Try Out SMAGA

Heyy, sobat wiks!

Minggu lalu, tepatnya tanggal 22 Maret 2009, salah satu subsie di SMA Negeri 3 Surakarta ngadain try out buat anak-anak kelas 9 SMP. Nah, subsie yang bikin event ini adalah HUMAS! Udah jelas, dong, “agen” WIKS gak mau ketinggalan buat ngeliput jalannya acara. Nah, ini, nih, wawancara kita ama sang ketua pelaksana, Nurvitriana Evasari dari XI IS 3.

Latar belakang dan tujuan try out
Latar belakang dari try out ini buat ngelaksanain proker yang ada, sedangkan tujuannya untuk ngebantu para siswa SMP biar makin siap ngadepin ujian, and also ngomersilin SMAGA di kalangan siswa-siswa SMP.

Jumlah peserta try out
720 peserta dari target awal 500 peserta. ~wow! Salut, deh!

Usaha untuk dapetin sekian banyak peserta
Cara anggota HUMAS, nih, dengan masang pamflet di 50 SMP (kalo di kelas hitam putih, kalo di mading berwarna) dan ngehubungin guru-guru di tiap sekolah untuk konsultasi.

Sikon pelaksanaan try out
Berlangsungnya event ini dianggap lancar, meskipun sedikit molor waktunya karna kendala tak terduga. Apa kendalanya?? Jumlah peserta yang mbludak ngebuat acara rada molor. Namun, secara garis besar, acara dinyatain SUKSES!

Kontribusi bagi SMAGA
Event ini sekaligus ngepromosiin Program SBI ama para calon siswa SMAGA dan balik lagi, dapat ngekomersilin SMAGA .

Suka duka pelaksana
Dukanya, karna waktu yang terbatas buat nyiapin, nih, event. Cuma SEBULAN, loh, sobat wiks!
Kalo sukanya, nih, meski waktu mepet, HUMAS masih dapet nyiapin sebaik-baiknya, and moreover, acara lancar terlaksana! ~congrats, deh, buat HUMAS!

Subsie yang turut berperan dalam terlaksananya try out
PKS yang of course, bantu banget di bidang keamanan, HUMAS as pelaksana ni acara, both KESNAS and TEATER yang ngebantu sebagai hiburan bagi peserta.

Ada tidaknya kerja sama dengan guru
Ada. HUMAS minta tolong guru buat bikinin soal. Para guru juga ikut ambil alih pas promosi SBI.

Harapan setelah ini
buat HUMAS, kinerjanya semakin baik dan lebih berpengalaman jadi PROKER selanjutnya yang akan dilaksanakan akan lebih tertata.
buat SMAGA, pendaftar siswa SMAGA menjadi semakin banyak dan semakin baik.

Asal muasal dana
Dana diperoleh dari OSIS, donatur, dan sponsor. Nominal?? Rahasia, doongg.

Pesan sang ketua pelakasana
“Khususnya untuk ketua Humas, Amelinda.A, tetep semangat dan berjuang! Bagi rekan-rekan humas dan lainnya, makasih banget atas semua bantuan dan supportnya. Humas Jaya, Smaga makin jaya!”
Nah, sobat Wiks, tuk sekarang, sekian yang bisa WIK’S crew kasih buat kalian. Cao!

Menyiapkan panenan Porang

Semakin mendekati masa panen - meski di beberapa daerah pengepul sudah berlomba-lomba berburu porang di hutan-hutan, karena prinsipnya siapa cepat yang dapat - bagi para petani yang sudah membudidayakan porang secara intensif, semakin terbayang gemerincing rupiah yang bisa diperoleh. Dengan budidaya, margin yang bisa diperoleh semakin besar, dibandingkan dengan jika hanya mengumpulkan tanaman liar di hutan, karena siklus budidaya yang intensif dengan komposisi lahan produksi dan lahan bibit bisa menyebabkan biaya nol untuk pembelian bibit. Selain itu, budidaya memiliki kelebihan dibandingkan dengan berburu di hutan yaitu konsistensi ukuran dan kontinuitas panen yang bisa di jaga. Dengan budidaya, ukuran umbi hasil panen bisa dipilih dengan hanya memanen umbi yang berusia tiga tahun atau lebih atau minimal memiliki berat 1.5 kg.

Sebagai persiapan panen, untuk menghasilkan umbi berkualitas, utuh, bersih tidak berjamur terdapat beberapa hal yang mesti diperhatikan.

1. Pada saat menggali tanah untuk mengambil umbi, harus diperkirakan jarak yang optimal dari batang sehingga cangkul / alat penggali tidak sampai menyebabkan umbi luka atau bahkan terbelah.

2. Tiriskan umbi yang masih basah, kalau tanah cukup kering atau gembur, tanah yang membungkus umbi bisa langsung di buang dengan tangan. Sedangkan jika tanah yang menempel umbi terlalu becek, perlu di jemur. Tanah yang kering bisa dengan mudah dikeringkan.

