How your service or product is positioned in customers’ minds is the critical determinant of your success. But do you know how to achieve a strong position? Most organisations don’t because the assumptions they make about their product/service’s positioning means their communications and behaviours fall far short of what customers value.

The CARDS test

There are five key ways to improve performance.

• C is for Clarity: Communications, involving brands, websites or sales collateral talk too much about you and not enough about them (customers). Is it clear about who it’s for, why its better and what they should expect to get?
• A is for Authenticity: Is there an underlying reason for why you are in business? Does it ring true and is it something others (especially customers) care about?
• R is for Reliability: Does your thing do what you promise? Every time? How consistent are you
• D is for distinction: When thinking of the job they hire your product/service to perform for them, who do customers consider using? Do they think of many or are you the only one? How well do you stand out from the crowd
• S is for Saliency: Does your promise ring their bells, functionally, emotionally and socially?

Each of the five factors has a different influence on performance but managed collectively they yield superior results in both the short and longer term. So how well do your think your organisation is doing?

What to do about it?

Of course, self-assessment can only take you so far but customers can give you a much clearer picture. All you have to do is talk to them intelligently about the job they perform and your role in their lives. Then everything’ll become clear.

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It is easy for us to take for granted what makes England so attractive for business. But we do this at our peril but at times, it seems our political representatives don’t seem to understand what the country’s assets really are.

Foreigners, however, are a great source of insight as to what matters. And when making investment or business decisions, they look at England with the same slide rule they evaluate other countries with. But on a number of measures, England’s value is far greater than anyone in the world. Trouble is, if our politicians don’t seem understand how well we perform on these dimensions, they’ll never get the best deal for UK citizens or they’ll impair the underlying assets that make this country so attractive. It is their decisions that affect our long-term prosperity so it’s crucial to remind them what these are:

1. Stable democracy: There is no other country in the world with such a long history of democratic rule. We take it for granted but for investors long-term stability is a critical factor. The freedom of our citizens from corrupt rulers is sacrosanct and has been since Magna Carta; our island status keeps us (relatively) freed from armed conflict and our geography escapes the more extreme environmental threats – both help maintain security and stability.

2. Independent judiciary and rule of law: A rule of law that is clear, objective and consistently upheld is important to fostering a climate of trust, especially with regard contracts and disputes. Our judicial system and police force are quite simple the envy of the world.

3. Respect for private property: Property is private and cannot be taken lawfully by anyone. Funny how silly this sounds but the fact that no-one has the ability to take this away from us is an important aspect that few other countries enjoy today. Taxes are arguably one way governments legally do this but so long as this is long-term,  predictable and ‘fair’, most people don’t mind paying. Again, foreign investors value this highly.

4. Ease of doing business: Regulation, ease of registration of property, taxation, bureaucracy, these are all aspects that can create friction. England is pretty good at most and appears high up the ‘ease of doing business’ league tables. This high score coupled with the above factors, makes us as compelling if not more so than anywhere else in the world

So when politicians:

• interfere with the judiciary or police (civil liberties; judicial interference)
• fail to impose taxes consistently (politicians’ expenses), at all (Google, Amazon etc) or conversely impose stealth taxes on people and businesses;
• chop and change their thinking about important long-term investments (eg Energy supply, HS2, Trident etc),
• fail to regulate financial services and other sectors properly;
• allow our property market to be overrun with foreign money causing domestic housing shortage

they are undermining our long-term prosperity. And if you don’t believe me, ask the 400,000 French people why they live and work in London. They won’t talk about these factors but they will point to things that are built on these four pillars of prosperity.

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It has been said that if all Coke Cola’s factories burned down in a day, the business would survive. But if 7 billion people got amnesia, it would not. The value of anything is clearly only what exists in a customer’s mind.  But it is important to know that it is the remembering that matters, not the experience.  Trouble is, how customers feel about an experience determines what their memory will be. And after only a few months, this becomes distorted, falsified or forgotten.

