Marketing

Companies built on customer needs are all too rare

factory machine producing customized item based on customers' needs preferences style and requests

Originally published on December 22, 2016 as a Guest Column in The Globe and Mail: http://www.theglobeandmail.com/report-on-business/small-business/sb-managing/companies-built-on-customer-needs-are-all-too-rare/article33213377/

After years of fussing over KPIs, management by objectives and zero-based budgeting, I am pleased to see more and more business owners coming to grips with one essential truth: without customers, there is no business.

It sounds so simple. But companies that are designed and built around the needs of customers are scarcer than tulips in December. Businesses are started for many reasons – to put bread on the table, scratch a creative itch, fill a perceived need – but rarely to serve a specific client base. Companies have to learn to put customers’ needs ahead of their own, and it’s a journey that will last a lifetime.

Some of the worst offenders are startups – particularly the high-growth tech startups that Canada is counting on to generate jobs and export revenues. Typically started by engineers and scientists trying to solve specific problems, these companies tend to be product-oriented. When they encounter a setback developing a new widget, they are more likely to tackle the problem with new approaches or technology than by talking with customers to ensure they’re still on the right track. Result: many startups go through a series of jarring, risky “pivots” rather than continuous, informed iteration.

But there are signs of hope in the Canadian startup scene. More companies are joining incubators and accelerators to learn entrepreneurship from mentors, advisers and fellow entrepreneurs. And increasingly these groups are pushing the idea that success doesn’t come from the lab, but from meetings with customers.

In Ottawa, Carleton University’s Lead to Win program is one of North America’s Top 10 university business incubators, according to Swedish research and benchmarking firm UBI Global. Lead to Win was founded in 2002, following the bursting of the tech bubble, to help Ottawa-area technologists become business founders. That meant immersing them in the entire business community: professional advisers, seasoned coaches, service-providers, other entrepreneurs, suppliers, investors, and, yes, potential customers.

“The research is clear: high-achieving technology entrepreneurs operate in a business ecosystem that includes many different stakeholders, including partners, critical suppliers, and market channels,” says Dr. Steven Muegge, an associate professor at Carleton University, and one of the organizers of Lead To Win. Companies applying to Lead to Win go through a rigorous opportunity review process to ensure they’re ready to benefit from the Lead To Win ecosystem in ways that create value for themselves and for their partners, Muegge says: “If the founders are only thinking about the product, they’re probably not ready.”

Although Lead to Win stresses an “ecosystem” approach, its key success metric is sales: companies that earn entry to Lead To Win must demonstrate potential to generate $1-million in annual revenues within three years. “A good product is not enough,” Muegge says. “Revenues are the proof that what you’re doing is valued by customers.”

Program advisers and mentors help the entrepreneurs to identify prospects, build a pipeline, train salespeople, work on their pitch, and arrange customer meetings. Advisers may even sit in on early customer meetings. But what they’re best at, Muegge says, is demanding progress on all of a business’s sales activities. “We train and support, observe and provide feedback, and keep metrics, but the entrepreneurs are ultimately responsible for sales. They know that, on Monday morning, someone is going to ask how your sales call went. It creates accountability.”

In Waterloo, Ont., they’re setting high targets for customer development. Communitech, an industry-led technology association, has launched a six-month sales-acceleration program called “Rev.” Its goal: to give startups the vision and process to scale to $100-million in revenue.

With the aid of experienced product, marketing and sales executives, Rev helps client companies master all the intricacies of sales: segmenting and targeting markets, pricing, developing key messages, building buyer and user “personas,” perfecting their pitch, and building and training a focused sales force. Rev also tackles a challenge most startups overlook: finding large distribution partners to scale up sales quickly. “These are aspects of building the business that most of our founders have never confronted before,” says Communitech executive director David Chalmers. “At Rev, we build that structure out.”

Companies enter Rev with a product or service, and some sales. “Rev tries to work with the foundation they’ve created,” Chalmers says. “But sometimes, there is a reset. When you’re growing companies, what you did historically, might not be the same framework that is required to take the company to new heights.”

The biggest hurdle, he adds, doesn’t usually come from the market – but from the entrepreneurs themselves. “When CEOs come into this program, they have a good understanding of their business. Our goal in Rev is to work with them on the areas that require more due diligence and refinement, specifically those related to revenue attainment and growth. In other words, you need to see your business from the customers’ point of view, identify functional gaps, then build the necessary tools required for sustained growth.”

The good news is that once you accept that reality, your viewpoint shifts immediately. By the time Rev CEOs graduate from the program, Chalmers says, “Their go-to-market strategy becomes very transparent and their business confidence goes right through the roof.”

Open your eyes and ears to your customers. Success is waiting. Up there on the roof.

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Where’s your brand equity when you need it?

branding brand equity

I think that there’s something perversely poignant about Bell appealing to its Canadian consumers to go to bat for it with the CRTC. But, maybe I’m missing something. As I understand it, the CRTC is ready to grant Verizon the right to compete with Bell, Rogers and Telus for our mobile phone business. The Canadian companies are objecting. They feel that the CRTC is tilting the playing field in favour of an American mega-company.

