by Demetrios Sapounas
Part 8: Listen to the Market
In the past decade and a half, I have had the opportunity to work on several new ventures and advise and mentor numerous entrepreneurs on their journey to building a successful company from an idea. Recently, I also began working as a business coach with the Small Business Development Center (SBDC).
A common theme with all these interactions is the emphasis on building a product. This includes: raising capital, developing detailed revenue models, recruiting a team and getting customers – not necessarily in this order. This is the “classical” approach of going about launching a new venture where the belief of “build it and they will come” still seems to influence early- stage activities.
Most people will tell you that listening to the market helps you learn the customer needs and wants, the direction things are heading, the new concepts and technologies, the competition. This is certainly valuable, but what your existing customers feel, say (in many cases do not say) about your products or services, the quality, the performance, your responsiveness, the reliability, can also play a valuable role in the path your business will take. It is always nice to engage with happy customers, but when you engage with unhappy customers is when you really learn what is going on and where you need to improve.
As in the classic Volvo ad explaining how they plan for their cars to survive even a terrible crash, you need to expect and be ready for things to go wrong when working with customers. Every great customer-focused company has a framework for “service recovery”—the process of working with upset customers. Their employees receive training on this framework long before any actual customer is breathing fire down their neck. Marriott’s service recovery mnemonic spells LEARN (Listen, Empathize, Apologize, React, Notify); Starbucks memorably spells LATTE (Listen, Acknowledge, Thank, Take Action, Explain).
It used to be that the “nobody gets fired for buying IBM” quote was synonymous with largest chance of success, because at the time IBM was the biggest company with the quality, knowledge and scale to make things work and stand behind their products and services. A lot of things have changed since then, but customers still expect quality, reliability, performance, good service when things go wrong and innovation. This means that you must plan ahead, so you are prepared to address issues reported by your customers or independently identified by your employees. And this does not change, whether you are IBM, Ford, Amazon or Siemens or a five-person company with one client! Reputation is everything and you need to actively manage it, so you can leverage it to support the growth of the business.
In a previous segment, we talked about why your employees should come first. Here we discuss your customers, who come second! Many feel there is a love-hate relationship with customers. You often believe you have the perfect solution for their problem, only to be told that this is not exactly what they are looking for and need, and they want something that does most of what you are providing plus something else- and that something else is the deal killer. This does not apply only to the product or service you are providing, but also to the support that follows a sale. This is what many young companies do not plan for.
Every customer will have certain expectations once they purchase what you are offering. This is common for both consumer and business offerings. If you are selling a physical widget, the expectations would be that it will work as advertised, it meets certain quality standards and will last certain period of time (both of which usually differ from customer to customer), you will stand behind your offering and you will fix or replace as needed. If you are selling a digital product, the expectations may be even more extensive, ranging from continuous 24×7 availability, blazing fast performance (even if they do not have the fastest connection), it will work with whatever technology they have (even if you have published a compatibility list), any preferences or data will be available in perpetuity. The list is endless!
You may have been prepared to provide customer support. You authored and published user manuals and instructions, you posted your service level agreement (SLA), you performed extensive quality control and you feel you are ready for anything that comes your way. Some time ago I studied martial arts and my sensei’s favorite saying was “expect the unexpected”! This also applies when interacting with customers. Many items you buy come with the phrase “some assembly required”, but who actually takes the time to even look through a manual? It was not by accident that the RTFM (Read The F***** Manual) term was coined, which applies universally to all types of products. I have seen some engineers actually read manuals, though most people find it easier/simpler (though not necessarily faster) to call support for help instead of looking for the information in the manual (or the Internet or ask an AI). This means that you should be able to have flexibility and scale up or down your support resources. Typically support request volume increases with the release of a new product or version, so you should be ready for that through all the support modes you may employ (call, chat, email, social media, etc.).
Customer engagement through support channels is something companies do not leverage to its full potential. It is typically seen as a cost center and a numbers activity, so they can check the support Key Performance Indicators (KPIs). But those metrics (e.g., how many calls an agent handled, the average/mean time with the customer, how may incidents were addressed through the chat bot or the self-help) mean nothing, except for justifying a support department budget. This engagement becomes a lost opportunity to get real customer input. If the agents are properly trained to solicit real feedback from customers (e.g., what made you get this product, how do you like it, what other features would you like to see, how can it become better) instead of the typical follow-on surveys (e.g., was your issue resolved, what the agent knowledgeable, were you satisfied with the wait time), the feedback they capture could be a goldmine for the product and services team and it can be used to enhance the offerings, thus delivering higher value to customers.
For digital products there is the need to ensure that they are available and functioning properly 24×7 and any outages should be kept to a minimum, unless they are planned and well communicated in advance. In addition to possible bad publicity, most users are quick to complain and post negative comments for bad service on X (Twitter), Facebook or any other of their favorite social media platforms. There are also the real costs that come with outages. A perfect example is the Affordable Care Act (ACA) website and what followed its initial release in 2013. The publicity was so bad that vendors were fired, and significant modifications were implemented by a new vendor. A recent Gartner report estimated the average cost of IT downtime to be $5,600 per minute and the amount can rise to $9,000 per minute as companies scale in size and services. So, it is important not only to have a plan for addressing an outage, but also to perform periodic tests (fire drills) to ensure everybody knows exactly what to do when something happens and for how long things will be impacted before full service is restored.
In July 2021 an outage linked to the content distribution network Akamai impacted several major web sites. Even when an outage is beyond your control, you should be prepared. You should verify everything is well with your IT infrastructure (whether cloud or on premise) and you should put out communications through multiple channels, to communicate and inform your customers and to minimize any negative publicity.
The always on, always connected expectations of customers have changed how business operate and act. It is not only necessary to have good products and services and to provide good support. It is also important to act as a communications agency and continuously communicate (engage) with customers, to stay on their radar. Attention spans are very short these days and the more exposure you have with customers the more relevant you are perceived and the higher the likelihood you will retain and grow your customer base, you will have positive online posts and you will successfully compete in the market.
In the next segment we will discuss innovation and how it could be part of the culture and company DNA.
Resources
The Cost of IT Downtime: https://www.the20.com/blog/the-cost-of-it-downtime/
What is the Cost of Downtime for Small Businesses in 2021?: https://www.encomputers.com/2021/05/small-business-cost-of-downtime/