6 Customer Engagement Tips from The Experts

Whether you specialize in customer experience, engagement, success, or service, you’re tasked with retaining and delighting customers all the time. Plus, you have to get to know them.

It’s tough!

That’s why we talked to 6 customer engagement experts to find out what strategies bring the most success. Here are their top tips:

1. Using Tools as You Scale

At Grasshopper, we struggled with finding ways to engage our customers as we grew. It became a real challenge for us to develop and maintain strong connections with our customers the way we used to: sending welcome packages, notes and swag to people we spotted on social doing cool things or giving us shout outs.

We realized that what we were doing was becoming harder and harder to scale, Read More…

More Than a Metric: The Net Promoter Score Cycle

Imagine a lion tamer in the center of a circus ring, whip in one hand, a wooden chair in the other. The lion stares at the man, unsure of its next move. The crowd waits anxiously for the lion to strike — but nothing happens. The angry lion has been tamed, without brute force or coercion.

The secret, as writer James Clear details on his blog, to taming a lion isn’t submission. Rather, it’s confusion.

When a lion tamer holds a chair in front of the lion’s face, the lion tries to focus on all four legs of the chair at the same time. With its focus divided, the lion becomes confused and is unsure about what to do next. When faced with so many options, the lion chooses to freeze and wait instead of attacking the man holding the chair.

This is precisely the reason that Net Promoter Score is such an effective tool. In other words, the goal isn’t to “tame” your customers but rather to set them free. Read More…

Segment Integration– Use Wootric NPS without touching code

Update 11.30.2015: MOBILE Now you can use Segment.com to enable Wootric’s Net Promoter Score platform in your mobile app without touching code or waiting for the next release cycle. Learn more about Segment’s mobile integration platform.

In-product tools can be extremely valuable to a business.  Google Analytics, MixpanelOptimizely, Crazy Egg…I’m sure we all have a few we can’t live without.  But if your technical resources are constrained, even the easiest tools to install end up somewhere in the development pipeline.  As the non-technical side of the house, I know how hard it can be to wait to test out a new shiny tool.

We built InMoment to measure Net Promoter Score inside your product.  Why?  Because every online business deserves to hear from more customers in the most fresh and contextual way.  While a developer would tell you Wootric is a fast code install, it’s still an install.  And I’d certainly tell you that “marketing me” would need help.

We succeed when you succeed, so we’ll remove any barriers we can to help our customers–technical or non-technical–quickly get up, running, and listening to customers. Read More…

Five Steps to Uncovering the Real Customer Experience Journey

When I was growing up, a 50-cent, bottomless cup of coffee was the norm. People would have laughed at the thought of a five-dollar cup of joe, and yet how many of us drive out of our way to find a Starbucks to start our day? In the case of Starbucks, it is not even about the quality of their coffee. You can go to the grocery store and purchase the same coffee there, yet people flock to Starbucks stores because they provide an experience and not just a cup of coffee.

Today, the coffee shop is an iconic gathering place. From the moment you walk in, the aroma of the coffee surrounds you. The environment in the store is calm, relaxing and inviting. The store invites you to stay and relax for long periods, and many people stay to study, work, check their e-mail, update their social media account, surf the web, or share some time with friends. The servers are not called servers; they are “baristas,” adding to the sense that you are doing more than just grabbing an ordinary cup of coffee. Each cup is prepared individually and the customer’s name is written on the cup to personalize the experience.

In other words, the product is not the focal point; rather, the focal point is the experience that the company delivers.

Successfully delivering a good customer experience requires a comprehensive orchestration of a great many things. One of the most essential to the backbone of your CX program is a thorough understanding of the customer and his or her experience with your brand, people, product and service — a process popularly known as customer journey mapping.

Starbucks knows its customers well. It has a well-mapped journey of what the experience will be like from the moment the customer walks into the store. By selling more than just a product, the company is able to charge 5-10 times what a competitor could and still attract more customers. Starbucks clearly understands that focusing on the customer experience is not just a corporate tagline for shareholders. It is a business strategy.

