But We’ve Always…

It’s December. For those of us who make our living in any form of consumer business, that usually means two things:

  • We have made it through Black Friday and Cyber Monday, with our projections now being evaluated against actuals.
  • In less than a month it will be a new year, where we can either make the same mistakes again or invent new ones.

That leads to two takeaways I would like you to consider before the year ends:

  • Customer behavior tells us almost everything we need to know to be successful in business, particularly when we study data and benchmark assumptions against metrics.
  • We ignore the realities of customer behavior at our own peril, but darn it all if we don’t come up with really good reasons to flagrantly repeat our mistakes with passion and conviction.

How does our eye come off the ball precisely when it is crossing the plate and our bat is in swinging position?

It all begins with three wretched words:

BUT WE’VE ALWAYS.

Perhaps you’ve heard a few of these pronouncements before:

I know our customers complain when we send them too many emails, but we’ve always sent them at least four offers on Thanksgiving Day.

I know our customers don’t trust our pricing, but we’ve always jacked up our regular prices in the weeks before Christmas so we can mark them “50% off.”

I know it’s irrational to cover the cost of free expedited shipping and lose money on every sale, but we’ve always managed to convince our boss that losing money is the only way we can compete with Amazon.

I know our brand promise is what matters most to our company, but we’ve always managed to slip in a few low-quality products with our best inventory to even out our margins.

I know we believe our customers are loyal and have a lifetime value, but we’ve always cut our customer service costs to force our bottom line into compliance with our budget.

Yep, we know what we are doing is wrong, but we’ve always found a way to justify our shortcomings, weak logic, or poor decision-making because we’re out of time, out of patience, or out of energy to argue for doing what’s right.

Earlier this year I attended the third-annual ShopTalk conference in Las Vegas. It had grown 50% over 2017 with more than 8400 attendees. Ecommerce remains an escalating magic buzz word. There were two types of presentations:

  • “People may think our proud, established, vastly well capitalized legacy brand can’t adapt to new technology, but we’ve always been a customer favorite and there’s no reason anyone should bet against us.”
  • “We’re a new brand and will lose our jobs if we don’t succeed, but our investors are betting that if we brainstorm new experiments and focus on customer behavior, the results will tell us what works and what doesn’t.”

Which bet would you place with your own money?

Let me restate the choice:

  • “We’ve been around more than fifty years, we know exactly what we’re doing having coined a business model for hard-won success, we’re a household name, and we’ll still be a household name fifty years from now.”
  • “We have no idea if we’re going to be around in two years, but we’ll take whatever runway we have to figure out how to do what’s never worked successfully before.”

Don’t bother answeringit’s a trick question. The truth is you need some of both to win the long game, some of the newbies and some of the dinosaurs. Yet too many people convince themselves there’s little downside to a buy-and-hold strategy with “forever” companies like GE or GM. They won’t invest in a risky start-up with a funny name and an unproven business model like Amazon or Apple until it’s a fully valued blue chip.

No one knows what companies are going to win in the future, whether cemented or emerging. They all have unpredictable choices to make. It’s supposed to be that way. It’s how new companies are born and old companies die, or old companies are reborn through reinvention. It’s called creative destruction.

My point has nothing to do with improving your stock portfolio. My point has everything to do with recognizing the death knell of an established brand and bringing life or invigoration to a challenger brand.

It can be a fair fight. An established brand can be a challenger brand when it acts like an underdogwhen it stomps out the status quo and humbly looks to customers for confirmation or rejection of any working thesis.

I am willing to bet few employees at Amazon or Apple wander the halls uttering the words “but we’ve always” as a response to why they aren’t trying something new. Who knows, maybe I’m wrong, maybe they are becoming slow, cynical, and comfortable that they know what they are doing. I doubt it, but if they are, an opportunity for a challenger brand is out there for the taking.

I’ll bet they said “but we’ve always” a lot at Sears.

I’ll bet they said “but we’ve always” a lot at Toys ‘R’ Us.

When was the last time you said it? Still feeling good about that?

This year’s holiday shopping strategy is already behind us. There’s nothing we can do with history except study and learn from it.