3. Letakkan umbi panenan di tempat yang terbuka, teduh, dan tidak terkena air hujan atau air yang lain secara langsung. Jangan sampai ada air yang tergenang mengenai umbi yang sudah kering tersebut.

4. Jangan simpan hasil panen di dalam karung plastik atau di atas karung plastik. Panas yang di timbulkan karena sentuhan dengan karung plastik, bisa menyebabkan umbi gerah dan busuk.

Beyond the Carrot and the Stick: New Alternatives for Influencing Customer Behavior

Special offers, service fees, financing deals—these are all examples of how companies try to influence their customers’ behavior from time to time. Historically, the two basic tools for doing this have been the carrot and the stick. But some companies are having success with a third strategy.

So-called normative approaches make use of peer pressure and other social controls—some of the oldest techniques around. They establish credibility by tapping into the collective power of a larger group. In the right circumstances they can produce remarkable results.

Understanding the choices: instrumental versus normative controls

Carrots and sticks are known more formally as “instrumental” controls. A specific reward or punishment is applied to induce the desired behavior. For example, if you keep a minimum balance, your local bank may waive its normal fees. The bank offers you this carrot because it benefits by using your balance to cover the cost of servicing your account. At the same time, the bank may charge a fee for each out-of-network ATM transaction. Since the bank incurs costs for each of these transactions, it uses the stick of a fee both to discourage such transactions and to help cover its costs if they are made.

But JetBlue (Salt Lake City), the upstart low-cost airline, took a normative rather than an instrumental approach when it realized that it needed to turn its planes around at the gate quickly in order to achieve the efficiency required for profitability.

Cabin cleaning is a key element in the turnaround process. JetBlue knew that its customers were generally enthusiastic about the airline, so it asked each customer to clean up her area before leaving the aircraft. There were neither frequent-flier mileage bonuses for a clean row nor fines for crumbs on the floor—JetBlue simply told customers that they could help keep fares low if they would pitch in.

Customers responded positively— even those who might not have been eager to help didn’t want to stick out as shirkers. The company has been able to keep its costs low and is profitable at a time when many airlines are struggling to stay aloft.

Tapping into community

Successful normative controls gain credibility from the collective norms of a larger group. They reinforce that credibility by building on the group’s ongoing experiences. Several decades ago, when most businessmen wore hats as a matter of course, it was considered impolite not to remove your hat upon coming indoors. This wasn’t a law, it was just a social norm: Taking off your hat was simply the proper thing to do. Compliance was widespread, even though the only enforcement tool was the scorn of others in the social group.

We are much less prone to such broad social controls today (note the number of hats being worn indoors), but in specific circumstances they can be as powerful as ever.

Now, however, we need a more explicit explanation of the reasons for compliance and the benefits of doing so. We also need to be part of a group that is willing to undertake enforcement of the norm.

To see how normative controls work, look at Shouldice Hospital in Toronto, which performs only hernia operations. Shouldice has a much higher success rate and is more profitable than other institutions that perform the same operation.

Part of the hospital’s success can be tied to its particular medical practices: The facility is designed specifically for hernia patients, and it admits only patients who, aside from their hernia problems, are otherwise healthy. But that isn’t the whole story.

At Shouldice, there is an understanding not only that the surgery is only one part of the process, but also that its success can be dramatically affected by what happens immediately before and after the surgery. Shouldice relies on its patient community—that is, its customers.

For example, each patient is expected to be a “hernia mentor” to other patients. Patients conduct the hospital’s orientation sessions. They help one another with follow-up care after the surgery. And the facility sponsors reunions among former patients.

Such practices turn patients into a trusted peer group that helps new arrivals understand what they need to do to improve their procedures’ chances of success. By mobilizing the social power of this patient community, Shouldice has increased compliance with best practices and has dramatically improved the overall success rates of hernia procedures.

Using normative controls to improve quality

EBay, the online auction site, faced a quality control predicament as it began to grow. Although its technology was capable of linking large numbers of buyers and sellers around the world, eBay’s future growth could be threatened if customers found the experience unsatisfactory. There was no way that eBay itself could police the hundreds of thousands of transactions conducted on the site without hindering the rapid flow of information that characterizes the auction environment.

How, then, to ensure an environment in which people would feel secure transacting business?

The solution was to let the buyers rate the sellers and post that information on the site. The online community could set and enforce its own norms through the rating process. Sellers gained greater confidence because they could rely on the experience of a broad range of their peers.

Meanwhile, buyers learned that there would be consequences for disappointing sellers. Thanks to this low-cost policing mechanism, the standards on eBay have become so high that some companies have found that they have to provide a higher level of customer service through their online channel than they do to their offline customers.

