Why Competition is So Great and What Chicago Needs to Learn

Note from Art: I love the city of Chicago.  I love the people, the energy and I love the feel of the restaurants and museums and the theaters. However, I don’t love the knuckleheaded political and union wrangling that blares from every news channel in a constant drone of finger pointing and accusations and bone-headed moves. We’re battling insane ex-governors and ridiculous retail sales tax increases in the face of a recession.  One of the latest issues is the backlash and the stream of excuses for the loss of several major conventions due to complaints of usurious pricing and strong-arm tactics.

After losing major conventions to different venues, the local politicos and the brass that run McCormick Place in Chicago are back-pedaling so hard in defense of their labor and service costs that they are contributing to the wind velocity in this already “Windy City.”

It is shameful to watch the officials and local union leaders attempt to defend or deny their usurious pricing and their strong-arm tactics. If you’ve been involved in setting up a show on the floor at McCormick Place before, you would be flabbergasted to listen to the union official on the news blatantly denying that exhibitors are bullied and denied simple things like the right to put a plug in an outlet without union help.

Bull!

I’ve been on the receiving end of having an employee mistakenly plug in a device only to have the union workers complain…stop work and call over a union official to give the booth manager heck.  Additional fees were incurred and the service went from bad to really bad.

Another year, same incident…slightly worse outcome.  There must be something about plugging things in when you work for an electronics company, but yet another well-intentioned employee crossed the union line and was observed pushing a plug into a receptacle.  Same union crap storm followed by a week of suspicious, intermittent power outages and shockingly slow response times. (OK, that was a bad pun!)

• The reported stories of $50 per gallon coffee…3 gallon minimum, $50 delivery, 20% gratuity and extra handling and service fees are sadly all true.

• As reported by ABC News, “A plastics exhibitor vented on a trade group website that when he ordered four cases of Pepsi for his booth, McCormick Place hit him with a bill for $345.39.”

The defense from McCormick Place, “These are the industry standards.”

In another example: “The sticker price of soda aside, it’s the labor costs at McCormick Place that rile most exhibitors.  One exhibitor at the recently departed Health Care Information show said the electrical services bill in Chicago reached $40,000. In Orlando, the same work costs $4,000.”

Mayor Daley’s response: “McCormick Place has had a difficult chore in getting and keeping shows unless they get their costs down. It’s as simple as that,” said Daley.

In true Chicago fashion, the head of the Union responds, “We’ve stepped up.”

Keep stepping, buddy.

The Bottom Line:

It’s a big competitive world out there and the good news is that businesses and in this cases marketers and convention-going firms have options.  If I’m Orlando or Vegas or any one of a dozen other venues, I’m all over the Chicago-conventions that have had enough of the expense abuse.

Sad for Chicago in the short-term, but maybe good in the long-term.  A big dose of competition and a shock to the system will either result in the right improvements or things will just deteriorate.  There are few venues that can offer the menu that is Chicago for a conference destination.  Here’s hoping for a great response.  After all, we’ve solved the Governor-picking problem…errr, I mean the sales tax problem….err…. . Oh heck, I hope we fix this one.

Good for free enterprise. Now if only there was an airline (aside from Southwest) that gave a crap about customers.  But that’s another rave for another day.

Leading in the Trenches-What Do You Do? And No One Buys Gobbeldy Gook

OK, this might seem like an odd one, but ask most people what they do and what do you get? “I’m an accountant,” or, “I work in marketing/customer service/support” etc.

Attend a business-networking event and listen to the introductions.  “We’re a leader in…” or, “We make…” or, “We’re a software company…” etc.

Boring. Hard to stimulate interest with an answer that makes someone want to reach for the bacon-wrapped water chestnut and shout, “Next!”

Take it a step further.  Apply a modified form of my “Trade Show Floor” test to your colleagues at work.  It goes like this: “Hey, if someone asks you what our firm does, how do you answer that question?”

Quick background on my “Trade Show Floor” test and a note to marketers and sales executives everywhere: when I walk trade shows, I like to ask the booth staff what their firm does.  Instead of crisp, audience/customer-focused verb phrases that make me want to learn more, I usually get unintelligible gobbledygook. The more tech-oriented the show, the more tech filled gobbeldy gook that I get.

To the best of my knowledge, no one is in the market to purchase gobbeldy gook.  If your numbers are down it is possible that your people are trying to market and sell gobbeldy gook.  Remember, no one is buying this stuff!.

