Steve Yastrow

Pain is inevitable, suffering is optional

Last night began a 17-day odyssey, with travels taking me to speaking events in Seattle, New Jersey, Mauritius (look on your globe a few inches to the right of Madagascar), San Francisco (two events), and then up to Wisconsin with my band to play three times over a weekend. I’m expecting 64 hours in the air over the next two and half weeks, in addition to about 16 hours in airports and 12 hours getting to and from airports. I’ll make it home for a few odd nights along the way, staying just long enough for my geriatric dog, Puck, to get confused.

I’m excited about the work on these trips, but a bit concerned about dealing with all of the travel.  While on the flight this last evening, I was thinking that the best way to deal with mega-travel like this is to treat it like yoga. Relax, be present, don’t be anxious about things happening in other places. Focus on the moment I’m in right now. Avoid thinking, “When are we gonna get there?” and don’t let any travel hassles shake my peace of mind.  The four-hour flight from Chicago to Seattle was enjoyable; I settled into my seat, got some work done, read a bit, chilled out.

Well, this peaceful mentality was tested 10 minutes after arriving in baggage claim in Seattle, when it became clear that my suitcase (full of today’s presentation materials) didn’t make it on the flight. But just as my blood started to boil, I caught myself.  Yes, I think United Airlines is inept for making me wait in baggage claim, and then in a baggage service line, when they’ve known that my bag was lost for the last three hours. Why not send a message to me while I’m on the flight? Why not give me $100 to buy some stuff instead of saying “Government regulations give the airlines 24 hours to find a bag before requiring remuneration?” Why not apologize?

But I didn’t get upset.  I stayed calm.  Actually, I wasn’t calm for the first 30 seconds after the United agent confirmed that my bag was still in Chicago, but I caught myself.  I remembered that I have tons of travel in the next few weeks, and I don’t want to let these hassles interrupt my peace of mind.  This is not my normal reaction; I’m embarrassed to think about how many times I’ve lost my cool in airports.  But, hey, much of life is about practice and progress.

So why does this matter, beyond me keeping my personal stress levels down?

We Relationships are the great business differentiators in our new economy.  It’s very difficult to create lasting product advantages, and even more difficult to create lasting service advantages these days, because, if you are successful, your competitors are constantly trying to copy what you do and steal your customers.  But where your customers may see your products and services as replaceable with those from competitors, a personal We Relationship with you is unique, because it can’t be copied by the competition.

One of the biggest hurdles to creating relationship-building encounters is how the chaos in our lives makes it difficult to be fully present as we engage with our customers.  Here’s a common scenario:  In a workshop, I’ll ask attendees if they can tell when someone they’re speaking with on the phone is simultaneously checking email or surfing the web.  Invariably, people say they can discern this behavior, because it is obvious the other person is distracted.  Next, I ask them if they will commit that, for one week, they will not look at their computer screens during phone calls.  Just as invariably, people laugh and say, “No way, I know I can’t do it.  I’m so busy, I can’t resist looking at emails while I’m on the phone so I can get two things done at once.”

Now, take the same scenario, and add to it distractions from the BlackBerry, project deadlines, problems with other customers, personal issues, etc.  If we let these distractions get to us, we will not be able to engage our customers fully, and we will end up creating relationship-eroding transactions instead of relationship-building encounters.

Think about that.  As the distractions and stresses of modern business life increase, we are less able to have relationship-building encounters, at a time when relationships are the most valuable product we create.

As I wrote in this newsletter, We Are Not Multi-Taskers, “At any given moment, at places all over the planet, millions of interactions between buyers and sellers are devolving into mere transactions, missing the chance to be relationship-building encounters, because the people in the interaction are not fully present.” (For more on the idea of being present during customer interactions, see Chapter 2 in We or my free ebook, Encounters.)

So, if I let United Airlines’ ineptitude take over my brain, how will I be able to engage the audience to whom I will be speaking a few hours from now?  How will I be able to be fully present on the important call I need to have with a client before my speech?

As the Buddhists say, “pain is inevitable, suffering is optional.”  You will be distracted. People, and your BlackBerry, will interrupt you. Thoughts about one customer will enter your mind as you speak with another.  People you work with will piss you off, and your blood will start to boil.  United will lose your bag, too.