Zipcar serves as another example of the effectiveness of normative controls. This Cambridge, Mass.–based company provides urban dwellers with access to private vehicles for periods as short as an hour or two through a fleet of vehicles shared by all members. The customer reserves a specific vehicle parked at a specific location in the city. (There are no central lots like those used by traditional rental car companies.)

Zipcar not only asks its customers to return the vehicle on time, it also requests that they not smoke or bring pets in the car and that they leave the vehicle clean and with a full tank of gas. No Zipcar employee monitors each customer’s use; in effect, the company relies on its customers to satisfy one another. In fact, according to one Zipcar official, “the vast majority— 95% or more” of customers— understand the benefits of compliance and do so willingly.

Zipcar also engages in extensive community-building activities—from sending humorous newsletters to organizing its customers to make charitable food deliveries at the holidays— that help deepen the feelings of interdependence among customers. Given that 20% to 25% of the company’s growth comes from customer referrals, the strategy seems to be working.

Even so, normative controls alone don’t always work. Zipcar has instituted a late fee—to date, fewer than 5% of customers have had to pay one—and is considering raising it substantially for repeat offenders. A Zipcar spokesperson says, “No one thing works for everyone. For some people, a fine is a necessary enforcement tool.”

When do normative controls work best?

Based on these company examples, we can make a few inferences about the conditions under which normative controls are most effective.

1. Customers are looking to do things differently. Each of the companies we have discussed here has an offering that appeals to customers looking for an alternative to more traditional-minded competitors. These customers may be more responsive to normative pressure if they feel it increases the new alternative’s chances of success. The company’s success reinforces the wisdom of the customer’s choice, so the customer is willing to help the company.

2. There is a community of interdependent customers. Socially reinforced behaviors require some sort of connection between the individuals affected. At JetBlue, the connection is physical—customers sit next to each other on the plane. At eBay, the connection is virtual. In both cases, however, customers can see the consequences of complying with or ignoring the desired norms—and they feel a natural inclination to act in ways that will garner the approval of their peers.

3. There is a high degree of trust between the company and the customer. If Shouldice Hospital showed its patients a movie with actors demonstrating the right things to do after a hernia operation, there would be less credibility than there is when actual patients—peers with no possible ulterior motives—are the medium for transferring this knowledge.

How Strategic Is Your Sales Strategy?

Bringing high-level corporate strategy to the ground-level sales effort is a challenge for most organizations. Yes, most high-performing sales teams do carry with them a solid sense of company goals and priorities, but a sizable gap can exist between the way strategy is implemented in most parts of the organization and its role in sales. And into that gap falls a great deal of potential value. Recognizing that, some companies are infusing their sales efforts with a more vigorous sense of strategy and unveiling promising new methodologies in the process.

Putting the right people in the right seats

In Good to Great (HarperCollins, 2001), Jim Collins tells managers to get “the right people on the bus, the wrong people off the bus, and the right people in the right seats.” Could there be any business area in which this advice is more critical than sales? After all, selling is among the most “people” of all people functions.

“Hiring the right people in sales is very challenging. Unless you are very strategic, at best, you may be 50-50,” says Larry MacGirr, vice president of sales for North America for CIBA Vision, in Duluth, Ga. To increase the odds, the contact lens maker developed a profiling instrument that attempts to match the personality traits of prospective account executives with those found in the company’s top performers. Echoing Collins’s belief that companies should put more emphasis on “character attributes” than on specific experience, skills, or background, CIBA Vision worked with the Waco, Texas– based Profiles International to establish the baseline personality traits of its “eagles”—the top 20% of its sales team.

The resulting profile then became the basis of a tool CIBA Vision uses when hiring. Seeking specific traits in new hires “gives us the type of people we need to be successful,” says MacGirr. “We then put new hires into our training program and develop their skills to as high a level as possible.” Developing effective sales managers is another CIBA Vision priority. As with its eagles, CIBA Vision profiled its best frontline sales managers and created a tool for evaluating candidates for managerial positions. The company soon recognized that individual sales success is not a defining indicator of management potential. In seeking sales managers, MacGirr says, “I am not necessarily looking for my top performers as much as I am looking for my top performers who are able to influence their peers.”

So how can you retain high performers who aren’t destined to manage? You provide them “another career path that keeps them selling,” says MacGirr. At CIBA Vision “super-sellers” may be given the large driver accounts. For those who won’t become managers, “we will give you opportunities to have a bigger impact on the marketplace and on the company as your skills and abilities grow as a seller.”

Segmenting on needs and priorities

In 2001, when Hill-Rom Company, a $1.2 billion maker of patient-care products based in Batesville, Ind., decided to rethink its sales effort, the company looked first at its segmentation strategy.

Like many companies, Hill-Rom had been segmenting its customers by size. But after analyzing a variety of customer characteristics—including capital spending, profit margins, occupancy rates, and so forth— and interviews with salespeople and customers, Hill-Rom found that it could better serve its customers using a segmentation strategy that focused not on their size but on their needs and priorities.

