5 Genius Questions for Your Customer Survey

Every business owner or leader must study his/her customers (or potential customers for those in start-up or new product launch mode) and gather as much potentially useful information about them as possible. The first and greatest commandment of business is “know thy customer” and the research must continue for the life of the business. We can never stop learning.

The important matter of measuring customer satisfaction and customer loyalty became the life’s work of Frederick F. Reichheld, now an Emeritus Director of the Boston, MA consulting firm Bain and Company, also the founder of its Loyalty practice and author of The Ultimate Question: Driving Good Profits and True Growth (2006). Reichheld reported that it took two years of studying customer satisfaction and customer loyalty survey responses and correlating those responses to actual customer behavior—i.e., purchases and referrals made and then linking customer behavior to growth—to discover that a single survey question can reliably predict sales revenue growth.

The big reveal question does not directly address either customer satisfaction or customer loyalty. Rather, it simply inquires about customers’ willingness to recommend a product or service to someone else. While other factors besides customer loyalty play a role in driving a company’s growth—economic or industry expansion, a product or service line that reflects the needs and tastes of current and prospective customers, good financial management and so on—repeat business and good word of mouth are indisputably two of the most important drivers of sales revenue growth and in general, no company can be profitable without them.

Loyal customers talk up a company to friends, family and colleagues. Their recommendations are among the truest demonstrations of loyalty because the customer puts his/her own reputation on the line when making them. Customers will risk their reputations only if they feel intense loyalty.

The customer experience is, I am certain, another significant factor in a customer’s willingness to recommend a business and many actions contribute to that experience. Marketing Departments point survey questions toward metrics they control, such as brand image, pricing and product features and benefits. But a customer’s willingness to recommend a business is also connected to how well the customer is treated by the front line employees—are they friendly (but not intrusive)? Are they helpful?

According to Reichheld’s findings, customer loyalty differs subtly but substantively from customer satisfaction. Gauging loyalty by way of the usual customer-satisfaction survey questions is not helpful. His research indicates that customer satisfaction lacks a consistently demonstrable connection to customer behavior and growth. Reichheld says it is difficult to identify a sufficiently strong correlation between high customer satisfaction scores and outstanding sales growth. “The question ‘How satisfied are you with (company X’s) overall performance?’ is a relatively weak predictor of growth,” he says.

One of the main takeaways from Reichheld’s research is that companies can keep customer surveys simple. The most basic surveys, providing that the right questions are asked, can allow companies to obtain timely data that is actionable. Reichheld goes so far to assert that a customer feedback program should be viewed not as “market research” but as an operating management tool. Below are five of Reichheld’s survey questions.

  • How likely is it that you would recommend (company X) to a friend or colleague?
  • How likely is it that you will continue to purchase products/services from (company X)?
  • How strongly do you agree that (company X) makes it easy for you to do business with it?
  • If you were selecting a similar provider for the first time, how likely is it that you would you choose (company X)?
  • How satisfied are you with (company X) overall performance?

Thanks for reading,

Kim

Photograph: (l-r) Phyllis Povah, Rosalind Russell and Joan Crawford in The Women (1939). Sales girl Crawford is showing her customers the fictitious fragrance “Summer Rain.”

Advertisements

Shaping the Customer Experience

For all products and services, from the lunch you buy at a favorite restaurant to the purchase of a luxury automobile, the experience of the buying process matters more than ever, it seems. “Service with a smile” barely scratches the surface today. Buying a product or service has officially become a journey, a series of experiences that Freelancers and business owners must create and perfect. There are three phases:

  • The pre-purchase experience, when prospective customers browse advertisements, search company websites and scrutinize social media feeds and online reviews to obtain information about product/ service choices and prices to confirm or modify their expectations.
  • The purchase itself, when product or service choices are finalized, size and color are selected and payment is made. All aspects of the purchase process must be convenient and seamless.
  • The post-purchase experience, as needed, where typical customer service matters such as the (on-time) delivery date will take place and resolution of questions or problems must be quickly and expertly resolved.

As you and your team take steps to design a website that keeps browsers visiting pages and has a good (sales) conversion rate, present across social media channels a story-telling narrative that engages visitors and builds credibility and has excellent and reliable customer service protocols, below are a few things to keep in mind:

Customers want information  The pre-purchase phase continues to grow in importance.  Prospective customers want to know about you and also your competitors, so that comparisons can be made and the product or service that appears to offer the best value will be purchased.

