It’s much easier to claim that you’re customer-focused than to actually demonstrate it in your day-to-day activities. In fact, most companies can’t even identify what these behaviors look like, much less consistently demonstrate them.

If you want a quick way to determine where you fall in the seller-focused versus customer-focused continuum, look at what you pay attention to, and in particular what you measure and reward.

For example, is your focus all about the numbers – sales volume, profitability, earnings or share price? Or is it all about efficiency – production costs, price per widget, productivity, leanness? If the answer to either of these questions is yes, then you are probably seller-focused, not customer-focused. I’m not suggesting that you stop paying attention to profitability and operational efficiency. Those are vital to maintaining your business. I am saying that those things are no longer enough. Such data is important – but only to you, not the customer.

Operational efficiency is important. But, customers don’t care how efficient your operations are; they only care about the end result – how well it produces the outcomes they want.

Quality is obviously important, but not the quality of the production process. What’s important is the quality of the end result. And, that quality can only be defined by the customer, not by you

Price matters to customers, but it’s not price per se, but value-for-money and cost to own or use that matters to the customer.

Change your focus or become a dinosaur

The seller-focused approach is an obsolete remnant from the Industrial Age, and the post-WWII production frenzy. Both were times of mass markets when the customer had limited options and no control. But, that model has already changed. Slowly over the years, power began shifting from the corporation to the customer, as more choices became available. But, in the past two years (with the birth of social media) we’ve seen a radical change. Power and control have been seized by consumers.

This fact is evident in the vast universe of consumer written product reviews and consumer blogs. The buying public now relies on those sources for information, rather than the one-way sales pitches delivered by the companies. Strangely, many companies have yet to realize this change. In order to capitalize on this new dynamic, companies must shift their focus!

The Risk. Continue to focus internally on production and profitability and you risk finding yourself doing a really good job producing something customers don’t want. You’ll have great profit margins for a product that no longer sells.

Conversely, when you shift your focus to understand customers and involve them in the design, development and marketing of products, you’ll be better positioned to meet current and future needs. When you proactively measure your ability to deliver what your customers want, you’ll be well on your way to becoming truly customer-focused.

What does the customer care about?

Research by Redline Advisors indicates that customers consistently look for four or five specific types of attributes in virtually all products, whether tangible or intangible:

• Ease of use
• Timeliness
• Certainty (consistency, accuracy, reliability, predictability, safety)
• Cost to own/use
• Variety/choice

In spite of that research, companies rarely measure their product attributes from a customer perspective. As a result, organizations are unable to proactively address customer wants and expectations. As those wants and expectations evolve and change, data-focused firms risk losing more and more of their market share. How willing are you to put that at risk?

Revisiting Rewards

In most companies, rewards are focused on production and volume. The more widgets you make at a cheaper price, the better. The more people you call on and the more widgets you sell the better. Again, there’s nothing inherently wrong with this approach or these kinds of measures. It’s simply that business has moved on and this type of measurement breeds and rewards goals that are no longer relevant.

Bringing it all together with the customer at the center
It is unrealistic to expect organizations to dramatically change overnight. That said, companies that don’t begin to shift their focus place themselves at risk of quickly losing customers. People tend not to buy from firms that fail to solve their problems or meet their wants.

One simple way to adjust your direction is to begin adding customer-focused measures. Rather than give rewards based on short-term goals, reward sales people based on their network of key relationships, the value-add they provide the customer or their contributions to a customer information databank.

A second way is to begin to think and communicate in terms of outcomes rather than products . So rather than focus on what the product is, focus instead on what it does. As Peter Drucker said “Customers don’t buy products, they buy results” or as we like to say – customers don’t buy drills, they buy holes.

And, a third way is to refocus marketing so it is accountable for results. Borrow a page from direct response marketing and continually test to improve results. What drives results? Delivering to the target market a product that those people want, and communicating the benefits in a language that they are comfortable with. Give them choices and initiate a dialog with them.

