How to Calculate the Lifetime Value of a Customer

Take a look at this infographic explaining  how to calculate the lifetime value of a customer.

Delivering exceptional customer experience directly impacts your bottom line.

http://www.pretiumsolutions.com/how-to-calculate-the-lifetime-value-of-a-customer/

blog.kissmetrics.com/how-to-calculate-lifetime-value/

10 Things Every Customer Wants

Surprisingly, the best price and best value is at the bottom of the customer's priority list. See what's at the top.

Why does a customer buy from one vendor rather than another? According to research recently conducted by The Rain Group (detailed report here), customers tend to buy from sellers who are superlative at the following tasks:

1. Bring New Perspectives and Ideas
If customers could diagnose their own problems and come up with workable solutions on their own, they would do so. The reason that they're turning to you and your firm is that they're stuck and need your help. Therefore, you must be able to bring something new to the table.

2. Be Willing to Collaborate
Customers absolutely do NOT want you to sell them something, even something that's wonderful. They want you to work with them to achieve a mutual goal, by being responsive to the customer's concerns and ways of doing business. Ideally, customers want you to become integral to their success.

3. Have Confidence In Your Ability to Achieve Results
Customers will not buy from you if you can't persuade them that you, your firm, and your firms offerings will truly achieve the promised results. It is nearly impossible to persuade a customer to believe in these things unless you yourself believe in them. You must make your confidence contagious.

4. Listen, Really Listen, to the Customer
When they're describing themselves and their needs, customers sense immediately when somebody is just waiting for a break in the conversation in order to launch into a sales pitch. In order to really listen, you must suppress your own inner-voice and forget your goals. It's about the customer, not about you.

5. Understand ALL the Customer's Needs
It's not enough to "connect the dots" between customer needs and your company's offering. You must also connect with the individuals who will be affected by your offering, and understand how buying from you will satisfy their personal needs, like career advancement and job security.

6. Help the Customer Avoid Potential Pitfalls
Here's where many sellers fall flat. Customers know that every business decision entails risk but they also want your help to minimize that risk. They want to know what could go wrong and what has gone wrong in similar situations, and what steps you're taking to make sure these problems won't recur.

7. Craft a Compelling Solution
Solution selling is definitely not dead. Customers want and expect you to have the basic selling skill of defining and proposing a workable solution. What's different now though is that the ability to do this is the "price of entry" and not enough, by itself, to win in a competitive sales situation.

8. Communicate the Purchasing Process
Customers hate it when sellers dance around issues like price, discounts, availability, total cost, add-on options, and so forth. They want you to be able to tell them, in plain and simple language, what's involved in a purchase and how that purchase will take place. No surprises. No last minute upsells.

9. Connect Personally With the Customer
Ultimately, every selling situation involves making a connection between two individuals who like and trust each other. As a great sales guru once said: "All things being equal, most people would rather buy from somebody they like... and that's true even when all things aren't equal."

10. Provide Value That's Superior to Other Options
And here, finally, at the No. 10 spot (below everything else) comes the price and how that price compares to similar offerings. Unless you can prove that buying from you is the right business decision for the customer, the customer can and should buy elsewhere.

http://www.inc.com/geoffrey-james/10-things-every-customer-wants.html

3 Things You Don't Know About Sales

Ideas are great, but no start-up can survive without sales--and a mastery of the psychology behind selling. (Hint: manipulation skills are not required.)

Sales can be a daunting task for any young entrepreneur.

If you're working on a start-up, you're spilling your heart and soul into your idea. Now, you somehow have to convince others to buy into--and literally purchase--your idea too. The truth is, most entrepreneurs don't know the first thing about getting an effective sales process up and running, let alone how to pitch customers.

Since we created ElasticSales, which is essentially a sales team on demand, I've had the opportunity to work with several different young companies. I always start by teaching them about the psychology behind sales. Why? Because most people think a sale is about manipulating or pushing people into making a decision. That couldn't be further from the truth.

Here are the most important things I tell my clients (and my own salespeople) again and again about the psychology of sales:

1. People don't buy products or services. They buy emotions.
By "emotions," I mean: A desired feeling. Superiority. Love. Comfort. Excitement. Security. Or sometimes, the opposite--fear.

These and more are all emotions around which you can position your product or solution. However, you have to know what emotion your customers are actually looking for. If you don't, you won't understand how to sell to them.

The best way to determine this is to ask the customer what's important to them and what they need. Once you know this, you can position your solution around their needs and then sell your benefits--NOT your features.

2. Emotional states dictate buying (and all other) decisions.
Have you ever been in a "shopping rush?" A state in which you wanted to buy something desperately, though the feeling has very little to do with what you are about to buy?

This phenomenon happens in both consumer and enterprise sales. Make sure you pay attention to what emotional states your customers are in before selling them anything. Are they depressed? If so, they really shouldn't be making a big purchasing decision. Are they in that "shopping rush" where they have no idea what you're offering? Then the last thing you want is your customer to feel buyer's remorse because you pressured them into a purchase.

Above all, make sure you're in a good state for your customers as well! Customers can pick up if you're not in a good state to sell them your business.

3. Communication is all about tonality and body language--it has little to do with content.
This is a very old truth, but it's still surprising to most people. If your lips are saying "buy!" but your body and voice are communicating "don't do it," you won't win many deals. Listen to your phone calls or record yourself conducting a presentation. Make note of your tone and posture and ask yourself, "Would I buy from this person?"

If the answer is "no," then you have to adjust your pitch. Be conscious of your tone and body language to make improvements everyday. After a few weeks, you'll see improvements in your tonality, body language, and sales.

http://www.inc.com/young-entrepreneur-council/rules-to-work-by-steli-efti.html

Stellar Customer Experience: 4 Tips

I've been thinking a lot about our customer experience lately as we'll soon be making some sweeping changes to the way we do business at my online marketing company VerticalResponse. When I see other businesses that do a bang up job with their customer experience, I take copious notes of how we might incorporate it into the way we'll do things.

I'd like to focus on a company that originated in San Francisco called One Medical. If you can believe it, they're reinventing the dreaded doctor's office visit! I've broken it down into four customer experience touch points that make a difference for this business and that all of us might learn from.

1. Ease of Use, Right From the Start
You might hear about One Medical from a friend like me, and go to their friendly website where you might sign up and become a member, or log in. Then you see which physicians are available in a location, or a time slot that's convenient for you (Same day? Yup!) and you can make your appointment. Easy? You bet.
Lesson: Ask someone who doesn't know about your business how they feel about visiting your store or website. Is it the experience you want to portray?

2. Comfortable and Short Wait Time

Every One Medical location has nice, tasteful decor. There aren't a bunch of cheap chairs all facing each other, and no cheesy magazines from last month that an employee brought in. The waiting area is divided into comfortable sections and you get a warm and friendly greeting from someone sitting at a desk, not in back of a glass wall with a bunch of color-coded folders behind them. Plus, you always get seen on time. Waiting becomes a comfortable experience.
Lesson: Is your location set up to reflect your business? Are you edgy or subdued? Does your website reflect how you want your business portrayed? Does your team greet your visitors the way you want them to?