What Is a Customer Journey Map?

A customer journey map is a visual representation of the journey a customer has with your brand, products, services and people. It is important to note that journey mapping is not an appropriate replacement for quantitative efforts, but rather a good starting point or supplement to quantitative programs. It includes multiple touchpoints from the customer’s point of view, such as:

  • Key moments and evaluation points in the process
  • Positive and negative components of the experience
  • Attitudes and emotions that may come into play

Step One: Build the Company View of the Journey

Mapping the customer’s journey starts with identifying and building out the steps of the journey from the company’s point of view, from beginning to end. Start by identifying the key moments a customer has with the company. Getting agreement on the discrete steps a customer takes can be difficult, as each functional area and stakeholder will bring a unique perspective to the table. It is critical for the organization to work off a common vision of the journey, so measurements, improvements, and enhancements must be created using a shared framework.

Building out the steps

Once the steps of the journey are identified, build out the experience of each step, including the following elements:

  • Customer’s desired outcomes
  • Time or duration
  • Attitudes and thoughts
  • Emotional responses
  • Emotional needs
  • Customer pain points
  • Areas of weakness
  • Areas of strength
  • Importance of the step
  • Satisfaction with the step

Though some might argue that this process is overkill for organizational stakeholders to go through, the elements of this process enable a more educated approach to the secondary probing and qualitative research phase. Additionally, the process of including all stakeholders embeds customer journey mapping within the cultural framework of the organization. As stakeholders help build the journey, hear different perspectives from their peers, and eventually see the customer’s perspective of the journey, they are more likely to understand and accept the final product. Finally, it is very insight-provoking at the end of the process to highlight the differences in what the customer sees as critical moments and evaluation points in the journey compared to company stakeholders.

Customer-Centric Blueprint

A by-product of customer journey mapping is a customer-centric blueprint, which highlights customer experiences that lead to a decision or behavior that impacts financial outcomes for the organization. A customer-centric blueprinting process involves:

  • Determining what critical elements are impacting each step in the journey
  • Identifying all people and departments who are even remotely connected to this element
  • Identifying the policies, processes, procedures and tools that impact this element
  • Listing all internal metrics associated with this element of the step, which can serve as early indicators of a good or bad experience by the customer before they even take a survey

Step Two: Build the Customer View of the Journey

Once the internal stakeholders have created their view of the customer journey, it is time to have the end customer validate this framework. A series of qualitative research sessions are usually helpful for this purpose. In these sessions, customers walk through their version of what the journey looks like, using all the same criteria used by internal stakeholders.

During or prior to the interview, customers may also be asked to:

  • Create a collage, drawings or photos that illustrate how they feel about the experience they have when dealing with the brand, category, product, service or people. (See an illustration below of one perspective on air travel.) The use of imagery adds a richer perspective to the experience, which can elicit deeper insights than verbal cues alone.
  • Share metaphors that describe what their emotional needs are at each step. These can come from a standard list, or they can share their own. This part of the process creates a clear delivery goal for the company at each step of the journey.

Step Three: Review the Current State

The next phase of the journey-mapping process often takes the form of a workshop, during which the customer journey is reviewed, while keeping the following objectives in mind:

  • Create a common understanding of the customer journey
  • Identify areas within the experience with the greatest opportunity to improve/address
  • Identify elements that should be included in the VoC program
  • Review the design criteria for improvements and development of new experiences
  • Prioritize the steps in the journey that should be addressed

This step is critical for embedding the journey into the organization. It involves immersing participants in the qualitative research in a way that helps them step into the shoes of their customer. In order to do this, the room where this final workshop is conducted is turned into a customer gallery, which may contain detailed summaries of each step in the journey, customer quotes from the qualitative research, any photos or imagery created or solicited during the research, and any relevant previous research that contributes to the organization’s understanding of the customer journey.

