Creating Positive Moments for Your Customers

strategy + business, November 22, 2017

by Theodore Kinni


Quick question. Customers rank their interactions with your company on a scale of 1 (very negative) to 7 (very positive). Should you invest more resources in improving the experiences of customers who rank their interactions at a 1, 2, or 3, or those who rank them at a 4, 5, or 6?

When brothers Chip and Dan Heath, a professor at Stanford Graduate School of Business and a senior fellow at Duke University’s CASE Center, respectively, asked executives how they invest their resources, the executives estimated that, on average, their companies spend 80 percent of their resources trying to improve the experiences of their unhappiest customers. Yet, report the Heaths, in 2016, when Forrester Research tabulated its annual U.S. Customer Experience Index and modeled the financial results in 16 industries, it discovered that “there’s nine times more to gain by elevating positive customers than by eliminating negative ones.”

This finding supports the main point in The Power of Moments, the latest in a series of formulaic but insightful books by the Heaths that seek to illuminate questions with important business ramifications, such as how to make ideas sticky and how to create change successfully. The point in this case is that “positive defining moments” can produce extraordinary effects in both individuals and organizations. The book explains how such moments are created. Read the rest here.

How to Order Wine Without Making a Fool of Yourself

Inc., May 16, 2017

by Theodore Kinni

CREDIT: Getty Images

 

 

Americans drink more wine than people of any other nationality--we chugged 913 million gallons of the nectar of the gods in 2015.

Yet, sit most of us down at a fancy restaurant with a multipage wine list and a sommelier breathing down our necks, and we start to think a beer sounds really good. Make it an important business dinner with a prospective employer or a big customer and a shot of bourbon with that beer sounds even better.

It doesn't have to be this stressful. In fact, wine can help you seal the deal, according to Bianca Bosker, author of Cork Dork: A Wine-Fueled Adventure Among the Obsessive Sommeliers, Big Bottle Hunters, and Rogue Scientists Who Taught Me to Live for Taste (Penguin, March 2017).

Bosker is a journalist by training who "generally preferred wines from a bottle, but certainly wouldn't have turned up [her] nose at something boxed" before she became fascinated by the highly competitive, sensory world of sommeliers. She dove into that world for a year and emerged as a Court of Master Sommeliers' Certified Sommelier (she's one of the mere five percent of applicants who passed that exam on their first attempt).

In the following interview, Bosker offers us some savvy advice on how to order wine in a business setting...read it here

Nir Eyal’s Required Reading

strategy+business, March 8, 2017

by Theodore Kinni


Nir Eyal teaches companies how to hook customers. When he says hook, he doesn’t mean entice or engage — he means designing products that are habit-forming.

“Habit-forming products change user behavior and create unprompted user engagement,” Eyal explains. “The aim is to influence customers to use your product on their own, again and again, without relying on overt calls to action such as ads or promotions. Once a habit is formed, the user is automatically triggered to use the product during routine events such as wanting to kill time while standing in line.”

Eyal first got interested in habit-forming products in 2008, as cofounder and CEO of AdNectar, a platform for advertisers trying to reach social gamers. In the process of launching the company, he became intrigued with the behavioral influence that gaming sites and other social media sites, such as Facebook and Twitter, exerted on users.

After AdNectar was acquired by Lockerz in 2011, Eyal took a deep dive into the nuts and bolts of habit formation. He taught at the Stanford Graduate School of Business and the Hasso Plattner Institute of Design. He invested in and consulted with companies seeking to hook customers. Eyal encapsulated his findings in the best-selling book Hooked: How to Build Habit-Forming Products (Portfolio, 2014), which details the Hook Model, a four-step cycle for creating habit-forming products.

When I reviewed Hooked a couple years ago, it raised a few eyebrows: The ethical line between creating a habit and creating an addiction seemed too thin to some readers. It’s a common response and one that Eyal, like other influence experts such as Robert Cialdini and nudger Cass Sunstein, takes pains to address. “Let’s admit it: We are all in the persuasion business…[but] the power to build persuasive products should be used with caution,” Eyal warns.

One of Eyal’s motivations for developing the Hook Model and writing Hooked was his own frustration with the lack of information on the topic for product designers. When I asked him about the books that had influenced him, he shared the following four titles. See the titles here.

Zero-based trade for CPG leaders: Five steps for raising the impact of your trade promotions

Learned a lot lending an editorial hand here:

PwC Strategy&, March 8, 2017

by David Ganiear and Edward Landry


The next wave of profitability for consumer packaged goods (CPG) companies will come from zero-based trade (ZBT). This adaptation of zero-based budgeting goes beyond cost management of trade promotion. It helps manufacturers rethink their patterns of spending and increase the profitability of this all-important way of reaching end consumers in retail stores. Trade promotion, which directs shopper awareness at the point of sale, is a valuable strategic capability. In the annual expenses of a CPG company, it typically ranks second; only the cost of goods sold is greater.

ZBT represents a five-step process for raising the impact of that spending. The first step is to diagnose your situation and look for previously unseen opportunities for improvement. Second, develop trade promotion strategies that are aligned with your business strategy, reflecting both the financial returns you expect from your trade promotion investment and the level of freedom you have to redeploy it. Third, employ trade optimization levers — budgeting, pricing, analytic planning, and post-event analysis — to implement these new strategies. Fourth, bring your overall trade budgets in line with your new approach. Finally, give this new ZBT practice the enabling capabilities needed to sustain it over time. Together, these steps add up to a new overall trade promotion strategy that can yield millions in savings for your CPG company and give it a customer-facing competitive edge. Download the white paper here.

TechSavvy: The $105 Billion Enterprise Market for Pokémon Go

MIT Sloan Management Review, July 21, 2017

by Theodore Kinni
Suddenly, Pokémon Go, the app based on the 20-year-old video game, is everywhere. People with smartphones are more like zombies than ever. Marketers are formulating their Pokémon Go strategies. Thanks, augmented reality!

