By Jan Johnson, Chief Product Liberator, Landmark Performance Group
I had just finished a presentation detailing a product’s performance and suggested some improvements in order to turn customers from sour to smiling.
Everyone in attendance mulled some ideas over, until the manager of the division asked me, “These are kind of captive customers, they don’t need to be really happy, do they?”
Well, I thought to myself, “I’m not sure what he’s focused on, but it’s not maximizing his product performance.”
So I asked him, “Are you married?”
“Yes,” he replied.
“What’s the difference to you if your wife is happily married, or just married?”
Silence filled the room, all eyes on the manager.
The look on his face was one of dawning comprehension.
That’s pretty much the way it goes with product performance as well. In our years of experience, we’ve learned that customers can generally be categorized as Stuck, Sour, Stable and Smiling. How well products do in the market is a direct result of how customers feel when they use it.
Mind you, I’m talking about high-investment, long-purchase and use cycle products, not necessarily toothpaste. These products are directly related to the customers’ ability to make money, to thrive in their business, and often, these products must satisfy purchasers for years, sometimes decades. Markets are often very small, so repeat sales are imperative.
So I took it upon myself to break down the various types of “customer relationships” I found our clients to have and it broke down into four basic groups.
Knowing which your customers fall into is vital in today’s business climate where one new disruption can turn your product into yesterday’s news pulling the rug out from under you.
The Four Customer Types and What to Do About Them Of these four, one will attract customers and three of these types of customers will be lost ultimately moving onto the one desirable one as you’ll see below.
1. STUCK CUSTOMERS
I’ve had customers tell me a product was “like being handcuffed to a cactus!”
These customers are STUCK. STUCK with a product that doesn’t perform to their requirements and they have no way out. If they are your customers, they are rarely going to buy any of your other products, and they are going to go out of their way to tell others about their experiences.
Before Twitter and Facebook, STUCK customers told as many as 15 others about their bad product, now who knows how many people hear about a bad product. We see all the time where one irate customer (and their really long online review) can make life really challenging for a company.
Unfortunately, with high-investment, long-term purchases, a stuck customer can stay that way a long time, and their frustration and resentment can grow with each passing day. Without intervention, stuck customers go away as soon as they can.
Consequences of having stuck customers are:
• greater sales costs,
• more “required” discounting,
• unsold inventory,
• uncooperative dealers,
• poor cross marketing…
the list goes on and on. None of the consequences are good. And the cost of doing business gets one in a stranglehold.
2. SOUR CUSTOMERS
Another one of my favorite comments was “I get so angry every time I see it, I just want to use it for target practice!” That’s a SOUR customer.
Sour customers are customers that aren’t as happy with a product as they need to be. The product might work well enough but doesn’t have all the features they want or need. Or it may have the features needed, but isn’t reliable enough. These customers make do until they can unload the product on someone else, then switch to a different brand.
They may not tell a dealer, or anyone else about the product’s shortcomings, they just quietly walk themselves and their wallet over to the competition.
Consequences of having sour customers are:
• sales that don’t meet projections,
• higher product support costs,
• more customer churn,
• fractional brand loyalty,
• lousy repeat business, and
• customers that never come back.
3. STABLE CUSTOMERS
Stable customers are those that are happy with a products features and benefits and the product delivers these consistently over time. The product meets the needs they have identified and it functions consistently well. These customers have no cause for complaint.
When you ask them about the product, they say things like “it’s okay.” “It does what I bought it for.”
They do business with you until they find something that meets their needs even better. If there is little innovation in your industry, stable customers may be with you for a long time. You rarely talk to them, because everything is stable.
Consequences of having stable customers are:
• stable sales, maybe with a little attrition from year to year,
• cross marketing may or may not be successful,
• advertising and sales costs may be higher because your product does not cause excitement in the marketplace, so you have to create buzz yourself.
4. SMILING CUSTOMERS
(this is the only that guarantees continued growth) Smiling customers are customers who are so delighted with the product they purchased that they can’t help but smile.
Many times their sentences start with “I just…” as in “I just touch this button here and ….”
They may turn into an unpaid sales force because they tell people about how happy they are, how well the product works for them. Generally speaking, these customers have purchased a product that meets their stated needs, but also anticipates their unstated needs, and delivers a product experience that is high quality and consistent over time.
For high-value, investment products, to achieve a smiling customer means consistently high performance repeated over time. These products make customers’ lives substantially easier or more pleasant because they reduce problems, perhaps almost to zero, and increase productivity, all the while providing a pleasant interaction.
Consequences of smiling customers are
• increased orders,
• greater profits,
• happier dealers, and higher market share.
In fact, a product with smiling customers may make sudden sweeping gains in the market, because all those stuck, sour and stable customers migrate to it as quickly as possible.
The thing is, a lot of times it doesn’t take much more money to have smiling customers than it does stuck customers. It just takes more thought, and more relentless pursuit of the ideal product.
I’ve seen instances where a product has gone from market leader to almost zero sales because of one “cost-saving” change that totally ruined the product’s ability to do the job it was purchased to do.
At Landmark Performance Group, we cut through the crap to get to the features that are really important to the success of your products. The result is products that exceed the expectations of your potential customers, turning them into easy sales.
Our proprietary system shows your product potential and how to get there. Fast, focused and designed for success.
When you want to make sure every feature adds value, let’s talk.
Jan Johnson is Chief Product Liberator at Landmark Performance Group, Minneapolis, MN. She has more than 20 years of experience rescuing failing or underperforming products in brutal marketplaces.
LANDMARK PERFORMANCE GROUP