3. Friendly and Informational Visit

Each physician has a comfortable office with a laptop where they document your consultation directly into your account so you have a record of it. They put off a kind, approachable vibe, and never make you feel rushed. A rarity these days when most doctors have about 15 minutes tops, to spend with you.

Lesson: Are your salespeople dressed casually or suited up? How do you want them to speak to visitors whether they call in or come to your business? Is the interaction with your team and your business the way you want it to be? Send some people in and have them describe how they perceive what your biz is all about.

4. Quick Follow-up

One Medical physicians email your prescription directly to the pharmacy of your choice (no paper here) and they email you after your visit to find out how you're feeling.
What's more is you can email your physician anything you want to ask, at any time and expect to get an answer within a few hours!
Lesson: Are you thanking your customers for buying? What does your confirmation email say? Does it reflect your style, or is it too stuffy for how you want to sound? Are you set up to get back to customers quickly with chat, or a phone call, or do you even follow up?
Whether your business is online, offline, or both, take a note of everywhere a customer or a potential customer has to interact with you and form their quick opinion. Then make some changes like we are and give your customer experience a clean bill of health!

http://www.inc.com/janine-popick/stellar-customer-experience-4-tips.html

6 Ways to Be More Compelling

Everyone has to sell something, most often themselves. Most pitches fall flat or offend. Here are six ways to make your offering compelling.

Selling something? Teaching something? Applying for a job? Trying to motivate people? If you are attempting any of these tasks, you better be compelling or you are simply wasting other people's time and your own energy. What's worse is you might be blowing great opportunities that may never come around again.
Time and attention is precious in today's information overloaded environment, so it's important to make the most of anytime you might get someone to consider your offering. I didn't want to waste this opportunity with your attention so I teamed up with positioning and branding expert, Mark Levy, who puts the "compel" in compelling.

Levy makes his living behind the scenes helping companies and experts like Marshall Goldmith, David Meerman Scott, and Simon Sinek position their concepts for maximum attraction. Together Levy and I created this 6-tip insider's guide that will help you compel people to action.

1. Find Your Contribution
Levy accurately points out that wanting to be compelling for the sake of being compelling is megalomania. Being compelling needs to be in service of a greater good. How is what you're doing a legitimate contribution to people's lives? When you're clear about why people indisputably need what you offer, the compelling part often takes care of itself. Oh and just because you think people need your offering, doesn't mean they really do need it, or believe they do. Your job is to communicate the need in a way they'll understand and ultimately respond.

2. Tell the Truth
Too many people try to cover up lack of substance with abstract language or sexy props like infographics. Just saying you're different, doesn't actually make you different, and lipstick on a pig still presents as a pig. Levy queries his clients on their current promotional material to get at the compelling core of their offering. "What would I see that's truly different?" He asks. "What have clients said that proves it?" Levy and I agree that being truthful is critical to long term success. As Levy says: "Your offering must be based, not on head-spun concepts or wishful thinking, but on real facts and the five senses." People can sense exaggeration and will become cynical and defensive. Besides, as Levy suggests, genuine benefit is always more compelling than fancy packaging.

3. Surprise and Entertain
Few offerings are short and simple these days. There is real value in offering complex solutions. But long explanations can quickly grow tiresome and boring. The surest way to get people's attention is with surprise. Provide an Aha! moment, an insight that makes your audience see something familiar, but with fresh eyes. A story they haven't yet heard. A fact they hadn't expected but changes their perspective and adds to your argument. Once you have their attention, make it fun, different, and intriguing. Levy starts by asking: "What do you know that most people don't?" The answer needn't be huge and life changing, just something they don't normally hear or read. People love to learn and will follow those who teach them something valuable. Levy's book Accidental Genius is a great tool for getting those amazing lessons out of your head and into theirs.

4. Be Intentional

Compelling communication is naturally strategic. Levy suggests you should decide the purpose of each statement, asking yourself; what do you want your audience to think, feel and do at each line of your pitch? His free e-book on making lists helps you organize your thoughts so you can determine what's important to communicate and how. Once you figure out what to say and how, you must edit, edit, edit. There should be nothing in your pitch that leads the audience away from the desired goal. This will be difficult for those of you who believe that every fact is important and moving.  Be brutal and deliberate in your cuts.

5. Communicate Appropriately

Thanks to social media, tons of data is now available to learn about your audience. That means the responsibility to speak to them in an appropriate way is now on you. As Levy points out: "Context is key." The expectations of the audience need to be surpassed perhaps even with shock value, but not in a way that offends them, tarnishes your image, and kills your credibility.  Study your audience and listen to your own pitch with their perspective in mind.

6. Rehearse
Being compelling doesn't just have to do with what you say. It's also in how you say it. Once Levy helps clients position their pitch, he makes them rehearse it aloud dozens of times. If they're confident about what they do and how people benefit from it, that confidence should come through in their voice, and the image they project, as well as in their written materials.

http://www.inc.com/kevin-daum/6-ways-to-be-more-compelling.html

Convert Community Goodwill Into Cash

You've worked hard to build your company's reputation in the local community. Convert that goodwill to real value as you prepare to sell your business.

Valuation can make or break the sale of your business. If your company is overvalued, it won't capture the attention of serious buyers and can languish in the marketplace for years. But undervaluation can be just as problematic. Although your business will sell more quickly, it may also mean sacrificing the financial objectives you hope to accomplish from the sale.

In the business-for-sale marketplace, overvaluation happens more frequently than undervaluation. For years, the seller has worked hard to build the company's reputation in the community, so when it's time to sell the business the intangible value of the company's reputation should be factored into the sale price, right?

The value of a company's relationships with customers, employees, suppliers and other stakeholders is called goodwill--and it does have real value for buyers. But to realize that value in the final sale price, business sellers need to execute strategies designed to convert goodwill to demonstrated business value.

How to Demonstrate the Value of Goodwill
As a small business owner, it's in your best interest to start making a case for the goodwill value of your company as early as possible. The more time and energy you invest in creating tangible measurements of your company's relationships, the easier it will be to demonstrate its goodwill value to prospective buyers.
With adequate planning, it's possible to increase your company's sale price by strategically documenting foundational elements of goodwill value.

1. Measure customer loyalty.
Customer loyalty is a reflection of your company's relationships in the local community. Although most business owners recognize the importance of loyalty improvements, relatively few owners establish loyalty goals and document the achievement of loyalty milestones for buyers.

2. Document customer service outcomes.

Businesses with strong customer service programs can benefit from positive word-of-mouth, advocacy on social media sites and other advantages. In addition to archiving positive customer comments and customer service interactions, create mechanisms to measure the effectiveness of your customer service efforts (e.g. average response time improvements, customer survey results, etc.).

3. Prioritize employee retention and development.
Employee relationships play an important role in determining the goodwill value of a small business. Buyers are willing to pay more for stable companies that can demonstrate above average employee retention rates and organized employee development programs.

4. Differentiate your products and brand.
Businesses that offer a unique product or service have a tendency to pique buyers' interest. By differentiating your business from other local providers, you can significantly improve its goodwill value--especially if you can demonstrate that customers perceive your business as the community's sole provider an in-demand product or service offering.

5. Benchmark everything.
Benchmarking is the key to demonstrating the cash value of goodwill. Sellers that make the biggest impact with buyers in the business-for-sale marketplace gauge loyalty, retention and other measurements against industry and regional benchmarks to quantify the company's intangible value.