The consumer market is not the only place AR is taking off, according to Bhavesh Kumar of VMWare AirWatch. “There’s increasingly reason to believe that AR could take off for businesses long before it goes mainstream with consumers,” he declared in a blog post that appeared one day before Pokémon Go, well, went mainstream with consumers.

But that doesn’t mean Kumar is wrong. He’s right in saying that the AR device ecosystem is more developed for the enterprise market than for the consumer market, and that the industry standards needed to put AR to work are already emerging.

Moreover, Kumar is backed up by a new study from Index AR Solutions, a developer of customized AR business solutions for the corporate market that is collaborating with Newport News Shipbuilding. Index AR forecasts that the enterprise market for AR will hit $105 billion within 15 years, including $49 billion in hardware, $11 billion in software, and $45 billion in services. Assuming, of course, that we can tear ourselves away from Pokémon Go. Read the rest here.

TechSavvy: Does Social Media Enhance Employee Productivity?

MIT Sloan Management Review, July 7, 2016

by Theodore Kinni


Do you know what your employees are doing online? Come next May, Singaporean prime minister Lee Hsien Loong won’t have any trouble answering that question. That’s when 100,000 computers used by the city-state’s civil servants will be disconnected from the Internet. The government is taking this drastic action to “tighten security,” writes tech editor Irene Tham in The Straits Times.

Being of a cynical bent, I think that eliminating employee access to Facebook and Twitter and other social media platforms might give Singapore’s government a nice bump in productivity, too. But I might be wrong, according to a report from the Pew Research Center that delves into the use of social media in the workplace.

“Today’s workers incorporate social media into a wide range of activities while on the job,” explain Pew Center researcher Kenneth Olmstead and University of Michigan School of Information professors Cliff Lampe and Nicole Ellison. “Some of these activities are explicitly professional or job-related, while others are more personal in nature.”

Sure, their survey says — ding! — that the number one reason why American workers use social media at work (34% of respondents) is “to take a mental break from their job.” Moreover, reason number two (27% of respondents) is to “connect with friends and family while at work.” But then comes a list that might make your inner CEO perk up a bit: 24% of the respondents use social media at work to foster professional connections; 20% to help them solve work problems; 17% to foster relationships with co-workers and/or learn more about them; and 12% to ask work-related questions of people outside their organization and/or inside their organization.

So, maybe your company shouldn’t follow Singapore’s lead. Anyway, aren’t all those civil servants simply gonna go all Hillary Clinton with their personal devices? Read the rest here

A look back at Cialdini's classic book on influence

The Six Principles that Influence People to Say “Yes”

Posted March 17, 2015 by Safari Books Online & filed under Business, Content - Highlights and Reviews, delegating, influence and persuasion, management, managing yourself, Personal Development.

By Theodore Kinni
Theodore Kinni has written, ghosted, or edited more than 20 business books. He was book review editor for strategy+business for 7 years.

Long before writers like Malcolm Gladwell and Dan Pink started picking through scientific studies for business tips, there was Robert Cialdini and his classic book, Influence: The Psychology of Persuasion.  The first edition of the book, which was based in part on Cialdini’s own research, was published in 1984. Since then, it has racked up sales of more than 2 million copies.

“I can admit it freely now. All my life I’ve been a patsy,” the Arizona State psychology professor writes in the book’s introduction. “For as long as I can recall, I’ve been an easy mark for the pitches of peddlers, fund-raisers, and operators of one sort or another.” Influence was written as a defensive weapon for the patsy in all of us, but it quickly became a bible for sales and marketing types, too. And from there it spread to business leaders.

Good leaders don’t play their followers for patsies—if they did, they wouldn’t be leaders for long. Nevertheless, they must be able convince people to follow them and to do the things that they ask. In Influence, Cialdini offers up six basic psychological principles—reciprocity, consistency, social proof, liking, authority, and scarcity—that any leader can use to obtain compliance. They work because they contain triggers that set off fixed-action patterns within us.“Click and the appropriate tape is activated; whirr and out rolls the standard sequence of behaviors,” Cialdini explains... read the rest here

Zombie Marketing 101

My latest book post on s+b is here:

Zombify Your Customers

These days, zombies are everywhere. They’ve become so commonplace that the Centers for Disease Control and Prevention in the United States uses “zombie preparedness” as a way to educate people about being ready for an emergency. But what, aside from their infectious personalities, accounts for our current fascination with the walking dead?

“Perhaps technology’s unstoppable progress—ever more pervasive and persuasive—has grabbed us in a fearful malaise at the thought of being involuntarily controlled,” suggests Nir Eyal, author of Hooked: How to Build Habit-Forming Products (with Ryan Hoover, Portfolio, 2014). But he is less interested in finding a cure for humanity’s tendency to zombieism than in explaining how to exploit it.

Eyal’s goal in Hooked is to show companies how to stimulate “unprompted user engagement, bringing users back repeatedly, without depending on costly advertising or aggressive messaging.” The idea is to transform services or products into unconscious habits à la Google and Twitter, Angry Birds and Candy Crush Saga, or lottery tickets and slot machines.

To that end, the high-tech entrepreneur, blogger, and lecturer at Stanford’s Graduate School of Business and D.School presents the “Hook Model,” which he constructed from “distilled research and real-world experience.” The model has four consecutive phases: trigger, action, variable reward, and investment.

A trigger activates a customer. You advertise your product, get somebody like me to review it, get friends to tell each other about it, or—in the case of an app icon—place it on a customer’s phone or computer screen. An effective trigger prompts customers to do something: For instance, Eyal points to a Coca-Cola vending machine, with its big color photo of an attractive young person who is reaching out to you, Coke in hand, and the easy-to-read question, “Thirsty?”

