problems cheaper, faster, or easier.

So how can you do that?

According to Clayton Christensen there are three distinct ways:

1. Sustaining Innovation
2. Low-End Disruptive Innovation
3. New Market Disruptive Innovation



1. Sustaining Innovation
Deliver better performance to highly demanding buyers in an existing market. Crowd Spring is my favorite example. In the new transparent world of social media, graphic designers and ad agencies are struggling with the commodization of their product. As one of my graphic designer friends said upon seeing Crowd Spring for the first time, "This makes me sick to my stomach." Crowd Spring is a crowd sharing web site for graphic designers. A buyer simply posts a project and creative brief on the site with a budget--a very low budget. For example a logo and identity for a new architectural firm for $500. Depending on what market you're in, that is either very low or "wouldn't buy me a cup of coffee" low. Here's the really bad part for designers: Fully developed concepts are submitted from graphic designers all over the world. Hundreds of them. When the buyer selects the concept he or she likes, then the $500 is released to that designer. Bottomline: For $500, this buyer gets to see hundreds of concepts and ideas and only pay for the one they choose. Crowd Spring is providing remarkably better performance (in the form of same quality for much cheaper prices) to highly demanding buyers in an existing market.



2. Low-End Disruptive Innovation
Give “over-served” buyers “good enough” performance at lower prices. My hero R. Sam Bowers described it this way: In the old world, sellers always sought to exceed the buyer's expectations--go above and beyond what is being asked for. Today, buyers have learned that the extra effort costs money. What buyers want is "good enough" at lower prices. A great example of this is healthcare where striving for the highest quality has been the mantra. This mission has also resulted in the runaway costs of healthcare. Minute Clinic discovered that there are many ailments for which patients just want "good enough". For $40 you can get diagnosed and get presciption meds and be on your way in less than an hour. These patients don't need a doctor, a nurse practioner will do. Minute Clinic is providing "over-served" patients with "good enough" care at much lower prices.



3. New Market Disruptive Innovation
Provide “excluded buyers” a simple, lower cost, easy solution. Traditionally, there have been services or products that have been priced beyond the reach of many potential buyers. One of these is business legal services. LegalZoom has changed all that. Now, small businesses can get the legal documents and services they need for prices that fit their budgets. LegalZoom has created a new market by finding a significantly cheaper way to deliver the service.


In today's new customer-centric world, marketers need ways to increase their competitive advantage and win more business. Employ one or more of these three customer-centric strategies and you will be amazed by the results.

A final note about profit and margin. The only example above that diminishes margin is Crowd Spring. But it diminishes it for a commodity. You can't put lipstick on a pig and you can't add margin to a commodity. The other two invent better processes that actually increase margin while dramatically lowering price.

The New Face of Unemployment

In past recessions, the face of unemployment has been the laborer. That face has changed. When I received this photo from a friend I laughed at the irony of it. What's sad is how accurate it probably is.

I celebrated my 50th last November at Grand Cypress Resort in Orlando. A special trip for me and my wife with close friends. Despite the time of year we had trouble getting tee times on the three courses they have. The reason is Merrill Lynch had booked the entire place to entertain their star brokers. You wouldn't believe what they were lavished with.

Opportunistic profiteering is dead. If you don't add value, you will be left behind. I'm still a capitalist. But a wealth-builder rather than an opportunist. Viva la'revolution.

How to Interview Your Customers and Find Out What They Really Want

You can't hardly hit a blog or business feed without hearing about the importance of understanding your customer. And to do it, you've got to talk to your customers and find out what they want.

Seems like pretty straight forward stuff, right? Not true.

Harvard Business professor Clayton Christensen says the current tools on which business relies for understanding customers are no longer relevant because they are not designed to uncover complex demands.

Any type of research that asks customers direct questions fails to uncover what the customer can't describe or simply does not understand. Focus groups, quantitative surveys, and even voice-of-the-customer all rely on the customers' ability to describe what they want.

But when it comes to the emotional and social aspects, customers don't know what they want. At the very least, they don't know how to describe what they want.

So how do you find out? Here's how to interview a customer and uncover what they really want:

1. Be Their Psychiatrist - Do not drive the questioning in an attempt to get them to "tell you the answer" -- because they won't. They don't know the answer. Once they identify an area of frustration, stop talking and listen. Let them talk. When there is a lull, use words of encouragement to keep them going such as "How is that impacting you?" or "Do you think it will ever change?"

2. Don't sell--ever - The reason marketers struggle getting good information from their customers is they don't listen; they sell. The minute a customer begins describing a problem, our brains shut off and we go into "sales mode" and begin convincing the customer our product can solve that problem. These are not sales calls. If you start selling, you'll learn nothing.