Most small businesses have at least some goodwill value that can be converted into cash value during a business sale. However, the quantification of goodwill can be nuanced, so it's advisable to consult a business valuation professional before you assign actual dollar figures to the value of your company's relationships with customers, employees and other stakeholders.

http://www.inc.com/mike-handelsman/convert-community-goodwill-into-cash.html

3 Ways To Keep Your Best Customers

In my last column, we discussed three types of customers, categorized by the type and strength of the attachment they have to your company. The biggest category, the “brain” customers, are the most analytical folks, and the ones you need to pay the most attention to.

What you need to do is simple. Accomplishing it is not. You need to have a conversation with your ‘brain’ customers that will address their concerns. Then you need to provide them with the “strokes,” or incentives, that will convince them to stay.

This is tricky. These customers don’t want to feel as if you’ve convinced them to do a certain thing. They want to make their own decisions. So your ‘conversation’ has to be conducted passively rather than actively. It’s not as if you can simply send someone a coupon in the mail. If you’re in an industry where it’s relatively easy to make comparisons between brands, and where customers don’t have strong attachments, your job just got a lot harder.

There are three large buckets of benefits that you can manage to try to reach and convince these customers. I call them:

1. Where’s the beef?
To borrow from Clay Christensen, the question here is how well does the product or service do its job? You’ll be judged on two metrics: the price/value equation (is it worth it?) and the cost of alternative solutions (where else can I find it?). You should do whatever you can, as quickly and as often as possible, to bolster and improve the customer’s perceptions in these two areas.

2. Where’s the heat?
The more “heat” or, more accurately, the more friction that is built into your systems and processes, the more likely that there will be direct and negative customer reactions. Anything that takes too much time, requires repetition, or seems to serve only your interests is a risk to your business. Customers buy for their reasons, not ours. Radio Shack has a pretty strong and flexible automatic return policy, but if you want a cash refund, you need to give them your phone number. That’s good for them, because it helps prevent internal fraud. But for a lot of customers, it seems like gross overreaching and defeats the whole salutary basis of the general policy. The customer doesn’t work for us.

Sometimes, businesses don’t even really understand the “job” that the customer wants done. Inadvertently, they make things harder or more expensive than they need to be. Customer loyalty punch cards are a well-intentioned retention device, but they were often more frustrating than rewarding to customers. How many half-punched cards can we jam in our wallets? Encouraging customers to consolidate their spending with you and return often is the holy grail, but only if the process is as painless as possible.

3. Who’s your Mama?
At the end of the day, everything in business is about relationships. The greater the connection and relationship that you can build with each and every customer, the longer you’ll keep them.  Save me time or money, or make me more productive, and it’s going to take a very substantial and persuasive argument to make me walk away. Nine times out of 10, price alone won’t do it. The impression of “belonging”; being a coveted or top-tier customer; or receiving special perks can all improve your connection with the customer.

The best customers are those that “never come up for air” to look at competitors. That’s because you’ve satisfied their past needs and their present requirements, and you’ve anticipated their future desires.

 http://www.inc.com/howard-tullman/three-ways-to-keep-your-best-customers.html

5 Surefire Ways to Piss Off Customers

We’ve all had customer service nightmares that never should have happened. I don’t know about you, but I’ve come to expect that sort of thing from big companies like AT&T and Best Buy. Don’t even get me started on insurance and power companies.

What really gets me is when small businesses shoot themselves in the foot by screwing up in ways that have nothing to do with their core products or services. Let me be blunt about this. These days, customers have nearly limitless choices. If you think you can get away with subpar customer service, logistics or any other function that impacts your customer’s experience with your brand, think again.

What’s sad is that there’s just no excuse for it. E-commerce and automation solutions make it easy for small companies to operate like the pros. There are all sorts of choices for outsourcing noncore functions to professional firms that get things done like clockwork. And there’s never been a better time to hire good people at competitive wages who would kill for a decent job.

Is it any wonder that you can pick just about any market and find one company that consistently gets things done right while a nearly identical competitor can’t manage a single flawless transaction?

Since I know you don’t want to be in the latter category, here are five common pitfalls that every business should avoid like the plague.

1. Fail to deliver. With all the great logistics services available from the likes of UPS and FedEx, there’s simply no excuse for failing to deliver product to a customer as promised. And yet, it happens all the time. Either the tracking information is wrong, they deliver the wrong product, they show up on the wrong day, or they don’t show up at all.

2. Waste your customer’s precious time -- and test their patience. How much time do you spend on the phone or online just trying to figure out what’s gone wrong and get it taken care of? And you never seem to get a straight answer until you’ve asked to speak with whoever’s in charge or threatened to take your business elsewhere.

3. Create problems out of thin air. Let’s face it. Not all customers are fun to deal with. And since I have the attention span and patience of a two year-old, I could never deal with the general public. Still, you’d think companies could do better than having customer service people who are like crazed lunatics that went off their meds.

4. Ignore feedback (or make it hard to give it). In the age of Twitter, Facebook, and Yelp, you’d think companies would clue in to the fact that, if they don’t take feedback to heart or make it easy for customers to get in touch with them, they’re going to get eviscerated in a very public way, which is never a good thing. And yet, some companies make it nearly impossible for you to contact them directly.

5. Hamstring employees. The most important thing I learned in quality training back in the 80s was that 90 percent of all problems are management problems. If anything, the real number’s actually higher. So most of the problem situations we attribute to individuals on the front line are actually caused by bad management and flawed processes. Go figure.

Now, here’s an example of how one small business somehow managed to nail four of the five pitfalls--in a single transaction.   

A winery uses a boutique next-day service for wine club deliveries. The service notified me that they’d be delivering on a Monday. Since it’s wine, they needed an adult signature. I was there. They weren’t. Three days later, they supposedly attempted delivery and said nobody was there. But I was there. All day.
I’ve probably gotten wine deliveries from a hundred wineries via UPS and FedEx over the past 20 years.
Never had a problem.

So, there’s a problem with this little delivery service, right? Not so fast. The wine club director wasn’t buying it. First, she made excuses for why the delivery never went out on Monday and then questioned the authenticity of my story, saying, “Why would a delivery service make something up?” Yup, she really said that.  

Furthermore, she insisted I provide an alternative address where an adult would be around to sign for the delivery. I asked to speak with whoever’s in charge, and she said, “That’s me.” So I cancelled my club membership and sought a way to contact the winery owner, but there was none. So I posted on Yelp and called it a day.

For all I know, the owner is the problem and the seemingly shrill, agitated wine club director was caught between a dumb boss, a bad delivery service, and a customer. I doubt it, but you never know. In any case, that’s one winemaker whose product I can probably live without. Which is sad because, well, he made pretty good wine.

Don’t let that happen to your business.

http://www.inc.com/steve-tobak/5-screw-ups-that-can-kill-your-business.html

How to Cultivate Truly Loyal Customers

"How do I create loyal customers?" a reader emailed recently. Good question: Customer loyalty is an issue every business owner cares about greatly.