A focus on achieving “customer delight” would seem to be a good idea in this context. But often these initiatives end up costing more for no incremental benefit. And you know how you get suspicious when people are extra nice to you? Customers feel the same so they’ll end up questioning your motives and worrying about the value exchange.

So how do you get a customers’ repeat business (assuming you want it) when they might forget or misremember you. Here’s five suggestions:

1. Always make sure the experience ends on a happy note. Happy endings have a dramatic effect on positive memory recall.
2. Frame the value for them: Summarising the value exchange in terms of the value they derived. It helps create a record they can refer to later which will challenge memory lapses (so long as they remember they have the record!)
3. Ask for feedback: Make sure you give them a chance to say what’s important. Open ended qualitative conversations are powerful and rewarding methods which in themselves create another positive memory. Quantitative, satisfaction type survey methods do not
4. Be present: The next time a customer needs your service you need to be ‘present’ in their mind. This can be done through direct contact (eg in person or emails) and indirect (eg media) but little and often is better than pestering. I’m sceptical about branded items (eg mouse-mats) unless they are relevant to the job they hire you for.
5. Stay relevant: If you understand what job they were performing with your product/service, you can add value. For instance, writing, speaking or hosting events, focused on their issues, are powerful ways to position your business. In fast changing markets, it also keeps you current.

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Business customers find it hard to tell you why they buy one service over another. Forcing them to rationalise complex decisions involving risk, trust, emotion and other people is very hard. But understanding how they take decisions could make all the difference to your sales.

For most customers, managing downside risk is as important as the upside value they expect to get from a  new product or service. Here are five issues our research throws up that buyers worry about.

1. The risk of the new

This is not to do with how well your thing works, far from it; it’s about its expected utility value. And the customers’ unconscious mind tends to overvalue what they currently use and discount the value of something they don’t. Some early adopters don’t really consider this but they are in a small minority; everyone else does.

2. The risk of company failure

Young firms struggle not just from lack of brand awareness and reputation but also by virtue of being young. What customers know is that many do not succeed and will go out of business, which, for the mainstream majority, is a big problem. They worry about the risk of investing time and money into adopting a new way of working with a supplier that may well go out of business. So either they don’t buy or if they do, they want to know that if it does go out of business, they won’t be left high and dry. So whilst their behaviour and requests for information pre and post purchase may reflect this concern, they rarely mention why.

3. The value of proximity

Many technology business models rely on being able to ship a box or software access codes without having people on the ground. Resellers are often thought of as that resource but the truth is, many customers, without direct access to the manufacturer, see that as a problem. Access to the source . And the larger the investment or the more important it is, the more customers value access to local help. Local phone numbers and addresses on websites for example send a powerful message to these customers that help is at hand, in the same time zone. Its not that they necessarily expect to use it, it’s more the reassurance that it’s there. Experience shows that when comparing two similar technologies, proximity to local help and support can trump superior price or performance criteria.

4. Importance of human relationship

Anyone experienced at new technology implementations knows that usage and adoption is a far bigger challenge than anyone expects.. But technology providers’ business models rarely accommodate the levels of post sales support required for the client to extract the value. Which leads to client dissatisfaction and conflicts about the costs of providing the training and support they end up needing. Fear of failure is where human relationships become important, knowing that someone, somewhere will help bail them out of things go wrong.

5. Defendability

Whatever the relative merits of two competing technologies, often the decision comes down to ‘defendability’. The old adage”you never get fired for choosing IBM” is ,and always has been, the way many customers think.. At the end of the day, if the whole thing fails, customers will choose the supplier which is most defensible to their boss/board/shareholders so they don’t lose their job.

As any good salesmen knows, objections can be overcome if they ‘speak’ to the customer’s needs. But often these are hidden from them and even the customer. So its important to really get to know your prospective customer and understand their emotional concerns, not just their rational ones.

