Alan Hale - c3centricity

The 23 Keys to Creating Raving Fans Part 2

Posted on August 3, 2021May 24, 2023 by Alan Hale

This is the second part of “The 23 Keys to Creating Raving Fans” post by Alan Hale from CMG (Consight™ Marketing Group) in Chicago. Don’t forget that you can download the full white paper using the link at the bottom of this post.

In addition to using NPS, we also like to use other diagnostic questions to see how we can improve. In general, it is critical to get the importance level of each function as well as our performance score. If the customer is willing to discuss the competition, the insight will be valuable in how you compare to the competition as well as to the best in class vendor. They also will give you specific actions to improve.

The Customer Loyalty Wheel™

The following is how we look at customer satisfaction, loyalty and creating and Raving Fans.

It all begins with the trust and alignment and ends in creating Raving Fans.

8. A few criteria are explained in further detail.

Trust. If the supplier continually breaks promises they have made, there is no trust. The relationship will not deepen, and in fact might eventually be terminated.

Quality. Quality is an ante to play the game. If your product does not perform according to your specifications or breaks down too often, the account will find another supplier. We had a client who moved their production overseas to reduce costs and increase margins. The quality was very poor and the product frequently broke. The client could not understand why they were losing business!

Risk. Pre-sale, it is important to reduce or minimize the risk factor so the customer is more likely to buy. When you buy the wrong toothpaste at home, your family might be disappointed. When you buy the wrong CRM (Customer Relationship Management) or ERP (Enterprise Resource Planning) system at work, you could be fired. When you sell a product or service new to the market, find out how to minimize risk. This could be having someone on site, providing results from an independent lab, or showing a list of positive testimonials from well- known companies.

Be easy to do business with. Don’t be so difficult to deal with. Exchange the defective product, have customer service solve the problem, issue accurate invoices. Train customer service, give them the power to make decisions up to a certain level. Everything being equal, a customer would rather give business to someone who is easy to do business with. Conversely, if you are 10% of their purchases and 50% of their problems, expect to be terminated. Don’t be a PITA (a pain in the arse). Everyone has problems. Make it easy to resolve. There is research which states customers are more satisfied when a vendor heroically solves a problem versus having no problem at all. We recommend you do not try to game the system i.e. by making artificial problems you know you can heroically resolve.

Be responsive and proactive in communications. We will give … Click to continue reading

The 23 Keys to Creating Raving Fans Part 1

Posted on July 27, 2021August 23, 2024 by Alan Hale

This week we have another guest post from Alan Hale of CMG (Consight™ Marketing Group) in Chicago. Exceptionally, I am publishing it as two separate posts because its length and value deserve the detail and effort he has put into it.

I have been fortunate to have managed over 250 voice of the customer projects in B2B over the last four decades, with over 50 engagements on customer satisfaction and loyalty. These projects were across a wide variety of industries.
Which weight machines to develop the quadriceps? proper hack squat form hotel du palais (weight room / cardiotraining room), biarritz (64200) – pyrénées-atlantiques.
During this time, I have seen some great successes and some tragic failures in trying to make customers Raving Fans. Based on this experience, I wanted to share some best-in-class insights on how to make your existing customers Raving Fans.

According to industry research, acquiring a new customer is 5 to 7 times more costly than keeping your existing customers, which is why you need to concentrate on keeping your customers and making them Raving Fans. While customer acquisition is indeed important, so is holding on to your customers and making them Raving Fans.

There is a lot of information on the media and LinkedIn about customer acquisition such as website development, SEO, ad words, effective selling and phone calling etc. Very little has been written on keeping and serving existing customers. Other industry research states reasons why accounts churn. Very seldom is the reason for defection price, no matter what the sales reps tell you. It is a breakdown in account service, the account is not being serviced at a level of their expectations.