The new year awaits all big ideas, particularly those focused on truly delighting customers with a sustainable business model and a resonating brand promise.

My advice going forward in whatever you are doing?

Eliminate the phrase BUT WE’VE ALWAYS from your company’s vocabulary before it eliminates you.

Erase those three words entirely from all conversation.

BUT WE’VE ALWAYS is defensive, uninspiring, and telling.

Try something instead that hasn’t worked, something that you think might work because you have reason to believe in a thesis. Measure the results. If there’s promise, hone it with precision. If it starts to work, stay humble. Stay inquisitive. Question the potential interpretation of every collected data point. Remember that every successful idea has a life cycle, and a bad idea yesterday might be reformed under changing market forces as a good idea tomorrow.

When an idea works dependably and someone questions it in a future review, just don’t say BUT WE’VE ALWAYS done it that way. You haven’t always done it that way. It had a beginning. It can have an end. What can’t end is innovation.

_______________

Image: Pixabay

You Call This a Loyalty Program?

Try this episode on for size and tell me how it makes you feel about the brand:

I recently logged into one of my hotel loyalty accounts where I had amassed several hundred thousand points. That is, I thought I did. All my points were gone. Apparently this chain has a policy that deletes all your points if you don’t stay at one of their properties for a year. Did they send me a courtesy email reminding me I needed to stay there toward the end of the twelve-month lapse? They did not.

I called customer service and they recited the policy back to me, willing to say farewell to a customer who had paid the freight to accumulate several hundred thousand points in its loyalty program, just not in the past 14 months.

Then I tweeted my complaint about the forfeited points publicly. A few hours later whoever runs the company’s Twitter account tweeted back publicly that the company was very sorry for the situation and dedicated to my satisfaction. The Twit-master asked that I send a private tweet to follow up, which I did. Then we moved the correspondence to email.

I was then told that the company had a one-time exception to the policy where points could be reinstated, but that had already been done for me approximately 13 years ago. Silly how I could have forgotten their grace. However, they said that in an attempt to reinstate my customer satisfaction, they would restore half my forfeited points now and the other half if I agreed to stay at their properties at least three times in the next six months. I wrote back that it sounded a bit ridiculous to be playing Let’s Make a Deal – Loyalty Edition with them, but I would agree because, well, why not?

To their credit, they did return half my points upon receipt of our “written agreement” in that email thread, and I have booked one stay with them. I just wonder, is this what they really set out to accomplish in developing their loyalty program? Is it a loyalty program at all, or just a rewards program that effectively gives me a rebate on what I spend provided I do it on their timetable?

If you give me a reward for my business, then take it away because I didn’t precisely follow your rules, then give it back conditionally with an expectation that somehow I have become pleased by our interaction, how has this helped me as a customer or you as a business? It’s a quid pro quo. I don’t think a quid pro quo has anything to do with loyalty.

When I think about loyalty, I think about preference. When I think about preference, I think about what brand comes first to mind when I need a particular item or service. I choose that brand for a host of reasons, for the totality of my experience with the brand.

I prefer to fly Alaska Airlines because they tend to treat me better as a human being, so I am loyal to them. I am also a member of their loyalty program, but that has very little to do with my loyalty. The way we interact all the time has to do with my loyalty. There is a consistency in my interaction with their airline personnel whether I am flying in coach or upgraded to first class, whether I bought a discount or full-fare ticket. That consistency is what creates loyalty.

I prefer to shop at REI for sporting gear because they are patient with me when I come to their stores not knowing nearly as much about hiking or biking shoes as they do, and when I leave it is with the right pair of shoes. I am also a member of their co-op because that is required to shop in the store, and I get a member rebate every year, but that is not why I am loyal. I am loyal because when I am on a trail or in spin class and my shoes are comfortable, I remember how great they were about helping me get the exact fit and charging me nothing more for their time.

I don’t prefer the hotel chain that gave me back half my points now with a contingent promise for half my points later. We have a transactional relationship based on price and location. I wouldn’t seek them out. I could, but they have given me no reason. Now when I think of them I think of my Let’s Make a Deal experience rather than any experience staying under their roof. That’s sad.

