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The Inside Advantage
The Strategy that Unlocks the Hidden Growth in Your Business
By Robert H. Bloom
The McGraw-Hill Companies, Inc.Copyright © 2008Robert H. Bloom
All rights reserved.
The Most Important Word in Business
As a corporate manager, a business owner, or an entrepreneur, you are intimately involved with all aspects of your business. You know everything there is to know about your products, services, employees, costs, and competitors. You live your business 24/7.
You talk to your customers every day—and when you don't, you are reviewing sales reports, learning about customer reactions to your products and services, and, I hope, examining the entire transaction experience with your firm.
You pore over every piece of demographic information you can lay your hands on: data from trade associations and community and government agencies as well as the charts and graphs in the original studies your company has initiated. You know that any current, reliable insights into the profiles of your customer or potential customer will prove valuable in growing your business.
But after all that, do you really know your customer?
I believe that customer is the most important word in the vocabulary of business.
That's why the first step in my Growth Discovery Process focuses on your core customer, your target for all future growth. You can't leverage your Inside Advantage, you can't grow, you can't even survive in business, if you don't recognize that customers and potential customers are paramount and that there is far more to them than a statistic can convey.
If you are convinced that you know everything you need to know about your customers—perhaps this story will convince you otherwise.
Procter & Gamble (P&G), one of the largest, most profitable consumer products companies, recently introduced its highly successful Swiffer Wet Mop in Italy. According to the Wall Street Journal, P&G conducted research that revealed that Italian women keep very clean houses, in fact spending an average of 21 hours each week on household chores—not counting cooking. By contrast, Americans spend only four hours on similar chores. The data confirmed that Italians wash the floors in their kitchens and bathrooms four times a week or more, while Americans take on the task only once a week. It's likely that P&G managers rejoiced in this information, knowing they were entering a market where customers are known to use and buy more cleaning materials than the norm.
So, how could P&G's Swiffer Wet Mop product "flop" in Italy? It did, until the company dug in and began to learn a great deal more than what mere statistics revealed about its Italian customers. As the Journal puts it, "What the world's biggest consumer-products companies failed to realize is that what sells products elsewhere—labor-saving convenience—is a big turnoff here. Italian women want products that are tough cleaners, not timesavers. The Italians 'are not ready for convenience in the way Americans are' says Elio Leoni Sceti, chief marketing officer at Reckitt Benckiser PLC, maker of Lysol cleaner and Woolite laundry detergent. 'It's perceived as a step back.'"
P&G eventually came to realize that if it was to succeed in Italy, its products would have to be experienced as get-the-job-done cleaning materials rather than as labor-saving devices.
P&G, one of the best marketers on the planet, got it. Learning that the Italian customers had been using the product to polish rather than mop, as they didn't believe it could handle the tougher mopping job, P&G introduced a product with beeswax for polishing, which was successful. It also introduced the Swiffer Duster, which did a light job well without offering timesaving "convenience"; the product became a huge bestseller in Italy. "Italy," the Wall Street Journal tells us, "is now the biggest European market for Swiffer."
This story underscores two vitally important lessons about core customers. First and most obvious, what works in one market or with one customer does not necessarily work with others. One size does not fit all—a well-known fact, but one that's frequently overlooked. Second and even more important: it's not enough to define your customer as a market statistic—you can't get to know a statistic.
Go Well Beyond Demographics
Many managers and owners of businesses large and small, when asked to describe their customers, tend to rely on a statistic like "my customers are females 25 to 40 years old" or "my customers are purchasing agents in big industrial companies." You can't get to know a group of people like "females 25 to 40" or "purchasing agents." That's why you must think of your customer or potential customer in the singular—as one living and breathing person. That person you can get to know, and you can develop a close relationship with him or her.
Knowing your customer—fully understanding his or her needs, preferences, and prejudices—is vital to creating a robust and effective growth strategy for your business. Quite simply, you'll have a much better chance of selling your product or service to someone you know and understand.
Stanley Marcus knew that. The brilliant, urbane founder of Neiman Marcus was also the company's visionary and merchant prince. Above all, Stanley was an absolute master in the art of knowing and understanding customers. He knew almost all of his wealthy Texas customers and well-heeled Dallas visitors by first name. He had a close relationship with many of them. Stanley would magically appear in his store "just to say hello," when the famous and not-so-famous customers were trying on mink coats, considering buying diamond brooches, or shopping for expensive gifts "for a friend." Stanley knew what his customers preferred and understood their aspirations. He built a store environment, created a merchandising philosophy, and cultivated a worldwide reputation with those customers' needs and desires in mind. He did this in many obvious and not so obvious ways.
Prior to Neiman Marcus's U.S. expansion, Stanley had only the one store in downtown Dallas at the corner of Main and Ervay streets. Today, this grand old building remains a showcase of fashion for people from all over the globe. When I was a young cub learning the business, I met with Stanley at this store to get his approval of a special print ad that, as in most retail ads, had the store's address just below the logo. Like all intuitive marketers, Stanley not only knew his customers, he also knew what he wanted his customers to think and feel about his brand. Pointing to the address in the ad, he said, "Bob, please remove the address." He added, quite gently, "when you are Neiman Marcus, you don't need an address."
This was a very valuable lesson, and "Mr. Stanley," as everyone called him, was a great teacher. By excluding the address in his ad, Stanley was adding exclusivity to his brand. He was not inviting just anyone into his store, he was whispering to his valued customers, "of course, you know where we are located and you are welcome." He was subtly giving his customers permission to feel a bit elitist in matters of taste and style. He showed me the importance of knowing your customers and knowing what you want them to think as well as feel about your reputation.
Form an Intimate Image of Your Customer
Obviously, the best way to know the person you're selling to is to sit across from him or her in the quiet of an office or in a corner of your store or across a lunch table. You can learn how she really feels about the new product that you're launching. You can get a sense of his tastes and values by seeing what he orders for lunch or observing the kind of car he's driving. You can hear her talk about her
Excerpted from The Inside Advantage by Robert H. Bloom. Copyright © 2008 by Robert H. Bloom. Excerpted by permission of The McGraw-Hill Companies, Inc..
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