Indicators you can trust
It's a moonlit night in the Atlantic, as we come to the final leg of our 8000-mile sail home from South Africa. As I look up at the top of the mast, I see a wind indicator there, an illuminated arrow that shows where the "apparent" wind is coming from ("apparent" wind is the wind created by a combination of the actual wind blowing over the water, and the boat's speed through the water). As I do, my brain naturally shifts to business indicators - and how easily we are misled when we pay attention to the wrong ones.
In my next book, I talk about the fact that I am usually aware of many customer trends in the business-to-business marketplace two to six months ahead of the reporters and analysts. Why? Because I'm constantly interviewing customers for my clients. Two to six months is often how long it takes before the decisions made and actions taken by customers are obvious trends. Until then, the only people who know what customers are thinking and doing are the customers - and the people who are interviewing them.
This is clearly one of the best arguments for interviewing your customers on a regular basis. You will know what they are concerned about, what they are hoping to accomplish, how it's going, what they are attracted to and what they are trying to avoid. Your competitors, on the other hand, will still be reading business blogs and the business press. Good. They won't have the revenue-enhancing insights that you do.
Why not? Aren't blogs the best indicator of leading-edge consumer behavior? Ha.
What is a blog? Most of them are one person's stream-of-consciousness observations and commentary. Is that person your customer? Probably not - especially if you are in the business-to-business marketplace. Is that person doing what your customer is doing, buying what your customer is buying, dealing with the political and corporate issues that your customer is dealing with? No.
If that person were working in a corporation, and going through the same things your customer was going through, would he publish it in a blog? Not unless he wanted to get fired.
The truth is, you're not going to find the needs, frustrations, and perceptions that drive your customers' buying decisions in a blog.
We can also dismiss the business press as an important revenue indicator for you, with the simple observation that those who write for business publications are getting sanitized versions of the truth.
No one will tell a reporter what they'd tell an interviewer, especially a knowledgeable, effective interviewer who has promised the interviewee anonymity (and who always keeps that promise). Having a one-on-one, personal phone conversation with an interviewer, who is an expert at drawing out every last bit of useful information, is a conversation where the interviewee enjoys revealing that useful information. The interviewee also feels that he or she is being helpful - that the information given is actually going to do some good, improving the product that she buys.
One of the most delightful things about interviewing current customers is that they have a vested interest in the company that hired the interviewer. They have invested time and money in that company, and they want the company to succeed. They also hope that some of the problems they've had with the company will be resolved, because the interviewer will take the information right to the top, and will make sure the CEO understands what his company is putting its customers through, and the importance of those problems. They are happy that someone wants to listen, and they will help work on a solution. They make sure, by the time the call is finished, that the interviewer really understands what the issues are and has heard the suggestions - many of which are excellent - that the interviewee has thought about.
At this very moment, your own customers are having problems with some aspect of your company - it's too difficult to buy or use your product, your people aren't "delighting" the customer with their behavior, the promises your salesperson made in the pitch aren't coming true after the sale, and so on. These issues are the most important "indicators" of your chances for more revenue (or less) than anything you'll ever read, anywhere. Period.
Your customers would be thrilled to have someone call them and ask them how its' going. They'd love to describe their experience, and suggest how that experience could have gone better. They can be very specific.
"There are two customer service people in that office. One of them, Susan, is fantastic. I always get an answer when I talk to her. The other person, Maggie, just hasn't got a clue. She is always rushed, she is disorganized, and she doesn't know the product well. Now when I call, if I get Maggie, I ask for Susan. I know Maggie is insulted, but frankly, I don't care. I'm running a business here, and I don't have time for Maggie's ineptitude."