Back to your colleagues and the question.  I’m willing to wager a cup of leadership caffeine or your favorite coffee that the answers are closer to gobbeldy gook than to clarity.   Imagine the chaos if you have a whole company of people that cannot simply describe what your firm does and for whom. (Sure hope I got that whom/who thing right…it’s been a life long struggle.)

Core questions to ask and answer:

• Who do you serve?  Who are your customers?
• What vexing problems do you solve for your customers?
• How do you uniquely solve those problems? (Your Purple Cow factor.  Thanks, Seth Godin.)

Wrap it all up in a verb phrase. Before you know it, you’ll have John Jantsch’s (Duct Tape Marketing) version of a talking logo.  I love John’s examples (I paraphrase):

Typical: “I’m an architect.”

Revised: “I’m an architect that shows contractors how to get paid faster.”

Typical: “I’m a tax accountant.”

Revised: “I show recently divorced women how to dramatically reduce their taxes.”

Executed properly, you’ll have people saying, “Wow, tell me more.”

The Bottom Line:

Quit boring people to death with your personal and professional introductions.   Tune up your descriptions, try them on for size and when the accurately describe what you do for a specific audience in terms that seem to interest people, make certain that the description is taught to everyone in your firm and that it jumps off of your website and all of your materials.

Don’t leave people guessing on the most important of all personal and professional marketing issues.

“Hey, what does your firm do?”

Leading in the Trenches: How Well Do You Know Your Customers?

Note from Art: Leadership is about driving the right results in the right way.  We often focus on the interpersonal dynamics of leadership and the characteristics and behaviors of effective leaders.  And while those issues are critically important to a firm’s success, so is ensuring that everyone is  focused on the activities that create value.  This inaugural “Leading in the Trenches” post will introduce an on-going series focused on applying effective leadership practices to improving critical organizational practices.

Enjoy!

The word “Customer” takes on a larger than life meaning inside most firms.  It’s bandied about in meetings in slightly reverent tones.  “Oh, the Customer raised this issue.  This must be important.”

It’s used as an argument stopper by those that claim to speak with the Voice of the Customer.  “If that’s what the customers want, we’ll have to give it to them.”

Sometimes, it almost seems like the customer is the enemy.  “They don’t understand our product.  If they would simply attend training, we wouldn’t have to keep simplifying our user interface.”

And at high levels, THE Customer is the reason for new strategies, directions and programs.  Listen to a CEO spout a new direction or shift a paradigm and the name of THE Customer will be invoked somewhere.

Spend some time listening to all of the things done in the name of the customer, and you would be correct if you asked yourself and everyone around you, “who is this customer, anyways?”

I do this with clients (notice the subtle word shift!) and the answers are fascinating.

Them: “Well you know, people who buy are products.”

Me: “Who?”

Them: “You know, consumers.”

Me: “Which ones?”

Them: “The ones with money.”

-

OK, that’s a bit of an extreme case, but it happened.  More often than not, I’ll receive a description of a general class of individuals surrounded by demographic and geographic information. When I probe for a detailed understanding of who these people are, why they buy and what key problems they are solving with our offerings the answers begin to resemble the narrative above.

The Issue:

If you don’t know your customers at a sufficient level of detail, including their hopes, dreams and emotions, everything you are doing includes a high degree of guesswork and randomness. Your messaging likely includes a great deal of blah blah about your firm.  Promotional activities are fired from a shotgun, and while they occasionally hit something, there is no viable, sustainable marketing system in place.

Sales efforts are grossly sub-optimized and new product and service development efforts are at best hunches.

Yikes!

It’s time to Grok Your Customers:

The authors of Tuned-In (one of my three most referenced marketing books along with Duct Tape Marketing and Crossing the Chasm) talk in detail about the need to understand individual buyer personas at a deep level. They invoke the term “Grok” popularized by Robert Heinlein in his science fiction classic, Stranger in a Strange Land, and encourage firms to “grok their customers.”

While I don’t encourage the method used in Heinlein’s book…final grokking (if memory serves) occurred once someone died and their remains were made into a nice soup and consumed, if you were able to effectively “grok your customer,” you would come to understand him as well as or better than he understands himself.

The essence of this is of course, you want to understand the customer at an emotional level and use this knowledge to create and deliver messages, products and experiences that address core emotional needs and that fix vexing problems.