The buying process may begin with an advertisement that you placed.  If your product or service piques interest, the pre-purchase phase will progress to a visit to your company website.  While on the website, social media icons will be clicked and the story you tell on those platforms will be read with interest.  Pre-purchase research often concludes with a visit to online reviewing sites, such as Trip Advisor and Yelp, to confirm the value of your organization, product, or service.

Customers want convenience.   It is imperative that doing business with your organization will be no-stress and easy.  If you don’t have the best turkey sandwich in the neighborhood, you can make up for it by being very convenient for customers to buy from you, online or in person (even as they complain about your product or prices).

Master logistics.  Especially if yours is an e-commerce business, your website must be fully operational as well as easy to navigate, with an intuitive flow.  Last week while shopping for client holiday gifts, I found a lovely little shop that sells very nice air plants, housed in interesting containers and in the right price range.  But the website was down and I didn’t have time to visit the store.  Sadly, I could not buy from my small business colleague. Why the owner felt it would be a good idea to re-do a website in mid-December is beyond me.

Once an order is placed, there is the (outsourced) delivery system on which you depend. Your delivery service will be compared to Amazon, so it’s advisable to take every step to ensure that merchandise deliveries meet customer expectations. If items are out of stock, make sure that you are able to give a very good approximation of when the item(s) will be available.  Finally, packing must be expert to eliminate the chance of damage during transport.

Technology.  There’s no need to splurge on every technology product that’s available, but do invest in those tools that will make a noticeable difference in the ease of doing business with you, in the pre-purchase, purchase, or post-purchase phases of the buying process.  Make it easy to browse, make it easy to get questions answered, make it easy to buy, make it easy to arrange and receive delivery, make it easy to resolve problems.

Timely communication.  The trick is to communicate with customers only when they will perceive the contact as beneficial. Depending on your business, that could be once a month or once a quarter.  Signing customers up for a monthly or quarterly newsletter is an excellent way to keep customers up-to-date about new products or discounts on your products or services. Remember to give an opt-out choice.

Information that you’ve included in your newsletter can be recycled through your social media platforms and website.  During the December holiday season, send cards to customers, including lapsed customers with whom you’ve not received an order in five years.

If there’s been a problem with your product or service, or if a product is out of stock, quickly contact the customer and if the problem is serious, or the customer is upset, a telephone call is recommended.

Building and sustaining a profitable business takes planning and careful execution.  Providing a superior buying experience that carries through the three buying process phases will bring customers to your organization and promote referrals, which continue to be the most effective form of advertising.

Thanks for reading,

Kim

Photograph: Chefs at Sushi Sho Saito in the Akazaka district of Minato, Tokyo

5 Customer Survey Questions That Work

Every once in a while, it makes sense to address your client feedback metric, so that you will receive some lived-experience insight into your operation’s strengths and weaknesses.  You need to learn what can be done better, which service delivery or other operational processes might be simplified and what clients would like to see more of.

The smartest way to begin the client feedback process is to decide what you want to know and what purpose that information will serve.  Are you trying to develop new products or services, so that you’ll be able to give clients what they want before they know they want it? Or is business dwindling and you’re in damage control mode, attempting to win back clients?

Some market research questions are best explored through the eyes of clients and others around the conference table with your leadership team (or maybe your front-line staff, who have loads of on-the-ground experience that they’d love to share). Let’s examine when it makes sense to query your clients and when you’ll learn more from in-house research.  Given below are five standard yet very clever survey questions, some that apply to clients and others that apply to you and your team:

  1. What are the challenges that clients (in a given industry or category) are facing?
  2. Which of these problems is our organization equipped to address?
  3. What solutions are we offering now and what can we/should we add, re-tool, or quit?
  4. How effective are our solutions—what do clients most often hire us to do?
  5. What do we do next?

Note that questions 1 and 4 would best be put to your clients and that questions 2, 3 & 5 involve business strategy and would be addressed in-house, once you’ve spoken with selected clients to figure out questions 1 and 4.

How you conduct the client survey deserves some thought, as well. It might be best for Freelance consultants and small business owners to run a low-key survey by setting up an environment that enables comfortable and candid conversation.  Consider making the process informal and perhaps even seemingly impromptu.  Larger companies may feel comfortable running a formal focus group, perhaps facilitated by an outside market research firm.

