The Two Flower Merchants

tale of two merchants


one day, two flower merchants set up shop next to one another. They opened for business on the same day, carried the same lovely selection of aromatic flowers, and maintained similar prices for their marvelous plants. Both merchants took great care with raising their plants and both were kind and courteous to their customers.

In fact, their stores appeared to be equal in every way.

At first, the merchants even received equal traffic through their shops, but–as time went on–the first merchant’s shop became more popular among the people. The second merchant noticed this and became concerned. One particularly slow day, he decided to look into the matter. As he stepped out his door to visit his neighbor, he passed one of his regular customers leaving the first merchant’s shop carrying their weekly purchase of flowers. In disbelief, the second merchant hurried into the next store.

Indeed, the store was teeming with customers. The second merchant noticed his competitor wasn’t taking the money himself, as he always did. The first merchant was out among the aisles, talking with his customers. To his amazement, the second merchant watched as the first would chat at great length with the customers and even would occasionally talk to the flowers themselves! The second merchant prided himself on being a serious store owner and could not understand this leisurely approach to running a shop. Yet this behavior seemed to be working for the first merchant, as his thriving store would attest.

When the second merchant could stand it no longer, he approached the first and politely asked to interrupt the conversation. The first merchant smiled, handed his customers to one of his clerks, and turned his attention to his exasperated neighbor.

The second merchant asked, “Brother, I am your humble student. Our stores are nearly the same in all ways, yet your results are doubling while mine are halving. I do not understand.”

“Brother,” the first merchant said, “We are the same in most ways, this is true. The difference lies in what we see with our hearts. You see your store as a store, your plants as plants, and your customers as customers. I see my store as a beloved home and my cherished friends are my customers, clerks and plants, all present to be adored. In that way, we are very, very different.”

Pick Your Customers Wisely (or Prepare to Pay the Price)

marketing ideas 101 pick your clients

Chris Lema, VP of Software Engineering at Emphasys Software is a WordPress advocate. He maintains an informative, engaging blog at chrislema.com where he regularly discusses the in’s and out’s of WordPress development, best practices and client engagement. In his post Two Kinds of Customers, he describes two common scenarios in the web development world:

Customer #1: The Savvy

They’re clear about the tasks they want to assign you and have reasonable estimates about how long it should take. They want to know about your availability and cost to see if they can afford you. […] they want a web site, they know they want WordPress used as their CMS. They know that some themes are better than others, so they’re ready to pay for one of the more popular and well-coded ones. […] You get off the phone, having enjoyed your time and no more than a minute goes by before it rings again.

Customer #2: The Neophyte

This customer sounds like they don’t know a thing about what they want. […] They’re not clear on the tasks or why you might be the right answer. They don’t know anything about technology […] And they’re hoping you have time and aren’t too expensive to help them. […] They have no sense of budget and can’t grasp what aspects of the project could be done in minutes verses days. […] All they know is that they need something – and of course, they’ll know it when they see it.

Chris’ big question:

If you could only pick one customer, which do you pick?

pick your customers

At first blush, Customer #2 is the kind of customer I think we all cut our teeth on and eventually strive to get away from. Of course, there are always exceptions to every stereotype. Some of these Customer #2 types turn into fast friends, great advocates and long-time clients, while Customer #1 projects can fall prey to phenomena like bad technical karma, long response times and “design by committee”.

Still, stereotypes exist for a reason and Chris has held up these two for us to consider.

We who have been in business long enough to have been knocked around by customers who think we wave magic wands that materialize websites (widgets, whachamahoozits, whatever.. you name it..) eventually begin to gravitate toward more savvy clients. Why? Less heartache, higher-profile projects and “professional grade” budgets and attitudes.

Yes, margins can be wider for that lower-hanging, Customer #1 fruit. If a customer just needs to migrate to a WordPress platform (as many do), an outsourced migration can offer a wonderful return. We’ll do those too, so long as the prospect answers an extensive questionnaire designed to solidify their vision. If they don’t survive the questionnaire process, we figure they weren’t serious about their project and we have managed to keep our attention on the folks that matter most; those who already know us, like us and rely on us for web and marketing services.