But remember, relationship-building encounters are the most important thing you produce every day.  The more you can focus on the customer with whom you are speaking, right now, and ignore the distractions, the more successful you will be.

Posted in Customer Encounters | 8 Comments »

Recalibration Interview

Apparently, a Microsoft executive read my tompeters.com post on Recalibration.  That led to an interview with Microsoft’s Retailspeak magazine.  Here’s a link to the interview.

Posted in Recalibration | 1 Comment »

“It’s Already Prepared”

This past Saturday morning I took my 16 year-old son Noah to a restaurant, Max’s Deli, in Highland Park, IL  I had told Noah about the breakfast burritos at Max’s, and he was excited to order one.  However, I didn’t see the breakfast burrito on the menu.

“Don’t you have breakfast burritos?” I asked the waitress when she arrived at our table.

“Only Monday through Friday.”

“Do you think they could make one on a Saturday?” I asked.

“I’ll ask.” she replied.

“What’s in the breakfast burrito?” asked Noah. “There are certain things I don’t like.”

“I don’t know what’s in it.” she said, somewhat curtly. “It’s just what they put in the breakfast burrito.”

“Can you ask what’s in it, and then I’ll tell you what I want in my burrito?” Noah continued.

Now, here’s the kicker:  The waitress replied: “You can’t change it. It’s already prepared.”

What?  They haven’t served a breakfast burrito since yesterday, and “it’s already prepared?”

The only thing that was “already prepared” was the waitress’s pre-fab, scripted, impersonal, customer-insensitive response.  I am a big enemy of scripting in service situations; when service employees are taught to spout policies and pre-written statements they are liable to come up with insipid gems like this one.

Here’s what happened next.  The waitress relented, and Noah ordered what he wanted, which amounted to a tortilla with scrambled eggs and onions in it.  In the end, her rotten, transactional, canned, scripted response was totally unnecessary.

What causes companies, and their employees, to think that customers are so dumb that it’s possible to tell them really stupid things?  What causes companies, and their employees, to forget the most basic elements of human communication and human relationships when they interact with customers?

Posted in Customer Encounters, Marketing | 10 Comments »

What is the one thing you want to know?

In these tough times, what’s the one thing you want to know?

I asked this question of a friend the other day, and, without hesitation, he answered, “How to motivate people to buy for a reason other than price.”

Today’s newsletter discusses my answer to the question.  I’d love to hear your answers and insights in the comments below.

Posted in Invent Your Future, Thrive in a tough economy, We relationships | 2 Comments »

The Differentiation Ladder

We all want our customers to think, “I can’t get it anywhere else!” when they think of us.   How do we do this?  How do we differentiate our companies in our customers’ minds?

Consider four different ways of differentiating your company:

• The least effective way to differentiate your company is through advertising and other traditional marketing communications.  Ads are easily copied and more easily forgotten.  This is the main tool of differentiation employed by advertising and marketing agencies on behalf of their clients.
• The next way to differentiate your company is through price or price-related promotions.  These tools are generally more effective at driving sales than advertising, but are still weak differentiators, because they get your customer to focus on the wrong reasons for buying from you. (Unless you want your customers to focus on price, which, for most of you, is not the case.)
• Next, you can attempt to differentiate your company with superior products and services.  This is increasingly difficult, because your customers, no matter who they are and no matter what you make, are convinced they can buy similar products elsewhere.  Welcome to our land of plenty, where too many sellers are chasing buyers with limited spending power.
• The best way to differentiate your company in your customers’ minds is to help customers focus not on your advertising, your prices, your promotions, your products or your services, but on the relationship they have with you.

Relationships are, simply put, the most powerful differentiators.  Your competitors can copy just about everything you do, but they can not copy the private relationships you have with your customers.

In your mind, flip the four bullet points written above upside down, with advertising differentiation on the bottom and relationships at the top.  The higher you can climb on this ladder, i.e., the higher on this ladder are the reasons your customers buy from you, the more differentiated you will seem to your customers, and the more loyal they will be.

