customer-centric

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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Building a customer-centric brand for community retail

When I started Spyder Works almost 25 years ago, I was in the making promises business.  The firm created design, marketing strategy, advertising and promotion in support of clients’ brands.  Back then, I considered my job well done if I could attract legions of new customers into their stores.  After all, that’s what the ‘making promises’ business is all about in retail.  Attracting well-qualified traffic. The idea was that compelling advertising and promotions along with great store design and signage would delight our clients’ customers and build their brands.

As my relationship with retailers grew, I had the opportunity to travel from community to community and store to store.  What I quickly realized was that some stores have an important social role beyond just places to shop.  These stores are also like informal community centres where you run into friends and acquaintances, where you can chat and catch up, where you can make plans and stay in touch.

During my travels, and particularly during store visits across Canada, I saw first hand how powerful a sense of belonging can be.  Building and nurturing inclusive communities is one of the things we do best in Canada, which is really a vast connected landscape of tight-knit neighbourhoods.  Main street communities in Canada have many faces and are as diverse and unique as their urban counterparts. When main street communities succeed, the nation succeeds.

Community stores not only offer a welcome sense of belonging, they are also good for  business. 

After all, the longer people linger in a store, the greater the chance that they will buy more.  A welcoming store also increases the probability that your customers will return and develop a loyalty to your store and a stronger relationship with your brand.

I realized that all of the branding work you do, no matter how clever, won’t keep a customer coming back if the experience in-store doesn’t reflect the customer’s expectations on all levels of experience.  To properly serve our retail clients, Spyder Works also needed to be in the ‘promise keeping’ business.

How do you build a brand around the culture of ‘promise keeping’?

Businesses have to take it upon themselves to foster a sense of close-knit belonging in any environment whether it’s in a big city or a small town.  They need to evoke the sentiment of old-fashioned “Main Street” culture.  Retailers, marketers and agencies have the same goal when it comes to connecting with consumers, simply, to build a passionate community of customers that engage regularly with a brand.

The success of your customer relationships depends largely on how well you are able to engage your community.

Community stakeholders’ participation can help you shape your business to ensure you are responding to local preferences.  In community retail, the members in your community are not looking for just a cheque to support local causes, events or sponsorship – the community is looking for your participation, engagement and involvement.  How committed are you to where your customers live and work?  Ideally, you should be involved with your community from an early stage engagement; this will help you to form lasting relationships with community members to ensure a sense of belonging in a neighbourhood that everyone can be proud of.

In contrast, in all retail, where your front line people are face-to-face brand ambassadors, employee turnover can leave your brand perilously exposed.   Without a solid foundation, your brand is at risk of not keeping the promise that it communicates to everyone.  That’s why, at Spyder Works, we feel that it’s important to look at branding from both sides of the coin, outward and inward facing.  This insight has lead us to design learning programs and workshops to extend your brand to the in-store experience, embracing your corporate values and your mission with the people responsible for keeping your brand promise with your customers… your front line team members.

Retailers need to complete the branding circle to survive in the economy of relationship building. 

At Spyder Works with our retail clients, we have created ambitious brand strategies that more accurately capture the essence of brand by embracing community and engaging customers.  In this hyper connected world we are supporting our clients on the front lines of their stores, we can boldly claim that we’re no longer a half-branding company.

The secret to building a customer-centric brand for community retail is like maintaining a long lasting relationship with your close friends. Keep your relationship transparent and genuine.  Show up, stay in the moment, stay in touch, encourage and support them as they grow with you.

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Innovation Culture

There is great interest today by organizations in developing innovation cultures.  And why not?  Creating a mechanism that perpetually harnesses the internal brilliance of your employees is a powerful thing.  Not only is this impactful for employee engagement but, done right, it will continuously delight your customers who will in turn delight your bottom line.

Creating an innovation culture is viewed by most as a daunting undertaking.  While characterized by complexities requiring detailed planning and skillful execution, it doesn’t have to be overwhelming.  Here are some simple techniques that can get you started.

Step One:  Have a Compelling Vision

Having a compelling vision starts with being crystal clear on what your future destination is, including the path to achieve it.  While the future destination should be aspirational and encompass emotional attachment, it must be accompanied by step by step plans outlining the direction in detail.  Your compelling vision should be reflective of your brand and resonate equally with your customers and employees.

Step Two:  Communicating the Vision

Once the vision is created and detailed, a robust communication plan needs to be developed and delivered to begin cascading the vision throughout the organization.  This goes far beyond sending a series of e-mails through various levels of your company.  A successful communication plan includes identification of the types of stakeholders as well as consideration for the various mediums, frequency, timing as well as messaging.  The heart of the communication should address the emotions that customers and employees will experience on the journey to the future destination.  Unaddressed emotions, good or bad, can stall the best planned initiative.  Communicating the vision is one of the first steps in creating a shared goal.

Step Three:  Always Keep the Customer at the Forefront

Like any journey, as your plan for creating an innovation culture unfolds you will face opportunities requiring pivots.  When faced with these junctures, be sure to always keep the customer in mind when determining the best route.  It is easy at times to become distracted by shiny objects along the way.  If you truly understand your customers and use them as the talisman for decision making, you should remain centered on the correct path.

Step Four:  You Just Have to Ask

Part of creating an innovation culture involves tapping into the hearts and minds of your employees.  And who better to understand how to delight your customers then those who work most closely with them.  And the best part, all you have to do is ask the right question to be able to mine this greenfield of opportunity.  Time and time again I am amazed at how few organizations have learned and are utilizing the powerful technique of asking questions.  If you haven’t yet tried this, here’s one to get you started.  Ask a front line employee “If you had a magic wand and could change one thing to make our customers’ lives better, what would you do?”.  Ask it often enough and you’ll begin to see where the pattern of innovation opportunities exist.

Step Five:  Celebrate Successes

Creating an innovation culture takes time.  Along the way you need to mark the milestones with celebrations.  This will help refuel your employees and reinforce the new behaviours you are trying to operationalize into your daily routines.  When creating an innovation culture you will need to celebrate near successes as well as the slam dunks.  Positively calling out selective “almost” wins will help reinforce “trial” behaviour and increase tolerance for risk by reducing fear of failure.  All essential characteristics of an innovation culture.

Creating an innovation culture is one that engages your employees to continuously delight your customers.  While not a simple undertaking, the destination is worth the journey and these five steps will help you get started.

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