Question 1: What are the primary challenges facing your client’s organization?

Whether the client comes to you or you go the client, start by asking a “how are things going in your office” question, or inquire about the next big project or objective (whether or not it would involve your organization). Find out what’s going on and let the client talk.

Questions 2 and 3: Which challenges do you want to solve? How will that be done?

Given the expertise and resources you have, coupled with the client’s inclination to contract for the necessary billable hours, which additional client challenges might you be asked to take on (or what can you cleverly propose to be hired to do)? Can your organization successfully deliver the desired outcomes, or will you need to subcontract some portion? Can you learn how clients are managing these responsibilities now? Is there a competitor who gets hired to do that work , or is nothing being done because the client isn’t sure what to do, or lacks the budget to complete the job?

Question 4: Have our solutions satisfactorily resolved the clients’ challenges?

What project did the client hire you to do? What are the projects that your organization is most often hired to do? How does do clients feel about your performance—is your expertise and ability to deliver the service trusted and respected by clients? Does it seem that you’ll receive more business from several of your clients, on a similar project or another type?

Question 5: What do you do next, based on client responses?

Now here is the judgment call for you and the team. The essence of the process is interpreting the data compiled.  What can you realistically do, based on the responses from clients in questions 1 and 4 and the opportunities and strengths within your organization, as noted in questions 2, 3 and 5?

Remember, it is most likely possible to beta test a new or re-tooled service  with a trusted client who would receive a reduced project fee in exchange for helping your organization to perfect the business model.

Thanks for reading,

Kim

 

 

Fatal Flaws in Your Business Plan

A business plan is the blueprint, or road map, that guides aspiring entrepreneurs as they build their business venture. Business plan writing is about getting the details right as you keep in mind the big picture.  I’ve taught business plan writing since 2008.  I was invited by the program manager of an SBA-affiliated women’s business development  organization to teach a 20 week course that met once a week for three hours and students wrote their plan week by week.

A couple of years later,  I developed a six hour workshop that does not ask students to write their plan but rather, I present material that shows them the information that will be included in a good business plan: a marketing plan (including customer identification, branding and pricing), financial projections, operations processes and other elements.  We talk about how to do research and how the information discovered will help them build a successful business and if desired, attract investors as well.

When envisioning a potential business concept or writing a business plan, it is possible that unrealistic expectations or flawed thinking could influence the process.  Sometimes, one is just so excited about the great business idea that has surfaced that the adrenaline “rush” distorts clear thinking, such as the ability to see potential stumbling blocks that would require precautions to avoid.  Below are a few scenarios that entrepreneurs-in-the-making should beware.

Unrealistic expectations about the need and value of your products or services

While it is sometimes true that starting a business with yourself as the profile that represents the target customer is a smart idea, since you understand the value and availability of that product or service,  you may misinterpret the size of the market and the traction that can be achieved beyond a select group of true believers.

Insufficient information about target customers

Whether or not the target customer is modeled on you, research must be done to verify the number of potential customers who have the money and motive to do business with you,  regardless if this is a B2B or B2C enterprise in the making. You must identify the need for your products or services—what problem will you solve, what solution will you provide?

Furthermore, you must understand the buying process—who is the usual decision maker (the COO or the head of maintence?),  how will purchases be made and what is the tolerable price range? Lastly, from whom are your potential customers obtaining these products and services now? You must also identify and investigate competitors.

Vague about how to access customers

Especially in the B2B sector, access to customers is everything.  Some fields really are a closed shop. You may know who the ideal customers are,  know and describe well how your products and services fit their needs and know how to price and deliver them.  But if potential customers do not have the confidence to do business with you because you have not received an endorsement from a source that they trust, you will starve.

Overestimating cash flow

Usually, a business does not achieve desirable gross sales, and hence will not show a net profit, in its first year of operations.  Businesses that require high start-up costs especially will require a longer ramping-up period. The business plan must acknowledge the potential for negative cash flow and demonstrate how fixed and variable expenses will be met during that period.  One must know how inventory will be financed,  how payroll will be met and how the store or office rent will be paid.

When writing a business plan,  conservative financial projections are strongly advised.  Acquisition of paying customers may take longer than you expect and the size of their purchases may initially be small and infrequent.  Moreover, it is entirely possible for a venture to be profitable on paper and still suffer from cash-flow problems, because customers do not pay their bills on time.