Once this information is absorbed, it is time to prioritize the areas the company considers more important to focus on for improvement. Among the improvement opportunities is the chance to evaluate the current VoC measures against what customers identified as their key moments of the experience. This process can either validate the current measures or identify gaps that need to be filled with VoC tools.

Step Four: Create Customer Experience Design Criteria

You now have detailed journey maps, photos, interview transcripts, previous research, customer quotes, etc. How do you make sense of this and avoid everyone running in a different direction to improve the customer experience?

Creating common customer experience design criteria helps prevent organizations from becoming overwhelmed. Customer experience design criteria are the three or four top criteria that serve as the essence of what customers need in any experience they have with your organization. These criteria are derived from analyzing the attitudes, thoughts, emotions, and needs of customers at each step in the journey, and then identifying a few common themes that represent the essence of what the customer needs. For example, the design criteria for a business technology supplier may look like the following:

  • Proactively identify solutions that add success to the business owner
  • Be impressively responsive
  • Remove the technology burden from the business owner
  • Make every interaction professional

Each of these represents what the business owners conveyed throughout the journey. By creating common design criteria, everyone in the organization can now use these as criteria that should be met in any customer-impacting service, tool or interaction. Additionally, marketing and customer-facing communications should also reinforce the same criteria so that there is better alignment with every customer touchpoint.

Step Five: Ideate a Future State

The final phase in the customer journey mapping process is to leverage the new insights and design a better customer experience. One of the greatest challenges in any customer experience program is achieving true organizational commitment and buy-in. It is not that companies are against having a customer focus; quite the contrary. The challenge is getting the attention of stakeholders who are stretched so thin that it is difficult to get their attention. But the benefits of engaging stakeholders in customer journey mapping gives them a vested interest in the process and increases their common knowledge of the customer experience well beyond where it was.

The final step is to leverage this insight and engagement into the design of a better customer experience. This is done through ideation. Unlike brainstorming, ideation is structured so that it can take participants beyond their current framework of thinking and view solutions through different lenses using the customer experience design criteria previously identified. While ideation is intended to unleash creative thinking, the design criteria help ensure the thinking is focused on what the customer needs the new solutions to address.

While there are entire books written on ideation alone, here are a few of approaches with very brief descriptions:

TOP MIND IDEAS: People throw out top of mind ideas (these tend to be very incremental/not very innovative, but allow people to get the pent up demand ideas out of them).

PICK YOUR PROBLEM: Split up into groups — each group picks two to three high priority problems/opportunities identified in the journey mapping. Each group then develops as many ideas as they can around their selected items.

RELATED WORLDS: After breaking into smaller groups, each group picks an industry outside of the one where they operate. Each group then identifies the characteristics of the selected industry, focusing on how that industry generally solves its key problems (e.g., cell phone companies require contracts for additional service, they offer the phone for free or at a steep discount based on a two year contract, etc.). The intent is then to leverage the list of characteristics to ideate around how companies in the related industry would apply their thinking to solve the problems at hand in your business.

Get Fired/Get Hired High Risk — High Reward Ideas/Far Out Ideas.

GET FIRED: Moderator encourages participants to generate ideas that are so outrageous that in a normal meeting you would “get fired” for bringing them up.

GET HIRED: Moderator asks the group for ideas that scale the outrageous ideas back to something for which you would “get hired.” The intent is to give participants the license to bring up ideas that normally they may be too cautious or prudent to do.

Idea Tournament Session

The last step in the ideation process is to take the mountain of concepts and evaluate them in order to whittle them down to something more manageable. A structured process of voting is used based on top-of-mind reactions and tied to the design criteria. Different targets can be set, but generally allow people to vote for 10% of the ideas. Once this is complete, a process of evaluating the ideas on criteria such as customer need, revenue potential, feasibility, ability to create a sustainable competitive advantage and time to implement (or other gauges that are relevant to the organization) is completed. The output is a “portfolio” of ideas that includes some ideas with “breakthrough” potential (high risk — high return), and others that are more incremental in nature (low risk — low return).

