STRATEGY CENTRAL

Very similar to the ideas in Peak: How Great Companies Get Their Mojo from Maslow, Human Sigma takes a look at four levels of emotional attachment using a Maslovian pyramid.  Basic idea?  Customers who are fully engaged (as opposed to just engaged) deliver a much higher share of wallet.

But what are the entry level commitments that a customer is looking for?  Simple confidence in your product or service and a sense that you have integrity.  Isn’t that enough?  Actually…no.  As is being found in one study after another, entry level engagement doesn’t retain a customer.  It’s what you must offer to play at all.  If you want to retain customers you’ll need to provide much more.  In fact,

"It’s absolutely critical to recognize that if a business’ ultimate goal is sustainable organic growth, these measures simply aren’t high enough.  We’ll need to aim higher (p. 88)."

That is a line that resonates with me.  That’s what we all dream about.  But is it what we’re all aiming for?   

There’s a commercial on these days for Chase Bank…and the song always makes me want to listen to the whole song.  So here it is:

‘Course if you want some comedy you could listen to the David Hasselhoff version:

5:00 pm.  67°F.  39% humidity.  Beautiful day in Southern California.  Really gorgeous.  New blooms on the Pink Pearl Bougainvillea.  Weather just about perfect.  Got a brisket in the smoker.  A little chicken too.  Mark’s Killer Baked Beans and Debbie’s great Au Gratin Potatoes in the oven.  Maybe that’s our homage to Alexandre, our foreign exchange student?  We’ll see if Au Gratin potatoes are even French.  After all…the french fries turned out to be a little bit of a fake out!

By the way…we’re smoking a brisket…none of that California tri-tip cut.  This is the real stuff.  Like I told the butcher…it’ll be speakin’ Texan by around 6:30.  Debbie’s secret rub made sure of that.  Now if we just had the Coca-Cola Cake!   

This is Al. He’s from France. You can see by the distinctive lack of a cone that he’s not from Southern France. He’ll be with us for a couple weeks. Even though the exchange rate is tough right now, you still get a whole kid…

One of the great advantages to reading widely is that you come across some ideas that you just would never find otherwise.  Here’s an example.  I love to read Seth’s blog.  Seth Godin is consistently onto things that really apply to the world I live in.  Great stuff.  And one of the many reasons that I love reading Seth is that he regularly links to ideas that he finds cool.  So today, I had the chance to trip across Kevin Kelly’s post Better Than Free.  Fascinating.

Basic idea?  In today’s world lots of stuff "wants" to be free.  Content of all kinds.  Music.  Video.  Print.  They all really "want" to be free.  What does that mean?  Everything is very copyable.  Very hard to protect.  As Kelly writes:

When copies are super abundant, they become worthless.  When copies are super abundant, stuff which can’t be copied becomes scarce and valuable.

So if you’re in the business of authoring content, how do you get paid?  How will you sell anything if everything wants to be free?  Kelly’s idea?  Some things are not copyable.  Need a for instance?  How about "trust."  Trust can’t be copied.  What are some other uncopyable things?  You can take a look at Kelly’s post right here.   Good stuff.  Well worth the read.
 

What if you could divide your customers into four categories based on their engagement?  Maybe the four categories would be fully engaged, engaged, not engaged, and actively disengaged.  And what if you could learn some keys to producing a greater sense of engagement, possibly even help a growing number of engaged customers move up to fully engaged?  Think it would be worth the effort?

What if you learned that "customers who are fully engaged represent an average 23% premium in terms of share of wallet, profitability, revenue, and relationship growth than the average customer (Human Sigma, p. 95)?"  Think it would be worth the effort?

Debugging the Concept

Before we go any further, let’s take a moment to debug the concept.  First, we might need to go back and talk again about the concept of "customer."  Don’t be so quick to retort that you don’t have customers.  That you’d never think of your members (constituents) as customers.  Get real.  They’re the same thing!  No matter what business you are in, you have a product that is theoretically designed for an end user.  And that end user, no matter what you call them…is a customer.

Second, it doesn’t matter if you’d automatically say that your organization isn’t about things like "share of wallet" or "profitability."  Truth is, whether you admit it or not your organization is about those things.  You may not think of it in those terms, but down deep those concepts still matter.  Take "share of wallet" for instance.  You might think that’s a purely business oriented concept.  But isn’t it really an indication of priority?  After all, "wallet" is a pretty good indication of "attention span."

Back to the Idea:

Now that we’ve gotten real about whether what we have are customers and what we want is an increased share of wallet…wouldn’t it be a good thing to figure out how to increase the number of fully engaged customers?  Isn’t it at the heart of what we need to be doing to try and help the engaged group become fully engaged?  Yes!

But the question has to be, "How can we do it?"  You’ll have to stay tuned.  We’ll be working on this for a while.  It’s too important.  Way too important.  And the cool thing is, this is where Human Sigma is going.  Pick up a copy and tag along.  You can get a copy right here.

Side Note: It’s interesting to me is that this is actually one of the possible explanations for the findings in Willow Creek’s Reveal study.  Couldn’t full engagement be represented that way?  Just a thought.

Think "satisfaction" is enough?  Turns out that satisfying your customer is only the entry-level bet, just enough to get you in the  game but not enough to keep playing.  As we learned in Peak, customer satisfaction is not enough.  By now, we all recognize that satisfaction is offered everywhere.  Very satisfied is what we’re going for.  Right?  How ’bout noooooo.  We’re actually looking for something even beyond or distinct from very.  How could that be?

Taking another look at Human Sigma, I came across this section:

Empirical results from a large and growing number of case studies suggest that customers who are extremely satisfied—those who provide the highest rating of overall satisfaction with a company’s products or services—can be classified into two distinct groups: those who are emotionally satisfied and those who are rationally satisfied (p. 76).

What’s the significance?  Customers without the emotional edge are still more likely to defect.  Emotionally satisfied customers "buy more products, spend more for those products, and return more often or stay longer with the business (p. 77)."  Rational customers?  "Behave no differently than customers who are dissatisfied (p. 77)."

You’re killing me!  Are you telling me we need to get our customers all the way to emotionally satisfied?  Apparently the answer is "yes".  How do we do it?  Stay tuned.  Or pick up your own copy of the book.  You can do that RIGHT HERE.

It’s early…but they are back!  See you in June baby!

There’s nothing like a session that results in a whiteboard full of great, brilliant ideas.  But if they stay just that, brilliant ideas alone don’t lead to change.  Actionable ideas lead to change.

Tripped across this great paragraph over on the Tom Peters blog today.  Thought you’d resonate with these words:

Our clients want to believe a brilliant idea can magically make a
difference. Need to fill your leadership pipeline? Hold leadership
training classes. Not as efficient as you would like to be? Educate the
organization in the Toyota Production System. Collaboration a problem?
Maybe some teambuilding activities. These are all good ideas and good
choices. They do not become actionable without the hard work required
to unfreeze old behaviors, remove existing organizational barriers,
build new reinforcement mechanisms into the system.

All in favor of change?  It takes more than brilliance, doesn’t it?

If you didn’t catch the trade news…Pau Gasol to the Lakers!  As my son said…for a bag of balls!

There were a lot of great lines in the news over the weekend.  I thought the best one was from Mark Heisler’s article in the Times.

"In 28 NBA cities, there’s reluctant admiration and/or consternation as
the great preening purple-and-gold darling-of-La-La Land arises once
more."

Read ‘em and weep baby!