Once triggered, the customer acts in anticipation of a reward. If you want customers to act, Eyal says, make it easy and mindless for them —like Facebook does when you want to share something you’ve read with your pals. The author borrows Stanford professor B.J. Fogg’s six simplicity factors for guidelines on how to achieve this task.

Once you’ve got them, it’s time to reward them. And the key to reward, the next phase in the Hook Model, is variation. The same old rewards eventually bore us. So, mix it up using three categories of extrinsic and intrinsic rewards, says Eyal, borrowing from various motivational researchers: “1. Rewards of the tribe—the gratification of others; 2. rewards of the hunt—material goods, money, or information; 3. rewards of the self—mastery, completion, competency, or consistency.”

Finally, to turn use into unconscious habit, the customer must make an investment. “The more users invest time and effort into a product or service, the more they value it,” Eyal writes. “In fact, there is ample evidence to suggest that our labor leads to love.”

The Hook Model is a positive feedback loop: Induce me to do something, and when I do it, give me a reward—preferably something that intrigues me enough to sign up, pay up, or otherwise invest in doing it again. Repitan, por favor, as my high school Spanish instructor used to say. But before you go counting your money, there’s also one more not-so-small thing to consider: First, you have to create something so cool that I’ll want to run around the loop enough times to transform myself into a zombie.

The best sales book of 2014

My new book post on s+b's website is up:

Reframing Sales Effectiveness

I’m calling it early: Aligning Strategy and Sales: The Choices, Systems, and Behaviors That Drive Effective Selling (Harvard Business Review Press, 2014), by Frank V. Cespedes, is the best sales book of the year. I know we’ve got a few months left in 2014, but I’m not too worried that I’ll be proven wrong—I’ve been waiting for a sales book like this one for a long time and the odds that another will appear before December 31 are long indeed.

With rare exceptions, sales books are about one of two things: the sales process or sales skills. The process books are aimed at providing the sales force with a path it can follow to close deals; the skills books are aimed at bolstering an individual salesperson’s results. Good ones of both ilks can be worth their weight in gold. “But,” warns Cespedes, a consultant and senior lecturer at Harvard Business School, “they also treat selling in isolation from strategy, and the focus of much sales training can have a perverse effect: It often leads a company’s sales force to work harder but not necessarily smarter .” Worse, he adds, the sales force can get “better and better at things that customers care less and less about…and the cycle can be self-reinforcing.”

 

In Aligning Strategy and Sales, Cespedes enlarges the frame in order to show us the bigger picture. That picture reveals a set of linkages:

• A combination of company strategy and market/customer characteristics dictates sales tasks (i.e., the sales process). This suggests it is highly unlikely that a generic sales process will be optimal for your company—unless your strategy is also generic, in which case you’ve got a different problem.

• Sales tasks dictate selling behaviors. You need to know what you are trying to accomplish before you can determine how to accomplish it. This suggests that generic lists of sales traits probably will not be optimal either (and I write this as the coauthor of a book that derived a list of desirable selling behaviors from the correlation between the behavioral traits of several hundred thousand newly hired salespeople and their subsequent performance).

• Sales behaviors dictate sales hiring, sales systems, and the sales environment. The latter three buckets are the levers by which you get the behaviors that you need to execute the sales tasks that enable you to deliver on your strategy in the marketplace.

This type of framework is not rocket science and it shouldn’t be unfamiliar to executives. After all, every function in a company is subject to the same—dare I say it, generic—set of linkages. But they are rarely articulated in a sales context and so one or more of them are often neglected when companies set strategy or seek to enhance sales performance. And, as you might expect, the results aren’t pretty in either case.

What I really like about Cespedes and his book is that he knows achieving success in sales isn’t simple. The parts are always moving. Executives are adjusting their strategies in response to a host of variables. Salespeople are changing their processes and adjusting their behaviors in response to ever-changing conditions on the field. Sales managers are coming and going. Sales incentives are constantly changed based on inventory levels and margins and demand. “In any situation where you have interacting variables like this, you must confront the interactions and diagnose the problem,” he says. “That’s what’s needed to improve selling and strategy.”

(That little italicized and is worth a brief aside: Strategy informs sales, but sales also informs strategy. Your salespeople are in the market and they are tripping over vital strategic intelligence on a regular basis. You might want to start actually listening to their bitching and moaning.)

Back to the business at hand: Let’s say your sales aren’t exactly cause for celebration and, as is their wont, everybody is pointing the finger at each other. How do you fix it? The answer to that question is the core content of Cespedes’s book. Chapter by chapter, the author deconstructs the big picture, explaining how to tell where there are disconnects in linkages and how to approach the job of repairing them. Again, not rocket science—but in a business world where sales is often seen as a black box and sales misses are addressed by firing underperformers, giving big signing bonuses to new managers and salespeople, and chucking money at motivational speakers, Aligning Strategy and Sales is well worth the cover price.    

Virtual markets aren't flat

My latest book post is up on s+b:

Location, Location, Location

As I recall, the Internet was supposed to render location irrelevant. Pioneering dot-com entrepreneurs, as well as more than a few investors, saw the online world as flat and filled with an endless supply of customers. Of course, many of these dot-coms became dot-bombs.

The bursting of the Internet bubble in 2000 has often been blamed on what then Fed chairman Alan Greenspan described as “irrational exuberance,” but that’s only one part of the story. In a new book, David R. Bell, the Xinmei Zhang and Yongge Dai Professor at the Wharton School of the University of Pennsylvania, suggests other reasons for the bust, reasons that should concern anyone with an interest in online commerce. The book doesn’t address the bubble directly, but it does deflate the idea that underpinned much of the exuberance in the second half of 1990s—that the Internet is always a flat, friction-less marketplace.