Customers are constantly looking for better ways to achieve the outcomes they want. If you as the producer continue to concentrate on the process of making widgets, or the mass marketing of those widgets, rather than on delivering high value outcomes, your future success is clearly at risk.

As our friends at Redline Advisors remind us, “Do you think customers will be buying your lamp oil after some enterprising Edison invents the light bulb?”

*This article was inspired by work done by Dar Schwanbeck at Redline Advisors in Edmonton, Alberta, Canada. Please see www.redlineadvisors.com and his article Seven Steps for Creating a Customer-Centered Culture.

1. It’s never about you. Always about the prospect.

2. The more you know/learn about the prospect, the more relevant you can show yourself to be to him.

3. Always give options that are relevant to the prospect.

4. Deliver your information in a specific, psycho-logical way.

5. Always gather information before you make any comments.

6. Always ask “linked” follow-up questions. They show your expertise and wisdom.

Social media is currently a buzz that is turning into a necessity. Firms that don’t start to use social media APPROPRIATELY will be seen as old-line firms that do not listen to their clients. See, social media is driven entirely by the readers. And, readers are your customers.

We could divide every firm into two parts: 1) the firm’s capabilities and 2) the firm’s credibility. Capabilities are products, features, technology – which are encapsulated in the formal marketing messages. Credibility is the firm’s character and qualities.  That is often encapsulated in the informal a corporate identity message. Who is the firm? What do they do? What’s their story?

Every firm has formal and informal messages. Traditional marketing is the formal message. If all you have is a sales pitch, you will lose big-time in the coming years.  What you say to people in friendly conversation about your firm is the informal message.  And, THAT is what you’d say in social media.

We have a new client in Houston. They do employee benefits – an old-line, traditional industry. I explained social media to the owner and he literally jumped over the phone. He had never considered how an informal message transmitted through an informal medium could be so important to him. In the next few weeks he and I will get together and develop a package of micro-messages that articulate the messages he wants to make about his firm.

We might develop 50 statements that his internal marketing person can then drop into various social media discussions. In that way, he builds a reputation for having great wisdom and relevant expertise.

Pam and I believe that many firms that don’t use social media just don’t understand it.   As in every new technology, it’s not about the damn technology!  It’s about People!  The technology is simply different types of gathering places.  Where are your future customers?  That’s where you need to start “lurking” and figuring out how to add value.

– Michael Lovas

I’ve had several conversations this week about what it means to have a meaningful dialogue with your customers.   It seems many companies mistakenly believe marketing is a meaningful dialogue. NOT!  “But we have blogs, they say, and we tweet!”  To which I respond – “And your blogging and tweeting is the same kind of one-way “push” message you’ve been using for years.”  It is not a two-way conversation and certainly not a rich dialogue.

Lest you think adding a blog, in an of itself, helps “connect you” or build trust, guess again.  According to studies by Forrester Research company blogs are one of the least trusted sources of information about a company.  Not only do blogs rank below newspapers and portals in the Forrester study, they rank below wikis, direct mail, company email, and message board posts. Only 16% of online consumers who read corporate blogs say they trust them. If you’re a corporate blogger or somebody who advises companies, you might want to pay attention.

And why don’t people trust company blogs?  My guess is because they quickly recognize the lack of authenticity and real dialogue.  We expect a brochure or a website or an ad to be marketing, but we secretly hope a blog isn’t.  If it “feels” like another marketing ploy, then our hackles go up immediately and any trust that might have been established is lost.

My advice to clients is if you can’t do blogs right, don’t do them at all.  And by “right” I mean a genuine conversation with real human beings responding to real customers.

When we talk about referrals, we’re talking about applied psychology.  It’s science in action!  And, the more effectively you apply it, the more rewarding your strategy will be.  Unfortnately, most sales people have not such strategy in place.  Duh.  If that’s you, let’s see what we can do to help you.  Think of getting referrals as simple psychology married to common sense and logic.

To turn your activities into a systematic strategy, just equip your current clients with the right language to use when they talk about you to their friends and colleagues. No politician goes into public without being well versed in his/her “talking points.”  All you’re doing here is giving the talking points to someone else.

