Which Comes First, the People or the Business?

If you were starting a new company, would you start first with the people or the business? Most, I imagine, would opt for the latter. They would find a gap in the market to fill and then define the competencies needed to fill the gap. So what happens when your company becomes a member of the elite Fortune 1000 and you are looking for new growth opportunities? Do you start first with the people or the business?

Remember, your employee ranks have now grown to the thousands and perhaps hundreds of thousands. The tendency for most organizations is to look first at their people and the assets they already have and then to assess what business opportunities match. After all, they figure it will be a monumental effort to change behaviors and thinking of such a large group.

I would argue, however, that companies should first assess the business and then determine how to get the people they need to grow in these new or emerging markets. From experience I can tell you your business will naturally gravitate to the new opportunities and your leadership team will become frustrated with "the culture," "those entitled employees," your "inability to move quickly or act with a sense of urgency."

Years ago I worked for such a company. We knew the culture was poor because our turnover was high and employee engagement was low. We wanted to be able to attract new blood, to bring in fresh thinking and create a more positive culture. Unfortunately, we didn't have tools in place to really understand our customers and the market. Instead, it was an internal effort to understand where the culture was and what it should be. We did surveys and focus groups. We even engaged an advertising agency to help us with messaging and to talk to prospective employees.

After much time and effort, we were unable to come to any position that would differentiate us in the market and allow us to be more competitive. In hindsight, I believe if we had looked at the market opportunities first, we would have taken a much different path. We might have acquired companies that gave us the people and culture we desired. We might have sold off mature parts of the business. We certainly would have managed the change for our current employees to bring them along.

Would we have lost employees along the way? Sure. Our problem, though, wasn't losing employees; it was losing our best employees and keeping those who needed a safe haven. I've worked for many years to help companies engage employees so they can execute better and deliver on their brand promise.

Of all the approaches I've seen companies take, an outside-in view is hands down the best.
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Using the Voice of the Customer to Create an Outside in Plan

In my last post I discussed three key elements for strategic planning:
  1. Use the voice of the customer to create an outside-in plan
  2. Ensure the plan is well understood by employees
  3. Integrate the plan in your management system

Let's focus on the first element: an outside-in approach.

Your business in constantly changing. Agreed? The individuals closest to this change are your customers. Still with me? By tapping into their knowledge base, you stay ahead of the curve and create strategy that can live, grow and adapt with your organization.

Your customers know what is happening in their business. They know where they want to be in the next 12-24 months and they can tell you what you need to do to be a partner in getting them there. So to have a dynamic and organic plan, you have to be connected to your customers and you need to have deep relationships with your most strategic customers.

How do you do this? Through Customer Advisory Councils (CACs). This is a formal program involving the decision makers from your top customers (define top as largest revenue, most profitable, or most strategic). 

Geehan Group research shows most B2B companies have 80% of their revenue tied up in as little as 20% of their accounts. What does this look like for your organization? Segment your base and I think you'll be pleasantly surprised to find this is true.

Imagine what you can learn about your direction and strategies from the customers driving 80% of your revenue. Now imagine the impact these customers can have on future growth when you start building relationships with them and enabling them to advocate on your behalf. 

During the initial meeting you can gain market insight to help drive your strategic plan. At a follow-up meeting you can validate elements of the plan or gain input for your product/service/solution roadmap, brand position, innovation...you get the idea.

This group becomes an integral part of your strategy development process. They also become tightly linked with your company and an advocate for your success.

In the next blog we'll look at what to do with information gained from your Customer Advisory Council.



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Three Ways to Avoid the Dread in Strategic Planning


If you are on a January-December fiscal calendar then you are entering the dreaded strategic planning cycle. Why is it dreaded? Usually it's because reams of data are poured over by strategic planners who create organizational thrusts and send them up the chain for review--only to be asked for a different slice or direction by senior leadership. I often hear organizations refer to the early stages of strategic planning as "analysis by paralysis." There is lots of great data, but no real compass to direct the analysis.

Where do you fit in this cycle? Are you the frustrated executive or the frustrated planner? Where is your presentation or binder from the past year? Please say it's not sitting on the shelf.

Materials on shelves are good for reference, not for day-to-day execution. The best strategic plans live within the organization.

 
  1. They are created from the outside-in based on the voice of the customer
  2. They are well understood by employees
  3. They are integrated into your management systems

 


A CMO told me the other day, "I know which customers are strategic to my company. My challenge is making my company strategic to those customers."

His comment demonstrates the shift in marketing that is currently occurring within high-tech and service companies. In these organizations the marketing function is no longer about awareness, brand or feel-good programs. It is a results-oriented entity enabling the relationships and market position necessary to increase customer value and drive revenue.