John Jantsch, author of Duct Tape Marketing, talks about defining an ideal customer…one that values what you offer, is profitable for you, and values you and the experience so much that he/she will readily refer you. In order to reach the point where your focus is solely on people that value what you do (the ultimate, well-qualified target audience), you’ve got to put effort into pushing beyond the demographics of a class of customers into learning through observation and interview.

Knowing Your Customers is an Issue for Large and Small Alike

In a recent article (somewhere) on the on-going makeover and turn-around program at Starbucks, it was reported that Howard Schultz bowed to internal team pressure to begin forming a detailed understanding of customer personas…a shift away from the traditional Starbucks focus on creating a culture around their mantra of “rewarding everyday moments.”  Accordingly, it is reported that you can hardly walk through Starbucks headquarters without tripping over cutouts of the core customer personas…all named and labeled with demographic and psychographic attributes. Instead of building a culture for an amorphous audience of coffee drinkers, they can focus on defining their stores, products and services for very specific consumers that value what they have to offer.

The Bottom Line:

Quit talking about customers as an amorphous glob of individuals that you bill.  Start understanding who your profitable customers are and importantly, start learning about the real problems that you solve.

Remember, Peter Revson of Revlon cosmetics didn’t sell make-up, he sold hope.  And the person buying a drill at the home store doesn’t need a drill, he needs a hole.

Quit guessing about your customers and start observing, listening and revisiting on all levels how you are engaging with these people that value what you do for them.

Twitter and Social Networking: Job Search Power Tools or Time Killers?

One of the best lessons that I’ve learned from working on about two million fix-it and improvement projects with my Dad is to match the right tool to the job at hand.  This is particularly true in searching for a job, which can be one of the more vexing projects for many people.

Fortunately, there are a number of interesting new power tools available in the form of social networking platforms, to help today’s job seeker.  However, unlike the tools in the picture, there are few guidelines on how and where to to use these tools to good effect.

Sidebar 1: Most of us probably know more than a few great people looking for work, and hopefully, you are providing your help and support in the form of networking contacts and moral and morale support.

Sidebar 2: A friend indicated that she now knows what it might feel like to suddenly be the person that no one is comfortable interacting with anymore. It seems her friends have responded to her lingering unemployment by doing what many people do when someone gets sick or suffers a personal loss…they disappear. Please don’t do that.

OK, back on topic. One of the issues that I make it a point to always ask my job searching colleagues about is their social networking strategy. I’m both curious how people are using the tools and whether they are finding them helpful or distracting. The feedback is mixed and interesting.

My informally captured, non-scientific research findings indicate the following about the use of social networking tools in the job search:

• Use and enthusiasm for social networking seems to vary by age and experience, with younger job seekers comfortable leveraging a broader swath of the social media spectrum than the more experienced (translated: older) professionals. No surprise here.

• LinkedIn is the most common tool that senior managers opt for initially. Again, no surprise.

• The minority of people that I’ve spoken with are Twitter users, and the perceptions of what Twitter is/can do are all over the map. Again, not surprisingly, there’s a great deal of ignorance about Twitter and a fair amount of cynicism. It usually goes something like, “I don’t know how telling people what I had for breakfast will help me find a job.” That’s certainly one point I agree with…, there’s no chance that telling people what you had for breakfast is correlated with landing a job!

On the positive side, I’m also hearing some interesting ideas and uses of the various media coming from some of the more adventurous job seekers.

The tone/theme of this feedback is: I don’t expect social networking to replace the hard work of researching, live networking and effective marketing and selling, but it is a valuable supplement and source of ideas, leads and contacts.

That’s a good, well-grounded perspective.

Some of the best uses that I’ve heard are (paraphrased):

• Targeting: I target the firms that I’m interested in working for, then I leverage the social media platforms to learn as much as I can about the company and the people.  I’ve openly shared with people that I’m interested in their company and have received some great insights and suggestions.

• Culture Assessment: I look at how involved a company and its employees are in social media as one indicator of culture.  I don’t want to work for a firm that is restrictive or paranoid.

• Pure Networking: I use the tools to meet people and learn about exciting new firms.

• Research: I use the tools to find people writing about or offering advice for job seekers.

• Power Research: I use the research capabilities of Tweetdeck (an application to help organize your twitter world) to search on key terms and find firms and people talking about things related to the type of work that I do.