So I turned to Larry Freed, CEO of Foresee, a global leader in customer experience analytics, for the answer. He graciously allowed me to share the tips below from his book Managing Forward: How to Move from Measuring the Past to Managing the Future, a great read if you're interested in better satisfying your customers.

"In business terms, I think of loyalty as a faithfulness or allegiance to a company or brand," Freed says. "In short, when I am loyal to a company, that company is my first choice."
But in broader terms, Freed says there are four basic forms of customer loyalty:

Purchased Loyalty
The best example of purchased loyalty is a customer rewards program. Other examples include memberships, coupons, and rebates.

Basically, purchased loyalty pays customers to be loyal, and there is nothing wrong with that practice. In many industries and market sectors the purchased loyalty strategy works extremely well.

The main problem with it is that purchased loyalty can be easily stolen because the customer is loyal to the program, not the company.

Say you have a frequent flier account with a particular airline. If the only reason you are a loyal customer of that airline is its points system, then when another airline offers a more advantageous system you will immediately switch.

Every business wants a sustainable competitive advantage and a purchased loyalty program can provide one--even though it can be very tough to sustain.

Purchased loyalty can also produce unintended consequences. Some programs condition customers to expect deals, discounts, and loyalty rewards, causing many to be loyal to the deal or discount and not to your business.

Convenience Loyalty
The local market, the corner dry cleaner, the coffee shop on your way to work. You might be loyal to those businesses simply because they're convenient. You're likely to remain loyal unless competitors come along who are equally or even more convenient.

Convenience loyalty can apply online as well, although less commonly. If you own the right real estate on a home page or portal you may create loyalty through convenience.

Still, convenience advantages online are generally fleeting.

That's why location matters... until it doesn't.

Restricted Loyalty
Restricted loyalty exists when there is no other game in town. Your cable company may enjoy restricted loyalty, especially if you live in a rural setting and there is no competition. (Although it is easy to argue that other options do exist, like online services.)

Utilities tend to enjoy restricted loyalty. Most cities do not have multiple electricity providers.
A corporate travel program with a company like American Express may be a form of restricted loyalty, especially if you feel no other programs are competitive. Arguably some Walmart locations enjoy a form of restricted loyalty with a dollop of convenience loyalty mixed in. If Walmart is the only game in your town you naturally are "loyal." When customers have no options, loyalty is their only choice.

Constraints often create loyalty. Restricted loyalty is great for a business--if you can get it and maintain it--but restricted loyalty is increasingly a thing of the past. Competition exists in almost every consumer situation, both within an industry or category and in the larger marketplace.
Companies compete, especially in down economies, for a larger share of wallet--across industries and across markets.

True Loyalty
True loyalty is earned loyalty. True loyalty is undying allegiance to a brand or product based on an incredible level of satisfaction.

Customer satisfaction breeds true loyalty. When you are highly satisfied, when your needs are completely met and your expectations are consistently met and even exceeded, you simply cannot imagine using another product or service.

True loyalty is the holy grail of customer satisfaction and is something every business should aspire to create.

How?
Clearly the ultimate goal for almost every business is to create and foster true loyalty. When you measure the right things, listen to your customers, and make changes and improvements that will increase customer satisfaction, you can create truly loyal customers.

That's great: Loyal customers come back. You don't have to pay to acquire and keep them. Loyal customers are more profitable as well since new customers are much more expensive to acquire.

But in order to achieve true loyalty you must first measure loyalty the right way.
For example, measuring a potential behavior, such as likelihood to recommend, does not measure loyalty. Likelihood to recommend measures positive word of mouth. We worked with a fantasy sports provider and found that 27% of its users said they would not be likely to recommend... but only 3% said they were actually likely to share that kind of feedback with others.

The fact that, when asked, people said they were not likely to recommend the service did not automatically mean they would volunteer that information to someone else.

The key is to understand customer needs and expectations, measure your results, and make changes that positively impact the customer experience and meet the real needs of customers. Creating truly loyal customers by satisfying customers is a long-term, sustainable advantage.
So don't be lazy. Purchased loyalty has its place as long as you also practice fiscal responsibility. (After all, it's easy to satisfy your customers if you don't have to be fiscally responsible. Simply spend what you want!)

Convenience loyalty can be wonderful, especially if you choose the right locations or modes of delivery. And restricted loyalty is great if you can get it.

But those forms of loyalty are difficult to obtain and tend to yield fleeting advantages.

True loyalty, based on customer satisfaction, is the ultimate goal of any business and the only true long-term competitive advantage.

http://www.inc.com/jeff-haden/how-to-cultivate-truly-loyal-customers.html

The Analytics Lesson from the Obama Campaign: Keep Your Data Organized, Secret

Time magazine just published a fascinating account of how President Obama's campaign team used data to microtarget voters. At HBR, we've been tracking the rise of Big Data in the private sector for some time, and see this as a useful case study of how one organization actually implemented those analytic principles to get results. I spoke over the phone with MIT's Andrew McAfee, a regular contributor and principal research scientist at the Center for Digital Business in the MIT Sloan School of Management. What follows is an edited version of our conversation.

Even though there's a push for data transparency, it seems like Obama's key to success was the opposite: to keep his data and algorithms as secret as possible. Organizationally, does it make sense to keep your data team siloed off from the rest of the team, or do you want them to work together more closely?

In this case, it's easier to identify the downsides of sharing that data more broadly. It could leak out, leak to the press, leak to the other candidate. If there is some secret sauce, you want to keep that close. If either the data asset itself or the algorithm on top of it seems to be cutting edge or proprietary, I wouldn't go shout it from the rooftops. You want to have the data team say to the volunteers, "Call up these people, knock on these doors, go to these neighborhoods." The volunteer doesn't need to know why; they just need to know they're knocking on the right doors.

That seems to be a move away from this movement we've been reading about about information wants to be shared, data wants to be free, everything should be transparent —

From any rational standpoint, that line is nonsense. That's like saying, "All money needs to be free," or if you're a trucking company, "All trucks need to be free." Data is an asset, like everything else.

In the spotlight on Big Data that we just ran in the magazine and online, we focused heavily on making the case that executives really do need to use it. We focused less on the execution piece of it. But it seems to me that having the data is only one part of the problem; you really need to know what to do about it.

There are two different questions to the execution piece. First, there's executing with the data resource and the computing resource itself. A lot of organizations aren't good at that because our data is fragmented. The amount of centralization and rationalization to take real advantage of big data is pretty daunting for a lot of organizations. To take the Obama campaign as an example, look at their move from having two databases in 2008 to one in 2012. I guarantee you that was not easy. That was technically pretty challenging, and it was organizationally super, super difficult — it means you have to convince one group to let go of their database and let go of being the sole keepers of that data. That's hard.

The second side of the execution, though, is the question of what do you do with the data. Which ads do you serve up, which doors do you knock on, which streets do you go down? Campaigns have been doing this for a long time; they know how to knock on doors. That's not the hard part. But to my eyes, what big data can do is help them be more efficient, by allowing them not to knock on every door on that street. You can say to the volunteer, "Just go knock on house numbers 14 and 18, and then skip the next six houses and go knock on house number 30."

Big data lets you be small. It lets you do really precise, targeted interventions. I see evidence of this over and over, in all kinds of organizations. It started with marketing, but that has led the way to operations and the supply chain also using those kinds of precise data-driven interventions. And then you can do that at scale.