The new strategy led Hill-Rom to recast its customer base into two broad groups, which the company termed key and prime customers. Key customers purchased with greater frequency and tended to buy suites of products. Prime customers were more concerned with price and tended to purchase individual products. Hill-Rom also found that selling to prime customers cost four to five times as much as selling to key customers.

When the company implemented a new sales approach and structure based on the new segments, sales effectiveness quickly improved. In a year, the company’s revenue growth rate doubled, sales rose in both segments, and overall customer satisfaction increased 6%. Meanwhile, over two years, the cost of sales dropped 1% each year.

“Amazingly enough, a large number of companies are still working in a world where doing customer segmentation means breaking your customers up by large, medium, and small,” says Mike Weissel, a Boston-based director at the consultancy Mercer Oliver Wyman. Instead, Weissel recommends segmentation that encompasses both demographic and behavioral factors. “The behavioral piece of that allows you to understand buying behaviors and both the relative value today and the potential value of customers in the future,” he says. “The demographic piece allows you to find the customers. The key when you talk about sales force effectiveness is the ability to take segmentation all the way down to tagging individual customers.”

Building a sales process around diagnosis

High-performing sellers can expend as much effort in helping customers understand their own needs and problems as they do in pitching their wares. This diagnostic approach is especially valuable in such industries as high tech, professional services, and health care, says Jeff Thull, author of Mastering the Complex Sale (John Wiley & Sons, 2003). “In a complex environment, customers need expert help to understand their problems and the parameters of an effective solution,” says Thull. “Buying is decision making, and the salesperson who guides the customer through a high-quality decision process is perceived as a valued business partner instead of a self-serving piranha.”

The Graham Company, a Philadelphia-based commercial insurance broker, brings the value of diagnosis into sharp relief. Graham is the 51st-largest insurance broker in the United States, reporting an annual premium volume of more than $200 million, yet its sales force represents less than 10% of its nearly 170 employees, and it generates its premiums from only 200 corporate clients. (Its nearest competitors have 2,000 to 3,000 clients.)

Graham’s approach is a radical departure from tradition. In an industry in which selling is a numbers game (provide enough attractive quotes and you’ll win your share), the company invests in a highly selective process of new client discovery. In each of the last several years, it typically contacted only 350 prospective clients, decided to seek a relationship with only 35 of those prospects, and earned the business of 28.

In pursuing clients, Graham invests substantial resources diagnosing the customer’s situation. The brokerage sends a team, which can include attorneys, risk managers, engineers, CPAs, and experts in the customer’s business, to evaluate the prospect’s insurance issues and exposures. This work is provided free as part of the sales process. (Consultants might charge $75,000 for comparable work.)

Similarly, Graham pursues an engagement with its clients that is deeper than that of the traditional insurance model. The company involves itself in the ongoing alignment of risk management strategies with the customer’s business objectives—for example, reviewing the insurance issues of proposed acquisitions.

How well does such a selling strategy work? Graham enjoys a 75% conversion rate in an industry with a 15% average and maintains a 98% customer retention rate. Three years ago, Waters Corporation, an $890 million maker of analytic instrumentation based in Milford, Mass., also adopted a diagnosis-based sales process. “One of the fundamental differences between other sales approaches and diagnostic selling is the notion that buying and changing are, in fact, similar processes,” says Richard Brooks, vice president of Americas Marketing. “If you understand how difficult it is to change, then you automatically understand how difficult the buying process is.

“Another important difference is the relationship of the whole process to the cost of [the] customer’s problem. It’s not so easy to do, but when you really help a customer understand the cost of their problem, it makes it easier for them to choose an expensive solution as long as they can see it is cost-effective,” Brooks says.

“You want to spend about 35% to 40% of your time with a customer developing that customer’s needs,” says CIBA Vision’s MacGirr. “Once you get the need well defined and established in both of your minds, the next step is not to present, but to confirm the need. Once that’s done, the close is actually pretty quick.”

How Apple and Amazon Manage Product Reviews

Two interesting stories going around in the last week, which I find to be similar (even if their impact is different): Apple’s being raked over the coals for rejecting an iPhone app that duplicates Apple functionality, and Amazon’s been dealing with the customer review attack on Spore, including purging and then restoring all of the reviews.

As I’ve mentioned before, I used to manage the Amazon customer reviews business, and so I know very well what the current team is going through. My assumption is that the Apple app store review business has some similar processes and problems. Here are some things I learned while dealing with this:

You start with some philosophical rules, and you try to make them stick. Providing guidelines is the only way to start. Example philosophies for Amazon (made-up, these aren’t real, don’t quote them anywhere else) could include “our customer is the Amazon buyer” (so no, Ms. Vendor, we won’t take down the negative reviews of your book, even though you spend a lot of money on advertising with us), “we eliminate reviews with demonstrably false information”, and “fairness is more important than justice” (so if you generally write good reviews and then get caught plagiarizing once, you can be given more chances).