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Its hard for backers to cede power to managers or management to their staff. But in services businesses, empowering front line staff  and freeing them from unnecessary bureaucracy is the best way to manage customers.

Take Buurtzorg, as a shining example of this in action. Formed in 2006 in Holland, it now employs 8000 community care nurses who operate in autonomous teams and are able to deliver better care, for less hours with a fraction of the management overhead traditional health models need. The customer experience is far superior to the old public system, the nurses are far happier and the public purse is 40% better off.  Buurtzorg now delivers the majority of community health care in Holland (only 9 years from set up to become market leader is quite some feat for a private enterprise) and is expanding around the world.

Professionally qualified staff are the best people to serve and manage customers but are frustrated and hindered from doing so by their managers and backers. In many businesses this is an ‘open secret’, where the professionals know whats wrong with the system (lack of trust mostly) but management don’t. Shifting the power and making frontline staff responsible and accountable for customer outcomes can be a smart way to change performance. Your staff know how to do it, if you care to find out.

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Do you run customer satisfaction surveys or  use Net Promoter Score (NPS) to track your performance? Have you ever thought about what customers feel about it? Do you realise customers on the whole do not like participating in customer sat surveys, which is why  response rates are so low.

Why? Firstly, there’s nothing in it for them as it is an asymmetrical exchange of value: they give their time, you get the benefit, they get nothing.”But if we ask we’ll be able to improve our services so they will gain eventually” you argue. But the methods used and the questions that get asked actually have a negative impact on customers . Questions like “would you recommend..” or “how would you rate the service” are questions YOU want to ask not what is important to customers. So by not asking them important questions, they know nothing will get better. (Sometimes I even get asked to participate BEFORE I’ve had a service experience,  as a non customer – pop-ups on websites I’ve browsed seem to do this a lot – which is ludicrous).

Many service providers are involved in sectors where the notion of ‘satisfaction’ is a problem in  itself. There are many sectors – utilities, financial services, telecoms – where customer expectations are low or they are so disinterested that asking them how satisfied they are makes the inquirer seem delusional. All customers want is the thing to work so they can get on with their lives not take part in surveys after their supplier has resolved a problem. And anyone with experience of these sectors know that nothing ever gets better irrespective of the number of surveys they run so why bother to invest time in a futile exercise?

Finally, asking customers to predict future behaviour (NPS is built on one question “would you recommend..”) is a nonsense as questions about future behaviour are no predictor of behaviour. Look at how wrong the 2015 UK Election polls were to see what I mean.

“But talking to customers would raise the cost astronomically” you say. Well yes, the quantitative methods of customers satisfaction surveys makes them cheap to run. But customers know this. Service providers who care about the customer experience and want to improve on it, will talk to me; service providers who ask daft questions to keep score, clearly don’t.  Which one are you?

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It is well known that human beings have a natural tendency for reciprocity. We are not nearly as selfish and self interested as some might argue and actually can be far nicer and more cooperative than the self-interested lobby would have us believe. Pro-social behaviours are well documented, where one persons response to one act of kindness can often exceed the value of the original act  But our desire to reward one good deed for another is also balanced out by a capability for vindictiveness that goes much further ,and is far more brutal, than our capacity for “niceness”.

So why does this matter to you? Well, happy customers will tell 8 others; unhappy ones will tell 16. Unhappy ones will go further, posting videos on youtube, writing angry reviews on Trust PIlot, ranting in private and actively discouraging others. And with referral still the most effective medium for acquiring new customers, that’s a problem. But worse, the vast majority of customers won’t even tell you about their poor experience and so you won’t even know about the conversations they’re having with others until its too late.