Maybe the problem is terminology. Maybe there is no such thing as a loyalty program. Maybe they are all just rewards programs masquerading as loyalty programs. That’s kind of a punt when you think about it. We could design a loyalty program that involved every point of customer interaction to ensure your satisfaction, but heck, that would be hard, why don’t you just take these points instead and we’ll play like we’re loyal to each other even when we know, wink-wink, we couldn’t care less about each other. It’s a bed and bathroom and points if you follow our rules, so come here at least every twelve months and someday maybe you can cash in those points for a standard room on the house. Maybe, if we have availability, certain restrictions apply.

I recently attended an e-commerce industry conference where at more than one session I heard the phrase, “There is no customer loyalty, consumers only care about price.” If this cynical statement is true, then I wonder why we have marketing departments at all. Don’t believe it. All customers are not automatons who solely focus on what’s cheapest.

Brands are not dead. A brand is a promise. Brands compete on price, quality, and service. If a company wants my loyalty it is there to be won, like Alaska Air and REI. If a company wants to make it about points and rules, that’s something else, and yes, in that scenario why should there be customer loyalty?

You get what you give. Since you’re selling and I’m buying you get to go first. You want my loyalty, show me yours. You want my loyalty, enter into a brand-customer relationship with me. You want to make it about points, if you piss me off I’ll dump you at the next possible off-ramp.

Loyalty is hard to win. It should be, because it’s valuable. That’s why the great brands think in terms of lifetime value rather than rules. If I have to publicly embarrass you with a tweet to get your attention, you don’t care about me a hoot, especially when you just had me on the phone. Think about that the next time a company penalizes you for breaking its loyalty rules. Those are stupid rules. You don’t need the points that badly, and if you don’t prefer the brand, you sure don’t need its crappy rewards program.

_____

Image: Stefan Hatos – Monty Hall Productions

It’s All Getting Personal

It’s a bit weird, this Author thing. Let me try to explain.

For as long as I can remember, putting words on paper has been an integral part of my life. It started when I was a kid, with little plays and poems. Then in high school it became short stories and full-length plays. Then in college some more plays, some student films, and the occasional joke for a journeyman standup comic. When I was done with school, I wrote about a dozen screenplays, and then when the Writers Guild strike hit, I wrote an epic story for one of the very first movie-like computer games.

Shortly after that I moved to the business side of the computer software publishing model, only occasionally penning a bit of dialogue here and there for a certain Carmen Sandiego. My life became focused on technology, marketing, sales, finance, and team leadership. As I’ve said before, I really didn’t write much for a couple of decades, other than business plans and PowerPoint decks, which I was later told might have had saleable option rights for media exploitation given my need to always tell a story (if only I then had an agent!).

All through these periods of business creativity and innovation, I never had much trouble calling myself a writer, because I felt pretty good about my ability to form pithy sentences and get other people to take an interest in them. Even when I wasn’t writing per se, people would call me a writer, and I would show up at writerly events and schmooze with writers because I could keep up with the banter and liked most of it. I felt fine about this. It never felt stuffy, arrogant, pretentious, or the least bit weird.

Then I hung up the spreadsheet programs for a while and wrote my first novel, This Is Rage. Suddenly I was an Author—at least that’s what my publisher called me. I fell into silence at that descriptor. That was weird. In that same window, one of my most valued mentors introduced me at lunch as a Novelist. I looked at him in fear and more silence. “No, it’s just me, Ken, the writer.” It was and it wasn’t. That’s when things started to change.

You can go online and look up all the different uses of Writer vs Author vs Novelist vs. Schmuck Who Types and Prays for Good Reviews and Modest Royalties (that last one is harder to find in search, so I think I’ll tag it). Here’s the really hard part, especially for me: Once you decide you want to sell books and do public readings and speak at lunches and conventions, you have made the implicit decision to transform yourself from Writer to Author. What’s hard about that? You now find yourself being public about things you never thought were your job to expose. Take, for example, this blog post. It’s a little different from most of my others, huh? It’s getting personal.