Underestimating start-up costs

Developing a reasonable estimate of how much it will cost to get the venture up and running is essential.  If certain permits must be in hand, if certain tools or equipment are must-haves, then you must know the costs of securing all of the above.  If you’ll need to hire employees,  it’s essential that you have a good idea of the staffing needs up front (you can always hire more as customers increase).

“Magical thinking” business model

The business model is the design for how your venture will become profitable.  Well thought-out interactions between marketing, financial and operational processes will promote and sustain profitability and you must map out how these will occur. The business model describes the core fundamental actions of the venture.

The value proposition of your products or services will be described.  The resources that your enterprise will have to promote and defend the value proposition— the intellectual property that you’ve developed,  or patent rights, key relationships, or capital—will be accounted for.  Sales distribution channels will be detailed.

Getting to Plan B, a 2009 book by Randy Komisar and John Mullins, describes key business model components and advises business plan writers to segment the business model chapter into sub-headings such as:

  • The revenue model,  which describes what you’ll sell, the marketing plan and how you expect to generate revenue.
  • The operating model, which will detail where you’ll do business and how the day-to-day will function.
  • The  working capital model, meaning your cash-flow requirements.  Cash-flow means that you’ll know when money will be in hand to meet expenses like rent and payroll. It is subtly distinct from revenue.  The business can generate adequate revenue and still suffer from intermittent cash-flow problems.

Your business model keeps you organized and your priorities realistic. Matters such as quality control,  collecting accounts receivable,  inventory management and identifying strategic partners mean much more than your number of Facebook followers, for example. Best of luck to you as you work to launch your new business!

Thanks for reading,

Kim

Business Model = Profit Engine

Hatching an idea for a business involves much more than inspiration.  Your entrepreneurial idea must also include a strategy for making the idea profitable. That strategy is known as the business model. The function of a business is to provide products and/or services that help clients solve their business or consumer needs.  In addition, your business must work for you  and generate a reliable and abundant revenue stream from which you derive your annual income.

Before we go any further, let’s clarify the meanings of business model  and business plan.  Your business plan  is a document in which you describe the mission of your business; the target customers; the marketplace and competitive environment in which it will operate; its marketing, financial and operations plans; and the legal structure it will be given.

Your business model  will detail how the venture will attain and sustain profitability. The cornerstone of a good business model is a competitive analysis, which will help you verify target markets (customer groups) and establish your expected value-added in the presence of enterprises that offer similar products and services.

The primary element of your competitive analysis is customer knowledge, something that regulars to these posts know that I encourage frequently.  Information-gathering is a vital and ongoing business function.  James King, Director of the New York (state) Small Business Development Center, notes that “…customer purchasing patterns change rather rapidly and if you’re not ahead of your customers, you’re not making sales.”  Along with your selection of products and services to provide and customer acquisition strategies, operational aspects — that is, the process of how your products or services will be delivered — must meet the often fluid expectations of customers and will therefore figure into your venture’s business model.

Once you’ve developed a proposed business model, find a trusted potential customer or business owner or colleague and ask for a review.  Discovering and closing immediately obvious gaps is something you’ll want to do before your business is up and running.

King recommends that aspiring entrepreneurs “Sit down with someone who doesn’t have a vested interest and ask that person to poke holes in your model. If they do a good job, you’re going to be better prepared for any eventuality. The more risk you can eliminate, the higher the probability that you’re going to be successful.”

One is advised to revisit the business plan and business model every couple of years, or at least when changes in your industry, local business environment or technology have the potential to impact your sales revenue or how your do business. This practice will also give you the benefit of reviewing your projections as regards expected vs. actual target customers and allow you to refine planning for growth and expansion, as you create strategies for sustainable business success.

Thanks for reading,

Kim

High Impact Brand Appeal

Business researcher, businesswoman and author Wendy Lipton-Dibner is a highly successful woman who has led highly successful enterprises and has made lots of money by not focusing on money. Yes, that is correct. This brave iconoclast says that the right product or service and a business model that is not quite like what they teach in business school, is the blueprint for building a long-lasting and lucrative business venture and she has the data to prove her claim.

Lipton-Dibner studied 1000+ organizations that covered a wide spectrum: global, small business, for-profit and not-for-profit. She has also operated several business enterprises herself. What her research revealed runs counter to the holy grail of business management, which is 100% focus on generating profit. From product development to customer service, it is taken as gospel that minimizing costs and maximizing sales are the things to do and every aspect of a business must be aligned around the singular goal of making money.

