Issue 7
February 2008

In the last "way too long" since I last wrote, there have been a few significant changes in the industry: CRM no longer holds its "buzz word" status and is becoming "table stakes"; the role of the Chief Customer Officer (CCO) is growing in popularity, and in certain organizations they've even gone so far as hiring a Chief Customer Experience Officer.  More so than ever before, today's CEOs are faced with increased competition and customers who are very savvy and can be highly demanding, which allows them to be more selective in their purchases of products and services.  

The result is that it's getting harder and harder to acquire and retain profitable customers.

Now, more than ever, it is critical to develop and adhere to a consistent customer strategy that carefully and consistently orchestrates the entire customer lifecycle from targeting and acquisition (I've always been bothered by this type of "search and destroy" militaristic feel), to customer service, retention, winback, and termination/loss.  Only by carefully managing customers in this type of comprehensive manner can CEOs hope to acquire and retain their most profitable customers.  Anything less is merely chance and circumstance.

Customer Purchase Drivers™:  The Most Critical Factor in Driving Sales-and Profits

Recently, I have worked with several Fortune 500 companies to help them determine what drives customers to purchase their products or services.  My focus for these companies was specifically on uncovering their particular Customer Purchase Drivers™--what inherent quality their product or service possesses that makes customers really want to purchase them.  These drivers are the features and attributes of products or services that enable customers to increase profits, decrease costs, mitigate risks, or satisfy emotional needs.  These drivers are critical for companies to understand if they want to be profitable, ensure that their offering remains both relevant and competitive, and to command premium prices.  By focusing on and understanding how to leverage these purchase drivers, companies can simplify the customer acquisition process, shorten the sales cycle, and increase customer retention-the net of which is increased revenues and profits.

How a Small Business Software Company Discovered $16M in Hidden Profits

A software company that provides financial software to small businesses had introduced a new add-on product to the market but despite spending huge amounts of money on advertising, hadn't been able to penetrate their existing customer base let alone reach newcustomers.  Prospects were complaining that the new product was too expensive or not that important. 

In interviewing their customer base, I found a group of customers that were willing to pay double, triple, and even quadruple the current price because the software product gave small business owners part of their life back-it saved them time and freed them up to go bring in more clients, spend time with their new baby, or just kick back and relax.  How valuable is that?!

Using this understanding of Customer Purchase Drivers™ we created a decision tree for salespeople to help them combat low price competitive offers that are rampant in the industry. By asking four to five critical and telling questions of prospects, salespeople could determine whether or not it was necessary to meet or beat competitive prices if the highly differentiated product was going to be valued regardless of the price.

Because so many people valued this particular feature of the product, and there was no where else they could get it from, it made it easier for the salespeople to convey its value and hold firm on the price, thereby avoiding any rampant discounting. 

My client told me they expected this small change would grow their revenue by more than $16 million dollars each year.

I've been able to help other companies like this enhance the customer experience to garner repeat business by discovering the Customer Purchase Drivers™ or key components that have the greatest positive and negative influence on customer purchase decisions.  Other examples will be shared in future newsletters.

I'm excited to announce that I'm launching a new teleseminar series for executive leadership beginning in early March.  This series will discuss customer strategy topics for executive leadership including CEOs, CCOs, VPs and GMs and will consist of presentations & interviews with industry luminaries/exemplars. 

The first one is titled, "3 Essential Steps to Finding & Keeping the Best Clients & How to Cast Off the Worst Ones:  Compelling Lessons from the World's Most Successful Companies."  

It describes how executives can:

• Increase profits by differentiating between the best and worst customers
• Shorten customer acquisition cycles, reduce price resistance, and keep customers longer by asking 6 critical questions of their customers
• Gracefully reduce resource/profit drain or even terminate unprofitable relationships without being maligned across the blogosphere

If you are interested in learning more about the seminar, please send an email to seminar@predictiveconsulting.com.

I'd like to give you a sneak preview of my article that'll be published in the April issue of CEO Refresher, "You Can't Save Your Way to Growth: Lessons Learned from Sears' Mistakes."  You'll learn how Sears has deviated from Harvard Business School professor Theodore Levitt's admonition that the sole purpose of a business is to create and retain customers.  Sears was initially rewarded for their efforts in cutting costs and increasing profits, but it became clear that they did so at the expense of their customers and their customer experience.  The article discusses the lessons learned and how you can avoid making the same mistakes, particularly in lean times when cost cutting may be necessary.  Find out how you can tackle this problem without jeopardizing your long-term viability.   

You can read the article at: http://www.predictiveconsulting.com/articles/CEORefresher-04-08-CantSaveYourWayToGrowth.html

I found this picture hilarious. It is interesting that people are taking pictures of the ad-it got people's attention! It has little to do with anything we've talked about here, but I hope you enjoy it anyway.