Category Archives: Customer Behavior

The Difference Between Loyalty and Habit – and Why It Matters!

If you ask me to define a word, I usually start by describing what it is, or what it means. “A screwdriver is a hand tool used for turning screws and bolts. Also good for opening paint cans. Also, a cocktail made from vodka and orange juice.”

Loyalty and comfort are different. These words are better understood by grasping what they are not. The way William Gass described comfort in a 1986 New York Times book review of Home, by Witold Rybczynski:

“. . . . comfort means . . . the absence of awareness. The air is perfect when it isn’t noticed; in tepid water my finger cannot distinguish the water from itself; in a comfortable chair, without being numb, I enjoy the lack of feelings in my back and rump. Each performance, like virtue, is an unconscious habit. In the zone of the mind, an idea I can serenely take for granted, which seems certain and remains unchallenged, is like a custom recliner where the mind may snooze. My spirit, likewise, prefers familiar surroundings; it is at home and without anxiety in its own neighborhood and country. I go out of doors there as calmly as I go to bed. In addition, comfort, ideally, has no consequence but continued comfort; the padded chair is not supposed to postpone our back pains until tomorrow. Finally, if I become self-conscious about my comfortable condition, the snug swiftly becomes the smug while mind and spirit turn arrogant, dogmatic and parochial.”

In other words, concentrating on comfort makes us less comfortable. Loyalty, a form of mental comfort, has similar properties. Loyalty is a reflexive choice, absent insight. Loyalty enables consumers to bypass circumspection, reach for their wallets, or to strait away click on the Buy Now button. When we dig into reasons for loyalty, we become less loyal. For example, when we understand that we buy Product X because it’s bigger, faster, stronger and cheaper, we start to wonder, which alternatives have superior attributes to Product X? That sets off a deluge of comparison shopping, which makes marketers tear their hair out and scream for help.

Consultants to the rescue!
Experts sell executives on a panacea for the problem:  keep fixing, improving, tweaking, and changing their products. And when those tactics sputter or stall, they hawk the merits of implementing the mother of all projects: transformational change. This assures another few years of steady, billable work.

Unfortunately for companies, these investments can be self-defeating. Anything that causes habituated customers to stop and think imperils the probability of repeat purchases. “Without a value proposition superior to those of other companies that are attempting to appeal to the same customers, a company has nothing to build on,” A. G. Lafley and Roger Martin wrote in a Harvard Business Review article, Customer Loyalty is Overrated (January, 2017). “But if it is to extend that initial competitive advantage, the company must invest in turning its proposition into a habit rather than a choice.”

If you’re a habit, then someone stopping to think becomes your arch enemy. “We don’t claim that consumer choice is never conscious, or that the quality of a value proposition is irrelevant. To the contrary: People must have a reason to buy a product in the first place,” Lafley and Martin say. The problem is, once consumers have made a choice, vendors don’t usually nudge them to a marketer’s holy grail: ingrained, reflexive action. What Lafley and Martin describe as “an ever more instinctively comfortable choice for the customer.”

Oddly, vendors seem resolute on forcing their customers to stop, and think. An example: Don’t Market to your Customers; Educate Them Instead. Or, “we’re excited to announce some major changes to our product line.” Why do marketers give customers such easy chances to reappraise their preferences? I’m not sure. Maybe they don’t know when it’s a mistake. Maybe they don’t believe in the competitive power of sameness. Or, maybe they don’t expect that in their zeal to change things up, a measurable amount of revenue will sail out the window.

Buying into Lafley and Martin’s ideas requires recognizing that ultimately, driving customer habit, rather than loyalty, is key to sustainable revenue. “If consumers are slaves of habit, it’s hard to argue that they are ‘loyal’ customers in the sense that they consciously attach themselves to a brand on the assumption that it meets rational or emotional needs.” That pithy sentence upended a ton of why-you-must-build-customer-loyalty hype that I’ve read online in the past 12 months.

Innovate, and die! MySpace versus Facebook illustrates this contrast. To grow its social network platform, MySpace tinkered with what Bloomberg Businessweek called “a dizzying number of features: communication tools such as instant messaging, a classifieds program, a video player, a music player, a virtual karaoke machine, a self-serve advertising platform, profile-editing tools, security systems, privacy filters, Myspace book lists, and on and on.” I never used Myspace, but I gather that if I logged on four times each day, I would have needed to re-learn the website’s navigation each time. Facebook, on the other hand, studiously avoided building habit breakers into the user experience. The rest is history. “The real advantage is that to switch from Facebook also entails breaking a powerful addiction,” Lafley and Martin said.