Yet Lipton-Dibner discovered that the most successful and long-lived companies are those that “make a difference” in the lives of their customers. Think of the distinctive, sometimes revolutionary experiences created by Disney, Ford Motor Company, Microsoft, Hermes and Whole Foods Markets. Each of those companies offers products or services designed to help their customers lead more fulfilling, efficient, productive, healthier and/or enjoyable lives. She asserts that there are two types of business enterprises: those that focus on making money and those that focus on making a measurable impact on people’s lives and it is the latter approach that makes the most money.

Ethical growth strategies that position the company to make a positive impact on the lives of customers reap the most success, especially over the long-term. So how can a Freelancer or small business owner integrate this philosophy into his/her operation? As always, everything begins with the customer.

Ask current and prospective customers how your product or service and its delivery mechanism might be adjusted in ways that would make it more user-friendly. Can you design and deliver the ideal customer experience from start to finish and make those who do business with you so happy that they’ll tell co-workers and colleagues, who may eventually become your customers as well? That is the power of your brand appeal and impact.

As you make the changes that will give your customers The Best Experience Ever, you may find that certain adjustments in your business model, operations processes, quality control, or service offerings may need updating and that is to be expected. You’ll also learn how to refine your marketing messages and sales strategy along the way, because you will be much more tuned-in to what resonates with your customers, promoting trust in what you do and making customers happy to do business with you.

Wise fiscal management of your enterprise will continue to be a requirement, but centering your strategies and actions on  the pursuit of the biggest profit margin and net profit often does not pay off in the end. Finding the balance between what it takes to gain and keep customer loyalty and the necessity of sustaining a money-making enterprise is the road to success.

Thanks for reading,

Kim

Customer Data: Collecting and Utilizing

Big data and data mining are buzzwords that have echoed frequently in the business press during the past three or four  years.   The noise level has caused business leaders to feel obligated to collect data from as many customer interactions as possible.   OK,  that’s very ambitious of them,  but now what? There is a lot of talk about big data and data mining and increasingly there is some action,  but the dust has not yet settled.  Many organizations are struggling with how to interpret,  utilize and store the copious amounts of customer data now in their possession.

Customer information is always useful,  but does data collection have meaning for small businesses and Freelance solopreneurs?  What information should a Freelancer collect and what do we do with it once we have it?  Do big data and data mining have any use for the little people?  The answer is yes,  but no.  Big data and data mining are of most use to the bigger players,  who use the costly to acquire information to fine-tune product offers to millions of current and potential customers.

Freelancers and small business owners can start with their client list.  Who has done business with you over the past five years? Who are your repeat customers?  What do they buy from you and when do they buy it?  If you have not done business with a B2B or B2G client in the past two years,  is your contact still at the organization and is s/he still in the same position? Are B2C physical and email addresses current?  Visit company websites and view the staff lists to confirm email addresses,  telephone numbers and job titles.

Customer data might give you ideas on how to improve customer service,  cause you to re-think your pricing strategy,  or help you to discover unexpected talking points for your next email marketing campaign or monthly newsletter.  Your customer data might prompt you to reconsider good customers of years past and get you thinking about how to win them back.  Updated customer information will make it easy for you to send out holiday cards in December to your B2B and B2G clients and do some relationship-building,  an important element of customer retention.

Online customer surveys that are accessible on your website and also emailed to your customer list have the potential to bring in still more useful customer data.  Learn how to devise a survey that makes it easy for customers to share the information that you want.  Keep the questions simple and don’t ask more than 10 to achieve the highest rate of participation.  Freelancers may also want to send out post-project surveys with the final invoice.

Social media outlets are another excellent source of customer data.  Social media have a way of bringing out uncensored thoughts and you might be surprised by what you learn.  Are your customers willing to engage with you on Facebook,  Instagram,  LinkedIn or Twitter?  Will any join in a Google + Hangout and join in a voice and video live chat?

Collecting data from many touch points is potentially very useful for every business entity,  but what you make of it and do with it are what matters.  Freelancers and small business owners can use customer info to improve revenue by way of expanding billable hours or sales of current customers;  re-establishing business with lapsed customers;  new customer acquisition and relationship-building.  Small data can yield big results when properly interpreted and utilized.