My recommendation: Develop a questionnaire to help you address the price-comparing tirekickers. Include all the questions you typically need to answer in order to develop a proposal. Include questions about their budget, timeline, goals, audience, tone, and competitors. All of this will assist you in bringing together a project that fits the client and it will serve to separate the chaff from the wheat.

P.S.- We recently ‘fired’ a prospect who said he didn’t have time to answer our web design questionnaire (a 7-page Word document.) He wanted an overhaul to his ecommerce site, but resisted updating the look and feel to accommodate a new cart (WooCommerce). When he said he couldn’t find the cart on the example we gave him (it’s located prominently in the horizontal navigation bar) we knew disaster lay ahead. In our eyes, that project was not worth the $5,000 he said he was willing to invest. We have ZERO interest in doing work for folks who don’t have time to invest in their own projects, resist change for the new and better, and have problems navigating websites based on common user interface standards.

Once upon a time–when we were hungry for work–we may have taken this client under our wing. In this case however, I let them know we would not be a fit for what he was looking for and I respectfully referred him to some other web designers in town.

What would you have done?

In support of your efforts,
Matt

Defining ‘Moments of Truth’ in a Business Customer’s Lifecycle

marketing ideas romancing the customer

by Joseph Fiochetta

There are several critical times during a customer’s relationship where a decision is made–by the customer–to continue or discontinue interacting with a company. This may be the first bill, a customer service call, a retail experience, a Web site…any event that helps clarify the relationship with a particular brand, product, or service.

We call these “moments of truth” and how a marketer interacts with the customers can significantly increase (or decrease) the long-term viability of that relationship. Identifying and anticipating those points of clarify is critical to maintain and grow a profitable customer relationship.

Staying Connected with Customers
For one telecommunications leader, economic and competitive pressures were making it increasingly difficult to attract and keep new customers in a highly competitive space.

New small-to-medium-sized business customers represent a substantial economic gain to this communications services provider because these customers generate a higher percentage of cross-sell opportunities and are one of the faster growth segments in business today. But new customers typically tend to be more vulnerable to competitors and generally churn at a higher rate during the first weeks and months of the business relationship.

Within the company, customer communications were siloed–in the same way that products often are siloed–and “touch points”–points of interaction–with small business customers were driven by regulatory and budget constraints. They were not based on each customer’s actual need. For example, within the company’s old business model, small business customers received multiple contacts from various channels (direct mail, e-mail, teleservices) across various products with no integration.

A customer’s first contact included an informational and legal document to confirm an order–traditionally a generic, off-brand direct mail piece with no offer.

This was followed by a number of different welcome kits from each product category that were sent up to three months after a new customer’s service activation. In addition, customer service was not integrated into the marketing mix so contact with the customer was conducted independent of other channels.

Senior management recognized that the more services a customer purchases from a telecom provider, the less likely customers will take their business elsewhere, but the move from a product focus to a customer focus was not an easy one and required a commitment from multiple stakeholders within the organization. The shift away from how the company was organized versus how customers engaged with the brand created an impact on the organization at strategic, tactical, and operational levels.

Developing a Plan to ‘Onboard’ New Customers
Critical to success was key stakeholder buy-in throughout the process. To combat the problem of new customer turnover, the telecom performed a number of qualitative and quantitative measures necessary to realign the new customer experience.

First, three guiding principles were established to focus the plan:

  1. All communications should generate a measurable response so that management may tell–at an individual level, as well as at the intervention level–what worked and what did not.
  2. Customer-centric communications must be frequent and consistent, targeted, timed, and delivered in a manner that is most appropriate for the individual customer. Tracking preferences and behavior is essential.
  3. Communications should be focused on increasing “stickiness”–which is the ability to keep a consumer coming back for more. Thus, each customer’s value over the time of the relationship is tracked.

The first step was to understand business priorities and analyze and document the telecom’s current state. Through customer focus groups, data analysis, contact mapping, impact analysis, and an environmental scan across multiple industries, a “best-practices approach” to prevent customer churn was developed.