The language you give them will include two connections: values and relevance. After all, you might share values but not be trained to help them. Or, you might be an expert in what they need, but possess vastly different values.

Ultimately, you want to give your clients a reason to talk about you with other people, and in order for that to be effective, they need to know what to say and how to say it.

Doesn’t that make sense?  Pam and I are writing a book on the psychology of referrals.  If you want to learn how to get more referrals, just send us an email:  michael@aboutpeople.com

Are you really creating value for your customers, or merely claiming to?  When we ask salespeople to say exactly how they add value, responses typically fall into one of three categories: 1) avoidance/no response;  2) A response based on a naïve (sometimes arrogant) belief that the product or service itself constitutes enough value; or 3) A description of pre-packed value as defined by someone in the corporate office with little or no understanding of real customers and their unique challenges. Suffice it to say, it’s a whole lot easier to claimvalue than actually create it.

Whose value is it, anyway?

Part of the disconnect lies in who defines the value.  If you believe that “you know best” and can decide what constitutes value for your customers, then you could be imposing your definition of value on them.  And, unless you’re a talented psychic, what you perceive as value and what your customer perceives as value are probably very different.

In the end, value is personal.  It’s a perception, like credibility and likeability.  And it’s not your perception that matters, the customer’s perception of value is the ONLY one that matters. Now, let’s look close-up at a more effective way to define value and present it.

You can’t add value to the customer until you truly understand your customer

Now, here’s the next wrinkle – You can’t add value unless, and until, you truly understand that customer. And we’re not talking about basic demographics or sales information, we’re talking about real knowledge of his/her business, industry, challenges and personal values and criteria.

If you find that maybe you don’t know as much as you thought about your customers, you’re in good company.  The fact is, few salespeople really understand their customers well enough to create meaningful value.  This is true in all sales but especially in high-end B-to-B sales.

Here’s what happens. Sellers often lose important sales because they lack credibility in the eyes of the buyer. And, the main reason they lack credibility is they simply do not understand their customer’s business.  Amazingly, those same sellers insist they are adding value.

It’s a simple fact of psychology; prospects are not going to listen to you pontificate about how important you are to them, or what you can do for them, once they recognize you do not understand them or their business. And, there’s no way to hide what you don’t know.

As Barry Farber says in State of the Art Selling, “You cannot relate to a man in business without understanding his business.  A man in the oil business wants you to understand the oil business, and what a drilling rig is, and what upstream and downstream means, and what crude and refined is, and what’s OPEC and domestic, and who his competitors are, and his recent history – has it been good or bad and why.  Too many salespeople don’t know anything about business, let alone the client’s business.”

For the rest of this article – click here.

Referability is the state of being highly referable or easy to refer. What makes you highly referable or easy to refer? Simple, it’s providing a service that is of high value to the people you want to attract.

But here’s the kicker. It’s not about whether YOU think you offer a valuable service, it’s whether the person you’re trying to attract perceives your service (and you) as highly valuable. It’s about how well you communicate your value.

Now it may seem like we’re splitting hairs here, but this is an important distinction. This distinction flavors your approach to referrals, and it dramatically impacts the results you’re likely to achieve.

Let’s start with a key principle of referrals: Most clients making a referral do so in order to help their friend or colleague, not to help the the person being referred.

At first blush, this may not seem like a profound statement, but it really is. Why? Because many referral efforts fail because they’re focused, whether consciously or unconsciously, in the wrong direction. They are focused on the benefit to the person being referred rather than on the benefit to the referee.

Think about it. When you ask for a referral, what do you say? “Can you share with ME the names of other people you know who might benefit from my services?” Or “I’d really appreciate if you could tell your friends about ME.

What does it mean or look like to shift your focus? It means you focus on what you can do for the friend or colleague referred rather than what the referral means to you. In terms of specifics it means you understand where your value intersects with the prospect’s needs and wants and you can effectively communicate your value proposition, the kinds of problems you solve for people, and where you do your best work.