• Introductions: Several times I’ve asked for help from my LinkedIn colleagues for an introduction to a contact of a contact, and they’ve come through for me every time.

• Rest, Relaxation and Rejuvenation: Social networking is my life-saving coffee break.  I let myself jump into the conversations twice a day for about 15 minutes each time, and I come out rejuvenated.  I meet great people and we exchange ideas and then I get back to work.

The Bottom Line for Now:

My two-cents suggests that it’s critical to use all of the tools available in securing a new opportunity. Social Networking may not hold the easy answer, but it certainly can be part of finding the answer. Savvy job seekers recognize the information and research power of social networking and are leveraging these new power tools to help get the job done.

Sales & Strategy Playbook: Competitor Acquired? It May Be a Gold-Plated, Gift-Wrapped Opportunity

While M+A activity has cycled along with the economy there are some signs that deal volume is picking up.

In talking with a CEO friend running a smaller tech firm, he indicated that there is increasing buzz about various potential combinations and roll-ups that will impact his specific sector. He said this with a smile, and an interesting observation that “when my competitors are acquired, our business spikes and new opportunities are uncovered.”

That’s an Interesting way to look at the situation. I know a lot of people who fear the outcome of Competitor X merging with Firm Y and respond by cowering behind corporate walls or flailing internally. Instead, my CEO friend advocates methodically seizing upon this as an opportunity.

A quick sidebar: The external pundits and internal fear-mongers like to exploit M&A situations for personal visibility.  It’s easy to sound like an expert and spread fear when no one can conclusively prove you wrong. In my opinion, if you were to provide the pundits and fear mongers with truth serum, they would be forced to admit that they have no more idea about the outcome of this merger than they do about the specific weather forecast for noon on a day far in the future.

While I would never counsel ignoring the potential disruptive or market-changing impact of a new combination, just like my CEO friend, I see ample opportunities to gain from an acquisition announcement for the smaller and more fleet-of-foot market participants.

Here’s why:

-Customers are immediately spooked. In the tech sector in particular, customer have been well-trained to react to an acquisition announcement of one of their suppliers with the knowledge that “this is going to hurt.” As a result, purchase decisions slow to a crawl, proof of concepts are derailed and risk-averse buyers begin looking for options that they can justify to their bosses.

You can professionally and ethically exploit this sales interruptus period.  You don’t have to and shouldn’t engage in hearsay and spread rumors as some firms do, but you should absolutely engage prospects (including those that you believed were recently lost to your competitor) and make certain that they know that you are the safe, secure choice focused on serving them.

-The company being acquired is horribly distracted. The press announcement is the beginning of the internal churn at the company being acquired. Confusion reigns supreme. Long-term projects are suspended. It’s not clear who will survive and what products will make the cut, and no matter how much cheerleading goes on from executives silently wondering the same thing, the business goes into autopilot mode.

Customers sense when a firm goes into autopilot mode and this makes them very uncomfortable and risk averse.  See the point above. It’s time to make hay.

-Consider cherry-picking talent. It’s a great time to approach the competitor’s top reps in particular.

There’s nothing an Alpha Rep hates more than having his/her potential sales glory impacted by extraordinary circumstances.  Any threat to the success of the hunt and the opportunity for commission accelerators and another club trip is a chance for your firm to gain some top sales talent.  Some will remain fiercely loyal, and others will seize the opportunity.  Again, do this professionally and ethically and consult counsel on non-compete issues.

-Watch for markets being abandoned. As the post-merger integration activities proceed, the newly combined firm will de-emphasize certain market segments in favor of others. This momentary “white space” can be just the opportunity to fuel your growth.

Make certain that your firm is watching closely and keenly attuned to any overt or even silent decisions to de-emphasize.  Listen carefully to your customers and prospects, they will sense this before anyone else. One firm’s unattractive market may be your treasure.

-Leverage the situation to build internal excitement and to fuel performance

There will never be a better time to get your teams fired up about serving new and long-standing customers and focused on identifying new products and services to exploit the changing market dynamics. Communicate and celebrate successes, encourage innovation and reward efforts that create value.

The Bottom Line for Now:

While the acquisition of key market competitors and participants can have profound long-term implications for your firm, there are often windows of opportunity created by these events that you can exploit to capture clients, strengthen market position and turbo-charge employee enthusiasm. Instead of fearing the worst, seize the opportunity to propel your business.

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