“The virtual world is flat in terms of the opportunity it delivers to all of us, but it is not flat in the way that we use it,” writes Bell in Location Is (Still) Everything: The Surprising Influence of the Real World on How We Search, Shop, and Sell in the Virtual One (New Harvest, 2014). “Because the way we use it to search, shop, and sell depends on where we live in the real world, which is anything but flat.” If you have a baby, for instance, and you live 10 miles from a drug store, you are going to be a lot more likely to buy diapers online than if you live across the street from a drug store.

This may seem obvious, but according to Bell, very few online businesses fully consider the geographic factors that can make or break them. Among these factors are resistance, adjacency, vicinity, and isolation.

Resistance is the level of difficulty that customers encounter as they buy products and services. There are two kinds: questions regarding where you might buy something are called geographic frictions, and difficulties that customers encounter in making purchase decisions are called search frictions. Furniture e-tailers, for example, had a lot of difficulty with search frictions at one point: It turned out that people wanted to sit on a couch before they bought it.

Adjacency is the direct proximity of customers to each other. This matters because “most people live in locations that contain neighbors who are similar to them in key ways.” We flock to stores—both online and offline—because our neighbors tell us about them or because we see them buying from stores and we simply copy them.

Vicinity is the connection of one community of customers to another that is not physically proximate. “The end result is the Spatial Long Tail,” explains Bell, “in which the head is demand from customers connected through ‘proximity,’ and the tail is demand from customers connected by ‘similarity.’” You need both.

Isolation is an extreme form of geographic friction in which the preferences of a small minority of customers are not being satisfied locally. Bell, a New Zealander who lives in Philadelphia, says he can’t find Vegemite locally. That’s “preference isolation,” and, often, it represents a demand niche that an online seller can profitably fill.

Although Location Is (Still) Everything is worth the read, I doubt you can use it as how-to guide for building a business plan. Bell takes a stab at tying the concepts he describes into a framework that online businesses can use to get location working for them, but it’s not as powerful as his thesis—that geographic factors play an essential role in online success. A thesis, by the way, that may offer some insight into why Amazon (parent company of New Harvest, the publisher of this book) is busy building 300,000-square-foot “sortation centers” that will cut its shipping times, and why Jeff Bezos is dreaming of fleets of delivery drones.

Know thyself, negotiator

My new book post is up on s+b:

A New Hat for Negotiators

What hat do you wear when you negotiate? A conservative Homburg, a swaggering Stetson, a gangster’s Fedora? If you’re literal-minded like me, you may say that you don’t wear one at all. But Shirli Kopelman, professor at the University of Michigan’s Ross School of Business and executive director of the International Association for Conflict Management, says all negotiators wear hats of some kind or another.

In Negotiating Genuinely: Being Yourself in Business (Stanford Briefs, 2014), Kopelman explains that when managers and executives enter negotiations, they typically assume a role—the proverbial hat. Wearing it “implies calculated self-interest with a dose of inauthenticity, or walling off vulnerable parts of ourselves.” This description may sound familiar to you. I know I’ve experienced the disconcerting feeling of sitting down with a heretofore friendly client to talk about a contract and finding that the client’s body has been possessed by a hard-eyed stranger who is determined to wring every possible concession out of me.

Kopelman, who broadly defines negotiations, thinks that even more enlightened win-win negotiators can find themselves impaired by the hat they wear. It’s as if the negotiator’s hat includes a set of blinders that artificially limits the options of every party in the negotiation. She says that we all wear multiple hats in our lives, and that each one represents a different role that comes with its own resources and constraints. (For instance, a business executive may also be a parent, a child, a spouse, a soccer fan, a scuba diver, or a church deacon.) But, Kopelman says, if we can integrate our hats, we might be able to use their combined assets to negotiate in a more genuine way and craft superior outcomes.

“Negotiating genuinely—wearing your integrated hat—enhances creativity, draws on diverse strengths, aligns you with your moral compass, and enables you to straddle the complex dualities of negotiations: Focusing on both the task and the people,” writes Kopelman.

How do you go about integrating your hats? In her slim book, Kopelman says to start by listing the names of all the hats you wear (she has 14 on her list). Then, define the domain in which you wear each hat, the people with whom you negotiate when wearing it, and the resources you negotiate for when wearing it. Finally, consider how you can integrate key elements of each hat.

This sounds pretty nebulous, and it does contradict common practice, which says the only hat you need to wear when negotiating is the one that will benefit your side the most. But Kopelman suggests you work through the exercise. “The key is that the process of hat integration transforms your hats into a single integral hat. It is not about impression management, nor is it a façade nor a mask, but a genuine reflection of you as person,” she says. “The integral hat becomes a metaphorical container that symbolically carries your identity as it ephemerally (momentarily), yet repeatedly, comes into being, reflecting you as a negotiator who fully engages with other people.”

It’s an intriguing idea—even if it’s not fully formed in this book. But if trying on your own integrated hat can help you achieve better relationships and outcomes in negotiations, it might be well worth the time.

Marketing insights from the art world

My new post on s+b's blog:

What Marketers Can Learn From Contemporary Art

Contemporary art often amuses me. I’m thinking of the 200-lb pile of wrapped candies that’s meant to be “installed” in the corner of a room for your guests to eat—or the waxwork of supermodel Stephanie Seymour made to hang on your den wall like a hunting trophy.

And there’s York University economist Don Thompson’s personal favorite: Yves Klein’s Transfer of Zone of Immaterial Pictorial Sensibility, a conceptual art piece executed and sold between 1959 and Klein’s death in 1962. As Thompson tells the story in The Supermodel and the Brillo Box: Back Stories and Peculiar Economics from the World of Contemporary Art (Palgrave Macmillan, 2014), Klein offered to sell art lovers an “immaterial zone”—that is, empty space. This was truly the emperor’s new clothes of the art world: You gave Klein a specific amount of gold leaf and he gave you a receipt stating you had purchased a zone of your own. But that was just the first step. If you were willing to pony up more gold leaf, Klein would throw half of it into the Seine (keeping the rest as his fee) and burn the receipt. You would receive photographs and an affidavit documenting the act. Apparently, Klein found eight buyers with a hankering for immaterial zones.