Conclusion

The end result of conducting a thorough customer journey mapping process is a more comprehensive understanding of the experience your customer has with your organization, insights in the areas that need to be addressed, ideas on how to improve the experience, and a common understanding of the experience your customers have with your organization. Walking out of this process, you will also have the following outputs to continue to guide the organization’s journey to improve the customer experience:

  • Journey Map: Company view of the customer journey
  • Journey Map: Customer view of the journey (both a detailed version and a more aggregate version that can be shared more broadly across the organization)
  • A customer-centric blueprint
  • A common set of customer experience design criteria
  • A portfolio of new ideas to improve the customer experience (both short term tactical ideas and longer term break-through ideas)
  • Transcripts of interviews
  • Visuals created by customers
  • A list of measures to consider adding to new or existing VoC efforts

Customer Journey Map redefined: Customer Journey Management

Let me make a suggestion right out of the gate. While many customer experience practitioners have readily adopted customer journey mapping as a best practice, too many of us look at it as a “once-and-done” activity. We mistakenly see the effort to understand and document the customer journey as almost a checklist step in a project plan with little if any utility value other than the production of a graphical “map” to hang on the office wall and to inform our design process only at the onset of new initiative.

Instead, may I offer the suggestion that we need to consider the customer journey as an evolving, living thing that will change over time as customers find new preferences and manners of interaction and experiences with us. As such, I’d like to offer up the idea that we look at the journey with fairly frequent revisits and, in doing so, work to manage the evolution of the journey. This will keep us from seeing the effort to understand it as a static step we often consider only at the beginning of a new customer experience improvement process.

We accept the notion that our customers are not sitting still and limiting their interactions with us to the same ways and for the same reasons they always have. They do not have a permanent “business as usual” approach to literally everything. Why then could it be sufficient to seek to understand the customer journey as only a single point-in-time exercise? Instead, why can’t we consider revisiting the process a few times a year as our markets and customers mature and evolve?

The purpose of follow-up journey assessments is to re-focus on gaps created by market conditions and changes in customer preference. These updates will bring value as we prioritize our own transformational efforts, focus on areas where we can implement customer-centric innovation and process improvements, and develop and launch new solution offerings. They will enable us to align our new developments with the refreshed journey map and moments of truth along it.

We can (in a progressive mindset) consider customers and their journeys with us as assets, no different from cash in the bank or infrastructure. Then why not do a new journey assessment and artifact map even quarterly, just as we produce financial statements several times a year? It’s just another way to look at this unique asset class; our customer relationships.

Even if you’re thinking to yourselves that your customers’ journeys with your company don’t change that much, that often, I’d still bet that your priorities change.

Some touchpoints along the customer journey may be necessary to make the customer experience more functional or efficient, while not being drivers of customer delight in and of themselves. But in time, these touchpoints, sometimes referred to as “experience hygiene,” may become more important to customers and grow into moments of truth. Similarly, factors that are loyalty drivers at one point in time can lose their importance for customers as the world changes.

It all changes based on the natural heartbeat of our businesses, our customers, and the markets we serve. Losing sight of new priorities or moving targets for optimization may create, at best, avoidable inefficiencies and, at worst, significant market setbacks. If we don’t stay up to date, we allow our competition to seize customer relationships, market share, and profits that should have been ours.

I’d like to strongly urge you to consider the best practice of frequently refreshing to your customer journey mapping work. Perhaps we could also consider, as the title of this post suggests, renaming our process – from customer journey mapping to something with a sense of repetition and continual improvement, like customer journey management. Doing so sends the right message about the process being “alive,” and suggests the need for the continual reprioritizing and frequent critical visits that will benefit our programs.

Let’s refocus on our takeaways: changing our old process of thinking about the map as an artifact to considering the fact that the journey has a heartbeat and is alive with change. The more clearly we understand this, the better the experiences we will create for our customers. Those customers will reward us long into the future with their wallets and their loyalty.