Thanks for reading,

Kim

 

 

12 Sample Customer Survey Questions

In numerous posts over the years,  I’ve recommended that you conduct customer service surveys to guide your decision-making as you refresh your brand,  update your business model,  promote client retention,  stimulate referrals or initiate any other changes in your business practices.  Customer surveys can unearth all sorts of interesting and actionable data.  A dozen well-written questions can  give revealing insights into what drives the need for your services,  what persuades decision-makers to choose you instead of a competitor and customer expectations that may not be immediately apparent.  Surveys help you learn how your operation stacks up against the competition and can identify business strengths and weaknesses.

To give you inspiration,  I hereby provide a few sample questions.  Send your customer survey along with the final invoice of a project.  Include it on your website,  Facebook, Google + or LinkedIn page.  Announce it on your Twitter feed.

  1. What service did (the company) provide for you?
  2. What factors made you decide to hire (the company) for this project?
  3. Do you feel that your project contact/manager acted in your best interests and your organization’s?
  4. How closely did (the company) adhere to the agreed-upon project timeline?
  5. Do you feel that your project contact/manager responded to your requests for information and other inquiries in a timely fashion?
  6. Considering the value of this project to your organization,  how do you feel about the amount paid as compared to the value received?
  7. If you feel that you received poor value,  please describe the problem (s).  How do you feel about the process of providing resolution?
  8. Would you be willing to invite (the company) to work with you on another project?
  9. Are there additional services that you wish (the company) would provide?
  10. How often do you typically hire outside project-specific workers?
  11. Based on the experience of working with (the company) would you be willing to recommend to a friend or colleague?
  12. Do you have any suggestions for improving the services provided,  or related administrative matters?

Thank you for your feedback. Your honest opinions are sincerely appreciated.

A big part of growing a successful business is through referrals and repeat business.  Clients only return to you or recommend your services when they are extremely satisfied with your performance and have a high degree of confidence in your operation.  Your clients possess a wealth of information that may not only give you the opportunity to bring solutions to their problems and increase your revenues as a result,  but may also give you ideas about how you might attract new business.  The only way to access this information is to ask your clients and listen to their answers.

Thanks for reading,

Kim

Big Data and Small Business Marketing

Let’s start with the definition.  When the term  “big data”  is used,  what does it really mean?  Jon Miller,  co-founder and CEO of Marketo,  calls big data a catch-all term for very large and complex data sets that exceed the processing capabilities of the typical available computer software.  In general,  big data refers to the compilation of everything that takes place over the internet: transcripts from Twitter comments or call center conversations,  online videos,  podcast uploads and visits,  webinar broadcasts,   all blog postings,   all website visits,  all credit card transactions,  all ATM activity,  all online purchases,  online advertisements,   downloads of music and uploads of photos.

As regards marketing,  big data refers to all information that details retail sales,  online sales,  market share,  website visits,  blog reads from your website,  newsletter reads from your website,  responses to online customer surveys,  online response to special offers and online advertising,  plus all marketplace and industry data about global,  national and regional  business conditions.

Whatever it is you need to know about customers,  the industry and the business conditions in which you operate is buried within big data.  But in the avalanche of information,   deciding which data to access and interpreting what is brought forth is the marketer’s challenge.  Determining the right questions to ask is the primary imperative,   as the late great management guru Peter Drucker pointed out.

If you want to use big data in your marketing plan,  then  propose questions that will elicit the answers you need to fine-tune your marketing mix.  Maybe you’d like to become more effective in converting website visitors into customers?  A list of the names of prospects who visited your website,  spent more than one minute reading your blog or newsletter,  forwarded the post to someone and and then tweeted some content about what he/she found to others would indicate a serious shopper for your products or services.  Big data can help predict which marketing activities are most likely to convert a prospect who has reached that level of engagement.

Google Analytics can reveal part of the game plan,  but only big data can get seriously granular.  For example,  algorithm-based predictions can forecast the expected impact of marketing campaign activity on those who surf your website,  indicating who should receive special offers via email or who should be invited to join a focus group.  Algorithm-based predictions can also forecast the likely impact of marketing activity on the next quarter’s,  or next four quarters’ revenue.