“The essence of brand loyalty is, customers have to remember you and what you stand for,” Sampson Lee wrote in a blog, Stop Trying to Eliminate Customer Effort . When it comes to brands, he might be right. But for product purchases, I don’t care that people remember what I stand for as much as I care that people just remember my product.

Still, I find loyalty and habit hard to tease apart. In formulating a working definition of loyalty, I made two categories.

Category I – Sincere, genuine customer loyalty. The kind of loyalty that’s unencumbered by noodling numbers on a spreadsheet, less bothered by “justifying the business case” and “Show me the ROI!” The kind of loyalty that just oozes, “Don’t think – buy!” Call it haboyalty or loyit – whichever you prefer. It contains these essential elements:

Memory. Whether through a capability, design, packaging, acquisition experience, or something else, repeat purchases only happen when customers remember a unique attribute associated with the product or service.

Habit. Growing and deepening buying habits will improve the probability of follow-on revenue.

Inelasticity. Loyalty is not loyalty if bonds are easy to rip apart. In the words of an actual consumer: “I drive a 2016 Lincoln MKX. I only look at Fords [Lincoln is a Ford Division]. My dad worked at Ford, and I have deep loyalty to the Ford Motor Company. I look for a car that’s a little nicer and has got enough room for my golf clubs but isn’t sloppy big. The MKX is sort of a mini-SUV, though it’s not an SUV.”

If you know which famous person said this, give yourself a pat on the back. It was Microsoft’s Steve Ballmer. Not exactly your consumer every-man, but he could be. I sense that his loyalty involves commitment. Love, maybe? Regardless, Ford can reliably forecast selling at least one unit of this ugly car next year. Ballmer’s not a candidate to jump from Ford to buy a Cadillac Escalade  – or any other brand.

Category II – Contrived loyalty. I use this term in deference to marketers who still like to think of their practices as loyalty-inducing, even when they are not. Some examples:

Switching costs. The blog, Switching Costs: 6 Strategies to Lock Customers into Your Ecosystem offers a helpful list for developers tasked with building shackles connecting them to their customers. “If you look closely at companies like Adobe, Salesforce, Google, or Rolls Royce, you’ll see that their dominance is no mere coincidence. Customers stay because they are locked into their ecosystems through high switching costs.” Check out the article if you want to learn more about “Base product and consumable trap,” “Data trap,” “Learning Curve trap,” Servitization trap, and Exit trap.” Trap was possibly coined by a clever content marketer, now jobless.

Loyalty clubs.
Frequent buyer points. Rewards. Discounts. Exclusive events. Lapel pins and fan gear. Nothing wrong with offering any of these to customers. But they’re marketing expenses – perks designed to mitigate the risk of customer churn. To test whether customers are true loyalists, claw back these benefits, or squish them down. Then, see what happens.

Contracts. “Terms of service are two years. Early termination subject to penalties and fees.” It’s a stretch to regard adherence to contract terms as loyalty. But the customer-retention metrics look great on the marketing dashboard!

In another swipe at a sacred marketing platitude, Lafley and Martin wrote, “The death of sustainable competitive advantage has been greatly exaggerated. Competitive advantage is as sustainable as it has always been. What is different today is that in a world of infinite communication and innovation, many strategists seem convinced that sustainability can be delivered only by constantly making a company’s value proposition the conscious consumer’s rational or emotional first choice. They have forgotten, or they never understood, the dominance of the subconscious mind in decision making. For fast thinkers, products and services that are easy to access and that reinforce comfortable buying habits will over time trump innovative but unfamiliar alternatives that may be harder to find and require forming new habits.”

Habit versus conscious choice. The boundary between Category I Loyalty and Category II Loyalty is not as crisp and clean as it sounds. There’s fuzziness and overlap. But marketers should not allow themselves to become confused. The former involves de-emphasizing rational choice. The latter means repeatedly reminding customers to stop, think, and decide.

Longues habitudes de vie! ¡Viva los hábitos! Long live habits!

When Does Online Customer Rage Become Unfair?

“Give enough people a computer and a mouse,” Walter Mossberg said, “and you’re bound to get garbage online.”

That was 15 years ago, when Mossberg was the principal technology writer for The Wall Street Journal, and before social media became a powerful cudgel for verbal assault. Today, people also hurl anger and its byproducts into cyberspace, including complaint, criticism, fulmination, accusations, false statements, diatribe, harangues, and revenge. Bad Customer Experience (CX) fuels much of the vitriol. And for good reason: “The percentage of complainants who felt they got NOTHING as a result of complaining [through company-provided channels such toll-free call centers] increased from 47% in 2011 to 56% in 2013, according to the 2013 Customer Rage Survey.