First, let’s define a Raving Fan. The term was coined by Ken Blanchard in a book called, Raving Fans published in 1993. A Raving Fan is a customer, who is excited about your product, service or solution. Think of Apple and Tesla. These companies have waiting lists for products and sometimes have long waiting lines for a new product. They are your brand advocates and are an extension of your brand. The characteristics of Raving Fans are as follows:

They are less likely to churn to a competitor
They are extremely loyal
They will buy more i.e. you have a higher wallet share
They are more likely to buy new products, services or solutions offered in the future
They are usually (not always) less price-sensitive and therefore more profitable
They may give insight on possible new products, services or solutions to introduce
They may refer you to other friends and colleagues and/or provide testimonials

Most of this discussion is applicable to both B2C and B2B; with the exception of the 80/20 rule which is explained later. The following discusses the issues and hurdles in creating Raving Fans.

1. Senior Management Paradigms and Expectations. Senior management has two dangerous paradigms. The first paradigm is “we know what our customers want. After all we have been doing this for many … Click to continue reading

24 Factors to Consider in Pricing your Product, Service or Solution.

Posted on June 3, 2021June 7, 2024 by Alan Hale

We have a treat for you today. It’s a guest post from the highly respected global expert on customer centricity, Alan Hale of Chicago.

He writes about the importance of getting pricing right and generously shares twenty-four (!) factors to consider when pricing your product, service or solution.

Over the past several decades, I have managed over 250 projects, and am currently serving as the President of Consight Marketing Group. During that time, I have noticed that some of these clients experienced customer erosion or profit sub-optimization due to poor pricing practices. The following article discusses some of the issues seen, as well as other pricing challenges described in other marketing journals and textbooks.

Pricing needs to cover your costs. Pricing needs to cover COGS (cost of goods sold), and contribute towards an allocation of fixed costs like rent, utilities as well as profit. Selling a high volume of products does not guarantee a profit. “We will make it up in volume” does not make sense.

It is related to capacity, the economic supply and demand. If you have strained capacity like oil pipelines, prices are substantially raised. Conversely, if a contractor has no backlog, they might be willing to discount prices. For you econ majors, it is the intersection of the Marginal Revenue and Marginal Cost curves.

Price according to the Market Lifecycle. Early adopters in the growth stage pay more than laggards in a mature or declining market. A major computer manufacturer used to price their line of PCs 10% higher than the competition due to their brand, perceived status and support. As PCs became more commoditized, the pricing premium came down. If you have a well-known brand name with a high amount of loyalty, you can charge a premium. If it is a mature/commodity item it is difficult to charge more. Would you pay 50 cents more for a pack of nails on the retail shelf?
Price insensitivity is positively correlated with ROI. Cost is not as important in the business arena if there is a high ROI. Look at ERP (Enterprise Resource Planning) systems that can cost millions upfront over the first few years with consultants and implementation. But it saves the organization tens of millions over many years.
Pricing depends on the amount of the cost of the components versus the total cost of the product. Bottling companies fill bottles with cola or other liquids. These polypropylene bottles are significant to the costs, and contract prices are negotiated heavily every year or contract period.

Pricing is dependent on selling to the MRO (maintenance repair and operations) channel or OEM (original equipment manufacturer). Because of volume OEM’s can demand much lower pricing. Car manufacturers can buy tires at a much lower price than the customer off the street for example.

Pricing is related to value. I have been privy to many research and consulting proposals. Some companies do a cost-plus calculation, the labour will cost so many hours, at an average

… Click to continue reading

How to Innovate Successfully (What You’re Still Getting Wrong!)

Posted on July 10, 2017October 4, 2024 by Alan Hale

I’ve written a number of posts on innovation and yet I still get client requests to further help them innovate successfully!

One of the favourite articles here on C3Centricity about the topic is “Improving Ideation, Insight & Innovation: How to Prevent Further Costly Failures.”

Despite all the great ideas and tips it includes, I believe there is still more I can share. That’s why I am adding to last week’s post on marketing in general, with a post specifically about improving your innovation. In particular, I wanted to help those of you who may be unable to complete all the “best-practice” actions I recommend, through a lack of resources, be it time, money or people.