So you're saying it lets you be small, but at scale? Are you then big again? [Laughs]

It's a very different kind of big; it's not mass production. "Mass customization" is an overused phrase and it's been around for a while, but in this era of big data we can really do that. It's no longer just configuring my car so it has the upholstery I want. It's that campaigns no longer need to do the kind of mass mailings they're always relying on; they can get the right kind of mailing to the right kind of voter. Maybe this one cares about women's rights, but that one cares about economic policy.

For the Obama campaign, that was at the heart of their ground game advantage. In our HBR article, we included an example from the health care sector. Over and over we're seeing this ability to be precise and differentiated, at scale and repeatedly, with a lot more efficacy.

How would this work in the business world, say in health care?

Take the example of Aetna. They have around 20 million lives under care. Because they're the company that pays the doctor, the lab, the pharmacy, and so on, they have all this information about my health. There are huge confidentially concerns, of course, but let's put that aside for a moment.

What that means is that they have better data about my health than any other player in the system; than my doctor, my hospital, my pharmacy. What Aetna can do at scale, in real time, over and over, is check across the millions of lives in their system and say, "Do we see any obvious gaps in care here?" They can then send a message to the doctor or to the patient. Now, we need to be careful about confidentiality, and we need to make sure the messages are phrased the right way so they're not ignored, but we can use this database to do mass scale interventions into health care delivery. And that means we can improve outcomes without having to rejigger the entire system.

Okay, so say everyone starts doing that. Then do you get to a place like we see now in baseball — where a few years ago, crunching the numbers gave some teams a big advantage, but now everyone does it and it confers less of one? Look at the Oakland A's. Using data used to give them a big advantage, but since every team started to do it, it really doesn't seem to give them much of one.

Yes, you've got to move on. It's not going to give you an advantage forever, but if you are analytically oriented, you can push ahead and get finer-grained insight and advantage. In baseball, the science of sabermetrics has moved on. They're doing increasingly sophisticated things. Billy Beane and the A's were able to pick the low-hanging fruit and do really well for a while because they were able to do the simple things better. Now everyone has those insights so they've got to work harder. The marginal benefit might be less, but you've still got to do it. If you just go back to scouting players like you did in the 1990s, that's a great way to have a terrible team. Standing still is a very bad strategy.

What's interesting to me is that the volumes of data are exploding terribly quickly. The toolkit is also expanding by leaps and bounds. This is a real new arms race. You might not love it, and you might wish the world was predictable and calm and that Excel would get you through — but that would be a recipe for disaster.

http://blogs.hbr.org/hbr/hbreditors/2012/11/the_analytics_lesson_from_the.html

Guy Kawasaki: Enchant Customers Like Apple, Zappos & Virgin

Investor and author Guy Kawasaki says the business world needs more charm. Here's his 10-step formula to enchant customers--and build a great big company.

If you want your company to be the next Apple, Zappos, or Virgin, take a page from their playbooks: Enchant your customers.

To do that, Guy Kawasaki, the investor, author, and former Apple "chief evangelist," boiled down a modern entrepreneur's goals at the Inc. 500|5000 in Phoenix on Friday like this: "You want the quality of Apple, the trustworthiness of Zappos, and the likeability of Richard Branson."

In his book, Enchantment: The Art of Changing Hearts, Minds, and Actions, and in his speech, Kawasaki outlined the path to "enchantment" in 10 steps.

Here they are:

1. Be Likeable

 It's simple. You cannot achieve anything if people do not like you. When Kawasaki met Virgin founder Sir Richard Branson, Branson asked Kawasaki if he flew Virgin. "When I said that I was a United Global Services member, he got down on his knees and started polishing my shoes with his jacket. This is the moment I started flying Virgin," Kawasaki said. 

2. Be Trustworthy

 "You can like Charlie Sheen--that doesn't mean you trust Charlie Sheen," Kawasaki said. Trust is never a given, so your company needs to be proactive and project an air of trust, he added. One easy way to extend the first hand of trust to your customers is by giving them something, with no strings attached. As an example, Zappos gives customers unlimited free shipping both ways.

3. Perfect Your Product or Service

 It's a lot easier to enchant people with great stuff than crap. "I have tried it both ways," says Kawasaki. So how can you tell if your product or service is 'great stuff?' It's great, says Kawasaki, if it's "deep, intelligent, complete, empowering, and elegant."

4. Tell a Great Story 

 Your company needs an origin story. Look no further than eBay, with its founding story of Pierre Omidyar wanting to enrich his girlfriend's ability to trade Pez dispensers (her alleged hobby). It's a cute story, but a "total bullshit story," Kawasaki chides. "But you need a story."

5. Overcome Resistance

 Kawasaki says it might be tough to get a parent to buy a kid a shoot-em-up game. But what about a game that's marketed as an educational toy? Sure, parents will buy that. Other ways to overcome resistance: show social proof--your friends are doing it!--or providing data as evidence.

6. Make Your Enchantment Enduring

 At Grateful Dead concerts, there was a special area for show taping. The band wasn't worried about piracy; they wanted the concert to endure over time. How can you apply this to your business? Invoke reciprocation at every chance you get. When someone says "thank you," the optimal response isn't "you're welcome," Kawasaki says. It's "I know you would do the same for me."

7. Be a Great Presenter

When speaking to a group, customize the introduction to your audience. Kawasaki does this by showing an intro slide of him doing something the local people--be it in Edinburgh or Istanbul--can relate to, like eating haggis or trying on a fez at a bazaar. Keep your presentation short. Kawasaki says the optimal formula for a presentation is 20 minutes and 10 slides, using 30-point font.

8. Use Technology

"It's a great time to enchant people with technology, because technology is fast, free, and ubiquitous," Kawasaki says. But there will always be speed bumps when new technology is involved. (Think: An indecipherable captcha screen.) Get rid of it, or risk losing customers.

9. Enchant Up

How do you impress your boss? "When your boss asks you to do something, you drop everything else, and do it," says Kawasaki. If it's a big project, you should drop everything and make a prototype--fast. Draft an early rendering, and ask your boss if that's what she's looking for.

10. Enchant Down

If you're the boss, you need to not only enchant your customers, but also your employees. One easy way: "Show that you are willing to suck it up," Kawasaki says. Bottom line: Get your hands dirty.

http://www.inc.com/christine-lagorio/guy-kawasaki-enchant-customers-like-apple-zappos-virgin.html

7 Ways to Make Customers Love You

The greatest compliment anyone can receive in the business world is "I just love working with you."  That's especially true when that compliment comes from customers, because it means that you'll be getting their business time and time again.

Here are the seven rules for getting customers to love working with you, based upon conversations with Jeffrey Gitomer, author of the The Sales Bible and Dr. Earl Taylor, master trainer at Dale Carnegie:

1. Make building the relationship more important than making the sale.
2. Create opportunities for the customer to buy, rather than opportunities for you to sell.
3. Have meaningful conversations and never give a sales pitch.
4. Be curious about the customer as a person and let the friendship evolve from that.
5. Don't try to be a hero who swoops in to solve the customer's problem.
6. Believe in your heart that you and your firm are the best at what you do.
7. Deliver exactly what you promised to deliver, no matter what.

http://www.inc.com/geoffrey-james/7-ways-to-make-customers-love-you.html

Where does trust come from?