It means ensuring that your best clients not only understand this but can easily and effortlessly communicate your value to their friends and colleagues. You are far better served employing a “pull” approach where you focus on making yourself a resource that clients will be eager to share, rather than a “push” approach where you focus on collecting names or directing clients to tell all their friends about what a great guy or gal you are.

In the past few months, I’ve become obsessed with Social Media Marketing. It’s very much like direct marketing (direct mail), but very different, too. I squeezed my brain trying to pinpoint the essence of the difference. This is important because until you get a handle on the psychological differences, you can’t be effective.

Here’s what I’ve discovered:

1. SMM is a totally different philosophy. It focuses on building relationships, not just buyers. This relationship-building process turns out to be the same one we describe in two of our books: Axis of Influence and the 5 Levels of Rapport.

2. Unlike every other marketing medium, SMM is totally dependent on good, clear writing. No graphics, no photos, no colors. Just good writing.

Question: what do you see as the differences?

- Michael Lovas

Since 1986, the common advice for getting referrals is ask for them. It took me years to figure this out – It’s wrong. It’s bad advice.

In this article I will share some of the research that clearly proves the folly of asking for a referral. Plus, I’ll share with you some guidance in developing an approach that is much more effective.

Fact Set #1

The following comes from a 2008 report titled Investor and Industry Perspectives on Investment Advisors and Broker Dealers.

FACT 76% of Investors Found Advisors through Referrals
Regardless of the types of services received, the most common way respondents found their current advisor was by referral from a friend or family member.(45.6%) The second most common way was by a professional referral (30.5%).

FACT Investors seek Attentive, Likeable and Credible Advisors
When asked “What do you like about the services you receive from your advisor” the types of comments most frequently mentioned fell into 3 categories:

1. Accessibility or attentiveness (“she stays up to date on my issues,” “is there when I need her”)
2. Relationship or personality (he’s “personable” or “friendly,” “listens, asks good questions, understands my needs”)
3. Expertise (she is knowledgeable about ” or “knows her business”)

There are really only two sides to every client relationship — the personal and the professional. The more important side is the personal. Unless that side is addressed effectively, you could give your clients the impression that you consider them nothing more than a number. And, that number would be their contribution to your income statement.

FACT Investors dislike advisors who fail to keep in contact
When asked why they disliked an advisor, the most common type of comment was in accessibility or attentiveness category (“lack of contact” or “doesn’t call me frequently enough”). One other notable negative comment commonly cited refers to the advisor’s focus (“I don’t think he has my interests at heart.” or “He is trying to make money for himself” or “Often tries to sell securities that the brokerage firm is pushing.”

Most clients won’t call you on it. People are loath to cause stress. They will merely nod and make you think they’re in agreement with you. Then, they will log it into their memory and move you from the “referable” category to the “un-referable” category.

FACT Investors are looking for an advisor they can Trust
Trust of the individual financial service professional was the most cited feature of what investors look for in a financial service provider.

Trust of the individual was cited as more important than trust of the firm for which that individual works.Who you are as a person, your personal congruence, is much more valuable to your clients than the firm listed on your business card. Your credibility is the most important asset you have. And, it’s the glue that bonds all the other elements together to make you referable – or not.

CONCLUSIONS:
Based on the research provided by this research, we see that most people who are looking for an advisor end up finding the one they hire through a referral from a friend or relative. The people making the referral are feeding new business only to a certain type of advisor — one who keeps in touch with them, is accessible to them, has demonstrated trustworthiness, and one who has that client’s best interest at heart. In our world, we call that Credibility because it effectively and successfully covers both the personal side and professional side.

With that in mind, my prescription to you is to create an effective system for keeping in touch with your clients, at least with your best clients. Mix your contacts with personal visits, lunches, small gifts and greeting cards.

Approach these touches personally. Think of it as individual communication or one-to-one marketing. If you can make those personal communications relevant to each person, you will have taken your first step into the realm of “Credibility Marketing.”