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How not to plan your Company’s Future — Five common mistakes when identifying customer needs?

How not to Plan your Company’s Future
5 common mistakes when identifying customer needs

By Jeff Mowatt

When managers plan their business strategies, common sense dictates that these game-plans should be in line with customer needs. The first step in planning is therefore to identify customer preferences. Unfortunately, most conventional approaches to determining customer needs are flawed. Here are five of the most common methods used to gather customer opinions along with their drawbacks. Keep these often-made mistakes in mind when planning your business strategy.

Mistake #1 — counting cash
One way to find out what customers think — indirectly at least — is to look at revenues. The assumption being that if revenues are increasing then customers must be happy. Dangerous. A repeat customer isn’t necessarily loyal. Customers may come back more by default than desire. If that’s the case, the moment your competitor finds a way to truly satisfy your customers, those repeat customers will abandon you. Or, if your team is providing support services to internal customers, you may be setting yourself up to be outsource. So, even though your revenues may indicate that you have happy customers, unless you do the research, you are potentially vulnerable. Business leaders whose companies endure are those who do not just assume that customers are happy, they create the right systems to know it.

Mistake #2 — counting complaints
Some managers assume that if they merely reduce the number of customer complaints, they are satisfying more customers. In reality, fewer complaints often mean that fewer customers are angry enough to complain. It doesn’t necessarily mean that they are happy. When it comes to measuring complaints keep in mind your own experience when visiting a restaurant with mediocre service. It wasn’t bad enough to complain. But, it wasn’t good enough to bring you back. If the restaurant manager was only counting complaints as a measure of customer satisfaction, he or she’d be off track.

Mistake #3 — trust focus groups
A popular method of collecting customer information is using focus groups. This is where a manager or consultant gathers a group of customers and asks their opinions. Consultants often like focus groups because the information looks scientific and they can charge a fee for conducting them. It’s been my experience, however, that focus groups tell you a lot more about group-think than anything else. In virtually every focus group I’ve been asked to observe, opinion leaders in the group influence the responses of others. That alone renders focus groups practically useless in terms of finding out what individuals really think.

Mistake #4 — paid phone surveys
The most promising way of identifying preferences is to have a one-on-one conversation with the customer. The problem is that the conventional approach to interviews receives miserably low response rates. Imagine you’re at home one evening when the phone rings. An unfamiliar voice on the line says, «Hello Mr. or Mrs. So-and-so, we’re conducting a survey on…» You’re thinking, «Not again,» and end the conversation — click.

As an alternative, rather than using standard telephone surveying, the manager of the company uses a resource I often recommend to my clients -business students. Picture yourself again at home. The phone rings. When you answer, a youthful voice says, «Hi, I’m a business student at the local university. For my marketing class I’m doing a project where I’m conducting a survey on such and such.» You find yourself saying, «OK, kid, let’s make this quick.» Response rates soar. Bonus — students work for the price of Kraft Dinner!

Mistake #5 — trust high ratings
On a customer survey, you can ask, «Overall, are you satisfied with the service?» And you may get results that show that 96% said, «Yes.» But be careful how you interpret those results. This is where many managers assume that they’re getting an A+ score. Think of the question again; it asks if overall you are ‘satisfied.’ In other words, the survey is asking if the service is adequate. By responding ‘yes,’ customers are not saying that they were impressed or even pleased-merely that they were satisfied. It doesn’t mean they feel loyal. Imagine your sweetheart talking to a friend and describing you as being adequate. You’d probably see that as reason for concern! It certainly isn’t reason to think you’re getting an A+ performance rating. Yet, that’s exactly what so many managers think when they see a 96% customer-satisfaction rating.

The lesson is that managers need to stop interpreting high percentages the way we did in high school. If you have a 98% customer-satisfaction rating you may still have serious problems in customer loyalty. According to marketing research expert, Dr. Mike Heffring, «It has been shown that it’s the percentage of people who give you excellent or outstanding ratings (e.g., nine or ten on a ten-point scale) who matter. If you increase that percentage, then market share actually moves. If you don’t, then you may feel better if the percent satisfied goes up but the impact is insignificant.»