3. Do not make it a product issue - Avoid your instincts to drive the conversation to your product. Let it happen naturally. If it's a product issue, they'll get there all by themselves.

4. Focus on their world - It's not about you, it's about them. You need to understand the full scope of the job the customer needs to get done. Your product only plays a small part. Sorry, you're not that important.

5. Focus on how they use the product and why - They hire your product to do a job. Focus on the job they're using your product to do. What works well and what doesn't work so well--or what isn't working at all. Remember, there's a huge difference between how well your product performs the job it's designed to do verses how well it performs the job the customer needs it do.

Is it important to talk to your customers? Absolutely. It's critical to your success. But you have to do it right or you'll learn nothing and perpetuate the same old practices.

Better, Faster, Cheaper

The following is from Mount Union College website.

I met Sam Bowers at a TEC meeting in De Pere, WI in 2007. His innovative perspective was incredibly enlightening. The rise of social media has accelerated his predictions. I pinged Chris Brogan on Twitter yesterday when he was commenting about weak customer service at a bank. I told him opportunistic profiteering is dying. The collapse of the financial markets was inevitable because they were the most visible symbol of opportunistic profiteering.

The rise of social media coincides with the rise of the empowered buyer. We're burning our loyalty cards and we're not going to take it anymore!

As marketers, we need to pay attention:


According to Bowers, president and founder of the Service Sales Institute, we are moving from the industrial revolution into the second major phase in modern business known as a “technology revolution” which will alter and change the world.

“Today we are using more and more technology to produce more and more output at an ever greater quality,” said Bowers. “We are going to see better, faster and cheaper explode in the coming future of business.”

Bowers believes that because of the advancement in technology, robotics and computers, the way companies do business is changing because the customers themselves are becoming better and smarter buyers.

In addition, Bowers stressed marketing as the key in today’s business world because buyers are doing their own research. The Internet has supplied buyers and customers with enough information to make better decisions and to find comparable products at a lesser cost.

“Businesses are being faced with the ever increasing need to improve productivity while lowering costs,” said Bowers. “In a world where selling is disappearing, the most important business skill of the future is marketing.”

The old style of forming relationships and relying on a reputable sales staff to drive business decisions is becoming a thing of the past.

“Technology and the use of the web is altering the way companies bring products or services to the market and marketing is drawing potential buyers to the product or services,” said Bowers.

According to Bowers, e-commerce is the next step.

“Customers have access to better technology and more information and demand alternative sources,” Bowers added. “Customers are driving businesses to e-commerce. They are looking for evermore increasing sources that can give them what they want at the lowest possible price.”

Bowers concluded that the future is now and he challenged the students in attendance to stay up with technology

“Companies are going to rely on and need today’s students to move them into this new age of technology in order to survive,” said Bowers.

Bowers has also been president and chief operating officer of multiple divisions of a company he helped grow from $7 million to over $465 million, and an economics professor. He has spoken to thousands of chief executive officers and numerous associations as well as conducted hundreds of strategic planning and positioning meetings for corporations.

The Smith Lectureship in Business was established in 2001 by C. Richard Smith, a 1953graduate of Mount Union College. The purpose of this Lectureship is to bring business professionals to the Mount Union College campus to share their knowledge and experience with business students, faculty and others from the campus and local community.

How to Market in a Down Economy

An economic downturn typically spells trouble for marketing budgets. If your marketing budget gets slashed, what can you do to keep sales leads coming? Here's a few tips:

1. Shift to Social Media - A recent study by Cone Inc. found 83% of Americans said companies should not only be present in social media but interact with the consumer using social media. If you believe social media is not happening in your market, now is the time to reconsider. Plus, social media is essentially FREE.

2. Create a Content Strategy - In the social media world, content is king. Social media guru David Meerman Scott said recently that the new marketer will need journalistic skills. The reason is the new marketer will spend most of their time creating content (e.g. writing news stories). A content strategy establishes your company's or brand's messaging platform for the content to be created and published. In the social media world this content needs to deliver value rather than promote. For example, how-to's. Share your knowledge and expertise. Another key aspect of your content strategy is leveraging SEO. You want to be sure your content is focused to drive specific keyword search phrases to your blogs and website.

3. Assign a Content Manager - If your marketing budget gets cut, you will have staff looking for something to do. Choose the strongest writer and make them your content manager. They will be responsible for creating and publishing your content.

Remember, social media is FREE. The other advantage is social media is inbound marketing. That means you spread content throughout the social media world and those buyers seeking solutions will find you. Even in a down economy, there are buyers. You don't have to worry about finding them, with the right social media program, they will find you.

In tough economic times when your budgets are being cut, social media is a great choice.

Get More from Your Market Research: Think Like a Chess Master

Most marketers know how to get data. It's the strategic analysis that they struggle with. I've talked about this before, but it continues to be one of the most important challenges facing marketers. "How do I find out what I should do?"