Of course, amusement turns to bemusement when you consider that the pile of candy sold for US$4.5 million and the waxwork of Seymour brought $2.4 million at auction. In fact, the market for contemporary art is booming again, after a big dip during the Great Recession. In May, Christie’s had its best auction ever, selling $745 million worth of postwar and contemporary art. Bloomberg reported that 68 lots out of 72 offered found new homes. But what is it that makes a Jeff Koons balloon dog worth $58.4 million and what can marketers learn from that?

Well, for one thing, there’s the power of a compelling backstory. The story of a piece of art—who made it, how it came to be, what happened to it in the past, and who has owned it—“may be more important than the artwork itself,” according to Thompson. That’s why art experts estimated that the value of Picasso’s Le Rêve actually rose after casino owner Steve Wynn accidently stuck his elbow through it.

Another insight relates to the value of reputation. Why did one painting created by Rachel Howard sell for $90,000 in 2008 and, a few months later, a similar painting by the same artist sell for $2.25 million? “The difference,” explains Thompson, “is that while Howard had created both, the second had Damien Hirst’s (indistinct signature) on it.” Howard worked as a technician for Hirst, who is the creator of works such as The Physical Impossibility of Death in the Mind of Someone Living. And Hirst is considered one of the great, if not the greatest of, contemporary artists—a reputation conferred on him by credible third parties, including critics, gallery owners, auction houses, and museum directors.

A third lesson regards the price-boosting effect of the art-buying experience. Paraphrasing Marshall McLuhan, Thompson observes that the “market becomes the medium” when it comes to selling art. Auctions create emotion-laden competitions to buy and be seen buying that drive prices up, even though, says Thompson, “Half of the works purchased at auction in 2013 will likely never again resell at the hammer price.” Art fairs, such as Art Basel Miami Beach and Frieze London, are also vibrant experiences, featuring VIP passes and lavish events that drive up both attendance and sales.

These are the things that distinguish Andy Warhol’s Brillo Soap Pads Box, which sold for $772,500 in a 2012 auction, from a case of Brillo in a supermarket, the design for which, Thompson informs us, was created by abstract expressionist and commercial artist James Harvey in 1961. It would be interesting to hear what Harvey, who passed away in 1965, might have had to say about that.

Selling after the unsuccessful close

Here's my weekly blog post on strategy+business:

What Part of No Don’t You Understand?

I have no idea who first snapped off the classic putdown, “What part of no don’t you understand?”
It’s not Shakespeare, but the sentiment is timeless. And I’ll bet that first barb was aimed at a salesman, probably a graduate of Glengarry Glen Ross University.

Until now, I’ve always thought that the correct response to this rhetorical question was to retreat. However, I may be wrong about that.

In their new book, When Buyers Say No: Essential Strategies for Keeping a Sales Moving Forward (Business Plus, 2014), sales consultants Tom Hopkins and Ben Katt parse “no” and find that it has a number of possible meanings. It might indicate that the buyer has unanswered questions and concerns about the salesperson’s offering, or might not be sure how it compares to the alternatives in the marketplace. Or the buyer might not be clear about the benefits of the offering. Or perhaps, the salesperson hasn’t properly qualified the buyer. Or the buyer doesn’t like the timing or features. Or maybe, the buyer just doesn’t like salesperson—a big factor in any sales arena that requires an ongoing relationship.

The upshot of all this, according to the authors, is that if you’re a sales professional, you better figure out exactly what the prospective buyer means by “no” before you head for the door. To paraphrase the great Yogi Berra, the sale ain’t over till it’s over.

The challenge is how you manage a “no.” If you treat it like an objection, and try to overcome it, chances are good you’ll get handed your hat. As the authors explain it, being asked to make a decision at the end of the close creates discomfort in the buyer. And too often, salespeople compound that discomfort by becoming unlikeable in response to a negative answer. “How do salespeople become unlikeable after the close?” they write. “They become tense. Their facial expressions reflect unhappy feelings of disappointment or impatience. Even worse, they become subtly belittling, implying with their nonverbal communication that anyone with commonsense would have said yes by now.”

This jives with something I just read in another new book, titled Conversational Intelligence: How Great Leaders Build Trust (Bibliomotion, 2014), by Judith E. Glaser. “Most people assume meaning is embedded in the words they speak,” Glaser writes. “But according to forensic linguists, meaning is far more vaporous, teased into existence through vocalized puffs of air, hand gestures, body tilts, dancing eyebrows, and nuanced nostril flares.”

When Glaser observed pharmaceutical reps making sales calls, she found that if doctors raised concerns about the products being sold, the salespeople usually communicated their displeasure with nonverbal cues, such as stiffened bodies, pained facial expressions, and tense tones of voice. The doctors, in turn, responded by stiffening up themselves and trying to end the sales calls. By now, it shouldn’t come as a surprise that the company where these reps worked was ranked 39th among 40 pharmaceutical firms in terms of sales effectiveness.

Interestingly, the authors of both books also offer similar solutions to negative buyer responses. Hopkins and Katt say that you should run through the “The Circle of Persuasion” again. That’s their generic four-step sales process: establishing rapport, identifying needs, presenting solutions, and closing questions. So, the first step after hearing “no” is to reestablish rapport by letting the buyer “know that it is okay that he didn’t immediately say yes.” In Glaser’s case, she taught the pharmaceutical salespeople to reframe buyer resistance as “simple requests for more information,” which shifted their focus “to relationship before task” and significantly bolstered sales.

The bottom line: When it comes to sales, whether a buyer’s no really means no depends first and foremost on how you respond to the word.