Where does trust come from?

Hint: it never comes from the good times and from the easy projects.
We trust people because they showed up when it wasn't convenient, because they told the truth when it was easier to lie and because they kept a promise when they could have gotten away with breaking it.
Every tough time and every pressured project is another opportunity to earn the trust of someone you care about.

sethgodin.typepad.com/seths_blog/2012/06/where-does-trust-come-from.html

Is This Your Employees' Idea of Service?

When an employee flipped off a key customer, this CEO realized his company had a culture problem. Here's how he fixed it.

Many years ago, I received a call from an irate customer. "Your driver," she yelled, "dropped off our fruit and then gave me the finger!"

After calming her down and assuring her that we would correct the situation, I caught up with the delivery driver. "What happened?" I asked.

"Traffic was bad," he said, "and I was running 15 minutes behind. On top of that when I got to the office my normal contact wasn't there. This woman came out of nowhere and started yelling at me that I was late and to put the fruit in her conference room and not in the kitchen where I normally do. So I put the fruit on the table like I do every week and threw up my hands and left."

"That woman," I said, "was your normal contact's boss." I paused. "Why would you do something like that and not try to figure out how you could make the situation better and help her?"

The driver looked at me skeptically and said: "My dad taught me a long time ago that if someone disrepects you then you have to disrespect them right back."

It was at that moment that I realized not everyone had the same definition of customer service that I did.
How do you communicate your customer service values to people who may have never had a good service experience or models of positive ways to treat people? You need to go past just defining what you do and explain why you do it. And this explanation--your philosophy of business--needs to permeate the entire culture and find its way into all of your processes in order to be truly impactful.

The FruitGuys 5Rs©
I spent a good year after that delivery driver experience thinking about how to articulate the company's values to my staff and embed them in everything we do at our fruit delivery business. I realized that those values weren't just about treating our customers in a certain way, they were about the way we treated each other, our peers, our suppliers, our customers, and even the world at large. I needed a system, a philosophy, that allowed for self-reflection, so that when people came up against a challenge in their workday they had a tool to assess themselves as to how they did and how they could improve.

What came out of that year was the 5Rs©--a series of five questions that are deeply aligned with our ethics at The FruitGuys and drive our pursuit of greater meaning through decisions we make every day at work.

Be Respectful:
"Have we been respectful at all times?" This first question in our 5Rs© process is key. To us, respect comes from a place of equality rather than status or forced authority. This means that we should be respectful of people not because (like a police officer) they have power over us, but because they are human just like us.

Be Responsive: 
"Have we been responsive to people's needs?" We talk about the difference between reacting (which tends to be emotional and often without thought) and responding. You need to observe, listen, and understand the problem and think about what solutions will produce positive outcomes in a timely manner.

Be Realistic:
"Have we been realistic about what we can and/or can't do?" This is one that is often overlooked but it's deeply important to admit when you can't do something. This is not to say that you can't strive or push to accomplish goals, but setting realistic expectations with clients, vendors, and other business partners is really the base from which success or failure will flow. We want to clearly assess potential roadblocks and be realistic about what it will take to be successful in our delivery of service.

Be Responsible:
"Have we all taken personal responsibility for outcomes?"  Running a business that is growing is like running a lengthening relay race in which you keep adding runners. The points at which you pass the baton will become greater and greater and you need to make sure that everyone in the organization takes personal responsibility for not just his or her leg of the race, but the handoff, the approach, and the departure of that baton. If everyone in the chain does this--takes the kind of responsibility that touches their work and the work of others--then you have a much stronger system in which everyone constantly communicates.

Be Remembered Positively: 
"Will our actions allow us to be remembered positively?" If, in your analysis of how you solved or didn't solve a problem, the first four Rs don't give you insight, then this last one acts as a catch-all. If you can't walk away from an interaction, scenario, project, or experience and feel that you will be remembered positively, then something went wrong and you need to figure out what that was. This last R truly drives more than just our philosophy of customer service at The FruitGuys, it drives our mission and desire to do good and create positive environments. It reinforces what I think is an inherent cultural value at our company--being humanists as business people who care about positive outcomes and healthy lives.

How to Build Customer Trust: 9 Rules

No one is going to buy from a person they don't trust. Here's how to build a better client relationships.

Customers don't buy from people they don't trust. Unfortunately, most sales gurus (including some that are quite famous) define selling as "convincing," "persuading," and "winning"–presumably with the customer being the convinced, persuaded loser.

No wonder so many people put up a barrier the minute somebody tries to sell them something!
Fortunately, it's easy to build trust in a business relationship. Here are the rules, based on a conversation with a true expert in trust-building Jerry Acuff, author of The Relationship Edge: The Key to Strategic Influence and Selling Success.

1. Be yourself.
Everybody on the planet has had unpleasant experiences with salespeople, and many have walked away from a sales situation feeling manipulated. So, rather than acting or sounding like a salesperson, simply act the way you would when meeting with a colleague.

2. Value the relationship.
If you want people around you to value having a relationship with you, you must truly believe that relationship building is important. You must also believe that you honestly have something of value to offer to the relationship.

3. Be curious about people.
People are drawn to those who show true interest in them. Curiosity about people is thus a crucial element of relationship building. Having an abiding fascination in others give you the opportunity to learn new things and make new connections.

4. Be consistent.
A customer's ability to trust you is dependent upon showing the customer that your behavior is consistent and persistent over time. When a customer can predict your behavior, that customer is more likely to trust you.

5. Seek the truth.
Trust emerges when you approach selling as a way of helping the customer–so make it your quest to discover the real areas where the you can work together. Never be afraid to point out that your product or company may not be the right fit.

6. Keep an open mind.
If you're absolutely convinced the customer needs your product, the customer will sense you're close-minded and become close-minded in return. Instead, be open to the idea that the customer might be better served elsewhere. In turn, customers will sense that you've got their best interests at heart.

7. Have a real dialog.
Every meeting should be a conversation, not a sales pitch. Spend at least half of every customer meeting listening. And make certain the conversation is substantive and about real business issues, not just office patter or sports chit-chat.

8. Be a professional.
Customers tend to trust individuals who are serious about what they do, and willing to take the time to achieve a deep understanding of their craft. Take the time every day to learn more about your customers, their industry and their challenges.

9. Show real integrity.
Be willing to take a stand, even when it's unpopular with your customer or your company. You don't need to be adversarial, but have the ability to make decisions based upon what you know is right. And on a related note: Never promise what you can't deliver.

Needless to say, gaining trust is only part of the equation. You must also have a product that customers want and need, and the ability to show how you're adding value, solving problems, and so forth.

However, if you don't earn the customer's trust, they'll probably buy from someone else whom they do trust–even if the offering isn't as good.

 http://www.inc.com/geoffrey-james/how-to-build-customer-trust-9-rules.html

How to Build Customer Trust: 9 Rules

No one is going to buy from a person they don't trust. Here's how to build a better client relationships.

Customers don't buy from people they don't trust. Unfortunately, most sales gurus (including some that are quite famous) define selling as "convincing," "persuading," and "winning"–presumably with the customer being the convinced, persuaded loser.