Wootric + Intercom: Closing the Net Promoter Score Loop

Watch the Video:


Here at Wootric we’re big fans of Intercom.   We are a customer feedback platform and we use Intercom ourselves to have meaningful conversations with our customers.   Not surprisingly, our customers also tend to share the same passion for reaching their own customers where they are most likely to respond.

We also believe that asking customers for feedback without proper follow-up is a cardinal sin in customer experience management.  When survey feedback, such as Net Promoter Score (NPS),  is coming in from your customers every day, it becomes something that you need to manage proactively.  We’ve taken steps to address that by making follow-up an integrated part of the Wootric dashboard.  But we also know that many of our customers manage their user conversations outside of Wootric.  Rather than re-invent the wheel, why not combine forces?

And so here we are, making the connection for Intercom users between measurement and proactive followup.

Wootric + Intercom = Customer Love

Here is how you can use Wootric in Intercom to make the most of Net Promoter Score feedback:

Note: This process is essentially the same for our Customer Satisfaction (CSAT) and Customer Effort Score (CES) surveys.

1) Wootric samples your user base to collect NPS score / feedback

2) Individual scores and responses get posted to your Intercom dashboard, and are also recorded as an event in the user record.

Intercom NPS
View a user’s recent NPS data (i.e. score, comment, date)

Wootric NPS Data Filters in Intercom
Filter users by NPS data, such as score and comment

3) Then the fun begins.  Some ideas:

  • Trigger Intercom messages to a user based on the score they provided.  Perhaps you’d like to ping your detractors (scores of 0-6) that chose not to leave you a detailed comment, asking for additional feedback.  Or maybe thank your promoters (scores of 9 or 10) and invite them to your referral program.  You set the rules to drive meaningful interactions!
  • Leverage NPS segments for future Intercom communication campaigns.   This could be something like releasing and communicating new features to your promoters first.  Or perhaps targeting specific passives with additional on-boarding to important features they might have missed.

Intercom Net Promoter Score (NPS)
Detractor auto message triggered off an NPS score

Ready to Get Started?

Here are two ways to implement:

  1. If you are an Intercom customer, simply click on this button to create a Wootric account (or sign in) and instantly connect it to your Intercom account.
    Intercom
  2. Use Zapier. With a free Zapier account, you can pass Wootric data to Intercom, or other applications, without touching code.

If you are doing other creative things with Wootric and Intercom we’d love to hear about it!

The Bottom Line:

Measuring your NPS is just the beginning of your journey.  Follow up in the ways that work best for your business, whether it’s through us, through Intercom, or another tool.  We are here to support you in connecting the dots.

Start measuring Net Promoter Score, CSAT or Customer Effort Score for free with InMoment

3 Tips to be Customer-Centric for Growth: Reflections on GrowthBeat

I heard about Venture Beat’s GrowthBeat conference a little last minute and made the decision to attend.  As a marketer and a founder of a platform often leveraged by marketers, I was interested to hear the latest on growth (who isn’t?) and connect up with other marketing minds in the tech community.

GrowthBeat brought together some excellent speakers and panels — great case studies of how companies that have been willing to push the boundaries, iterate quickly, and leverage new tools are learning and finding success.  But a few themes resonated for me at the higher-level–themes that spoke to the future of marketing, the future of organizations, and the role of the voice of the customer to drive growth.

Read More…

What is the Purpose of Customer Satisfaction Surveys Anyway?

Recently I completed a customer satisfaction survey for United Airlines after a particularly bad experience even by airline standards.

I actually wanted to be contacted by the airline, but there is no place in their survey for a hot alert (request to be contacted). Instead at the end of their survey it says, “Comments or issues on a particular travel experience requiring a response or resolution should be submitted through the appropriate department as listed on our Contact Us page.”  Whoa! The survey is not being conducted to address any issues I might have had? Why am I doing this survey anyway?

All bad jokes aside, this is a very good question.