Not every organisation has access to large market research or marketing departments and extensive budgets. In fact, in many companies these roles are being handled by one and the same person with very few resources; is that your case? If so then you will definitely find this post of interest. But even if you’re one of the luckier ones with a good size team and plentiful budget, I’m sure you will still find value from the ideas shared.

Let’s start by taking a look at some of the reasons why new products fail. And then we’ll identify some creative ways to completely eliminate them from your next launch. Sounds good? Then read on.

Why your innovations fail

Did you know that the proportion of product launches which fail every year is generally “guesstimated” to be somewhere between 74% and 95%?

Why CEOs accept such abysmal levels and accept their organisations’ continued use of the same old innovation process is beyond me!

In this article in HBR, Saul Kaplan, author of “The Business Model Innovation Factory” shared five important reasons that explain why companies fail at business model innovation:

CEOs don’t really want a new business model.
Product is king. Nothing else matters.
Cannibalization is off the table.
ROI hurdles are too aggressive for fledgeling models.
Rogues and renegades get no respect.

I find these five reasons spot-on. They are all based on fear of getting outside the organisation’s comfort zone. If you can identify yourself with even one of these, it might explain why your innovations are not as successful as you would like them to be.

Successful innovation involves change, and human beings don’t like being out of their comfort zone. It may involve challenging accepted ideas and ways of working too. No wonder so many innovations fail.

And with such odds, I think it is incredibly courageous to start a whole company based around just one new product idea, but that seems to be the norm for startups in many areas today.

Taking the organisational reasons mentioned above, I’d like to detail ten more ideas I have found in my work with clients as to why innovations fail:

#1 The process itself: Innovation is by definition a creative process, but many organisations use a well-worn, restrictive and uncreative process to develop … Click to continue reading

Does your Organisation Really Need a Market Research Department? And in the Future?

Posted on October 11, 2013October 30, 2024 by Alan Hale

There’s been a lot of talk recently about New Marketing; how communication is now all about engagement, how the consumer is boss and such like.

But there has been very little said about a New Market Research Department! If you’re concerned by this situation, whether you work in marketing, market research or a completely different area, then read on for some thoughts on how this situation can and must change.

Earlier this year I wrote about the future of market research / insight departments and what researchers need to do within their organisation to improve their image and perceived value. This week I want to take a wider look at the profession in general.

Current Perception of Market Research

According to Wikipedia, Marketing is “The process of communicating the value of a product or service to customers, for the purpose of selling the product or service. It is a critical business function for attracting customers” The definition of Market Research is “Any organized effort to gather information about markets or customers. It is a very important component of business strategy”.

What is interesting in comparing these two definitions is the difference in appreciation of the value to business of the two. Marketing is said to be a “critical function”, whereas Market Research is said to be “very important”. Perhaps this is why Market Research Departments continue to be hammered, their budgets are constantly under pressure and their value to the business is questioned.

Well, things are about to change, or at least there is an opportunity for this, if researchers take up the incredible chance offered to them in today’s world of information (over?) abundance. You can’t continue to do the same old same old when marketing, and more importantly the consumer, is clearly on the move.

What Business gets from Market Research

I think that one of the biggest problems that Market Research has (continues to have) is that Marketing and Management in general, find it too complex. What is often delivered from market research, BY researchers, tends to be numbers and findings, not underst anding, insight and recommendations.

We no longer need market research to share the numbers and information today. More and more often, these are coming automatically into companies from an ever-growing number of sources, and a lot of it is even in real-time, something market research results never were! Think sensors on products, GPS on smart phones, retail purchases with debit / credit / loyalty cards, social media interactions …. DataShaka recently wrote in their The Lab an interesting perspective on data management and information sources which you might want to check out.

That’s a lot of data; indeed Aaron Zornes, chief research officer of The MDM Institute, was recently quoted in Information Management as saying that “a typical large company with (has) 14,000 or so databases on average”. And most of that data will be just sitting around in IT storage systems, rarely reviewed and even … Click to continue reading

Author: Alan Hale