As a result of this shift, ITSMA research shows an increase in the following tactics as part of marketing strategies: 

  • Thought leadership development
  • References and testimonials
  • Senior level relationship management programs, customer advisory boards, councils


...and a decline in: 

 


  • Collateral (brochures, datasheets, etc.)
  • Hospitality
  • Sponsorships of sports/Cultural events
  • Print-based direct marketing
  • Traditional print/media advertising
  • Public trade shows

 

Source: ITSMA, Budget Allocations and Trends: Key Metrics Survey, 2010 www.itsma.com/access/research.asp

Has your company made the shift? If not, what's holding you back?

 

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Beyond NPS: Ways to Elevate Customer Relationships

When clients come to us asking how to take their customer relationship programs to the next level they are typically asking how they can increase the level of relationship within the account. In other words, how do they move from vendor-type relationships with procurement to C-suite trusted partner status?

 The answer: Customer Advisory Councils and Executive Sponsor Programs.

A Customer Advisory Council is the first step in our B2B playbook. This forum of 20-30 decision makers represents your best accounts. A typical program includes facilitated, face-to-face discussions twice per year with sustaining activities, such as subcommittees, between meetings to keep members engaged.

Unlike other marketing activities that are focused on lead generation or measurement, Customer Advisory Councils are solely focused on building relationships and generating the market insight necessary to keep your business ahead of the curve.

Clients who have implemented Councils have seen, on average:

  • 6% increase in customer retention
  • 22% increase in new sales
  • 10 additional customer references

The second tool is an Executive Sponsor Program (ESP). This formal approach to one-on-one relationships is best implemented following a Customer Advisory Council.

An ESP aligns an executive within your company with an executive in the customer account. The program exists outside of the sales cycle and outside of any particular deal or transaction. The intention is, over time, to create interdependency.

In interdependency, you become co-creators with your customers. Together, you and your customer create something that neither of you could do on your own. You become part of your customer’s long-term strategy.

Used in tandem, Customer Advisory Councils and Executive Sponsor Programs strengthen customer relationships and create sustainable, predictable, profitable growth. In doing so, they require the commitment and resourcing of any major corporate initiative.

 So, if you truly want to take your customer relationships to the next level, start with a Customer Advisory Council. Integrate the insights gained from the Council into your organizational planning process. As your company becomes more market focused, move to programs like ESP. Along the way, use your referral process and NPS programs to gauge how well you are moving the needle.

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Three Letters that Can Improve Your Year-End Results

One of the roles I play as a consultant is helping my clients see their blind spots. Sometimes this includes sales opportunities. To uncover these opportunities you don’t have to be a consultant, or sit outside your organization. You just have to A-S-K.

If you’re like most of our B2B clients, a majority of your revenue comes from a small sub-set of your customer base. This base is your best source for information. If you ASK, they will tell you where the opportunities are—inside and outside their organization.

Every day we see customer’s sharing insights that guide our client’s strategies. These insights range from competencies that should be acquired, to activities or offerings that should be divested or stopped, to opportunities for innovation to the design of new business models.

The same holds true for sales opportunities. You have to ASK.

In a recent engagement, my client was conducting primary research with several of their Customer Advisory Council members. The input from these high-level executives was being used to validate a new set of service offerings. We had drafted interview guides and decided the client would conduct the interview. After spending a few minutes in relationship building he asked the first question. Then he asked a few more. Then he said, “Since you already do quite a bit of business in this area I’m going to skip the rest of these.” Before I could interject, my client said, “Well, let me just ask if there are other areas where we could support you.” The conversation continued for another 30 minutes as my client’s customer shared additional ways his business could benefit from new services. My client told me later, “I’m sure glad I decided to ask that next question.”

If you are wondering how to meet or exceed your year-end targets, perhaps you should ASK that next question to your customers.
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Stuck in Amsterdam? Not so bad.

I recently conducted a Customer Advisory Board for a publishing client. The meeting was held in Amsterdam 15-18 of April.

On the day customers were scheduled to arrive a volcano erupted in Iceland causing air traffic to cease at Schipol and other major airports.

We weren't sure how many of the 23 customers, traveling from as far as Australia, would arrive in time for the meeting--or if they would still want to come. But they did. Showing the strength of their relationship, customers made their way by boat, by train and even taxi (expensive as it was) to attend the Advisory Board meeting.

In the end there were 18 members and 9 client representatives along with two of us from Geehan Group. We had an interactive and dialogue-driven meeting focused on innovation. At the conclusion, instead of saying good byes, we realized we would be seeing more of each other as we waited for airpoirts to reopen. Although we were all grown adults, my client acted as host arranging for extended hotel rooms, planning excursions and meals, acting as travel agent and even inviting us to their office and to their homes. 

I tried to explain to my client how important this was to their customers--that they were going above and beyond what was expected and that it would further deepen the relationships they have with these customers. My client commented it was what any company would have done.

As proof to my perspective, my client received the following communication from one of their Advisory Board members:
 


"...the level of support we got from you – as well as from the whole [Company] team – during our stay has been simply outstanding and may be well considered as a benchmark, in terms of professionalism AND empathy.