I think the vast majority of service experiences customers have do not meet their expectations but they continue buying because the customer doesn’t want to rock the boat when no other viable option exists. I suspect that’s why they don’t bother telling you. The way reciprocity works here is that customers are prepared to forgive service faults so long as the business acknowledges them and puts them right. Often these exchanges are unfair on customers, something they are acutely aware of and influence their appetite to reciprocate. The big problem is that imperfect and unbalanced relationships like this mean your reputation pivots on a knife edge. In this place, you don’t benefit from referrals and are at risk of plunging into the brutal world of revenge. All it takes to end up there is for the customer to find a better alternative or for their tolerance to snap.

So what do your customers feel about you? Isn’t it time to find out? It could make a world of difference to them and you.

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The conventional ways we go about understanding customers and the causes of their satisfaction fails to grasp an uncomfortable truth: customers can’t tell you what makes them satisfied. This is because the act of trying to rationalise an experience only accesses their conscious mind, leaving the unconscious one unexplored. This is like interpreting the world using 5% of your brain

Two groups of people recently went to the Sheraton Grand Hotel in Edinburgh for a three course meal. But despite having eaten exactly the same dishes, the two groups reported significant variance in their experience, in particular, their ‘liking’ of the food, its aesthetic value and how much they were willing to pay. This experiment was conducted by the University Of Oxford (isn’t it great to hear about a UK rather than a US piece of research) who reported their findings in Jul,y 2015. What researchers did was to vary the presentation of the starter (to the side or centred), the weight of cutlery used for the main (heavy and light) and the colour and shape of the plates used for the dessert (black square plates or white round ones). And it turns out that all three variables influenced the diners’ experiences, with heavy cutlery (vs lighter cutler) in particular having a marked effect on satisfaction of the main course (they liked it 10% better) and willingness to pay (prepared to pay 15% more).

Understanding customer satisfaction is much more complex than we think. Research methods in this field are generally unhelpful at pinpointing how to improve experiences. Net Promoter scores in my opinion are only useful  ways to measure  performance improvements over time and for competitor comparisons.  What they don’t tell you is why customers feel the way they do. That requires us to take a completely different approach to understanding customers, something which most organisations fail to understand. Bt when you do, you are far better able to engage with others.

 (Click here for the Oxford University research report) 

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Selling technology or a service to businesses usually involves several departments. A sponsor advocates its purchase, staff are the users, IT provides technical support and management, HR supports the implementation process. With all this complexity and different audience requirements, it can be hard to work out how to close the sale.

One way to cut through the complexity and improve your chances of success is to identify which budget is paying for it. This simple question and follow on questions about measurements of success, ROI etc does several things. Firstly it shows you are interested in the value they seek. Secondly it helps you find out more about the job they want performing and their dissatisfactions with the current system. Thirdly, you are far better able to market your proposition if you know what the value is to them.  Fourthly it identifies others involved in the decision making process. And finally, it helps you identify their level of commitment if for instance no budget has been allocated, saving you time and energy.

One question can lead to happier exchanges all round.

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With somewhere between 50 and 90%+ of new product introductions failing, you’d have thought we’d have come up with a better way to improve the odds of success. Trouble is, innovators seem to keep making the same mistakes: ask the customer what they want, make it and watch them ignore it. Many I meet don’t even bother talking to customers but bring their shiny new thing to market with visionary zeal with little or no understanding of the customer.

We’ve known about the role of the unconscious mind for decades but some reason management teams don’t seem to have changed their modus operandi. The cosy reassurance of research studies, the building or expensive technologies and the hiring of sales and marketing help all without understanding customers is simply a recipe for disaster.

Yet there is something you can do about it, it just requires a different approach. Most importantly, stop asking daft questions about future intentions to buy new things – customer responses are rarely accurate. In fact, any attempt to get their conscious mind to explain decision making is fundamentally flawed. Rather, get to know them in other ways. Hang out where they do, observe their  behaviour, watch their online conversations and talk to them intelligently about the jobs they perform, their dissatisfactions with the way perform it and get them to help you build the thing that’ll ring their bells. This is better for them, better for teams and better for investors.

*from “How customers think”, Gerald Zaltman

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