Be Our Guest Q&A

Adriana Dunn over at StellaService's happycustomer blog kindly invited me to do a Q&A on Be Our Guest. Here it is:

Book of the Month: Be Our Guest: Perfecting the Art of Customer Service by Ted Kinni
                           

Walt Disney shows Disneyland plans to Orange County officials in December 1954. Photo courtesy Orange County Archives.

In the Disney Institute’s Be Our Guest: Perfecting the Art of Customer Service, author Ted Kinni reveals the secrets to delivering magic to your customers the Walt Disney way.

The Walt Disney World resort enjoys a 70% return customer rate, and the Disney Approach to service has led to three decades of providing professional development programs through its Disney Institute. But just how does a company that was “all started by a mouse” and now employs 175,000 cast members worldwide ensure that its customers’ expectations are consistently being exceeded on such a grand scale? The Disney Magic, as you’ll read in Be Our Guest, is part art and part science — and Kinni details how the company approaches raising the bar at every customer touchpoint.

We think this book makes for a great read regardless of your industry or job title, especially given how much room there is for improvement when it comes to customer service. We spoke with Kinni over email to get a sense of what it takes to deliver Disney-level Quality Service to customers.

Your book discusses the “offstage” – the nuts and bolts of creating practical magic at Disney. What are some of the key takeaways from the process in which Disney consistently delivers exceptional customer experiences?

TK: The key takeaways in Be Our Guest are embedded in something that the Disney Institute calls the Quality Service Compass. There are four points on the compass. The first point is the art and science of guestology. You need to know and understand your customers (at Disney parks and resorts, customers are called guests, which helps create an entirely different mindset about how they should be treated). The second point is quality standards. You need to establish the criteria necessary to deliver great service and the metrics needed to determine how well you are delivering it. The third point is delivery systems. They are the three systems—cast (that’s Disney-speak for employees), setting, and processes—needed to deliver your quality standards. The fourth compass point is integration. You need to integrate the three systems so that they work together as one. If you box the compass—that is, if you work through each compass point in sequence, you can consistently deliver exceptional experiences.

Businesses are often faced with the challenge of scaling customer service operations. Disney employs 175k people worldwide — how have they successfully scaled Quality Service as the organization continues to expand?

TK: The secret is a systematic approach to service. When you look at companies that fail to scale customer experiences and service efforts, you usually find that they have missed one or more of the compass points. Sometimes, a company loses touch with the market as its customer base grows and changes. Sometimes, a company fails to define and measure its quality standards, and thus, there are no clear targets to hit. And often, the delivery systems break down or work at cross purposes to each. Maybe there’s a big influx of new employees who don’t get trained properly or the company’s technological capacity is overwhelmed by a surge of new customers. If you haven’t taken a systematic approach to service, you don’t have anything to scale.

What are some of the benefits the Walt Disney Company has enjoyed as a result of its relentless dedication to Quality Service?

TK: Brand equity, longevity, financial success. In 2013, Disney was #14 on Interbrand’s list of the world’s most valued brands. The brand is valued at $28 billion. The company has been around for 90 years and it’s now the largest media conglomerate.

A lot of this success is attributable to Disney’s park and resorts business. Walt Disney founded the modern theme park industry in 1955, when he opened Disneyland. Today, the industry is highly competitive and guests just don’t come back if they have a bad experience, especially when discretionary spending is constrained. Yet, Disney’s parks and resorts earned $14 billion in 2013 compared to $11.5 billion in 2008. And the Disney name is on eight of the top 10 most visited parks in the world. That’s a testament to Quality Service.

You note several times in the book that the simple fact is that everything speaks to customers. How does this apply to ecommerce websites where the customer is typically only interacting with technology throughout the transaction?

TK: The idea that everything speaks to the customer—that every customer touch point, whether it involves person-to-person contact or not, communicates something about a company’s attitude about service—is really important in ecommerce. Visiting a website is like visiting a theme park; using an app is like getting on a ride. Everything on every page and every click in every process should be designed to enhance the customer experience. If it doesn’t, you risk losing the customer.

What can ecommerce executives focused on customer service learn from the Disney approach to service?

TK: They can learn a lot, but here’s two big things. The first is that customer satisfaction is not enough. Exceeding customer expectations is the key to brand differentiation and customer loyalty in ecommerce and every other kind of business. Every customer arrives with a set of expectations. If that set of expectations isn’t satisfied, that customer isn’t going to come back. But that doesn’t mean the opposite is true: Customers who are satisfied might or might not come back. They might not come back if a competitor launches an interesting, new website or if their friends recommend another site. That’s why Disney thinks that the goal of service should be exceeding guest expectations instead of simply satisfying them. If you’re are committed to exceeding expectations, you will be the company with the best site and your customers will be recommending you to their friends.

The second is that service excellence isn’t built on heroic saves. It’s about eliminating the need for heroic saves. Quality Service is the result of a measured, consistent, and managed approach to understanding and exceeding the expectations of every guest at every touch point. It is hundreds and hundreds of little things that add up to world-class service, and for all of those things to happen, service excellence has to be embedded in the mindset of every employee, in the corporate strategy, and in the day-to-day operations of the business.

What types of objective data does Disney collect on its customers, and how is it applied to improve operations and service levels?

TK: The data that guestology generates comes from an ever-growing number of demographic and psychographic sources—surveys, listening posts, utilization studies, etc. Right now, the parks and resorts business is spending upwards of $1 billion to roll out the My Magic+ system, which will provide RFID-enabled wristbands to park visitors. Eventually, these wristbands will streamline and personalize the experiences of 30 million park visitors annually. They will also generate an endless stream of data about how Disney’s guests spend their time in the parks. All of this data will become fodder for continuing to improve every aspect of the guest experience.

How do you think Walt Disney would answer the question: Is the customer always right?