Or, "I went to their website, but I couldn't find the answer to my question about the number of records the product would support. I couldn't justify the cost of the product to my boss without this information. I called the salesperson in the Sunnyvale office - I think his name was Dale - and he not only couldn't answer the question, he kept telling me that it was 'no problem,' that the product would have 'more than enough room for whatever I wanted to do - that it was completely scalable.' Well, I knew I couldn't take that kind of answer back to my boss. His next question would be, 'That's nice, but how many records does it support?' I finally got a hold of this techie in Boston, and he told me exactly. It was sufficient for our needs, so I bought it. I have no idea why they don't have that information on their website. I would have bought the product much sooner if I'd had that answer. That was the most important information they could have provided." [Note that this fictional, but true-to-life person ultimately bought the product, but it was far too difficult - the less persistent prospects would give up and gone to a competitor.]
Or, "The biggest problem we have with their medical practice software is not the software itself, but the way it gathers and reports data for the insurance companies. They are finding more and more ways to refuse claims, forcing us to go back to the customer to try to collect the funds. We are turning into a collection agency. We have found that if we present the information a certain way to the insurance companies, the insurance companies are more likely to pay - but the software doesn't support that way of reporting. It's turning into a real problem for us, to the point where we are starting to look elsewhere for new software, even though we already have so much invested in this system."
Well, now. These customer comments, which are accurate representations of comments we've heard from real customers, sure sound more relevant than anything you'd ever read in a business publication or a blog, I'd wager. It's so easy to think we're being informed, when we pop over to our favorite business press site or blog.
So many CEOs pore over articles on the web, in the wee hours of the morning, and send links to those articles to their employees and vendors. Have they - or someone they've hired - talked to a customer in the last year? Two years? Nope.
CEOs always think they know everything they need to know about their customers, until an interviewer comes back with a report - showing that every single customer interviewed was having the exact same problem with "Maggie," or they were confused about the "number of records the product can support," or they are struggling with "the way the product describes our services to the insurance companies."
Spreadsheets: After-the-fact, too late to fix
In addition to looking to blogs and the business press for signals, CEOs also tend to bury their heads in their spreadsheets, endlessly analyzing quantitative data showing revenue, costs, profits, etc., hoping they can use the data to make good business decisions.
The problem is, quantitative data is the result of qualitative activity, and qualitative activity is what must be managed in order to generate nice numbers on those spreadsheets.
Let me explain. Let's say you're the CEO of the medical software company. That customer, who is not happy with the way the software creates reports for insurance companies, is probably one of the people that your company is using as a reference for new prospects. This happens ALL the time. Companies think a customer is "satisfied," because no one has bothered to ask the right questions the right way, so no one knows that the customer has some serious issues.
Your salespeople continue to give out that customer's name and contact info to prospective customers, from a "references" sheet. Prospects who call this customer get an unhappy earful. Will the prospective customer be influenced by what they hear? Of course. More influenced, in fact, than by anything your salesperson or even you - the company's CEO - will say, in an attempt to win the business.
So far, nothing I've described will be revealed on a spreadsheet. This is all about "fuzzy" stuff like needs and perceptions, which drive buying decisions.
These "fuzzy" needs and perceptions are the indicators that matter. These are the indicators that either feed the top line or starve it to death. By the time it shows up on a spreadsheet (or not - because the sale was lost), it's too late.
Stop the tape. This is big. I'll say it again: Lost sales don't appear on spreadsheets. More importantly, the CEO can't know when and how the sale was lost by looking at a spreadsheet.
Without this information, the CEO can't fix the problem. He can't do anything to make sure those sales are made in the future.
The actions that the CEO should have taken to save that sale, and future sales, had to happen back when the customer started having the problem. That's when the CEO should have found out about it. That's when he should have interviewed those same customers - and others - to find out what they needed, so insurance companies would refuse fewer claims. That's when he should have had the software modified.
Not only would he be able to save that "now I'm looking elsewhere" customer, he'd be able to tell new customers that the software is more "insurance-company friendly." And, he'd have a great reference to give to new prospects, who would get a different kind of earful from that now-delighted customer.
It pains me, it really does, to see CEOs so fixated on The Economist, their favorite blogs, and their too-late-to-fix-this-problem spreadsheets, while their own customers, the best indicator of all, remain untapped.
There is no more relevant, insightful, and actionable source of information. Nothing else even comes close. And to think they are as close as the telephone, and happy to help.