PlatformIn the publishing world, they call this “building your platform.” It’s not a platform you stand on in Hyde Park and it’s not a platform you adopt as a political candidate. It’s the sum total of all your networking outreach, private and public. You gotta go light up Twitter (@CorporateIntel) with clever BRIEF memes your soon to be amassed Followers can follow. You gotta have an Author Page on Facebook that gently steers people toward buying your new book without being too crass about it. You gotta pump up your LinkedIn Profile so your business associates know what you’re doing but don’t think you’ve gone completely rogue. You gotta get busy on Google+ which means you have to figure out how Google+ works and learn to repost everything there to get it scraped into the index.

Why in tarnation do you need to do all this? Can’t you just write the dang book (that’s hard enough!) and toss it over the wall to your publishing team? Well, I suppose you can if your name is Stephen King, J.K. Rowling, or Malcolm Gladwell. The rest of us quickly learn our real name is more like P.T. Barnum. When you are deemed an Author, you are also deemed Promoter-in-Chief, because if you won’t get out there and rally people behind your work, why on earth would anyone else? The introverted tendencies of writing reverse themselves into Living Out Loud! If you don’t think you can do it, you can always go back to being a Writer. In this day and age, writing for an audience is putting yourself out there, and no matter how uncomfortable it is to type the word Author after your name as some bizarre form of professional title from The Bloomsbury Group, you really have no choice other than to accept obscurity without a fight.

Okay, two more points and then I’ll wind down. First, if you know me, you know I’m a lousy introvert, and second, if you know me, you know I ain’t going down without a fight. Publisher says build the platform, I’m building the platform. Please don’t leave me out here on the ledge in the clown suit alone. Like me or something.

Here’s how I am reconciling this weirdness, this discomfort, this near unholy demand to say please pay attention to me. I’m going back to my business roots. It’s all about mission statement. It’s all about brand promise. Writer, Author, or Schmuck, that’s my job.

Sometimes the simplest ideas are the easiest to forget, and the ones most worth remembering. Two years ago I wrote a post on the importance of a mission statement in a business. What I emphasized was that it only mattered if it was more than words. At the top of this blog you see the words:

Ideas. Business. Stories.

That has been my brand promise to you, the underlying essence of this whole Author mishigos. You buy that, you buy me. I’m pretty sure the rest is arts and crafts.

Rolling deeper into my non-Author roots, as I was driving to a meeting last week, I heard a snippet of a radio interview with Dane Ban, the CEO of much-beloved Trader Joe’s. He was asked what advice he most often gives emerging entrepreneurs. He replied that a business has to be about a mission. Rather than leave it at that, which already resonated with me, he went on to quote the esteemed Peter Drucker in The Practice of Management:

“There is only one valid definition of business purpose: to create a customer.”

Simple. Relevant. Profound. Try to challenge it.  Very, very hard.

So as weird as it feels to me, as uncomfortable as it is being made for me, I am building that platform in advance of the launch of Endless Encores. Its subtitle is not coincidental: “People, Products, Profits—In That Order.” That also appears near the top of this blog in my mission statement. It all comes around. Like I said, it’s all getting personal.

Come along for the ride, will you, please? Don’t force me to come to my senses and claw my way back in. That might make me a writer again. How scary would that be?

_____

This article originally appeared on The Good Men Project.

Do You Care?

I Don't CareHere are a few marvels of bad business practices I’ve experienced in the past month:

In the middle of a presentation pitching me for a strategic business services contract, the presenter nonchalantly said the words: “We don’t really need this business.” He didn’t get it.

I reviewed two proposals for a project: one a two-pager with one paragraph personalized and the balance consisting of the company’s credits; the other a five-pager all personalized around my project with a single paragraph at the end articulating the company’s vision. The five-pager won.

I received via snail mail a stock market overview newsletter from one of the largest financial services companies in the world. Inside was the business card of some guy I have never met. There was no note, no signed cover letter, not even a form letter. Does he think I’m going to read the newsletter, pick up the phone, call him, and move my portfolio to his firm so he can manage it? Straight into the shredder it went. Cost of printing and postage vaporized.