Here's the trick. "It's not enough to know when to leap. You have to know the reason." This nugget of wisdom is courtesy of Bruce Pandolfini, from his book Every Move Must Have A Purpose.

Why do we struggle with strategic analysis? Because we focus on when and where to leap and ignore the reason. What's the "why" behind the tactical action?

The subtitle of Pandolfini's book is "Strategies from Chess for Business and Life". So what can chess teach us about strategic analysis? "Chess is change. Action and reaction. Every encounter offers a multiltude of intricate and layered relationships to disentangle."

Okay, so how does all this make it easier to figure out what you should do? Data is not insight. Data provides facts, but it is not self-evident. You will not find a piece of data that says, "Here's what you should do next and why." For that, you have to perform strategic analysis. Here are some tips to help you do that. They may seem a little cerebral. Don't be intimidated. They're actually easy--and, oh boy, do they work.

How to Analyze Data Like A Chess Master

1. Use Situational Awareness - For every action, there is an equal and opposite reaction. Look at what you're seeing--the data. Are you seeing the "action" or the "reaction". In almost every case, you're seeing the reaction. As an analyst, your job is to figure out what action occurred to cause the reaction you've just seen. Being aware of the action/reaction relationship is also called "situational awarness". Rather than waiting for data to come to you, you watch for the subtle interaction of everything in view.

2. Find the Purpose of the Action - People and organizations don't make meaningless movements. As Pandolfini says, "every move has a purpose." What purpose you ask? Pandolfini explains it: "In an ideal state of affairs, moves should always do at least two things in concert: foil our opponent's aims while fostering ours." So every action is motivated by the desire to foil our competitors' efforts or improve our own position. Begin with the premise that all actions are selfishly motivated until proven otherwise. You'll be amazed how often you're right.

3. Think Three-Dimensionally - Pandolfini says, "We must be supple-minded, for neither the position nor the opponent is likely to calcify." In the movies, they call it a "reversal". When it appears that one thing is about to happen only to have something entirely different happen. It makes us laugh, wince, and smile. It makes the story fun and compelling. Thinking three-dimensionally means looking for the reversal. Not accepting the obvious. "Rigid preconceptions can lock us in, preventing us from finding alternate routes," Pandolfini explains. Magic relies on our entrenched belief that all things happen the same way always. When you look at data or you read a story...ask yourself, is this really what is happening of is it slight-of-hand, a head-fake.

4. Sit in Their Seat - Actors work to understand Stanislavski's system and Strasberg's method style of acting both of which are focused on the actor immersing themselves in the character so their intuitions stem from the character rather than themselves. Too often, marketers rush to judgement and only see data that supports their assumptions or opinions. They don't take the time to sit in their customers' seat--or their competitors' seat. Stop selling and start listening.

5. Never Stop Thinking - How do we get mentally lazy? What does it look like? We begin relying on our experiences, beliefs and principles rather than what we see. The minute we recognize a familiar pattern, we abandon thinking altogether. As Pandolfini advises: "To win at chess...You don't play principles. You play moves. They decide your fate; cliches' don't." This may be a little difficult to grasp. It's part of the three-dimensional thinking. If what you see doesn't fit what's familiar, or only partially fits, don't make it fit. Look at it as something entirely new.

These five steps are not about research or data. They help you think about the data. That's where the insight is. Think of it as a game of chess and every move must have a purpose.

Thank you Bruce!

A Hot PR Firm

Looking for a PR firm that gets it? A firm that understands social media and networking and knows how to leverage it to market your brand? I've found one. It's Red Shoes PR.

Lisa Cruz and Jessica Dennis are the founders. Both have a wealth of experience in traditional and social media PR. Shortly following Hubspot's webcast of "PR in a Social Media World," the ladies at Red Shoes kicked up their social media offering and the results have been incredible.

The primary challenge facing marketers in social media is creating and publishing content. Most marketers lack the staff and expertise to generate the volume of content required to really drive success. That's where Red Shoes PR comes in. They understand how to develop an effective content strategy, create fresh content, publish it and promote you via social networking.

85% of Americans believe a company should not only be present in social media, but also interact with its customers via social media.* Red Shoes PR can help.

One of the most enjoyable aspects of my job is discovering innovative, forward-thinking companies and the people who run them. Red Shoes PR is one.

*Cone LLC Study, September 25, 2008

The Future CMO -- a Publisher?

NOTE: This is from ADWEEK. Please be sure to visit their site.