All sensible on face and all make sense to folks who think in these kinds of abstractions all day - there may still be debate but these are good places to start.

There’s a clear chain of command for decisions. The escalation path from “customer service rep in her fourth week receives a review complaint in the mail queue” to “Jeff decides the review stays” should be very clear. (In my ~2 years dealing with customer reviews, btw, Jeff only engaged once on actual content, and the issue was much larger than just reviews (and he was getting hundreds of mails on this topic) - he generally trusted the heads of these teams to do the right thing as long as they could articulate the philosophy.)

All of this sounds good, of course, but then people get involved. And customer service reps are trying to interpret the philosophies (if they can find them among hundreds of pages of other rules), and some of them are judgment calls (what is “demonstrably false?” If I say “the defibrillator didn’t work and my dad died,” is someone going to check? are comments on voting records trustworthy? etc.) that different people will make, and of course you don’t want Jeff or Steve Jobs or anyone making every decision.

So it’s messy, and when it’s messy, strange things happen - reviews appear and disappear, apps go away and come back (like Netshare), etc.

This is a long way of saying that it’s entirely likely that the banning of Podcaster is a problem of human judgment in a theoretically well-structured system - not least because the decision seems inconsistent - and that could easily come back, not because of a correction of a philosophy, but because of a correction of a human error.

Now, it’s Apple’s responsibility to make that correction, and then to treat the errant employee with respect and look at how the company can do a better job.

The Hidden Logic Behind Our Purchase Decisions

I drifted out of the house Monday morning without the charger for my BlackBerry. A seemingly small oversight, actually more akin to the doctor saying he forgot the tubing for the life support machine. I am utterly useless without it.

Luckily I was at the airport early enough to have time to trot over to another terminal where I knew there was a shop selling various gadgets for wireless. (My family and friends will now appreciate, by the fact that I did this, the extreme direness of the situation).

Once there, even in my pre-Starbucks state, I was very interested to note that the two young men manning the store had a very strong preference regarding the brand of battery charger I should buy — and for no obvious (i.e., articulated) feature or price rationale. Since these are pretty cheap products, even if there were a sales commission difference, it’s hard to imagine it would explain the enthusiasm for which they repeatedly pointed me to one brand over others. There was clearly some hidden logic going on. It may have been as simple (complex) as the “evilness” Umair Haque speaks of, associated with large traditional firms, since it was those they repeatedly steered me away from, in favor of a more “universal,” “open” option.

Well, I’m sorry to leave you hanging on that one (I was, as you’ll recall, rushing to catch a plane) but the encounter got me thinking about hidden criteria we each use to make purchase decisions — logic I bet companies don’t understand. Here’s an example: I strongly prefer one overnight delivery company over another — based on a rationale I doubt you’d suspect.

I’ve mentioned before that I live on a farm with a fairly large pack of dogs — mostly rescues in various sizes and shapes — together, a generally a happy-go-lucky crowd, always eager to great the next farm visitor. Now, here’s the secret: one of the delivery services stocks their trucks with dog biscuits and (at least in our area) has either hired or trained a dog-savvy driver. The gang loves every visit from this company, greeting the truck’s arrival, no matter how frequently it turns down the drive each day, with glee unparalleled by children welcoming Santa from the North Pole.

The other company not only does not stock its truck with treats, but has managed to assign a driver to our rural route who clearly does not like animals. This driver stays well up in his truck and hurls our packages out onto the stone wall, all while surrounded by a barking crowd of miffed mutts.

The bottom line is that I ask everyone I do business with to please use company A over B, if at all possible - it makes my life so much simpler.

And, today I wondered if these companies know what is swinging the business in rural Massachusetts. I get a lot of letters and packages — and all along our country route, my neighbors have a lot of dogs. I think the ROI on a box of biscuits would be pretty high.

By the way, if anyone tells you dogs are color blind, all I can say is mine can certainly discern their beloved purple and white from brown any day.

What hidden criteria do you use that companies may not suspect?

Involve Your Customers in Design Decisions

Those who read my blog may have been following my frustration with our marvelously engineered, but user-unfriendly European car (cumbersome navigation interface, dreadful cupholders and an iPod interface that only an engineer could love are among its annoyances).

Apparently, I am not alone in my sometime fixation on car amenities. Just this week, Jeff Jarvis of BusinessWeek comes at the same problems but offers a fascinating solution. What if, instead of treating customers like foreign spies intent on subverting the magic of each model years’ design process, the auto companies invited them into the very design process, in much the same way that Google invites its users to test and improve its software products? Perhaps we shouldn’t be messing about with stuff like energy transmission efficiency and torque, but hey, what would be the harm in letting us weigh in on the amenities that we both notice and use in daily life?

