|
Archived
Articles
Who
Would Have Thought – The Customer Really Is
Right
By Joni Hart and Michelle Metzger
We recently attended a panel
discussion at the SMU Cox School of Business called “Market Strategies Driving
Today’s Business” co-sponsored by the American Marketing Association.
While the fancy title suggests unseen “forces” that act as puppetmasters
in business, we were struck by the simplistic conclusion drawn by every panelist
– customers know what they want, and if you want their business, you’d
better learn how to listen to them. The old adage applies – the customer
is always right. What a novel idea.
The importance of communicating
with your customers is something you can learn the easy way – ask them.
Or you can learn the hard way – spend lots of marketing dollars pushing
a product customers don’t want or in a way that makes them not want to do
business with you. Either way, you’ll find out what they want in the end.
Your pockets will just be much lighter if you choose the latter. What follows
are a few lessons from the “big guys” on how they learned to listen
to their customers.
Put a Picture on
It
In the early 1980s, the home computer market was just emerging. The retail giant
Toys “R” Us approached Texas Instruments about the model TI99 home
computer. With hundreds of stores across the country, this would have been an
ideal distribution network for TI to use to penetrate this emerging market. The
only stipulation was that Toys “R” Us asked TI to modify the plain
corrugated cardboard box that packaged the computer. “They asked us to put
a picture on the box,” said Bob Greenburg of Texas Instruments during the
panel discussion. “‘Maybe you could put a picture of a mother and
child at the computer,’ they suggested.” Texas Instruments refused
to change the package of the computer claiming that, “If the product is
good enough, people will buy it,” regardless of the packaging. TI lost the
business, and, as Greenburg said, “That’s why you’ve never heard
of the TI99 computer.”
Mr. Greenburg went on to
tell how TI’s key marketing strategy had historically been to rely on the
company’s innovation. “We were the company that invented the handheld
calculator,” he said. The company proudly touted its innovation and was
not prepared for the onslaught of competitors that could manufacture its inventions
faster and cheaper. “Now, we listen to our customers,” Greenburg continued.
He said the company now does 80 percent of its business with just a handful of
customers. TI conducts research in partnership with their customers, develops
products to fit their needs like a glove, then co-brands and co-markets them.
In the end, TI reduced its marketing budget to less than 10 percent of what it
had spent in the past with greater results – all because the company decided
to check its ego at the door and start listening to its customers. This is quite
a shift in strategy from the days when TI boasted that it would “make Intel
TI-compatible,” rather than making its products compatible with Intel.
Why Don’t
You Just Ask Me?
Chapparal Steel and its subsidiary, Texas Industries, needed power – and
lots of it. Because they were such large customers, TXU (the energy supplier)
invited them on a guided tour of their power facilities. Tommy Valenta of Chapparal
recounted the experience for the group. “I was shocked to see this huge
facility that looked like that room in the movie ‘War Games,’ and
in one corner, there was this guy who looked at a big screen that had our name
prominently displayed along with one other customer,” says Valenta. “His
whole job was to sit there and guess when we would turn on our machinery. If we
turned it on, he would push a button to start the power supply. If we went to
lunch or had an unexpected break to re-supply, he had to turn it off – and
fast!” Because power is a perishable commodity, TXU has to closely monitor
supply and demand in real time – especially for power-hungry plants like
Chapparal. “This guy had to guess what we were going to do at a given moment
– and he was sweatin’,” Valenta continued. “I asked my
guide, ‘Why don’t you just put a phone next to this guy’s desk,
so we can call and let you know when we are powering up or down?’”
They did just that, and the relationship led to lower operating costs for TXU
and fewer ulcers for that poor power monitor.
Don’t Forget
the Human Touch
Do you remember the first Automatic Teller Machine (ATM)? It was so cool. No longer
were you bound to limited banking hours to get cash out of your accounts. The
banking industry analysts and influencers all said it was going to be the death
of the local branch office. People would not need to go into a branch for anything,
now that they could do their transactions so quickly and easily without one. Add
in the coming of direct deposit offered by many companies at the time, and you
had the final nail in the proverbial coffin of the local bank branch.
Instead of rushing to close
branches, Comerica Bank monitored what really mattered – their customers’
behavior. “If we had listened to those predictions and acted on them, we
would be out of business today,” said Charles “Chuck” Gummer
of Comerica Bank at the discussion. “People still like the human touch and
talking with someone face to face about their money,” he continued. Even
with the same predictions resurfacing with the emergence of online banking, Comerica
still opens new branch offices all the time and has more on the schedule to be
opened in 2004. It just goes to prove that the customers really do know what they
want, and companies that listen to them are sure to succeed.
As you have seen, talking
to your customers is vital to your survival, but you also need to listen. You
can create a flashy, expensive campaign, but if no one wants to hear it, your
efforts will be futile. On the other hand, if you approach the market with a product
and a message you know will have resonance, the opportunity is limitless. Especially
if you remember this one good piece of business advice: the customer is always
right.
E-mail
the authors: Joni
Hart, Michelle Metzger
Click
here to e-mail this article to a friend.
Archived
Articles
<Back
|