On the way back from a customer site visit last week, I was sitting in the airport and dropped by the news store. After searching through the magazine rack, I noticed “Connecting with your Customers“ by Harvard Business School Press. Naturally, I had to buy the book.
The book is broken up into four sections and then each section has chapters written by well known customer loyalty/marketing folk such as Fred Reichheld and Kristen Sandberg with additional thoughts and quotes from Guy Kawasaki, Patricia Seybold and Seth Godin.
The first chapter “Understanding Customers’ Needs” delves into just that, finding out what your customers want. The best way to do this is to talk to your customers, find out what they want, what they need and how they use your product. Customers don’t always use your product the way you thought they would. Although not given as an example in the book, do you think the makers of baking soda thought that it would be used for anything other than cooking? Probably not, but after witnessing consumers using it to reduce refrigerator smells, their marketing changed to encompass the new market.
One of the key quotes in the chapter is “watch what you customers do, not what they say.”
Chapter two “Identifying Customer Segments” reminds the reader that not all customers are the same. How do you segment them and why is it important? Companies need to find out who their customers are and think about business in their customers’ eyes. Who are the happy customers and what power do they have? Who are the unhappy customers and what are they doing to hurt your business?
Surveying customers is a very important part to understanding the different segments. What 20 year old women buy and think about your product could be completely different than what 50 a year old man thinks. And although you want to categorize these customers, it’s also very important to see the responses as individuals giving you their opinion. If needed, immediate attention might need to be given to unhappy customers. Companies must also stop thinking of customers just as data points and even consider creating groups within the company to support specific customer segments.
“Communicating with Customers” features Douglas Smith’s three innate psychological needs. Those include competence (enhancements in knowledge or ability), autonomy (the power to make choices without pressure from a company), and relatedness (the sense that a company genuinely cares about its customers).
One of the most interesting quotes to me in this chapter was, “In one study, cocktail-lounge customers who were approached by a server wearing a broad smile left more than twice as much in tips, on average, than customers who were greeted with minimal smiles.”
The book finished up with the chapter “Enhancing Customer Loyalty”. By finding out how much your customer is worth to you (what they’ve purchased, who they tell about their experience, what costs are associated with getting them to be a customer and keeping them) a business can change from being product-centric to customer-centric.
If you’ve got a few hours to read I’d suggest this book. There are supporting materials you can read to get more in depth coverage of most of the topics included and they are listed at the back of the book But, if you want to get a quick overview and some talking points, it’s worth the $14.95.
Filed under: customer loyalty, customer references, customer satisfaction, marketing, reference program | Tagged: "Connecting with your Customers", Fred Reichheld, Guy Kawasaki, Kristen Sandberg, Patricia Seybold, Seth Godin |