Jarvis puts it this way:

Car companies have no good way to listen to customers’ ideas. If they had opened up, years before, I would have been among the legions who’d have gladly told them to invest 39 cents for a plug-in car radio so we could connect our iPods. Every time I try to listen to my music or podcasts in the car via various kludges - FM transmitters that can’t transmit to a radio an inch away and cassette-tape gizmos - I curse car companies and their suppliers. At least let us help design the radios you install, I urged.

No such luck.

Jarvis’ recommendation is that car companies could help us design cars that we could truly love, because we would imbue them with our personality — colors we like, add-ons that just scream “us” and so forth. And why not - hey, they’re even saying that electric cars will be required to play sounds because their engines are so quiet that people can’t hear them coming. Imagine - ring tones for your car! Nobody hearing that old Springsteen number on the road could fail to know that you’re on your way.

Actually, although Jarvis uses a software company (Google) as his exemplary ideal of involving customers in design decisions, I think more easily translatable examples for car companies come from other firms that actually make products. Named as one of the most innovative companies in America by Inc. magazine, T-shirt manufacturer Threadless lets its customers actually design the product. Other customers vote on them. Winning designs get produced and sold; losers never see the light of day. The company that makes Legos is famous for including its more avid customers in the design and development of its Lego kits. Sealed Air Corporation (one of my personal ‘most admired’ companies) sponsors aBubble Wrap innovation contest every year to encourage inventors and entrepreneurs to put their product to the test in ever-more innovative ways. Kettle Chips annually runs a “People’s Choice” campaign in which its customers vote on potential new flavors. The winner gets produced and finds its way to supermarket shelves. Harley Davidson for years took inspiration for new product designs from its “HOGs” (Harley Owners’ Groups).

The truly ironic aspect about all this is that the concept of seeking inspiration for innovation from users is hardly new. Back in the 1970’s, the brilliant MIT researcher Eric von Hippel’s research showed that ‘lead users’ and early adopters were a potent and powerful source of winning product ideas. Indeed, he argued that most successful innovations had their origins in some kind of need expressed by customers. I guess some lessons need to be learned, relearned and then learned again.

Becoming a Customer Experience-Driven Business

2008 was the year I decided to no longer care about my frequent flyer miles on United. I’ve been Premier for about 5-6 years, and after finally reaching Premier Executive (having flown 50,000 miles on United in 2007), the only perk seemed to be exit row seating. After being charged $150 to change a ticket, and treated as little more than a nuisance onboard (they don’t even offer peanuts!), it became clear to me that “loyalty” is no longer rewarded. I’ve decided that, whenever possible, I would fly Southwest, JetBlue, or Virgin America instead.

This isn’t because of price — most trips my company pays for, and in the past I’m sure I’ve spent a little extra to fly United for the miles. It’s because these airlines demonstrably care much more about my experience with them. In Forrester Research’s Customer Experience Index 2008, Southwest is the only airline to rank in the top 25, whereas American, Delta, Northwest and, yes, United, sit in the bottom 25. Even though they are a low-price alternative, Southwest delivers the better experience. Why? Because customer experience is an organizational mindset. It’s not something a business buys, it’s something a business becomes.

Customer experience refers to the totality of experience a customer has with a business, across all channels and touchpoints. Southwest succeeds because of the care it puts into providing a satisfying journey at a reasonable price — from the simple website to their recently redesigned boarding queues to the friendly staff members who help you, it’s clear that Southwest considers how the customer will feel every step of the way. This even goes for their pricing, which, compared to the byzantine rules of the legacy airlines, is remarkably straightforward, and doesn’t nickel-and-dime you.

Though the business community increasingly recognizes the importance and power of customer experience to drive innovation and positive financial results (witnessed press coverage of such favorites as Apple, Amazon, Proctor and Gamble, and Nintendo), most companies have not successfully embraced it. This is because becoming customer experience-driven is not a snap. It’s more than just embrancing “The Power of Design”, or building empathy for your customers by observing them (though both of these things are important). Nor can you buy a technological fix, no matter what the CRM providers say.

Embracing customer experience is a process, one that requires fundamental shifts in how your business behaves and is organized. In my 15 years working in user experience, particularly my last 8 helping run Adaptive Path, a leading experience strategy and design firm, I’ve learned what it takes for a business to embrace customer experience, and I look forward to sharing this with you. As Southwest Airlines demonstrates, this isn’t about money — in my work, the biggest impact I’ve seen a customer experience mindset have is to help companies understand how they can better orchestrate existing elements to realize new value. I’m sure that sounds like some retread of the dreaded “Business Process Reengineering“, but there’s a key distinction — this isn’t about efficiency and effectiveness and reducing waste throughout your processes. This is about choreographing what you already have (technologies, people, offerings) to better respond to your customers’ needs and wants.