 

I really appreciated it and I know for sure that it was not definitely simple for you and your colleagues to cope with such an extraordinary situation: in my understanding this means that your approach is something different from the usual “customer care”: you took care of the people, not simply of the librarians, and I really appreciated it."

My client has frequent interaction with their customers, values their opinion and takes care of them when times are tough. They see this as "normal." Their customers, and others like me, think it is exceptional. Regardless of whether it is normal or exceptional - ROI studies show this level of customer care pays.

So while we were stuck in Amsterdam for several additional days, I've have to admit it really wasn't so bad...for any of us.

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Is the Customer Experience Important in B2B?

Sure, I have an opinion, but after discussions with numerous companies whose sole focus seemed to be cost cutting, reorganization and internal initiatives, I began to wonder.

I posted this question to the B2B Marketing group on LinkedIn and here were some of the responses:


"The customer experience is undoubtedly critical in B2B if only because of the buying process. Whereas in B2C, where the number of buyers and/or influencing parties are typically small in size, the buying process in B2B typically involves multiple audiences, job responsibilities, and in many cases, many channels as well. For these reasons, especially when we live in society governed by immediacy and specific relevancy to *me*, nothing could be more critical than a specific, user-relevant, positive customer experience. And if done correctly, especially on B2B web sites with strong analytics, the results from a positive customer experience can be *very* lucrative in terms of sales leads and revenue growth."  - Lance Baird, Vice President, Sales and Marketing at Godfrey

“Customer Experience is absolutely critical especially in services or complex solution sales environments. I learned LONG ago that the sales person might get the first sale, but it is the customer services, i.e. customer experience, that gets the 2nd, 3rd, 4th and so on. That lesson supports the idea of growing customer share or insuring customer loyalty. Of course the other aspect of that is, it's of course also an imperative to growing market share. It is more than difficult to gain new customers if current customers are not willing to be a reference or even better an advocate for your products and services.” – Rick Volz, Sales Executive

“’You can fool some of the people some of the time but you can't fool all of the people all of the time.' Customer experience is everything in B2B. You can acquire customers using transactional techniques in the B2B space just as you can in the consumer space but to grow them into advocates requires that the whole experience by all of the people engaged in the relationship from user and buyer of the service is required to before you can develop the relationship any further. And just to make it even more complex those buyers and users are human and they change on average every two or three years. So understanding customers is much more complex in B2B and the relationship needs to be monitored all of the time. There is no room for complacency.” Iain Lovatt, Founder & Executive Chairman Blue Sheep Limited

Finally, after 14 posts, someone asked the question I was dying to know…

“What it is interesting is, that if we all feel so strongly that customer experience is so vital in B2B why is it so overlooked? Or is now the time for Business Leaders to understand that the brand is defined (whether we like it or not) by the experience we give and that to have a sustainable advantage and to be different in your market you MUST start with the Customer Experience?

It would be great to hear what you all believe are the barriers? I'll start with a couple:

- the lack of understanding of the importance (although this is changing) of the brand
- not enough listening to customers about how they feel about working with "company X"
- the B2B focus on quarterly results at the expense of the longer term plan
- the complexity of CX design in B2B

- .... (over to you) ...” - Richard Bush, Managing Director, Base One

There were several more posts about the importance of the customer experience in B2B), but only two that really answered the question posted by Richard about why it is often overlooked.

“Having been Head of Enterprise Customer Experience at Vodafone UK I speak from 'head in hands' experience of the complexity of getting the end to end experience right for business customers. Consumers, I would argue, are much less complex in their decision making, but businesses, well.... how complex can you get - certain people within a company may search for the right product, others may purchase it, others may use it and a different set may pay the bill (this applies to larger SMEs and definitely corporates). Getting the 'experience' right for all of those decision makers is hard but not impossible! I personally think B2B Customer Experience is a really interesting space and one that is just starting to get the attention it rightly deserves, but I definitely agree with the earlier comment from Richard Bush that there are many barriers to making B2B experience work. The biggest barrier I have found both as a client side practitioner and more recently from my consultancy work with B2B clients is that senior management (small business owners up to corporate boards) sometimes talk a good game but are less reluctant when they have to commit to the budget required for chance.” - Melanie Gray, Owner of GrayMarketing, a B2B marketing consultancy that specialises in Customer Engagement.

“... B2B transactions are based on an exceptional high level of trust. If trust is not present between you and the client from the outset, it’s almost impossible for a positive client/customer experience to be achieved (depending on what is the procurers driver). For my company this is our emotional trigger for our brand and one that resonates with our stakeholders. It’s not just about making relationships in B2B, it’s about maintaining them...” - Chris Hedges, Marketing Executive for Appleyards Ltd

I agree with Melanie and Chris that customer experiences in B2B are more complex because they are about relationships and trust at multiple levels and functions within the customer account. ..BUT if it’s the lifeblood of your organization, shouldn’t it be more than a nice-to-do? I'd love to hear your comments on why customer experience appears to be an afterthought instead of a managed process.

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