Over the holidays, versions of the classic “A Christmas Carol�? were in full rotation on our TV. My favorite is Scrooged, featuring Bill Murray.
If you remember, Scrooge is shown his past, present and future by three ghosts. He is reminded of the strong relationships he had when young. Then, he witnesses how he became more self-centered over-time, and, finally, he’s given a preview of what will happen if he continues to disregard others’ needs and feelings. He ultimately comes to the realization that he can change – that things don’t have to be that way and he can reconnect to those he cares about.
Now imagine what “A Customer Carol,�? a corporate version would look like…
Enter a customer-focused startup. They grow dramatically but begin to lose sight of their customer and mission over time. Without rekindling that connection to their customer, they will die alone (and probably in debt), just like Scrooge.
But it doesn’t have to be that way! Wouldn’t it be great if you could stand in a room of your customers - invisible like Scrooge? If you could figure out exactly what mattered most to them and make changes to be more impactful?
All successful businesses start with a focus on the customer. They build their business model to fulfill a customer need. During the early stages, they must listen to the customer because each sale counts, but overtime many lose their focus on the customer.
We don’t mean to, but we start to get a little Scrooge-like. We start to make decisions based on our own intuition, thinking only about our own goals.
Unfortunately (or perhaps fortunately?), we don’t have the Ghost of Christmas Future to show us the danger of our ways. We have to course-correct ourselves.
The stakes are high. Most markets are facing an unprecedented pace of change, and customer needs and expectations are ever-evolving. If you don’t stay closely connected to how your customers are choosing you vs. your competition, you could lose ground quickly.
As Jacob Marley says in the story when Scrooge remarks that he was a good businessman focused on the bottom-line, “BUSINESS? Mankind was my business! Their common welfare was my business!�?
Business is nothing without the customer – without people. All business and financial outcomes are the result of a customer, a person, making a choice. You’re in the business of winning customer choices, so you can’t afford to lose focus on how they make decisions.
And the truth is that we can’t assume to know what’s important to customers. Lots of research conducted by lots of smart people has demonstrated how our thinking is biased. And when we make decisions based on wrong assumptions, we develop solutions for the wrong problems, wasting our limited time and resources.
Therefore, in order to stay in touch with customers and understand how they make choices, we have to engage in ongoing conversation with them. We have to ask them.
But how? In particular, how does a smaller company figure this out without the budget and resources of the large Goliath companies?
I’ve worked for large manufacturing companies like Ford Motor Company and Nissan North America where budgets are large enough to conduct focus groups and extensive market research. Inevitably, these findings about customer personas are aggregated, simplified and communicated to their dealerships.
But I’ve also worked for dealerships, where very rarely did the customer persona we received from our manufacturers walk into my showroom. Clearly, customers everywhere are different - with different factors impacting how they choose between competitors.
So, again, how does a smaller, local player like an automotive dealership figure out what impacts their customers’ choice?
Well, Vennli would suggest keeping it simple. First, ask customers what’s most important to their decision (we call these choice factors). Then ask how you and your competition perform on these factors. Their perceptions (which drive their behavior) provide the information you need to make better decisions about your marketing, sales, and product development.
But you’re not done yet. Now it’s time to visualize those two pieces of data on what we call the vLens. From here, it’s easy to base your decisions on the biggest drivers of customer choice. (We use a fancy mapping algorithm to map customer survey results this way, but try mapping your own customer data in order to get a feel for how actionable strategies immediately pop out. The key is to use your customers’ perceptions, not your own!)
The yellow circle is your customer (for example, car buyers). The overlap between what customers value (yellow circle) and what you provide (blue circle) represents the value you provide to customers.
This is important information, but, let’s be brutally honest – we exist in a constant state of competition. It doesn’t only matter what value we provide – it also matters what we provide that our competitors do NOT. For example, why do customers go to one car dealership for service vs. an independent service center?
Therefore, it’s crucial to ask customers how they perceive your value and the value of your competitors (red circle).
Each colored zone has implications for decisions about sales, marketing, and product development:
- Green Zone: What can you do to build and defend this area? Develop strategies to move choice factors into this area.
- Yellow Zone: These are opportunities for innovation and improvement. How can you capitalize on these to fulfill customer unmet needs?
- Gray Zone: These are points-of-parity or table stakes. These factors represent an opportunity to differentiate from competitors.
- Orange Zone: What can you do to neutralize a competitor’s advantage?
- Purple and Blue Zones: Are there things that you are spending resources on that customers don’t care as much about? Can you divest these investments and redirect these resources to obtain higher ROI?
Visualizing how your customers make choices in this way and making decisions based on these insights ensures that you are focusing on initiatives that will drive value for your customers.
Let’s all take a pledge like Scrooge: “I will honor the customer in my heart and try to keep it there throughout the year!�?