Social platforms offer the perfect medium for exasperated consumers to get things off their chest. Click to complain! In fact, “posting information on the web about customer problems has almost doubled since 2011.” – a key finding from the Rage Survey. Companies collect the output, a digital slop of anguished storytelling and opinion, and place it in sterile repositories for data scientists to mull over. Marketers just call it negative sentiment, which sounds kinder than “I hate Internet Explorer.”

“Unfortunately, with all of that complaining, the implications of customer complaint behavior for organizations have been examined far less often. Yet, how an organization responds to a complaint can have a major impact on its customer’s post-complaint consumer behavior, from re-purchase intentions to likelihood to engage in word-of-mouth activities, and it may even affect the valance of the word-of-mouth message,” says Moshe Davidow, a professor at the University of Haifa, and a prominent researcher in corporate complaint resolution.

In 2013, nearly $76 billion of consumer revenue was at risk as a result of problems with products and services, according to the Customer Rage Survey. That’s the same amount as the 2015 worldwide revenue forecast for all tablet computers, the third largest consumer electronics category, behind TV’s and PC’s. “Companies are losing most of this revenue given the high levels of dissatisfaction with corporate complaint handling practices. Even though companies have substantially increased their spending on handling customer complaints, complainant satisfaction in 2013 is still no higher than in the 1970’s.”

When customers air this dirty laundry in public, revenue risks escalate. “Most research supports the idea that complainers on social media will complain to the company first, and only if they don’t get a proper response do they go on social media. In other words, if you want to minimize the damage of a social media complaint, it starts with handling the complaint internally, and then it won’t get to social media,” Davidow wrote me in an email.

Companies have responded with an effective antidote: sue the complainer. “In 2012, a Washington DC-based contractor sued a Fairfax [Virginia] woman for $750,000 over her one-star takedown of his work on her home. And the Virginia Supreme Court is expected to decide soon whether Yelp will be required to turn over the names of anonymous users who disparaged Alexandria’s Hadeed Carpet Cleaners,” The Washington Post reported in March, 2015. In April, the court returned its verdict: Yelp is not legally obligated to share the identities of anonymous online reviewers.

In another case, a Yelp reviewer, Jennifer Ujimori, might have to pay $65,000 for her comment, “In a nutshell, the services delivered were not as advertised and the owner refused a refund.” The owner Ujimori referred to, Colleen Dermott of Dog Tranquility, based in Burke, Virginia, disagreed. She sued Ujimori, claiming that her statements posted on Yelp were inaccurate and caused Dog Tranquility to lose sales.

The case balances two rights: freedom of speech versus freedom from defamation. “People should be free to express their feelings about their service providers. Companies using the legal system to silence their critics has a chilling effect on First Amendment rights,” Ujimori said. Dermott countered that the contract Ujimori signed had a no-refund clause, and that she offered a credit for future services, and other accommodations, but Ujimori rejected all of them. “[The negative review] had a significant impact in that I’m a small-business owner,” Dermott said. “I have to rely on these review sites as a major source of advertising.” The wife of a soldier, Dermott is raising two children, and trains dogs for assisting veterans with PTSD (Post Traumatic Stress Disorder). Whose right is right? The court will decide.

“Balancing free expression with privacy and the protection of participants has always been a challenge for open content platforms on the internet . . . The foundations of the Internet were laid on free expression, but the founders just did not understand how effective their creation would be for the coordination and amplification of harassing behavior,” Ellen Pao, former Interim Chief Executive of Reddit, wrote in a July 17 editorial, The Ugly Side of the Internet. The recipient of withering online abuse, Pao spoke from experience.

“It’s got no signs or dividing lines and very few rules to guide.” When songwriter Robert Hunter wrote New Speedway Boogie in the ’60’s, his lyrics were prescient about social media etiquette. Consider this vignette from The Ethicist in The New York Times:

“My wife and I recently stayed at a very good hotel in South Beach, Miami. We were generally happy there until our third day, when our room was broken into and we were burglarized. Luckily, our out-of-pocket losses were only $100 or so. The hotel moved us to another room but seemed to show little concern beyond that. In the end, I made a huge stink and they refunded us one-half of our stay. I made no promise to not mention this in the online reviews of the property. My wife wants us to post online reviews about the burglary and the hotel’s response. I think it’s unethical to do this after they more than made good on our misfortune. Who is right?”