Why understanding an old craft is crucial to mastering new techniques
Oct 1, 2008

-By Joe Pulizzi

Considering technology has enabled marketing to make use of once implausible platforms -- mobile phones, interactive displays and even virtual worlds -- who would have guessed that the next generation of CMOs would need an in-depth understanding of a trade that goes back to the days of Benjamin Franklin? The answer: not many. Even so, publishing is the driving force behind today's most successful brands.

Even the word "publishing" sounds old-fashioned, so it's understandably difficult to fathom how the process could possibly be revolutionizing the marketing techniques used by the largest organizations in the world.

Publishing and Trust
Do you know IBM's most important marketing objective? According to Ed Abrams, vp of marketing for IBM, it's to "create and develop trust with technology decision makers."

Eduardo Conrado, corporate vp of business and technology for Motorola, is singing the same tune: Motorola's most important goal is to "become a trusted partner and resource to customers."

But how are they meeting this objective? By publishing online content, Webcasts, Webinars, videos, educational newsletters, white papers, content microsites. The list goes on. In order to create an environment of trust, marketers must develop valuable, relevant and compelling content on a consistent basis. That's publishing -- and now, marketing.

The challenge for corporate marketers is that most do not have the skill base or a clear understanding of the elements required for publishing.

Marketing Is Publishing
If you have any doubts as to whether marketing is morphing into publishing, just compare, side-by-side, the products of any media company and the communication tactics used by major marketing organizations. They are almost identical. The only difference is how they are measured. While media companies measure each product with an individual P&L, marketers measure their tactics through customer growth and retention.

While this is great news for non-media companies (advertising agencies and agency-side content providers) and client-side CMOs, it also explains why most media companies are hurting. The media's main competition is no longer other media companies; it's past clients, companies like yours.

This is a recent but rampant and steady shift. Up until just a few years ago, corporate marketers were still primarily dependent on aligning their products with media brands to distribute their overall message to their target audience. Now, they're cutting out the middleman (that would be traditional media) and communicating directly to their customers.

There are two major elements primarily responsible for this shift: Search engines, which have democratized the playing field, and technology, which is so cheap that there are essentially no barriers to publishing the messages you want to your target buyers.

The Publisher's Skill Set
While the metrics, the marketing knowledge and the concepts of integrated marketing are still extremely valuable, the differentiator between the haves and have-nots of leading marketing executives comes down to the process of delivering valuable, relevant and compelling content on a consistent basis.

What are the defining traits of publishers? And how can your average CMO adopt them to do his or her job more effectively? In short, CMOs need to think like publishers and understand concepts such as:

-- The ongoing informational needs of the buyer (outside your products and services).
-- Anticipating the informational needs of buyers and presenting cutting-edge industry trends (again, not product- or service-related).
-- The art of storytelling and its role within the organization.
-- Audience development tactics that rely on in-depth knowledge of buyer personas.
-- Content tactics that cut through the marketing clutter and gain readership.

The CMO publisher allocates resources much like a media company would, including:

-- Aligning an expert content network of journalists and custom publishers.
-- Developing an editorial plan and content schedule.
-- Leveraging employees to be part of the content-generation process and positioning them as industry experts.
-- Creating an online, in-print and in-person content strategy as part of the integrated marketing program.

It Comes Down to Trust
Most leading organizations still leverage traditional media, and will continue to do so for a long time to come. During this "transition" period between traditional and alternative media strategies, big brands such as IBM, Siemens and Procter & Gamble are beginning to leverage vast amounts of traditional media to market their own content. IBM pushes buyers to their DNA portals. Siemens promotes to their Siemens Answers content program. P&G integrates both traditional and nontraditional marketing efforts toward sites like HomeMadeSimple.com and BeingGirl.com, which have both been big wins for the company.

These are publishing efforts that are designed to engender buyer trust. The new rules of marketing dictate trust over all other objectives. Trust leads to long-term relationships. Trust leads to the purchase. Trust leads to online and offline word of mouth.

Without publishing consistent and valuable content to customer segments, trust is hard to come by, even with a revolutionary product or service.

The Opportunity Is Now
Although organizations across the globe are starting to catch on, we are still at the beginning stages of the publishing and content marketing revolution. The average company spends about 30 percent of its total budget on the creation and execution of its own content. Over the next few years this number will grow to 50 percent. This means that more emphasis will need to be on best-in-class publishing methods and less on traditional measurements.

In today's climate, a majority of Americans are more inclined to trust business than they are government or media (source: 2008 Edelman Trust Barometer). That means you start off with the deck stacked in your favor: your customers want to trust you. By publishing your brand message in the form of useful information, your company and brand are in a position to become "the trusted information resource" and to create lifelong brand loyalists. Those that don't will be left on the outside looking in, and by that time, a publishing mentality may be too late.

Joe Pulizzi, author, speaker and evangelist for content marketing, is founder of Junta42 Match, the leading custom content marketplace, and author of Get Content. Get Customers.