No wonder so many people put up a barrier the minute somebody tries to sell them something!
Fortunately, it's easy to build trust in a business relationship. Here are the rules, based on a conversation with a true expert in trust-building Jerry Acuff, author of The Relationship Edge: The Key to Strategic Influence and Selling Success.

1. Be yourself.
Everybody on the planet has had unpleasant experiences with salespeople, and many have walked away from a sales situation feeling manipulated. So, rather than acting or sounding like a salesperson, simply act the way you would when meeting with a colleague.

2. Value the relationship.
If you want people around you to value having a relationship with you, you must truly believe that relationship building is important. You must also believe that you honestly have something of value to offer to the relationship.

3. Be curious about people.
People are drawn to those who show true interest in them. Curiosity about people is thus a crucial element of relationship building. Having an abiding fascination in others give you the opportunity to learn new things and make new connections.

4. Be consistent.

A customer's ability to trust you is dependent upon showing the customer that your behavior is consistent and persistent over time. When a customer can predict your behavior, that customer is more likely to trust you.

5. Seek the truth.
Trust emerges when you approach selling as a way of helping the customer–so make it your quest to discover the real areas where the you can work together. Never be afraid to point out that your product or company may not be the right fit.

6. Keep an open mind.
If you're absolutely convinced the customer needs your product, the customer will sense you're close-minded and become close-minded in return. Instead, be open to the idea that the customer might be better served elsewhere. In turn, customers will sense that you've got their best interests at heart.

7. Have a real dialog.
Every meeting should be a conversation, not a sales pitch. Spend at least half of every customer meeting listening. And make certain the conversation is substantive and about real business issues, not just office patter or sports chit-chat.

8. Be a professional.
Customers tend to trust individuals who are serious about what they do, and willing to take the time to achieve a deep understanding of their craft. Take the time every day to learn more about your customers, their industry and their challenges.

9. Show real integrity.
Be willing to take a stand, even when it's unpopular with your customer or your company. You don't need to be adversarial, but have the ability to make decisions based upon what you know is right. And on a related note: Never promise what you can't deliver.

Needless to say, gaining trust is only part of the equation. You must also have a product that customers want and need, and the ability to show how you're adding value, solving problems, and so forth.
However, if you don't earn the customer's trust, they'll probably buy from someone else whom they do trust–even if the offering isn't as good.

http://www.inc.com/geoffrey-james/how-to-build-customer-trust-9-rules.html

Are Your Employees Waving Away Customers?

As a business owner, you go above and beyond to keep customers happy. But your employees might not feel the same.

I recently visited a local small business (a pet food store) because I wanted to get my doggie, Dwight, some kibble. It wasn't a highly trafficked joint and in a remote area, and I only wanted a small bag of food. So I got out of the car and went up to the door only to find they had just closed.

Turns out I had arrived three minutes after closing time and the person who was manning the store was still behind the register with a customer. I waved to see if he would open the place up just to get one more sale, but this employee gave me the cut-across-the-throat gesture and waved me off.
What did that tell me? That he clearly wasn't the business owner.

All of you business owners are out there clutching your proverbial pearls, right? If you were there, you would have opened the doors to get one more sale for the day. But in this case, it was an employee who wanted out after eight hours of looking at the clock and not giving a damn about poor Dwight and his lack of delicious dry food.

How do you make sure your employees aren't waving off customers and potential sales? Here are four ideas:

1. Go above and beyond.
Your employees want to feel part of a family, so make it so! Hang out with them, get to know them, do fun things like happy hours and picnics with them. Everyone wants to love where they work and who they work for, so give it to them!

2. Make them feel invested in the company.
Why not try giving them a part of your company so they feel invested? At my company, VerticalResponse, we give all of our employees stock options to let them know that if the company is successful, they will be, too. You might also try giving them a piece of the profits at the end of the year so they know that the more the cash registers ring, the more they'll get.

3. Be transparent.
Let them know what your growth is and what it needs to be. Even if it takes the old thermometer sketch to illustrate where you are in the month, it's worth it. I give my entire company a monthly update on where we are, where we need to be and what we need to do to get there.

4. Give them incentives.
Tracking their daily sales could get them more of a bonus at the end of the month. Ever have someone ask you at the register, "Who helped you with that?" They're tracking the effectiveness of their employees who make an impression.

Here's a story I love to share. Since VerticalResponse is an online company, there's not really a reason for customers to physically visit us. At the very beginning of our existence, a woman came to our offices and sat on our couch for 20 minutes (we didn't have a receptionist at the time) until an employee (there were four of us total) came out into the open area on his way to the restroom and saw her. She was there to give us $20 in cash so she could send an e-mail campaign to her list.
Instead of pushing her out the door and directing her to our website, the employee took the cash, printed out an invoice for the amount she gave us, and even gave her extra e-mail credits. She took the time to come to us, so we felt we needed to return the favor.

The bottom line is that you need to have your employees be as passionate as possible about your business. Including them on various parts of your business, even the down and dirty, and incentivizing them to do what you as the business owner would do, might work wonders. Have you tried?

4-Step Formula for Guaranteed Success

This amazingly simple formula drives virtually every successful business. Unfortunately, many entrepreneurs and investors lose sight of these basic principles.

Success in business, especially in growing businesses, does not require an ingeniously complex solution. Often, success comes from mastering the basic fundamentals.

In short, success is about addressing a customer need better than you or your competitors currently address it. In many cases, the "new and improved" solution is surprisingly incremental, rather than revolutionary. Examples abound:

Google, one of the most valuable companies in the world, began as a slightly better search engine.
The Toyota Camry was the best-selling car in America for many years because it had better gas mileage, was fun to drive, didn't break down, and was less expensive than other sedans.
Oprah Winfrey dominated daytime TV by tapping into topics for women in more interesting ways than Phil Donahue and others had done for years.

Starbucks reinvented the concept of the coffee shop-something that had been around for generations-by consistently serving good coffee in a pleasant environment.

As we analyze the drivers of success in these and virtually all other entrepreneurial successes, we find that there is an extremely basic, and in hindsight, glaringly obvious, four-step formula common to each.

1. Develop an understanding of customer value.
What's the value equation from the customer perspective? This is defined, most simply, as benefit minus cost. Many businesses and entrepreneurs simply don't understand what would make a customer happier or better off. Often they are trying to fit their product to the customer rather than identify what product would fit the customer

2. Create a better product or solution for a specific customer.
Because each customer is different, identifying the specific customer or segment you are targeting is critical. Attempting to be all things to all people typically results in an indistinct product that benefits no one.

3. Determine how to scale the product from one customer to many customers.
Once you've mastered the value equation for one customer, you can focus on finding many customers that think and act alike. Most management teams try to scale the business before they've created a valuable product with one customer. It's similar to launching a rocket to the moon without mastering the aerodynamics. It might have the power to get there, but it's not going to make it.

4. Develop a business model that allows you to build scale while generating incremental return on Investment.  

In the end, you'll need to build a business case for investing capital to grow the business. If the customer value equation is still in flux, no amount of growth capital will fix the problem. We like Alex Osterwalder's business model canvas as a template for building a solid business model. But, it's important to calculate how the investment will create a return on capital.