Good question. In response, legal scholar Kenji Yoshino wrote, “The thing that tips me in favor of writing is the responsibility to third parties. Is it unethical to withhold this information from other people who might want to stay at this hotel if the hotel is going to take a lackadaisical attitude toward burglaries? That would make me lean toward saying that it would be ethical to write the review. I’m just not sure that I’m willing to say that it would be unethical not to write the review.”

That’s a circuitous way to say, “I’m ambivalent.”

If you want clearer guidance, go with what author Amy Bloom wrote: “I don’t think that everybody in the world who stays at a hotel has an ethical obligation to write a review about everything that happens there. I couldn’t stand to receive all that information.”

Do public customer complaints asphyxiate revenue? Yes, if you own Dog Tranquility. No, if you’re United Airlines. The granddaddy of negative online rants, United breaks guitars – which had 17 million views on YouTube – produced nary a revenue hiccup. As of December, 2014, United flew 27.2 million revenue passenger kilometers, second only to American on the list of global air carriers. The transgression didn’t malign United as an enemy of the arts, and it didn’t thwart the Chicago Symphony Orchestra from retaining United as its official airline. “In three words I can sum up everything I’ve learned about life: it goes on,” Robert Frost said. If he were alive today, he would fly United, too.

“Did you see the video that surfaced [in 2011] of a delivery person throwing a computer monitor box over a customer’s fence? Augie Ray asked in a blog, How Powerful is Social Media Sentiment Really? “Which delivery service was it, and did you purposely stop using them after seeing the clip? Answers: FedEx and no.”

Even though consumer outrage can be ephemeral, vendors are plenty jittery. And increasingly litigious. Complaining through social media has spawned a new legal beast, called a non-disparagement clause. The Union Street Guest House in New York used this one, which Colin Shaw wrote about on CustomerThink in August, 2014:

If you have booked the Inn for a wedding or other type of event anywhere in the region and given us a deposit of any kind for guests to stay at USGH there will be a $500 fine that will be deducted from your deposit for every negative review of USGH placed on any internet site by anyone in your party and/or attending your wedding or event. If you stay here to attend a wedding anywhere in the area and leave us a negative review on any internet site you agree to a $500 fine for each negative review.

Imagine your Aunt Diane, who you never wanted to invite to your daughter’s wedding, writing in a Yelp review, “The meal was fine, but the wine did not live up to the sommelier’s recommendation.” She just cost you an additional $500.

A less-wordy example mentioned in another article has even broader reach:

Any disputes between the parties remain confidential. Customers shall not make or encourage others to make any public statement that is intended to, or reasonably could be foreseen to, embarrass or criticize the company or its employees, without obtaining prior written approval from the company.

These contractual restrictions, often embedded into lengthy customer contracts, have provoked legislators. The Consumer Review Freedom Act, introduced in September, 2014, aims “to make it illegal for businesses to penalize customers who write negative reviews on Yelp or other online review sites. The bill was motivated by several examples of companies attempting to dissuade people from writing honest reviews by slipping non-disparagement clauses in their consumer contracts,” according to the website of Eric Swalwell (D-CA), one of the co-authors of the legislation.

Last year, California became the first state to approve a law that protects online reviews. “No consumer should ever face penalties for voicing their opinions on the services or products they have purchased, and California law is now clear that no company has the ability to silence consumers,” the bill’s author, Assemblyman John Perez (D – Los Angeles), said.

Healthy economies depend on informed consumers, who, in turn, depend on free speech. Non-disparagement clauses protect businesses, but they throttle conversation. While getting government off our backs makes popular rhetoric, these bills are vital for ensuring that prospects and customers have balanced information. After all, corporate communications – even from the world’s most ethical companies – are, at best, distortions. “Frankly, I think there’s a special place in hell for someone who markets a product and says it will cure Alzheimer’s,” Senator Claire McCaskill (D-MO) said. Stifling conversations about customer experiences makes everyone gullible to marketing hype.

But what protections should business owners have? Reviews foster transparency, but they spread plenty of misinformation, too. How fair is it for a customer to post an online complaint when she is misinformed or won’t accept amends, as the owner of Dog Tranquility contends? The financial harm to a company can be considerable. And the risk that a company could be driven out of business through a sustained campaign of misleading negative reviews is not theoretical. “People that want to distress other people can now do it in the comfort of their own home,” said Michelle Drouin, an Indiana University psychology professor who studies technology. “It has less repercussions than harassment offline, and the Internet allows for this emotional distance between the harasser and the victim . . . the anonymity and connectivity of the Internet have created a ‘sadist’s playground.’”

