With rapidly increased commoditization and expanded globalization, competition in almost every marketplace has become ferocious and is certain to become more so. In this book, Scott McKain provides a wealth of information and counsel that can help decision-makers in any organization to "stand out and move up while [the] competition fails." In the introduction, he asks: "Can your customers tell the difference between you and your competition?" In some instances, the answer is "no. "In other instances, the answer is "I have no idea." And in still other instances, the answer is "Yes, unfortunately." McKain provides a roadmap for understanding how the phenomenon of "sameness" happened and what to do in response to it. He outlines and discusses various strategies that, if executed effectively, can help to make a significant and sustainable difference to any business.
Distinction (or differentiation) initiatives must be based on a solid foundation. McKain identifies four and devotes a separate chapter to each.
The first and one of his most controversial suggestions is that every business needs a razor-sharp Customer Experience Focus. Consequently many businesses may need to “fire” some of their customers. Often, in an economic climate such as the current one, the pressure is on to expand services or product offerings, or accept projects that are not in synch with core business, in an attempt to add more customers and get more business.
The problem is that in the real world, this seldom works. More time than is commercially realistic is given to pleasing a customer that should never have been solicited in the first place. Good customers are alienated because of poor service, or move away because what attracted them in the first place has been diluted or changed.
The ultimate business goal is not be to "please" customers. Studies show that only 6% of "satisfied" customers remain loyal to a given organization. "The purpose of any business is to profitably create experiences so compelling to customers their loyalty becomes assured."
He gives four reasons why organisation’s need to review their customer lists.
- No business has the time or resources to create the Ultimate Customer Experience for everybody. If you sharpen your focus by "thinning the herd," you can devote your attention to those who bring you the most business.
- Ever notice that bad customers complain more and take up more time than great ones?Why give your time and emotion to customers who make up a small part of your business? Concentrate your efforts on those who are already converts and help them grow to another level.
- Do you have customers who create bad impressions about you and your organization simply because you are doing business with them? Beware of being tarred by association and concentrate on customers who share your company values and professional ethics.
- Are you doing business with someone who casts a negative light on your organization? Bad customers cause stress that you don't need and at levels that are difficult to manage. McKain gives the example of a customer who made everybody edgy as soon as they heard she was on the phone. Despite the fact that everybody would jump through hoops to try to keep her happy, it was an impossible dream. In the end, he fired her telling her that his business did more for the opportunity to work with her than they did for their very best customers and that is where they wanted to devote their efforts. As a consequence productivity was enhanced, his best customers got even better service and increased their business, and the bad customer came back and asked what she needed to change so they could continue to work together.
So, which customers do you fire? McKain suggests
- Eliminate the bottom. Cut loose those who take effort and time but aren't delivering in terms of sales.
- Eliminate the unprofitable. Some "good customers" are unprofitable to serve if they take too much staff time, ask for unreasonable concessions etc.. Remember, the goal for your business isn't volume, it is profit.
- Eliminate the obsolete. If you have only limited resources, don't spend inordinate time and money on customers from declining industries.
Which customers do you keep and continue to support?
- Support the advancing. Customers in growth industries may not be delivering high returns now, but your business will grow as they expand.
- Support the elite. Find a way to spend more time and resources with your most-profitable customers. Get to know their business better and, in many cases, they could expand their current level of business with you.
- Support the "cool." Sometimes your instinct tells you that you need to be attached to a customer because that customer has great potential.
The other three factors identified by McKain that organisations need to promote in order to avoid corporate amorphousness are:
1. Total Clarity about who and what the organization is - and isn't;
2. Continuous Creativity that is nurtured and supported at all levels and in all areas of the enterprise;
3. Effective Communication that makes maximum use of storytelling. On average, most of us receive about 2,500 messages each day from various sources (e.g. print and electronic media as well as interaction with others) and experience what McKain characterizes as "The Ebert Effect”. According to McKain, this effect occurs when people, from their perspective, "are inundated with indistinguishable choices, they perceive a product, service, approach, or experience with a specific point of differentiation to be superior."
Creating a company of distinction must be an integral in every action of the company. McKain reminds us that it must be embedded in the company from the vision to the execution. It is not a separate function. He challenges us to examine our people, our strategies, our processes and our abilities to create compelling relationships with our customers.
During tough economic times, the ability to stand out from the crowd is critical for long-term survival. Master the techniques McKain provides, and your company will not only survive; it will thrive.