Of course, execution is everything. If business success was as easy as following a few steps, everyone would be a mega-billionaire. But it's surprising how many competent entrepreneurs, corporations, and even experienced strategists develop business models that omit one or more of these basic steps.

Psych! 5 Brain Tricks to Make Customers Buy

Want to increase your revenue? It's time to get smarter about how your customers' minds really work, suggests a new book.

Roger Dooley wants your business to succeed. So he's laying down the facts and dissecting recent brain and behavior research to enable you to tap into consumers' brains.

Fact No. 1: People aren't always rational thinkers. In truth, research shows that a huge amount of decision-making is actually based on subconscious factors.

In both his new book, Brainfluence, and in a recent interview, Dooley offered several ways to use "neuromarketing" to do a better job persuading consumers.

1. Clean Up Your Font

Are you using a stylish, elegant font on your signage? It's time to dump it.

A study shows that more ornate fonts make people assume a task to be more time-consuming than when the same task is explained in a clearer font. This could make your products or services seem slow or even tedious--and no one wants a purchase that'll take forever to assemble or start using.

"Probably nine times out of 10 the simpler font is going to be the better choice," Dooley says, "because the text will be more likely to be read, for one, and you'll better convey information."

Bottom line: Go easy on consumers' eyes; use a clear, easy-to-read font such as Arial, for product and service descriptions as well as any instructions.

2. Don't Show Them the Money

A restaurant currency study showed that patrons tended to be more price-conscious when dollar signs appeared alongside the prices on menus. If there was just a solo digit, by contrast—no dollar symbol, no decimal point—then spending went up.

"When people see a currency symbol like a dollar sign or a euro symbol, that … activates a part of the brain that can sometimes help the marketer, but often not," Dooley says.

Bottom line: If you're a restaurateur, take dollar signs off the menu to increase your sales.

3. Remember the Senses

Customer transactions are about more than facts and figures. Getting smart about sensory appeal can also help a brick-and-mortar business.

Look for environmental elements that you can control, like pleasant scents—even if your products don't naturally have a smell. "You can create a scent environment that is pleasant, memorable, and distinctive that reinforces your branding," Dooley says. "The scent will then trigger consumers' senses and create a desire for that [the product or service]." Tests have shown that scents in shopping areas can increase sales.

And don't overlook the music, which can also affect customers' buying decisions. One test, for instance, found that when a wine shop played French or German music, it increased sales of wine from that country.

Bottom line: Find creative ways to tempt customers' senses.

4. Respond to Customers

Nobody likes being ignored—so make sure you can provide real feedback to social media messages and posts.

Dooley cites one study that looked at people who complained via social media about a company or its products. When they got a prompt response—even if it wasn’t an actual apology—the majority of customers either removed their negative comment or revised it with a positive addendum. So take a minute to acknowledge what was said; it's worth your time.

The customer doesn't need to be right every time, Dooley acknowledges: "But you'll almost never score points when arguing with a customer. You may win the argument, but you'll lose the customer."

Bottom line: Keep your cool and respond to customers promptly.

5. Tell a Good Story

Statistics are great. But you need people to pay attention to your numbers to help drive sales. Our brains are wired to process stories in a more engaged way, Dooley says: Brain scan work shows that when people read a story with a lot of action elements, their brains actually mimic the motions.

So whether you're citing case studies or designing ads or other promotions, draw customers in by weaving facts and favorable information into a story format. A great story can engage customers on a deeper level; this also increases word-of-mouth marketing. "In general some of your information should be in a story format to keep your reader engaged," Dooley says, "because if it's all facts and all statistics, you'll lose a lot of your audience."

Bottom line: Turn percentages and figures into a good tale to capture—and keep—your customers' attention.


http://www.inc.com/caitlin-berens/roger-dooley-brain-tricks.html

You Screwed Up. Now What?

We all make mistakes. It's how we handle them that makes the difference between a simple "Oops," and an epic fail.

It happens. We’re all human.

Everyone makes mistakes. It’s the way they’re handled that can mean success or failure to a business. Our team is no different. We work extra hard to fix problems quickly and earn back the trust of our employees or customers.

Not everyone is so conscientious. Take, for example, our soon-to-be-former payroll provider. Errors that could have been remedied quickly have now rolled into one huge epic fail.

Despite repeated requests for our year-end W-2s, they arrived 1) more than a week late, 2) ugly as hell, and 3) incorrect. Any of these would be horrible. But this was special. Our payroll report arrived accompanied by reports from other companies, complete with the social security numbers of their employees. The payroll provider missed both calls they had scheduled to discuss these errors with us, our names were frequently misspelled, and the payroll company placed blame on our employees for screw-ups in their process. Let’s say we’ve got a bit of an issue on our hands.

So, what should you do when you make a mistake?

1. Listen. The person you let down might need to get her disappointment or anger off her chest. Just listen. Don’t make excuses. Don’t interrupt. Don’t even try to respond right away. Listen. Let it sink in. If there’s a way to repair things, you’re hearing it right now, so pay attention.

2. Own it. You or someone on your team made a mistake. No finger-pointing. Fans of Pixar’s A Bug’s Life know Hopper’s first rule of leadership: Everything is your fault. Here, we call it falling on the sword. Sometimes, it’s the only thing you can do before starting to make it right. Be sure the person you’ve disappointed knows you understand the mistake belongs to you.


3. Be contrite. In our business we ask consultants, “Do you want to be right or do you want to be rich?” You will not convince someone of anything else when they feel they were wronged. You might be angry. You might be embarrassed. But what you need to show the person you let down is that you are contrite and humble. Everything and anything else will not make things better.


4. Make amends. You can offer to fix the problem or come up with perfectly good ideas about how you might patch things up. If the person wants a letter of apology to make things square, get them a personal note from a top executive. If they want a discount, do it and throw in something else they didn’t ask for. It’s the “little bit extra” that speaks volumes and may even strengthen the relationship in the long run.

Note: I’m not suggesting you let someone take advantage of the situation. There are real jerks out there. You can’t give them what they want if it’s completely unreasonable. Own the mistake, give a heartfelt apology, and extend a powerful “above and beyond” gesture.


5. Be careful. Just because you’ve made amends, don’t think everything is back to normal again. Be even more mindful of the wronged customer and go to great lengths to ensure your product or service exceeds their expectation. Until you get an unmistakably clear signal that all is well again, stay in the penalty box. And for goodness sake, spell his or her name correctly while trying to fix the problem.


6. Learn from it. Someone I respect says, “Always make new mistakes.” As long as you’re still a human you’re going to make mistakes, so get used to it. A true leader learns from mistakes and uses the experience to grow and change in positive ways. If you really come to understand the consequences of your mistake, then there’s a much better chance you won’t do it again.

Every mistake says, “We don’t give a damn about you,” unless you go above and beyond to prove that mistake was just that -- an extremely rare, sub-par event.

I wish I could tell you the payroll company followed these steps to repair the damage done by their errors. Heck, we’d be thrilled just to have accurate payroll, responsive account reps and our name spelled correctly on messages. I guess it’s time to find another payroll provider that will give a damn about us.

http://www.inc.com/rene-siegel/you-screwed-up-now-what.html