BUSINESSWEEK ONLINE : AUGUST 28, 2000 ISSUE
THE 21ST CENTURY CORPORATION -- THE NEW LEADERSHIP Hey, Are You Listening to Me? Forget mass production, mass marketing--even mass media. Customers will be calling the shots from now on Subject: Why I'm ditching your company Date: January 4, 2010 To: Vice President for Sales & Marketing Organization: Global Enterprises Inc. From: Jane Everyconsumer C.C.: Dear Sir or Madam, I have been one of your best customers for years, though apparently you don't know it. You think you're so edgy, sending me so-called ''personalized'' e-mail for products and services that I don't want. Your Web site can't remember what I buy from one visit to the next or how I like to shop. You still spend most of your budget on TV ads, which I promptly zap. And products made to order? They don't exist on your Web site. That's why I intend to forget about you. I hear your rivals calling--the vice-president of customer communities, the vice-president of customer conversations, and the chief relationship officer--and they've wooed me away. Crazy titles? Not anymore. Ask Greg A. Tucker, CEO of consultancy Futurize Now. He calls this new breed of marketing executive ''the customer advocate. In the New Economy, customers make the rules.'' Or talk to Steve Larsen, senior vice-president for marketing at Net Perceptions Inc., which makes sophisticated software for mining consumer data. ''Markets will no longer be driven by what manufacturers choose to make and sell but by what consumers want to buy.'' In short, the era of mass production, mass marketing, and even mass media is over. Thanks to the Internet, I've got more power and more choices than ever before. To build a meaningful brand with some pricing power, companies will have to really listen to customers like me and act fast on what they hear. Don Peppers, a partner in consultancy Peppers and Rogers Group and co-author of The One to One Future, says businesses must develop ''learning relationships,'' remembering what I want and making the product or service better as a result. REAL-TIME FEEDBACK. Amazon.com (AMZN) was a pioneer, studying the books I've bought and making recommendations based on what I'm reading. Dell Computer (DELL), which sells PCs built to order, remembers what customers have bought in the past and, with individualized Web pages, makes it simpler with every subsequent order to add new computers, upgrade existing equipment, or troubleshoot technical problems. But do you know what I'm thinking right now? Sure, you've talked to me before. Wasn't I part of a focus group for your company a few years back? And didn't you once send me a customer-satisfaction survey? That's no longer good enough. Now, we're talking about real-time customer feedback, online and off. Thanks to the Net, ''companies can now have conversations with hundreds or thousands of customers, all over the world, all of them personal, all of the time,'' says Tucker. Everyone in your company should be listening, not just the sales department. Gary M. Stibel of The New England Consulting Group expects CEOs and even board members to regularly visit online chat rooms, listening and talking to customers who might be praising or bad-mouthing their products. And tech tactics are not enough. Continental Airlines Inc. (CAL.A) regularly gathers advisory groups of travel agents, big corporate customers, and frequent fliers to talk about performance and problems. The airline even sends sales execs to talk to new customers as they board flights at the Newark (N.J.) hub. ''We're going back to the old days when you talked to your customers,'' says Stibel. Why should I trust these companies with my information? Because they're going to ask permission to use it, and they're going to give me something of value in return: the products, the services, the marketing messages that I want. Not just tailored to some ill-defined market ''segment'' but created just for me, a market of one. ''The tail end of this is delivering mass-customized products and services,'' says Bruce E. Kasanoff, CEO of Accelerating1to1, a consultancy that helps companies personalize their customer relationships. ''Without personalization, there's no loyalty, there's no reason for the customer to come back again,'' he says. Publishing and music giant Bertelsmann envisions the day when I can create my own CDs, mixing and matching the songs and artists that I like--and allowing Bertelsmann to snatch back this business from Internet pirates like Napster. Or the company might learn that I'm a Scottish history nut and e-mail me excerpts of a proposed book on the Battle of Corunna. If there are enough folks like me willing to buy the book and cover the royalty and production costs, it will get printed. That way Bertelsmann reduces its publishing risks. ''Personalization is absolutely key to Bertelsmann as a business,'' says Andrew D. Dorward, director of personalization for the company's Web site, BOL.com. Don't laugh at his title--it appeals to me. It says he's looking out for my interests. What's more, he says the company is about a year away from ''creating an experience that is totally personalized for the customer'' in the way it makes and markets books and music. ''My vision would be a totally personalized media network, which is different for whoever signs into it.'' He sees the same possibilities for cars, fashion, and furniture. Indeed, Levi Strauss & Co., Nike Inc. (NKE), and many others are experimenting with ways to let consumers create the products they want. Nike already offers customized shoes. Via its Web site, shoppers can choose color combinations and other features. Levi's launched its Original Spin jeans in 1998, allowing customization of fit, style, and color. The result: Levi can produce nearly 1.7 million variations to meet customer tastes. The jeans are cut and sewn to order for about $55 a pair. Or take tiny American Quantum Cycles Inc. (AFV) in