Our phone rings in the evening. Often. With no Caller ID recognizable on the little screen. Occasionally I pick it up. There’s a pause, handing off my call from the much-despised auto-dialer. Someone tells me he is a building contractor of some kind and he is going to be in my neighborhood tomorrow and can he stop by and offer me a free estimate on work around the house. No, you can’t have my address. You lost me at much despised auto-dialer.

Another contractor who was referred by a good friend actually came to the house, walked through the prospective project with us, took a copy of our site plans, and said she would get back to us with a proposal. A month later we hadn’t heard from her. My wife called and emailed, asking if she was still interested in the project. Still didn’t hear from her. The next email from my wife asked her to return the site plans. Coincidentally, we were subsequently asked for a reference on this contractor by another friend. You can surmise how that went.

What are the key takeaways here?

First, if you want a piece of business, care enough to go out and get it. If you don’t, don’t waste your time or mine.

Second, never confuse tonnage of time invested in vast outreach with proper, focused, caring effort. You can allot infinite hours to scouting the wild, but if your approach is lazy and lacking in detail, your results are likely to reflect your lack of innovation and thoughtful initiative.

Pitching is not perfunctory. Much like dating or interviewing for a job, it’s how you get to know someone before you decide if you want to pursue a more involved relationship. Don’t tell me in the Digital Age a sales call is somehow different from yesteryear. A sales call is still just that—it’s one of many steps in securing prosperous deal flow. It requires the art and science of selling. If you’re not going to bother preparing, being respectful, being responsive, or following through, just stay away. We’ll both be a lot happier—although you won’t have my business, my endorsement, or my goodwill.

Not a problem. You probably don’t care. But you should.

Here’s the thing: you may have enough business now, at this very moment, but you won’t always. No one does. What matters when you don’t have enough business is how wide your network has become—the glowing part of your network. You have no idea where one client can lead you, where one prospect can lead you, where one seemingly casual handshake can lead you. What you can know for sure is that a burned bridge leads nowhere, usually in perpetuity, and the swiftness with which a bridge can be burned forever pales in comparison to the time it takes to build a relationship.

Relationships are worth it. You need them. We all do.

Here’s the corollary: if you don’t have enough business right now, there are no real shortcuts to landing new work. You may think it’s a numbers game and you can just dial and smile, carpet bombing the business terrain with junk mail and door-knocking. What kind of clients do you think that is going to bring you? A crappy sales pitch that does lock in a piece of business is likely to land you a crappy piece of business. Think about who would respond to your unpolished approach. Now imagine their sophistication in carrying out the contract, paying their bill, and passing you along to another prospect. If a crappy pitch and a crappy client are the foundation of your business, I think you can fill in the blank with the adjective that best describes that business.

Imagine instead a well-researched approach to a narrower set of prospects. Imagine doing your homework, preparing a written, phone, or in-person pitch that speaks to your desire to do a job that will capture a client’s imagination. Imagine being sharp, creative, and personal in asking for the business. Imagine following through with a great job that exceeds customer expectations. Then imagine the reward of future business from that client (repeat business is the best of all, because your sales costs are so low), or the networking value that will come from future business you could otherwise never access. Is that what you want, or would you prefer to continue dialing and smiling—and generally soiling your name and reputation before you even get a chance to demonstrate what you can do?

When I get an email offer letter from Yosemite, they refer to my last visit and craft a well-priced offer that speaks to me as a person. We recently were referred to another contractor, who showed up on time and had already had a look at the yard so he had ideas to share immediately after we said hello. One of the national non-profits I support calls once a year just to thank me for my donations and ask if they can send me any information about upcoming programs, without requesting an incremental dime. A market research vendor recently reached out to me on LinkedIn and invited me to a conference that was relevant to one of my business interests, spent time with me at the conference, and is now at the top of my list when I might need his services.

None of this is very hard to understand, but it is immensely hard to do consistently, which is why it gives those who do it a competitive advantage. What they all have in common is one simple thing: they care about my business. They convince me that they want my business, not just any business. They don’t take it for granted. I’m not lost in a carpet bombing campaign. I want to respond. I want to be an evangelist for them.

Before you formulate your next pitch, before you pick up the phone, before you hit send on that email, before you waste the money on postage, ask yourself the one simple question that will make your sales pitch better: Do you care?