Customer satisfaction surveys are used for several different purposes, each of which is important to the company that wishes to continuously monitor and improve the customer experience they provide. Top objectives include:

  1. Fix any meaningful problems that have occurred for customers with the company’s products or service.
  2. Assess the performance of its customer-facing units (retail locations, call centers, digital care team, etc.) and staff (salespeople, call center reps, etc.).
  3. Improve its processes and standards for delivery.
  4. Understand customers’ needs as they use the company’s products or services so the company can help them have a better overall experience.

If you have read any recent blogs I’ve posted, you know that I’ve written a lot about Number 4 on the list, as it has been an area of customer experience that’s been largely ignored by customer experience management programs.  Increasingly, customers want companies to engage with them differently, treat them as individuals, and show they are valued throughout their journey.

Clearly, the United survey is not geared towards understanding my needs or helping me have a better overall experience with them, nor is it trying to fix meaningful customer problems, which in and of itself is pretty astounding. That said, I can clearly see in its construction that it’s likely geared toward Numbers 2 and 3, assessing performance and improving processes. Make no mistake, I am in no way saying that these objectives are not important. They are. As a customer, I’m glad that a company cares about coaching and training its people and fixing processes. However, I am a lot less glad if they aren’t dealing with my problems and don’t seem to care about me as a customer.

An effective customer experience program will address all four of these objectives. To do this, a company may need several different but integrated components. Effective measurement of processes and performance of people requires a focus on transactions and traditional measurement that uses a consistent and robust methodology, whereas a focus on customers as individuals requires a unique and individualized approach that follows a customer periodically throughout his or her tenure as a customer.

Any contact with a customer is an opportunity to identify any issues or problems that customers are experiencing and correct them.

Whichever kind of engagement the company is having with a customer, it should be clear why the customer should care and how it will return value to them. If United told me it was to improve performance and gave me examples of what they have done with survey results, I might better understand why they ask the questions they do and understand why I should continue to complete their survey each time I receive it.

Following customers throughout their journey and helping them prospectively is a new imperative. Traditional transactional satisfaction studies remain important but should be updated and integrated with this new and important objective.

Has your company adopted a comprehensive customer experience measurement and management approach? Tell me what you think.

By the way, has anyone been delayed 3 hours at a major hub when their pilot just didn’t show up even though he’d just landed there from another city? Just thought I’d ask.

Feedback: Bagels and the Art of Real-time Customer Listening

Feedback is a powerful concept.  The word itself sets you up for improvement—even success.  And, so, for your online business (as a software-as-a-service (SaaS) provider with customers, a blogger with an audience, or an e-commerce product with a market), you want to solicit—heart-in-hand—feedback.

Getting Enough Responses

You are looking for feedback in any form:

Great, small, lean, prolific.

Negative, positive, optional, specific.

Feedback from fathers, mothers, uncles, cousins.

Feedback by tens and dozens.

Use a feedback tool that increases the likelihood that your audience will respond.   That is, for your SaaS app, blog, or e-commerce site, don’t use email surveys—ask for feedback inside your product.  Email surveys can hope for open rates of 20% and even lower response rates.  In-app surveys regularly achieve response rates of over 40%.

Context is Everything

In-app NPS Wootric
In-app NPS Wootric Survey

Feedback is nothing without context.  Read More…

Persuasive Survey Design

While browsing entertainment options on a 10-hour trans-Atlantic flight, I spotted a “feedback survey.” Included in the survey was my seat number, a valuable piece of information that could reveal more information about me. I wondered if and how the airline would use this content to gain insights and find patterns.

The airline was off to a great start by engaging me when I had time to ruminate and provide honest feedback. Unfortunately, the feedback process quickly went downhill with too many clicks, questions I did not understand, and a lengthy feedback form.

The designers of the form had failed to consider the feedback process from the respondent’s perspective. In my chapter Persuasive Survey Design in Allegiance’s book, Delivering Customer Intelligence, I discuss in detail how good survey programs designed from the respondent perspective can lead to higher response and completion rates and provide a more engaging, user-friendly experience.