I’m thankful to HarvardBusiness.org to offer me this forum to share my experience. And, let me say at the outset, what I have to say is not definitive. I’m always learning, and hope you are, too. I’d love for this to turn into a continuing dialog about how to successfully change organizations so they embrace customer experience.

So let’s get started: Where is your company when it comes to embracing customer experience?

It’s Not Who Your Customers Are, It’s How They Behave

Wow. I’m humbled by the commentary from my first post. I hope I can maintain such passionate interest!)

Businesses cannot exist without customers, so it’s sadly ironic that many, if not most, businesses, actuallyunderstand so little about them. As a company grows, a smaller and smaller percentage of the staff interacts with the customers. In fact, those folks on the “front line” (think call centers, service counters, retail stores) are typically among the lowest-paid and have the least authority.

Meanwhile, back at headquarters fundamental decisions are made with extremely limited information about customers.There, understanding the customer is often considered someone else’s responsibility, because, “we have a department for that.” No department has a complete view of the customer, however, and so in place of true understanding are models and frameworks that attempt to describe the customer. Many companies don’t go beyond demographics and market segmentation. While it’s helpful to know how they break down by age, sex, income, region, and other easily measurable characteristics, there’s actually very little you can actually do with that information. In order to become customer experience-driven, you need to go beyond who your customers are, and understand what they do.

When companies think of how their customers behave, it’s typically in one of these four ways. See if any of these resonate with you:

1. “A gullet whose only purpose in life is to gulp products and crap cash”
That quote comes from The Cluetrain Manifesto, still one of the best books on how companies should embrace a new way of communicating with their customers. Very few companies would admit it, but you know that some still see their audience this way (I’m looking at you, broadcast media.)

2. Sheep
This view holds that with the right “messaging”, you can guide people to behave in certain ways, because they’re docile and gullible and respond only to emotional tugs. And while this might be fine in the world of packaged consumer goods, where there’s not a lot of complexity in using (i.e., literally consuming) the product, it breaks down when your offering is more complex. During the first Web boom, I remember companies spending tens of millions of dollars on advertising, and a tenth (or even a hundredth) of that on the site experience. You can no longer simply hound people into buying your product.

3. Homo Economicus
If Sheep are one side of the behavioral coin, this is the other. This view argues that customers are highly rational beings who want to maximize the utility of their purchases. This leads to an assumption that what matters most is “bang for the buck,” which in turn gives us products with bloated feature lists, because who wouldn’t want to buy the item with 14 bullet points on the packaging over the item with just 10? Sadly, there’s research that suggests that many customers do make just this purchase decision; however, there’s also research that up to 50% of product returns are for items in perfectly good working order — they’re just too confounding to use.

4. Type A Personality
Perhaps the most sophisticated common view of customer behavior is the one that understands customers are completing tasks in the process of accomplishing a larger goal. This view comes out of the world of software and Web design, where the functionality can get quite complex. This perspective becomes problematic when taken to the extreme — that people are some kind of flesh robot seeking to maximize productivity. This leads to offerings that work, but can be joyless and dull. Perhaps you’ve used some of Microsoft’s products?

Now, these perspectives aren’t wholly wrong (well, maybe the gullet), but clearly they’re not quite right. In order for a company to deliver truly outstanding products and services, it must embrace the messy complexity of human life, and endeavor to understand its customers as people. In other words, understand your customer as you understand yourself.

This means going deeper than tasks and goals to appreciate behaviors and motivations. A few years ago, I worked with a large national bank to help them better understand how customers decide to purchase the bank’s products and services. The bank had a sophisticated demographic model, but didn’t understand what cinched the deal.

Our initial efforts focused on the “goal” of buying a product, and we were able to outline the steps that people took to achieve that goal. They researched banks online, then compared products within banks as well as across banks. They visited nearby branches, and spoke with representatives in person or on the phone. And once they amassed enough information, they committed.

In our analysis, we realized this was only part of the story. We asked the research participants to retrace their steps, focusing on the Web site, to walk us through their experience. And in doing so, we saw that while there was a set of discrete tasks that lead to achieving a larger goal. More importantly there was an underlying motivational layer of emotion that actually guided their decisions. Buying financial products is challenging, because unlike physical goods, it’s hard to define what you want ahead of time. At Best Buy, you can point to a 52? television and say, “something like that.” You can’t do that with a loan or a line of credit.

So what happened was that while people appeared to engage in the appropriate steps to make a purchase decision, because they couldn’t articulate an end state, they were simply going through the motions and would never commit.We realized that customers must satisfy three sets of requirements — functional (does the product meet my basic needs); intellectual (through comparison, am I confident I’m getting the best deal); and, crucially, emotional (could I have a relationship with this bank?). The bank wanted to drive all applications for new products online, but the customer research analysis made clear the importance of maintaining a quality cross-channel experience. Potential customers often wanted to meet representatives, either in person or on the phone, before committing to an application, even if they’ve done all their research online.