Identify what customers really think
In other words, when it comes to planning your corporate strategy, the focus becomes, What do managers need to do to shift customers from being ‘satisfied’ to being ‘delighted’? Just make sure as you do this, that you also ask yourself if your current information is telling you what your customers really think.

How to Make Money From the Thing You Love

Making money online seems the answer to all ills, be it for stay-at home moms, those sick of the rat race and to those who have just lost their jobs and know there is nothing else out there at the minute.

However, if you just jump in without any thought at the first great offer you find on the internet, the first promise to make you a millionaire, you will undoubtedly come unstuck. Nearly every other ‘profession/job’ requires some work; lessons to be learned, pitfalls to be aware of. To be successful, you have to be prepared.

The same applies to the Internet Marketing industry. It may appear simple but it is not easy if you don’t know what you are doing. Most people will not make any money online and yet there are others who will make more in one month than most people make in a whole year. Why is that?

It is simple; you have to love what it is that you do. Working for yourself is harder than working a job. There is no-one looking over your shoulder to make sure you are doing what you are supposed to be, nobody looking at the clock when you arrive at your desk. This is a good thing! But the flip side is you only have yourself to answer to and when you feel de-motivated, it is your passion that will get you back to your desk.

Don’t underestimate how demotivating working at home can be. As much as you hated your 9-5, you will have had and, I’m sure at times, enjoyed the human interaction that your job afforded you. People other than the postman would have said hello to you during the day. There would have been jokes, a little gossip, the feeling of cameraderie and belonging, a drink after work. When you’re at home, there will be no-one to cheer you up or help when things get hard.

Most would give this up willingly to get rid of all of the downsides of working for someone else but you will need a great level of enthusiasm to keep you going during the hard times.

If you are selling someone else’s products, you should have researched and like the company and products or services. Not many of us can effectively sell something that we just don’t believe in. Many online entrepreneurs are so good at what they do that they ignore passion. This is because they can sell anything. It always helps if yo have used the products and services so that you know first-hand the benefits.

So you can see doing something you love works in two ways; providing motivation and belief.

Of course, doing the thing you love is not the only thing you need; you must also have a good website if you are selling online, good marketing strategies, widespread advertising and a sustainable plan for the future.

It is your goal to get to the point where you can sell just about anything online. This is when your passion becomes internet marketing itself!

Remember, start by doing something you love; it will keep you motivated through the learning curve which will be steep for most and focus on products that you believe in. If you do these things, success will be yours.

Lessons From Ups: Beating A Bad Economy!

The economy is declining but companies like the United Parcel Service are making ends meet and exceeding expectations. They have utilized the growth in the global economy, better supply chain management techniques and customers attempting to reduce costs by sending low priced packages. UPS has become a victor in an arena of losers precisely because it has implemented a winning strategy.

UPS has experienced two major upswings in the past few years. In the third quarter of 2007 they had an increase of net income of $1.08 billion dollars and over a year ago they had a $1.04 billion dollar upswing. This was after their 46 million dollar restructuring program in France to improve their supply chain. Other companies are not having nearly the same upswing or growth which makes UPS unique.

UPS Chief Executive Mike Eskew state with some happiness, «UPS turned in a solid performance in the face of a slower U.S. economy». This proves that diligent American companies have an opportunity to increase profits and continue to grow despite many of the difficulties that American companies face.

UPS has a number of strategies that it is using to achieve success that many businesses would be wise to pay attention to. These strategies are in the field of global expansion, reduction of cost, flexible labor costs and efficient supply chain management. The concepts make sense and are grounded in very basic principles of understanding what their main objective is (increasing shareholder wealth).

Strategy Concepts:

Global Expansion: UPS has been tapping into world markers much more successfully then many other organizations. They have their own aircraft division that delivers packages; they are spreading out throughout Europe and beginning to move into Asia. They are growing and beating out small competitors. When the global economy is expanding it is important for American businesses to get out there and conquer the market before others.