TK: Channeling Walt is way above my pay grade, but I bet he would say yes and no. Everything Walt ever did—animated and live films, television, and theme parks—was created with the customer in mind. He said, “You don’t build it for yourself. You know what the people want and you build it for them.” So, in that sense, Walt was convinced that the customer was always right.

I don’t know if Walt would say that every individual customer was always right. Nobody is always right. But we do know that he believed that all customers must be treated with respect and that whenever possible their expectations should be exceeded. That’s the ideal, right?

A love affair with stuff

My weekly book post on s+b's blogs explains why consultant and author Tim Halloran thinks it’s time to inject some romance into brand marketing.


How’s Your Brand’s Love Life?

Cupid is coming this week. Stores have heart-shaped boxes of chocolates stacked to the ceilings and the price of roses has trebled. But here’s what I’m wondering: Will your brands be getting any love on Valentine’s Day?

This question came to mind after I read the new book by Brand Illumination president Tim Halloran, Romancing the Brand: How Brands Create Strong, Intimate Relationships with Consumers (Jossey-Bass, 2014). Halloran begins the book with a story from his time as a brand manager at Coca-Cola. He was watching a focus group through a two-way mirror when a member of the group, a woman in her late 20s, held up a can of soda.

“I drink eight of these a day,” she said. “It is always with me, no matter what happens. It was there when my boss gave me my promotion last week. It was at my side two months ago when my cat died. It got me through it. I start and end my day with it. It’s never let me down. I can always count on it. To sum it up, it’s my boyfriend…Diet Coke.”

Leaving the health considerations aside (my doctor’s head would explode if I told her I drank that much of any kind of soda), this consumer’s relationship with a brand is clearly based on more than a cost-benefit analysis. “This was preposterous, wasn’t it?” writes Halloran. “We can’t connect with products the same way we connect with people!”

But of course we can. Research by academics like Jennifer Aaker and Susan Fournier suggests that brands can have personalities, and consumers can have highly emotional relationships with them just like they might with a significant other. In Romancing the Brand, Halloran explains how marketers can create such a relationship using an eight-stage approach that starts with “know yourself” and ends with “breaking up and moving on.”

This sounds like it has some Svengali-esque potential to me. So, I asked the author whether his book could be used as a pickup manual by manipulative marketers... read his answer here.

Ditch the pitch

My weekly blog post on s+b explores improvisation as a sales tool, as described in a new book by Steve Yastrow:

Improvisational Selling

I like sales pitches about as much as vampires like garlic. Steve Yastrow clearly feels the same way. In his new book, Ditch the Pitch: The Art of Improvised Persuasion (SelectBooks, 2014), the sales and
marketing consultant lists some reasons why sales pitches are so often ineffective: They’re all about the seller, they’re monologues, they don’t connect the buyer’s offering to customer’s needs, and so on.

This won’t come as news to most professional salespeople, especially those who sell large-scale, B2B solutions. They already know that delivering a pitch in a warm conference room, with low lighting and a few hundred PowerPoint slides, is more a cure for chronic insomnia than a prescription for sales success. The problem is knowing what to do instead.

Yastrow thinks that salespeople should learn to improvise. In Ditch the Pitch, he applies the principles of improvisational acting to sales conversations. This is a terrific idea: Like improvisation, selling requires being in the moment, listening to what’s being said by the other players, and responding in a collaborative manner to move the process forward.

Although improvisational skills can be a valuable addition to a sales professional’s toolbox, Ditch the Pitch should have come with a few warnings...read the rest here

Daniel Pink’s new pitch

A few months ago, I got the opportunity to interview Dan Pink for strategy+business. Smart guy, great writer, fun to talk with. The results were published yesterday. Here's the opening:

Daniel Pink didn’t plan a career exploring the world of work as much as he gravitated toward it. After studying linguistics at Northwestern University and law at Yale, he became an aide to U.S. Secretary of Labor Robert Reich, and then served as chief speechwriter for Vice President Al Gore. “When I had the opportunity to dole out assignments, I kept the ones about work, labor, business, economics, and technology,” he recalls.  

In 1997, disillusioned by the realities of politics and burned out by the workload, Pink quit to write under his own byline. An article published in Fast Company later that year became the kernel for his acclaimed first book, Free Agent Nation: The Future of Working for Yourself (Warner Books, 2002). It plumbed the transition from employee to self-employment by millions of people much like Pink himself, and established a format that Pink has been following ever since: presenting a highly articulate, accessible synthesis of a topic or trend and a practical tool kit for putting it to work at work.

Several more books followed, bringing Pink into the ranks of the world’s leading management thinkers and speakers. His most recent book, To Sell Is Human: The Surprising Truth about Moving Others (Riverhead Books, 2012), explores a topic ripe, perhaps even overripe, for Pinkian synthesis. The very nature of selling has been fundamentally altered by digitization, which continues to render long-accepted sales conventions irrelevant, yet, paradoxically, makes salespeople more important to companies and customers than ever before...read the rest here

Business ethics reader

I was pleased to see an article of mine included in Annual Editions: Business Ethics 10/11 (McGraw-Hill) edited by John Richardson at Pepperdine.

The article, "An Ethical Dilemma," was published in Selling Power in 2004. It uses the TAP Pharmaceutical case, in which the company paid an $875 million fine to the government, to illustrate the dangers of unethical and illegal sales practices. It goes on to describe how to build ethical integrity into the sales function in four ways, by:

• Specifying boundaries that are supported by corporate values and policies;
• Including ethics as a consideration in hiring decisions and training curriculum;
• Building ethics into selling and compensation systems;
• Enlisting unwavering managerial support in terms of compliance and enforcement.

The reader is part of McGraw's Annual Editions series, which publish selected articles from periodicals in topical collections and sell them for use in college courses. I wonder if I'll be getting a little payback for all the boring reading I had to do as a student.