In my following post, I’ll discuss our approach for better understanding customers, and sharing that insight throughout your organization. In the meantime- does your company “have a department” for customer engagement? Or is customer understanding something that’s infused across your organization?

Why Small Companies Will Win in This Economy

I just heard a story from a client that’s hard to believe but true.

In the worst economy we’ve seen in decades, Passlogix, a privately owned 100-person software development company, just received over a million dollars in prepaid commitments for the next three to five years of service. And they beat out several much larger more established companies, like CA (14,000 employees) and IBM (400,000 employees), to win those customers.

Now, how do you explain that? The bigger companies aren’t getting similar deals. It’s not standard in this industry to prepay contracts of that size and duration. And the clients received only a small reduction for their upfront payment, less than the cost of capital.

I think it’s a trend. And understanding it might just be the difference between failing and thriving in this economy.

Yesterday morning I had breakfast with a good friend of mine, a mentor in the consulting industry. He’s a senior partner in a large consulting company and has worked in one large company or another for the past 35 years. Really smart, really talented.

And now really depressed. He hasn’t been having fun for some time but it’s gotten worse. He’s survived several rounds of layoffs but who knows, he tells me, he might be hit by the next one. And if he isn’t, he might leave anyway because it’s so miserable. He doesn’t understand how his company is making decisions, including how they decide whom to let go. He is one of the most senior leaders in this company and even he doesn’t trust it anymore.

This is not an isolated case. I’ve been hearing this from many of my large clients. People in senior positions don’t trust the decisions being handed to them. And if you go one layer down, to middle managers, the distrust is palpable. I don’t know a single person who works for a large company who feels confident they’ll have a job in 6 months. Not one.

Now, imagine you’re a client wanting to buy from one of these companies. You call up your client contact to talk about the sale. One of two things will happen:

1. You have a relationship with her and so you talk and get a sense of her insecurity, fear, and distrust.
2. You have no relationship with her because the company is so big and you talk to a different person each time you call.

Either way, you’ll probably get the sense that your contact may not be there in the future to fulfill her commitments to you. And that won’t make you comfortable committing long-term dollars (or any dollars) to the company?

Now compare that to Passlogix, whose clients know they can pick up the phone and speak with Marc Boroditsky, the CEO. He tells clients about his commitment to the company and to them, and they know exactly who to call if the work isn’t done to their expectations. That personal relationship, that trust, is important to them. They’re willing to invest in it long term — to the tune of millions of dollars, up front.

And it’s not just the CEO. If clients speak with other employees in the company, they’ll get the same feeling of trust. A small company gives its employees a sense of security and employees pass that feeling on to clients. Not that small companies don’t go out of business. They do all the time. But each employee has much greater control over his own destiny. In a company of 30 employees, if you do a great job, there is a good chance you’ll be recognized. But in a company of thousands? It’s easy to be missed. And easy to be laid off.

The gap of confidence between small companies and big ones is growing. We used to rely on the security of big companies. That’s why we worked for them. And hired them. And put our money in them.

But with the virtual collapse of AIG, Lehman, Citibank, GM, Chrysler, and many more — now even GE is in trouble — all that’s changed. Now it’s a risk to do business with the big ones.

We simply don’t trust companies anymore. We trust people. And in big companies, it’s hard to even find a person to trust as we scream “operator” into our telephones only to get transferred to another menu whose options have changed.

That gives small companies a huge advantage.

Just ask John Drummond, who started Unicycle.com after getting laid off from IBM during the last downturn. Once he got the hang of it, he started Banjo.com, his other childhood passion. Both are doing well and he’s about to launch more sites.

There are hundreds of thousands of businesses like John’s. Small companies that aren’t making millions but provide a good living for the people who work in them. Niche companies whose owners are trying to build sustainable businesses they love rather than fast-growing companies they can flip. They have no intention of retiring. They like working in them. And their clients know that. Which is why they have a loyal customer base willing to invest in the relationship.

Big investment banks are burning — but lots of small boutique firms, each with ten to twelve people, are opening up. And they’re doing well. They’ve gone back to the fundamentals. Finding a niche in which they have value to add and deals in which they are experts. And then sitting across from other people in the deal, building the relationship, making reasonable commitments, and following through.

Small companies with low overhead, reliable owners, a small number of committed employees, personal client relationships, and sustainable business models that drive a reasonable profit are the great opportunity of our time.

Small is the new big. Sustainable is the new growth. Trust is the new competitive advantage.

Between my starting this post and finishing it, Marc Boroditsky called to tell me he’s about to book another million-dollar prepaid, three-year contract with another client who said he’d lost trust in the other companies he’d been considering.

The client isn’t looking for a vendor who has lots of time in the industry, or who’s highly capitalized, or who has a long list of big name clients and a flashy office. I’m sure those things don’t hurt. But it’s not what he’s looking for.

He’s looking for people he trusts. For a CEO who picks up the phone when it rings.

Next Page »