Posts Tagged ‘Customer Relationships’

Is Your Best Customer an Educated Customer?

August 18th, 2010
Seemingly simple question, but one with huge implications in a socially-transparent world. I have worked for some folks over the years who were “nice guys” until they got in a room with a potential customer and turned into sharks. Their belief was that they needed to close the customer as soon as possible and with as much margin as possible.

Forget value-based pricing, it was “Caveat Emptor” or buyer-beware pricing. Their best customer was an uneducated client who didn’t understand the value of the offering. They preyed off of the buyers ignorance.

As any of us who run businesses know, it is a struggle to find the right balance between customer and company needs in a relationship. Customers do not really appreciate martyrdom when you cannot deliver at a ludicrously low price. Some buyers look for predatory deals on their own side as well. At the end of the day, win-lose negotiating means someone loses.

I have always believed in win-win relationships with customers. My belief is that you operate as if the client has all of the available information and you treat them respectfully as an educated buyer with all of the benefits in the negotiation and represent their interests even if they cannot. Integrity is not bought or sold, it is earned. Sometimes at great cost and sacrifice. And it is always constantly challenged.

I have also always believed that you can “win” with integrity and that eventually those who practice predatory business practices will be exposed.

Social media has the opportunity to profoundly impact market transparency. My sincere hope is that it will be easier for buyers to get a more “accurate” picture of the value of the offering and the integrity of the provider. Markets become more efficient with better information so I believe that the ability to check references, get self-educated, and validate product claims will make markets more efficient and reduce the ability for “bad actors” to operate.

I think those who believe in “an educated buyer” are already participating in social media for the right reasons. The “give to get” model of providing thought leadership and market education has helped many. Not sure yet that it is affecting market behavior on a macro-level, but I am always hopeful.

Why Fortune 1000 (All) CEOs Needs to Understand Social Media and Marketing

July 7th, 2009

The reality is that very few Fortune 1000 CEOs (or even Divisional CEOs) will read this post. Actually, very few will read any posts. BUT here is why they should…

  • Marketing – Traditional marketing activities are getting diminishing returns; social marketing leveraging social media represents a shift to lower cost, higher return activities. Ecomomics is the driver. Mantra should be “Find more cost effective ways to drive revenue”.
  • Competition – The competitor that can figure out how to leverage online social relationship networks to drive customer acquisition at a faster rate grows faster.
  • Employee Productivity - Your employees can be much more productive leveraging these web 2.0 tools. Problem is that most organizations approach these tools at a tactical level and therefore only get marginal results. Some of the real innovators are using it to rethink and realign their value delivery systems.
  • Cost of Sales – Used to be that vendors that could short circuit an RFP could command higher margins. If your prospects are doing research on the web, you need to short circuit that process OR at least get in early enough to influence the process. You will lower your aggregate cost of sales.
  • Customer Relationships – Customers are demanding better information and better interaction throughout their lifecycle. Every major company has customer retention and referral programs. How is your organization trying to provide a better customer experience?

Could you cut lead generation, customer acquisition, or customer support costs leveraging social media? Can you demonstrate a ROI?

The short answer is “yes”, but having a Corporate Facebook page is probably not the right answer when someone on your board asks your CMO about how you will leverage social media …. or how you will drive sales growth over the next 2 quarters when you are also cutting marketing budgets. You could probably flog the troups to work harder to get the short term results, but the reality is that a lot of smart companies are crafting strategic approaches to social media to help change the market dynamics. If you are not getting the sales growth that you would like even in the face of a myriad of corporate initiatives, you may want to rethink “Social Media is a Fad” or isn’t really for <insert your market here>.

Why? Social Media represents a fundamental shift in the way people interact on the web. As a result, this impacts the way customers and employees interact in business. We all have B school case studies where innovative companies leveraged innovative technology challenge the established market order. There are just as many examples of where the established market leader crushed an upstart competitor by leveraging the same innovative technologies to maintain their market lead.

Your organization spends a great deal of money and time around preparing strategic plans, why aren’t you taking the same approach to social media? Could be a game changer for your business… or your competitor…

If you don’t have people in-house who can build and articulate real strategy with a Roadmap, Business Case, and ROI around social media & marketing, then I suggest that you acquire that talent post-haste. Even if you decide that you need a slow-roll approach to leveraging social media; having a strategic gameplan that is well thought out and justified is priceless. Especially if social media represents a fundamental paradigm shift in the way businesses interact with customers.