Posted in Marketing, We relationships | 2 Comments »

The Advertising Algorithm is an Anachronism

I just don’t buy it, now more than ever.

The equation:

(super-duper creative ads + big audience) = buzz = changed customer behavior = great advertising ROI

… is virtually always false.

This week’s Super Bowl proved it even more.  A few hundred million dollars were spent on media, plus another, let’s say, $100 million on ad production, and most of it was lost in a cacophony of guacamole, Pinot Grigio, competitive noise and a great, buzz-worthy football game.  Yes, conversations about your business can spur sales, but those conversations can rarely be manufactured and drilled into consumers’ minds with the self-indulgent “creative-based” pseudo-science that the advertising world tries to foist on corporate America.

If I hear one more person defend Super Bowl advertising because “it’s the only time you can reach such a big audience at one time,” I’m going to vomit.  The only time reaching a large audience all at one time matters is when you want to generate timely, collective behavior, like voting in an election.  But, last time I looked, we all go to the grocery store one at a time, so why is there any advantage to reaching all of us at once?  In fact, it’s a huge disadvantage to reach a large audience at one time, because the number of people who don’t want to buy your product increases at an increasing rate as audience size increases, and the audience begins to resemble the entire population.

“Oh, but what if you’re Coke or Budweiser?  It works for them, doesn’t it?” It might, but if it does, it’s not because the ads themselves worked, but because the ads are just one small part of the brand harmony these products create. Coke and Budweiser can afford to spend this kind of money to complement the rest of their customers’ experience with the brand.

“Hey, but Monster.com hit a home run in 1999, and came out of nowhere with only one Super Bowl ad, so why can’t we do that?” Yes, crazy, speculative, risky investments like Super Bowl ads once in a while work, and you might also win if you put all of your money on Red 14 at the roulette table.  But, it’s much more likely that you will lose your money.  Exceptions  don’t prove the rule. They only prove that exceptions are possible once in a while.

“But the ads are so entertaining, that people pay attention to them.” I’ve got a great idea.  Let’s have a new category in the Academy Awards for Super Bowl advertising.  DDB Chicago and Weiden & Kennedy can accept their awards there for amazing creative, and we won’t confuse ourselves trying to prove that the advertising experts have any special insights into what makes consumers buy and what drives business results.

Now I’m going to really surprise you:  In one sense, the Super Bowl isn’t a bad idea because it is so expensive, but because it is so cheap.  Huh?  Here’s the story:  $3 million spread across 100 million people is 3 cents per audience member.  If you only spend 3 cents on a customer encounter, how can you expect it to be meaningful?  All you are doing is bouncing light off of 200 million retinas, and the effect can only be superficial.  The Super Bowl is the epitome of “a mile wide and an inch deep.”

We are living in a never-before-seen economic meltdown, where customers are scared and strapped for cash.  If you want to earn the love, loyalty and business of today’s customers, you can’t do it just by interrupting their days, millions of people at a time, with :30 second or :60 second ads.   You need to focus on connecting with fewer people, but in a much more meaningful way.

Differentiating yourself with advertising is usually futile and, at its best, very short-lived.  Differentiating yourself with relationships is lasting.

The new equation:

(Brand Harmony across many interactions) x % of those interactions that are relationship-building encounters = clear, compelling customer beliefs = profitable customer action = profitable business.

Posted in Brute Force Branding | 11 Comments »

Either/Or? No. Both/And

Twice in the last week, this has happened during workshops:

I made the statement that, almost without exception, the most lucrative source of untapped latent profit for most companies exists in their current customer relationships.

In each case, executives said something like, “Wait, I have too much business concentrated in too few customers. I need new customers.”

I probed.

In one case, the company had 60% of its business with one large customer.  Yes, that’s pretty dangerous, and they should find some new customers.  But, in a short discussion, we quickly saw that there was a ton of unrealized potential in the company’s other existing customer relationships.  It didn’t take long for the people in the room to recognize that their quickest route to reducing the vulnerability to this one large customer was by improving relationships with other customers, while they are out prospecting for new accounts.

