Uncovering the Hidden Wealth of Your Customers
Relying on your employees to grow your business is no longer enough. Savvy companies know that to be competitive, they need to convince their customers to sell, market, and help create products for them as well. In his new book, The Hidden Wealth of Customers, Bill Lee, president of the Customer Strategy Group, explains how organizations can maximize their "return on relationship" with their "rock star" customers. Lee points to examples from companies that have done just that, including Salesforce.com, SAS Institute, 3M, and Microsoft. Associate Editor Judith Aquino caught up with Lee to find out what other companies can do to uncover the value of their customers.
CRM: In your book, you mention that companies are missing the point in their attempts to delight their customers. Why is that?
Bill Lee: Companies are trying so hard to make the customer experience delightful by loading extra features onto their products and services that customers either don't notice, or worse, are annoyed. Where companies go astray is by missing opportunities to create substantial value for their customers, such as opportunities to engage or affiliate with peers and establish status and respect through professional communities. Companies miss these opportunities by focusing too much on just their products and services.
CRM:Why should customers endorse a brand? What's in it for them?
Lee: It generally ties back to affiliation, status, and recognition. Start with the value that you can create for your customers. Let's say you have a solid customer who has a strong network and wants to expand it and gain status among her peers. Tailor your request to what she values by making suggestions like, "Let's have a panel discussion in front of your network or shoot a video of the great things you and your company are doing with us." Where companies miss the boat is [when] they think all the value rotates around their product or service.
CRM: What surprised you about the companies that you researched for your book?
Lee: I was surprised by the level of creativity of companies that are finding new ways to engage with customers. When Marc Benioff [founder and CEO of Salesforce.com] developed the customer program that he unleashed at the City Tour events, he got an 80 percent sales close rate [in new customers]. He didn't have to train these customers; they naturally knew how to talk to each other and prospective customers. It's an acknowledgement that customers are going to be more persuasive and credible to your buyers.
CRM: Where do companies stumble in gathering customer advocates?
Lee: A major mistake is when companies create several programs—they have a customer reference program, a community-building group, a customer advisory group, etc., and they're all coming at the same customer from different directions. That's where you see reference burnout. For a while, you can live off the fact that your product or service is doing a great job, but eventually customers will get tired. It's important to coordinate these programs to provide a holistic value for your customers.
CRM: Which department should be responsible for identifying and nurturing customer advocates?
Lee: That's the eternal question: Should marketing or sales do it? I don't think it matters. What matters is getting a strong executive who is passionate about customer advocacy and customer engagement, and has clout. Make sure that person is in a position where he has a strong sponsorship role and is able to be actively involved in creating an advocacy program. Companies need to get over the notion that only sales or an account rep owns the [customer] relationship.
CRM: So how do you find the right customer?
Lee: Customers who are loyal and profitable should be your baseline. They should also have an attractive network, [be] active in other relevant communities, and want to get their names out there. They also need a great story to tell. Enthusiasm isn't enough. They don't have to be a marquee brand or your biggest customer. If you look at Microsoft with their MVP [Most Valuable Professional] program, which they use to penetrate new markets in foreign countries, they find local influencers. Microsoft engages them first by saying, for example, we've followed your blog and we'd like to provide you with some information about us.
CRM: Do you have a tip that our readers can use today?
Lee: Start by identifying your growth challenge. That could be trying to penetrate new markets, compete against better-funded competitors, or improve customer retention. Next, get creative about which customers would be most persuasive, most credible in speaking on your behalf and solving your growth challenge. How can you get them involved? That will open some new ways to thinking that, in my experience, will probably lead to something nice.
Buyer's Guide Companies Mentioned