Reduction of Costs: UPS continually is looking for methods of reducing costs. They track fuel efficiency, labor costs, and other overhead to ensure they are reducing these expenses as much as possible. Every organization should be focusing on both long-term and short-term costs.

Flexible Labor Costs: In the United States labor costs can be a huge factor in whether or not a company is profitable. The automotive industry has been hit hard by unreasonable labor and benefit costs. UPS is utilizing flexible or seasonal labor that is hired for peak periods. 60,000 employees will be added in the United States to help with holiday packages.

Supply Chain Management: In the transportation industry supply chain management is of crucial important. If packages are shipped via long routes, old machinery, inability to track, etc… there is a good chance that costs will raise and profits will decline. When companies investing in their supply chain as UPS did in France they often are able to save millions of dollars while increasing efficiency.

UPS should be set as a standard of how companies can beat the declining economy problems of the U.S. When other companies are laying off workers UPS is putting more people to work. While business is becoming more difficult to conduct in the U.S., companies like UPS are creating more efficiency and are reaping the rewards. Companies have the opportunity to learn from UPS and develop their own growth strategies.

How to Skyrocket Your Sales This Year

Completely grasp the power of the Best Buyer Concept and you will double your sales within the next twelve months. The concept is easy to understand, yet powerful: There’s always a smaller  number of ideal buyers, compared to all the possible buyers, so ideal buyers are cheaper to market to and yet bring greater rewards.

A magazine used this strategy to double sales in 15 months flat. Here’s what they did:

They took a database of 2200 advertisers and sent promo-pieces to them each month. After learning this
strategy, they did an analysis and found that 167 of those 2200 advertisers bought 95% of the advertising in their competitor’s magazine.

This concept is called «The Dream 100 Sell,» a concept where you go after your «Dream» prospects with a vengeance. This magazine sent the 167 (best buyers) a letter every two weeks and called them four times per month.

Since these were the biggest buyers, the first four months of  intensive marketing and selling brought no actual reward. In the fifth month, only ONE of these Dream clients bought advertising in the magazine.

In the sixth month, 28 of the 167 largest advertisers in the country came into the magazine all at once.
And since these are the biggest advertisers, they don’t take quarter pages and fractional ads, they take full pages and full color spreads. These 28 advertisers alone, were enough to double the sales over the previous year. The magazine went from number 15 in the industry to number one in just over a year.

Lesson learned: Market to your best buyers

Now you’re probably thinking to yourself, who are my best buyers?  If you sell to the business-to-consumer market, chances are, your best buyers live in the best neighborhoods.If you are a dentist, accountant, chiropractor, R.E. Broker, financial advisor, restaurant, or even a MLM professional you should consistently go after the folks who live in the best neighborhoods.

They are the wealthiest buyers who have the money and the greatest sphere of influence. If you send them an offer every single month without fail, within a year, you’ll have a great reputation among the very wealthy.

If you sell to the business-to-business market, it’s usually fairly clear that your best buyers are the biggest companies. So what are you doing, every other week, no matter what, to let these companies know who you are?

There’s no one you can’t get to as long as you constantly market to them, especially after they say they’re not interested. People will not only begin to respect your perseverance, they will actually begin to feel obligated.

This doesn’t happen right away, but even the most hard-bitten and cynical executive or prospect begins to respect you when you refuse to give up. The publication I mentioned earlier went on to double sales two more years in a row. They  consistently marketed to the best buyers and much more aggressively than they did to the rest of the buyers.

A company selling to manufacturer’s used this strategy to target the 100 biggest manufacturers in the country. For the first three months no one responded to any of the calling or phoning.

But after three months executives started saying: «I just have to meet you. I’ve never had anyone continue to call me so many times after I said no.» Within 6 months they had gotten in to
see 54% of those they targeted.
The secret is to NEVER give up.

Just keep going after those companies again and again. Or if you sell to consumers, commit to sending a promotional piece every single month to those wealthy neighborhoods. Eventually, all the wealthy people in your area will know exactly who you are.

Now the question is: Who are your DREAM prospects and how committed are you to getting them as clients?