As the company set out to develop best practices in developing new customer communications, it learned that:

  • The first 90 days are critical – there can be as much as a 15% to 20% “take rate” of additional products and services during this initial period.
  • The sooner one can engage a customer, the better.
  • Messages developed early in the relationship should be designed to set and validate customer expectations.
  • Personalization works!
  • Using multiple touch points across a variety of media are preferred by customers – because channel preference is situational.
  • Multiple response channels are essential.
  • Surveying and data gathering are critical components for gaining customer insight. Programs that are data gathering stimulate: customer interaction, transactions (revenue), stickiness (retention), and usage.
  • The velocity of customer communications and engagement should increase during “moments of truth.” Trigger-based programs, ones where offers and dialogue are built upon data-based business rules, can enhance an already effective new customer strategy.
  • Consultative selling is a key part of any customer program and can help avoid negative “moments of truth.” Right-sizing and proactive account management can effectively stem high attrition during choke points in the customer relationship.
  • A product-centric focus is not the key driver in new customer retention. Customer-centric programs that address the lifecycle of the customer through vulnerable periods are more profitable.

From this insight, the company set out to identify the critical milestones for each business customer through time-driven occurrences and data-driven activity. The customer’s “relationship” with the company was marked by five key lifestages: courting, honeymoon, newlywed, settling-in, and getting-the-itch. Within each lifestage, expectations were established and the metrics for success were developed to support the business case for this new change.

Implementing the New Approach
At the core of the company’s new strategy is a precise contact strategy that optimizes each customer interaction. Channel alignment, combined with predictive modeling and analytics as well as customer-centric messaging and creative, is the foundation of this evolving new customer onboarding process.

At each lifestage, the focus and intent of the communications change as a customer progresses from one stage to another. As a result, the telecom is able to identify each stage and allocate the right offer, message, and budget to that customer’s situation. This enables the telecom to communicate with customers when they are prone to churn.

Small business customers are contacted several times within the crucial first six-month period, not including billing and account information. Number of contacts, channel mix, message, and offer are determined by in which lifestage a customer resides. Further, each contact is treated as part of a continuity curriculum, where the conversation with the customer extends over a period of time versus the traditional single message approach.

For example, during the “honeymoon” period, a single welcome kit is sent within five to ten days from service activation (versus 12 weeks). This package establishes the one-to-one dialog with the new customer and thanks the customer for choosing the telecom, delivers product information, sets expectations for the customer experience, and validates the decision to interact with the brand.

While entering the “newlywed” stage, new customers receive messaging that acknowledges the products/services the customer currently has and offers additional solutions or offers based on how they migrate through the telecom’s solutions. The goal of this effort is to provide the customer with evolutionary products or services rather than the telecom’s focus product during that time period.

In the “settling in” period, customers can expect to receive loyalty-based packages with savings designed just for them–so the more detailed the information about the customer, the more dynamic the communication stream, and the more successful (and profitable) the customer interaction.

This right-message, right-time approach extends to other channels throughout the process. The sales and direct marketing channels work closely together to present a consistent and cohesive face to the customer.

Throughout the onboarding period–from service activation through month six, the telecom company is able to “right-size” a customer’s product and service mix through: account reviews, consultative-selling via inbound and outbound telemarketing, and rules-based triggers that can help identify and stem a potential churn event.

Of course, this new approach requires changes to infrastructure, budgets, and available resources that will be deployed over several phases. Although still in the first phase, early indicators point to the success of the new program. The telecom company was able to reduce customer churn, increase sales and revenue, and experience higher overall response rates as a result of the innovation.

By implementing customer-focused communication “best practices,” a marketer in the business-to-business space can optimize the profitability of new small business customers for the long term.

marketing ideas leadership

Joseph Fiochetta is director of strategy for Harte-Hanks, a worldwide, direct and targeted marketing company that provides direct marketing services and shopper advertising opportunities to a wide range of local, regional, national and international consumer and business-to-business marketers. He can be reached at (215)750-6600 or at joe_fiochetta@harte-hanks.com.