In the second case, the company had four extra-large customers, creating a similar vulnerability.  Again, it didn’t take long for the executive who made the claim to see that he needed to mine his existing customer base if he really wanted to protect himself.  New customers? Of course.  Develop existing customer relationships? Don’t waste a minute.

For some reason, people reflexively think they need to make a choice between developing existing customer relationships and creating new customer relationships.  I still hold that, in virtually every case, you should prioritize developing existing customer relationships, because it is a quicker road to profit. But that doesn’t mean you have to give up finding new customers. It’s just secondary.

I first encountered this either/or mindset about 15 years ago, when I was vice-president of resort marketing at Hyatt Hotels.  I quickly saw, after taking the job, that we were doing a great job of getting customers to love us at our resorts, and a really poor job of translating that love into future visits and strong relationships.  I moved money from acquisition-oriented advertising to customer retention efforts.  What did the advertising folks say?  “We can’t believe that Steve doesn’t believe in finding new customers.”   That seemed like a pretty stupid comment to me.  But, they said it.

I’ll repeat what I said above:  New customers? Of course.  Develop existing customer relationships? Don’t waste a minute.

Both/And!

Posted in We relationships | No Comments »

Letters to the “C-Suite”

Exact Target is a company who markets itself as “On-demand email marketing and one-to-one digital communication platform. ” I’ll add to that by saying that I think of Exact Target as a group of really smart, cutting-edge marketing experts.

They asked a number of people, including me, to contribute to a whitepaper called, “Letters to the C-Suite: Sage Marketing Advice for Uncertain Times.“   Please have a look.

Posted in Announcements, Speeches & events, Thrive in a tough economy | No Comments »

You are never so unique as …

No matter how great your product is, there’s probably someone who makes a product just as good.  Even if your product is truly better, your customers may not be able to see the difference.  And … if your product is truly better, at this very moment a competitor is trying to copy it.

The same can be said for services.  They are easily copied.  And, of course, the same can be said about marketing messages and promotional offers.  These are the least differentiating (even though they are thought of as key tools of differentiation) and the most easily copied.

If you’ve spent any time reading this blog, my newsletters, or my books you know that I believe a strong relationship is the most powerful way to differentiate yourself in your customers’ minds.  A competitor can copy your products or services, but can’t copy the private relationships you have with customers.

Think what this means about your whole approach to marketing:

Stop trying to differentiate yourself by talking about how unique you, your products or your promotional offers are.

Start trying to differentiate yourself by helping your customers see how unique their personal connection is to you.

Posted in We relationships | 1 Comment »

Who cares about your 10th pizza?

Caroline and I have been talking a lot lately about the differences between True Loyalty and transactional loyalty … she had an experience the other day that showcases this difference.

Caroline and her sister/roommate Emily started ordering pizzas from Home Made Pizza Company a few years ago. (Home Made Pizza Company prepares fresh, uncooked pizzas that you can pick up at their store to cook at home.)

Here’s the short version of what happened when Caroline went to pick her recent pizza order:  When she arrived and gave her name, she also presented her completed punch card that showed this, her 10th, pizza should be free.  When she got her pizza she saw it was made with the wrong ingredients. The employees working in the store were not very helpful about re-doing the order, and it took about 40 minutes for the new pizza to be made, without much communication during that time about the status of her order. At the end of the ordeal they started to ring her up on the cash register, and she reminded them about the 10th pizza free. “Oh yeah,” was the response and they gave her the pizza for free.

If Home Made Pizza Company wants to create loyalty, they can’t delegate that loyalty building to a program. Loyalty is not created by programs. It is created by humans.  You can give away the 2nd pizza free, but if your company is not good at basic human interaction with customers, you will not create loyalty.  On the other hand, businesses with the best loyalty don’t build it with programs, they build it with relationships.

I don’t know much about Home Made Pizza Company, but I can see from their website that they have 21 stores and a few more on the way.  At that size, they probably have a corporate office, where the 10th pizza free promotion was created.  True Loyalty is not created in corporate offices.  It is created in one-on-one interactions with customers.  Transactional loyalty is like caffeine; it will give you a short burst of energy, but you’ll pay for it later.  Keep the program, if you want, but not at the expense of creating True Loyalty.

Posted in Loyalty | 5 Comments »