My survey experience made me think about what key factors grab consumer’s attention and keep it. I immediately thought of B. J. Fogg, a leading proponent of respondent psychology at the Stanford Persuasive Technology Lab who developed the “Fogg Behavior Model (FBM)” to help our understanding of human behavior and how it can be applied to survey design.

According to the FBM, in order for a person to perform a target behavior, he or she must be sufficiently motivated, have the ability to perform the behavior, and be triggered to perform the behavior—all at the same time. Core motivators include sensation (pleasure/pain), anticipation (hope/ fear), and social cohesion (acceptance/ rejection). These are essential for perceived respondent experience.

For example, surveys that include awards increase motivation and the likelihood that respondents will complete the survey. Also, the simpler a survey is, the more likely people are to respond. Once you have persuaded the user to fill out your survey, you should use the FBM throughout the three key stages of the feedback process—invitation, response and post response.

The target behavior for the invitation is to inspire the respondent to click on the link within the email or the feedback button on your site. One way to motivate users to respond to your survey is to tell them how their feedback will benefit them, such as improved products and services, rewards and coupons. For example, the airline I used during my recent trip could have motivated me more by giving away a few extra miles for survey completion and re-wording the button as “Give feedback, earn 1,000 bonus miles.”

Bottom line: Using respondent psychology and the Fogg Behavior Model to create simple, engaging surveys leads to higher response and completion rates. It involves keeping the survey objective and respondent experience in the forefront during the entire design process.

Tulsi Dharmarajan is Director of Product Management & Design for Allegiance

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Marketing Myopia and the 21st Century Automotive Business

It may seem like ancient history, but in a landmark 1960s article in the Harvard Business Review entitled “Marketing Myopia”, Theodore Levitt put forward the thesis that most companies take too narrow a view of the business they are in. He challenged executives to re-examine their corporate vision and take a wider perspective of the markets in which they compete. His argument was that organizations miss opportunities they are presented with simply because they fail to take a wider view.

An example he uses is the railroads whose failure to grow was due to a limited market view. The problem was that management saw themselves as being in the railroad business rather than the transportation business. There was a growing demand for passenger transportation but it was being filled by cars and airplanes, non-traditional competitors to the railroads. Management was railroad oriented instead of transportation oriented, product oriented instead of customer oriented.

Many credit Levitt with ushering in the era of modern marketing with many concepts we consider commonplace today. Levitt’s argument is that what usually happens is that management emphasizes selling, not marketing. The problem is that selling focuses on the needs of the seller, but marketing concentrates on the needs of the buyer. For companies to grow, he argues, they have to define their industries broadly to take advantage of growth opportunities. They must understand and act on their customers’ needs and desires, not bank on the presumed longevity of their products.

He says that an organization must learn to think of itself not as producing goods or services but as doing the things that will make people want to do business with it. And in every case, the chief executive is responsible for creating an environment that reflects this mission.

In the context of the automotive industry, product is key and I am encouraged by many of the technologies that are being incorporated in new vehicles being launched since they do seem to address genuine needs that customers have told us about. Who would complain about advances in safety, fuel efficiency, or navigation?

But a different perspective needs to be established, and this perspective must be squarely focused on customer needs. Does any new technology considered for a new model truly address a need that customers have or is it just cool technology that the engineering department has come up with? (Just so you don’t think I’m throwing engineers under the bus, I’m not. My brother and uncle are engineers and our son is currently studying to be one too!)

And in a wider context, do CEOs define their business as being in the car business? Or, taking a page from Levitt’s book, should it be defined as being in the transportation business? Defined in this way, it has the potential of broadening opportunities that CEOs will pursue for the company.

There is benefit in dusting off the old business management articles and books that we may have dismissed simply because “they’re too old.” Often the writers have already thought and written about business issues that we’re facing today and if we can learn from their insight and experience, then so much the better.

What do you think? Should manufacturers “stick to their own knitting” or should they consider seeing themselves as being in the transportation business, and not just the car business? Tell me what you think.

 

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