Attention CPG marketers

These days, there is a lot of interest in shopper marketing -- that is, marketing aimed at influencing consumers as they are actually in the process of selecting and buying products, whether they are making a shopping list at home or downloading coupons or standing at the shelf. CPG companies are investing a ton of money in it. For example, P&G says it spends over $500 million annually on shopper marketing.

There are good reasons for this. Shopper marketing is a great way to engage consumers all along the path to purchase. It can be used to create more collaborative and successful trade relationships. And, it can drive sales -- no small feat in recessionary times.

But there is also a lot of confusion around shopper marketing. Few companies have figured out how to align it with the rest of their marketing processes and spend. And no one has really figured out how to measure its effectiveness -- either as a standalone investment or in relation to other spending.

I got a great education in all of these issues a couple of months ago, when I worked with Booz & Company partners Matt Egol and Ed Landry to write up the findings of a major shopper marketing study which they co-led with the Grocery Manufacturers Association and SheSpeaks.com, a leading online consumer community. Whether you are looking for a primer on the subject or some cutting edge insights, it's worth a read. You can download it for free here...

One question: Dan Carrison

I was fascinated by the FBI’s Ten Most Wanted Fugitives List as a kid. In those pre-digital days, the Ten Most Wanted - do not approach, they are armed and dangerous - were hung on a clipboard in the local post office. I carefully perused them to be sure none of them were masquerading as my neighbors, friends' parents, or elementary school teachers - or perhaps, just buying a few stamps to send Christmas cards to their gangs.

Dan Carrison, a partner in Semper Fi Consulting and founder of ghostwritersinthesky.com, has resurrected my interest in the list. Dan's new book (his fourth to be published by AMACOM) is From the Bureau to the Boardroom: 30 Management Lessons from the FBI. As the title suggests, the book mines the Federal Bureau of Investigation (which is celebrating its centennial this year, by the way) for business ideas.

I asked Dan about the Most Wanted list - why it was effective and whether it has any business applications. Here's his generous and thought-provoking answer:

I, too, was fascinated, as a kid with the FBI's Most Wanted posters. My first impression was always, "Those tough-looking guys don't stand a chance, with the FBI on their tail." But as I grew older, I wondered why the FBI published their 10 Most Wanted list. After all, they could keep the list as an internal document for all law enforcement agencies, and spare themselves the possibility of public criticism for not having captured a high profile criminal.

The FBI, by broadcasting the names and faces of its Most Wanted criminals, is leveraging the eyes and ears of the tens of millions of citizens who gaze upon the list. It is also creating a whole new level of oversight from the general public. The "pressure is on" to perform! I also think that once our goals are announced, they have a better chance of being achieved, through the benevolent serendipity of the universe.

This concept could work equally well in private enterprise. A Top Ten list of “most wanted” customers, if posted conspicuously, would alert all within the organization—from the boardroom to the mail room—of the desired business that is still “roaming free.” Why shouldn't that be common knowledge? It might surprise many a CEO to discover how few employees in the wide organization have even an inkling of the top targets of the sales department.

The effect could be galvanizing; the list would be a constant reminder of the most desirable accounts “out there” in the marketplace. Each “poster” would be modeled after the real thing—with a flattering photo of the CEO the company wants to do business with, some organizational stats, and a “reward” to the employee who contributes to the establishment of business relations.

Now every employee would be “in the know” and explicitly recruited in the quest. And one never knows what can happen when the entire workforce is being leveraged. For example: a clerk in accounts payable may have a friend who works in the “top tenner” company’s purchasing dept.; a delivery man may have noticed something unusual driving by the company—such as a strange truck pulling away from the loading dock, suggesting a change of vendors; an IT tech may have read something on an industry blog that portends change (and opportunity!) within the top tenner’s infrastructure.

These little bits and pieces of information could prove to be very helpful to the company’s strategists. But the information will not be communicated unless the rank and file is involved in the hunt for new business. A conspicuous Top Ten list would keep the company’s goals fresh in everyone’s mind—especially if there were to be a Reward (such as a tropical vacation for two) for information leading to the “capture” of the client.

By publishing its top ten target customers (i.e., through conspicuous ads and commercials), the company would, like the FBI, invite the pressure of the public. Stockholders would ask about the progress made in reining in the top ten accounts at every shareholder meeting. Business journalists would reference the list, and perhaps even make fun of its ambitiousness. The current suppliers of the top ten companies would be put on notice that determined competition is coming after them and not afraid to say so. And the targeted customers? They would love it!

Just imagine a CEO picking up the Wall Street Journal and seeing his/her own “Wanted” photo posted, and his company listed as the stated business goal of a vendor—publicly, fearlessly, audaciously. The impression could be nothing but positive. The name of the vendor would be forever ingrained in the CEO's consciousness. He would investigate. What kind of company are they? And look! One of the Top Ten has been “captured" and is now doing business with this audacious supplier. The CEO might call that company and ask about their experience with the bold supplier; he might tell his purchasing department to entertain a quote. He might say to himself, “Surely, a vendor willing to go to these lengths—publicly—to acquire my business would do much in the way of customer service to keep it.”

To carry this somewhat fanciful, but eminently doable, metaphor further, there would even be a certain amount of public pressure now exerted on the target customer. He might be asked by his own shareholders or BOD members, “Why haven’t you done business with this vendor who has laid his reputation on the line to work with you? Have you at least spoken to him?”

A vendor is known by its customers; that’s why so many marketing campaigns are eager to list the prestigious organizations already being served. But a vendor can also be known by the customers it wants to serve. The higher the ambition, the stronger the company looks—for surely it wouldn’t aspire to serve a premier customer if it couldn’t actually provide the service. A supplier with the courage to take on such an imaginative initiative as a Top Ten List of Most Wanted Customers would surely be a salient feature on the business landscape.