Melbourne, Fla., which uses personalization to create a niche in the shadows of the giants. After discovering that Harley-Davidson motorcycle buyers were often spending thousands of dollars to customize their bikes, Quantum decided to let buyers do that from the start. From seats to handlebars to paint colors, customers make their choices online or in a dealership. The result: a customized bike at a factory price. But I want more than customized products. I want customized marketing. I want a world where advertising is completely based on my individual interests. Figure out how to do that via television, and I won't dart out for snacks during the commercial breaks. E-mail is already demonstrating the power of personal marketing. Brainbench, a company that offers Net-based tests of technology and other skills, thinks it's rapidly perfecting the art of targeted e-mail marketing. About 82% of those attracted to its site by e-mail campaigns actually register to take one of its exams, hoping to prove their skills to prospective employers who pay Brainbench to administer the tests. ''People like to receive information if it's relevant to their interests,'' says Bill Lake, executive vice-president and co-founder of Brainbench in Sterling, Va. ONLINE LANDSCAPE. Or consider the personalized marketing tools used by Garden.com Inc. (GDEN), an online gardening site. Twice a month, I get monthly gardening tips from the company based on where I live and the kind of garden I have--say roses, or tomatoes. While I get gardening help, they keep their brand in my consciousness and learn more about my preferences. Likewise, after surveying customers, Garden.com created an online landscape planner that lets customers instantly buy the plants we put into our designs. Sure, it helps sell Garden.com's products, but it solves my problem: actually finding the plants I put into my plan. If the competition doesn't force you to come around to these new ways of customer-centric thinking, maybe the power of my new household purchasing agent will. In the not-too-distant future, these technology-backed ''concierges,'' as consultant Elliott Ettenberg calls them, will work for me and others like me. My agent, paid by me and using sophisticated data-mining tools, will know what I'm willing to spend for basketball tickets, for example, and constantly monitor data to get me what I want--whether it's the best seats at any price or the best deal. And you thought consumers were fickle before. These agents take customer advocacy to the extreme. ''You tell me what you want, I'll get it for you. That's something a customer is loyal to,'' says Kasanoff of Accelerating1to1. Now, here's the part that should really get your attention: After you're through making all these updates and changes to the way you sell and market--I want to join you in your job. And you'll thank me for it, too, because I'll be the most powerful marketing weapon around. Before I can do that, you must find a way into my conversations with family, friends, and business acquaintances. Some call it ''viral marketing,'' but it's really good ol' word-of-mouth spread rapidly via the Net. Consultant Peppers calls it ''turning your customers into advocates for your business.'' Colin Campbell, CEO of San Francisco-based Gazooba Corp., which markets viral marketing tools, says customers typically pass along marketing messages that they consider valuable to five to seven others. Of that group, about 40% make a purchase from the recommended company. ''You know more about your friends' interests than anyone else ever could,'' says Campbell. And the most loyal customers typically don't need any incentives--like discounts or frequent-flier miles--to spread the word to friends. Procter & Gamble (PG) discovered the power of personal relationships when it introduced Physique, a new line of hair-care products. Using research that delved into both demographic and psychological trends, it identified the ''chatters,'' or consumers who are particularly effective at influencing others about new products. Direct-to-consumer samples and a Net site that encouraged visitors to tell a friend were aimed at this group. The program generated over 1 million referrals to the Physique Web site in six months. Less than 15% of Physique's marketing dollars went to TV ads. Whatever you do, do it fast. At Staples.com, the effectiveness of e-mail promotions is measured in minutes, not weeks or months. Thanks to electronic tracking of Web site visits, online sales, and coupon redemptions, ''we'll know in 60 minutes if [an e-mail campaign] is not meeting our benchmarks'' and make changes accordingly, says chief marketing officer Kelly A. Mahoney. ''This demands much more of a SWAT team-type of approach, an entrepreneurial, never-say-die personality,'' she says. Or consider Garden.com's response when a customer complained one day that she couldn't tell what size pots the perennials were shipped in. Company executives edited the site that night to include the information and informed her the next day. The customer ''thought it was so cool,'' says chief marketing officer Lisa W.A. Sharples. I wrote a complaint letter to you six months ago. I'm still waiting for an answer. Not cool. But don't bother now. I'll be shopping someplace else. Regards, Jane By WENDY ZELLNER _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS The New Leadership The Boss in the Web Age TABLE: The Boss in the Web Age TABLE: Now and Then: How CEOs Will Change over the Next 20 Years See the World, Erase Its Borders TABLE: Going Global: The Growing Importance of Worldwide Markets Up from Bean Counter TABLE: Desired Skills An Executive Whose Time Has Gone From Gearhead to Grand High Pooh-Bah TABLE: Not Just Any CIO Mining a Company's Mother Lode of Talent TABLE: What Does a Knowledge Manager Do for a Living? Hey, Are You Listening to Me? 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