Based on what is learned through big data,  the marketer can make much more specific and informed decisions about target or niche markets that have the most sales potential,  strategies to build brand awareness and loyalty,  advertising choices and budgets for targeted media outlets,   social media choices that create the most buzz and the ROI of that buzz and the marketing message that drives sales.  Who will be your best customers,   why will they be your best customers,   what is the average amount of money the customer will spend in your business,  how loyal is the customer to your brand,  what types of advertising does the customer respond to best,  what kind of social media does the customer respond to best and will those customers create good word of mouth  (still the best form of advertising)  for your business?

So how can small businesses and Freelance solopreneurs access big data?  It can be done by hiring a marketing firm that we most likely cannot afford.  At this time,  big data usage will be the playground of big businesses.   If it’s any consolation,  marketing firms are still trying to get arms around big data themselves.  For now,  traditional marketing analytics will have to suffice for the 99%.

Traditional marketing analytics are useful and certain data we already own: bricks & mortar sales data,  online sales data,  seasonal sales variations,  customer zip codes,  popular service packages,  pricing and the number of Foursquare,  Facebook,  LinkedIn and Twitter followers,  for example.  Market testing is expected to remain a vital part of developing a marketing strategy,   even when big data is used.  Business owners and marketers will continue to measure the impact of promotional strategies employed.  Finally, whether big data or marketing analytics are used when devising a marketing plan,  proposing the right questions,   as Peter Drucker advised,  is where one starts.

Thanks for reading,

Kim

Go to the Front of the Pack

I’m a little bit of an egghead and every once in a while I like to read a good study,  to keep myself current,  or even ahead of the curve,  on matters of health,  business or anything else that catches my eye.  Recently,  I read an interesting study on strategic competitive positioning,  a survey study done this year at Babson College’s Babson Executive Education.

Lead author H. James Wilson competes in triathlons and he used those competitions and their participants as the study framework.  Triathletes assess competitors in a clean and simple fashion:  who is Front of the Pack,  Middle of the Pack or Back of the Pack?  The first two groups are ranked as actual competitors and the latter is seen primarily as new to the triathlon scene and nothing to worry about.  MOPs and BOPs have one goal and that is to improve their time in every event they enter and move up to the FOP.

Wilson applied the FOP,  MOP and BOP classifications to 300+  global companies that had recently reported facing intense competition within their respective industries.  He segmented the companies as follows

  • FOP if they achieved greater than 15%  annual revenue growth in FY09  (5%,  16 companies)
  • MOP if they achieved 1-15%  annual revenue growth in FY09 (48%,  145 companies)
  • BOP if they showed flat or declining revenues in FY09 (47%,  144 companies)

The essential question of strategy is,  are you heading in the right direction?  Wilson knew that the FOPs were doing more than a few things right and to get to the heart of it,  he analyzed the FOPs and identified three ways in which they outpace the also-rans.  He then developed the following survey questions based on those strengths.

Wilson’s data indicate that if you can answer yes to each of the survey questions,  you’re on your way to the FOP.  How do you stack up?  Something to think about.

1.  Are you/is your company becoming more effective at meeting the needs of clients/customers?

Despite the economic downturn that spawned the planet-wide recession (depression?),  FOPs have maintained the trust,  confidence,  loyalty and dollars of their customers.  FOPs understand what customers want and they are better at anticipating future needs and trends.  They put resources into keeping a finger on the pulse of the customer and they know what resonates.  FOPs are proactive in market research and customer outreach.

2.  Have you/has your company recently implemented a significant innovation campaign or launched numerous small-scale innovation pilots?

Brainstorming ideas for new services,  fresh approaches,  an innovative marketing campaign or self-development plans is an important beginning.  It is always necessary to think things through,  examine the big picture and weigh the possible outcomes of your actions.  Just remember that  “implement”  and  “launch”  are the key words.  How many good plans have you left to languish on the drawing board?  FOPs understand that results come from deeds,  not words.

3.  Are you/is your company becoming more collaborative with other Freelancer colleagues/other organizations?

High levels of cross-company interactions distinguish FOPs more than any other factor studied.  FOPs are also more likely to inform those in their network about business opportunities.  As a result,  FOPs receive the benefits of reciprocity more than most,  when referrals come their way.  Think of  how you might include selected non-competing colleagues in business opportunities that would be mutually beneficial.  Perhaps this is the smartest way to scoop bigger contracts for both?  Plus,  you’ll gain exposure to another’s business methods and perspectives and that information will make you even more savvy and competitive.

Thanks for reading and Happy Thanksgiving,

Kim