In a sense, this multi-media advertorial campaign by Bell and by Rogers is a referendum on their brands. Do we care about them enough to support them against the threat of a foreign invader?

Both Bell and Rogers began as monopolies. The government granted them exclusivity and they both grew fat and happy. They thrived because consumers didn’t have a choice. And even after de-regulation of their markets, these are companies that have chosen to go for immediate profit rather than long term relationships. They have milked the Canadian cow for every dime they could squeeze out of it, and now, sorry for the mixed agricultural metaphor, the chickens have come home to roost. Bell and Rogers are turning to their customers for help and we are not coming to their rescue.

Is it because these are brands that don’t offer globally competitive pricing? Is it because the entire Canadian mobile phone marketplace is based on confusing and confounding contracts? Or is it because these are brands that haven’t earned our trust, admiration or loyalty?

And, about the argument that Verizon won’t create jobs in Canada? The last time I called the Bell Sympatico help line, I spoke to a gentleman overseas. You haven’t listened to me as your consumer, Bell and Rogers. Why should I come to your rescue with the CRTC?
Can you hear me now?

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What’s better than a great communication strategy? Conversation.

Originally published as a Special to The Globe and Mail
Wednesday, Mar. 13 2013

Fluevog-porter-shoe-1The other day, I was walking out of the office of an industrial manufacturer and one of its executives looked at my new briefcase and said, “Oh cool, you’re a Fluevog guy”.

That comment really made me think about the dynamic relationships that we form with companies and their brands today. It reinforced how certain, well-developed brands define you as a person to those around you. And, most importantly, it reinforced the fact that this status can and has been achieved by companies – big and small – like Apple, Zipcar or Fluevog.

As an advocate of branding and innovation, and a business practitioner, I try to maintain a measure of brand objectivity. But, for a minute, I’m going to put the shoe on the other foot, literally. I’m going to be the actual zealous consumer and use Fluevog Footwear as an example of a company that has progressively won my appreciation and affinity with innovative branding and wonderful products. (Full disclosure: they have never been a client of mine. I am simply a fan of the brand).

Founded in 1970 in Vancouver as a single, vintage shoe store, Fluevog now has 14 locations across North America and an amazing website where one can find this tongue in cheek corporate philosophy, ‘Moses used tablets, Picasso used paints, God used Moses, Alex G Bell used the telephone and John Fluevog uses shoes. Great minds of the past have used a variety of mediums to communicate their messages – since the beginning of time (or at least John) John has even been using the soles and foot socks of his shoes to communicate with the world.’ Compare this statement of purpose to the mission statements of most companies, and it’s evident that Fluevog has a pretty eclectic audience in mind.

Other than great shoes and briefcases, what compels me about Fluevog is its ability to connect on a whimsical and functional level with its customers. It has replaced a one-way communication strategy with what I’m going to call an open, two-way ‘Conversation Strategy.’ Today, a communication strategy can incorporate online dialogue tools. However, too many of us have simply carried forward the old “tell our story” approach to these new media, and that isn’t good enough.

Just being present on social media platforms isn’t enough to generate buzz and revenues. What Fluevog has managed to do is to use social media to seek out and attract kindred spirits to the brand. In addition to Fluemarket, a site where consumers can buy, sell or swap, Fluevog shoes, the company reaches out to potential designers through Open Source Footwear, where the best ideas are actually made into shoes and the designer given credit.

As a consumer, what distinguishes Fluevog from most companies for me is its passion for making its customers part of the journey. It engages rather than informs. It opens a dialogue instead of a monologue. And perhaps most crucial to Fluevog’s success… it lets its customers participate in and celebrate the creative process. So, not only do I own Fluevog products, I have also taken ownership of the company’s philosophy of making me a part of the conversion.

We may not all be as eclectic as Fluevog or as artistic. We may be a business-to-business manufacturer of industrial widgets versus purveyors of fashion-forward footwear and accessories. But, we all have a unique story to share. Not just about what we make or what we do, but how our business and our philosophies can enrich and engage our customers or our community. Creating a real conversation means connecting in a meaningful way. Not just about our products or the new innovative introductions that our company is bringing to market. That’s just a two dimensional conversation. What can make it 3D is by talking about the things beyond business that inspire us, like articles or books or trends or community events that help us to be better and more relevant people, leaders and managers. Fluevog inspired me by its approach to life in general, not just its shoes. It treats me like a sentient human, not just a paying customer.

Part of the conversion from communication to conversation is the ability to listen. Without the listening part, you can’t expect to know your audience and what inspires it. The days of speaking to our customers have been replaced by speaking with them. Conversation is the new cash. And in today’s era of social business creating an ongoing, engaging conversation is king. I’d like to invite you to be a part of the conversation by letting me know which organization has found a kindred spirit in you. How did the company engage, delight, involve and engage you in its mission?

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