It might seem that customers are the last thing on the minds of companies in the headlines these days. General Motors, Citigroup ( (C)
), AIG ( (AIG)
), Fannie Mae ( (FNM)
)—all of them and others might have avoided their monumental stumbles if they had focused more on the needs and wants of their customers than their own. It's a good time to remind ourselves of the innovative practices that win the hearts and minds of customers.
New truths have emerged from the information revolution we are all navigating. But the fundamental answers haven't changed. Here are five ideas to help keep customers front and center:
Customers want solutions.
In the words of marketing guru Ted Levitt: "People don't want a quarter-inch drill; they want a quarter-inch hole." All products and services should fall into the category of getting a job done, solving a problem, filling a need. Companies need to expand their thinking, and their product portfolios, to be more solution-centric.
Take Glaxosmithkline's ( (GSK)
) new weight-loss aid, Alli. To set the over-the-counter drug apart from other diet pills, Glaxo markets Alli as a comprehensive "weight loss program" that includes professional coaching, support tools, online networks, and communities to connect customers with others on the program. The company knows that Alli sales depend ultimately on customer success stories, so making it easier for people to share them is in Glaxo's own interest. At the same time, this company-sponsored support network should make it easier for dieters to lose pounds.
That Glaxo hit on a comprehensive solution like this is an innovation milestone for the pharmaceutical industry, which, for as long as I can remember, has seen innovation only through the lens of drug efficacy. With so many drugs becoming commodities that perform no better than others, I expect that smart companies will adopt this approach to develop competitive differentiation.
Customers take longer to find a solution than we think.
Companies tend to focus on their initial contact with customers, believing that shoppers' experience with a product or service begins when they walk into a store or visit a Web site. In fact, their journey begins much, much earlier. The easy availability of information on the Internet today allows customers to form opinions from countless sources. Conversations on Facebook, e-mail, and discussion boards steer consumers well before companies have had a chance to pitch their product or service. That means companies must search out customers sooner.
Through ethnographic research, a Peer Insight client in home design found that before consumers pick out paint or floor tile at Lowe's ( (LOW)
) or Home Depot ( (HD)
), they draw up their overall remodeling project. By the time they wheel their carts up and down the store aisles, they've pretty much made their choices—they're shopping for solutions, not inspiration. If companies haven't made contact with customers before then, they've probably already lost them.
A customer journey is a circle, not a straight line.
Companies that really understand customers know their journey never ends; they're circling back continuously, potentially using your products and services many times. Why cut off the conversation after working so hard to make that first sale? Companies should continue to give customers reasons and ways to keep them involved. Companies that offer lifestyle brands as opposed to brands linked to one-off products or services can keep customers loyal over lifetimes.
For example, Procter & Gamble ( (PG)
) has turned Pampers from simply diapers to a full-fledged motherhood resource. P&G begins by finding women who are pregnant or thinking of becoming pregnant and stays involved in their lives with a wide range of products and services throughout the first few years of the baby's life. And as their families grow, these moms start their journey with P&G again.
Your competition isn't who you think it is.
Remember, customers want solutions, and the cast of companies that can help fill those needs extend beyond your direct competitors. Take the local spa. Customers ultimately go to the spa to fill a need for relaxation. But vendors that can provide relaxation aren't limited to other spas within a 5-mile radius. Customers might relax by spending an afternoon at the bookstore or a quiet morning at the local coffee shop, or by going to have acupuncture or to the gym for a workout.
Companies that see their competition from this broader viewpoint will find new ways to stay relevant. The additional context helps companies imagine more comprehensive solutions. Partnerships are a great way to get the bigger picture. Nike ( (NKE)
) and Apple's ( (AAPL)
) iPod, and W Hotels ( (HOT)
) and Bliss spas are two team-ups that deserve accolades for mastering this principle.
Customers are part of a collective.
The information revolution has connected people in powerful ways; it's never been easier for customers to find the opinions of others to validate their product and service choices. A colleague recently underscored this point through a story of shopping with his teenage daughter for her prom dress. In each new outfit, she snapped and sent pictures of herself with her iPhone, asking for feedback from her Facebook friends, and getting it in real time. He was amazed by this new decision-making behavior.
So now that you've been reminded of these ideas, what's next? Don't leave things up to marketing—it takes a serious cross-functional effort to turn people into customers and then keep them coming back. It takes that same comprehensive effort to transform individual products or services into winning solutions. In other words, think the hole, not the drill.