The best advice: De-escalate grumbling – before it turns into public rage. “It would be a lot cheaper in the long run, just to make sure the customer is happy, I mean isn’t that what it is all about?” Davidow wrote in his email. “No hassles, no runarounds. Just a whole lot of happy customers spreading positive word of mouth.”

Leaving only lawyers to complain.

This article originally appeared on CustomerThink.com for Navigating Revenue Uncertainty. To read the original article, please click here. 

The Magical Power of 73%

“57% of the purchase decision is complete before a customer even calls a supplier.”

Gosh. That seems like a lot. Anyone going higher?

“Technology buyers are two-thirds of the way through their buying process before they engage with tech vendors’ sales teams.”

I like it. Do I hear 73?

“SiriusDecisions predicts that by 2020, 73% of the B2B sales process will be complete before a sales person is ever engaged.”

. . . 90?

“Although it varies greatly with product complexity and market maturity, today’s buyers might be anywhere from two-thirds to 90% of the way through their journey before they reach out to the vendor. For many product categories, buyers now put off talking with salespeople until they are ready for price quotes.”

It’s apparent that we’re edging toward 100%, at which point, the venerable salesperson will quietly slink from corporate org charts, tail tucked. An anachronism, squeezed out of a job, along with coopers, wheelwrights, and telephone operators. Press delete. Good. That wasn’t very messy. Now, where were we? Oh yes – generating revenue. Please, let’s continue.

These statements could not proliferate without idealizations of B2B buyers as intellectual superheroes – infallibly rational, knowledgeable, no-nonsense, process-oriented decision makers. Numbers-driven C-Somethings who are never, ever persuaded unless there’s a strong business case. The right business case. Behold, surviving salespeople, The Buyer’s Journey Workflow! Understand it. Accept it. Hold it close, for it is sacred.

A fantasy that Hans Christian Andersen could have spun into a fairy tale, The Paved Pathway to Purchasing Perfection. On PowerPoint, the buyer’s journey always progresses left-to-right, or top-to-bottom. Nested, colorful arrows represent the steps, each one distinct and clearly labeled. Some journeys have three steps: awareness-consideration-purchase. Some have seven. There are other versions, too. I like the one with seven.

For me, a better, albeit darker, title for the buyer’s journey would be Lost in the Woods. I haven’t published my flowchart, but I offer the Tokyo subway map as a useful approximation. A twisted convolution of overlapping lines pointing in every direction. Some going off the page, others coming back on. I’ve carefully labeled each node: Fits and starts, Squabbles, Indecision, Indifference, Infighting, Infatuation, Inaction, Firm Commitment, More indecision, Hidden agendas, Misunderstanding, Reconsideration. At the terminus of this mess – assuming a terminus exists – is a box labeled Just do Something. So, if you’re into mapping out buying steps, go ahead. Pick out some milestone events and plug them into a schema. Just remember that they are often imaginary, and they rarely happen in the order rendered.

If you subscribe to a less-linear, more imperfect notion of the buyer’s journey, then it seems a stretch to assign a percentage to how much can be complete before engaging with sales. Or the reciprocal, how much of the sales process is complete before engaging with a buyer. Complete and engaging are themselves imprecise terms, subject to rancorous debate in Philosophy 101. I won’t even go there. So when I read precise-sounding predictions like 73%, I start to wonder. Not 72%? Not 74? A rounder, friendlier number, perhaps? Whoa, buddy! Time out! I’m more comfortable with honest vagueness like pretty much all, or darn near every bit.

To me, asserting such hair-splitting numbers to processes as poorly defined and understood as selling or purchasing a complex B2B solution is the statistical equivalent of dropping a raw egg on the floor, then, after using only a fork, boasting to the world that you successfully collected very bit of what splattered. In fact, I’m fine with, “We got most of it, and the dog took care of the rest.”

When I dug into the provenance of the 73% prediction for seller engagement, this story took an interesting and quite unexpected detour. Turns out, in business development, 73% is a wildly popular finding. For example, I learned that,

73% of all CEOs feel that their CMO lacks credibility with regard to generating revenue.

73% of IT executives are influenced by social networks in decision making.

73% of [b2b customers] have engaged with a vendor on a social network.

73% of B2B marketers are producing more #content than they did a year ago.

73% of B2B organizations have a person dedicated to overseeing content marketing strategy.

73% of sales enablement teams share best practices for sales techniques and tactics.

73% of companies have no process for requalifying leads.

73% of marketing executives use spreadsheets for analytics.

73% of companies currently use, or plan to use, buyer personas.

73% of B2B marketers are not even measuring mobile traffic by device.

73% of B2B marketers use video as a content marketing tactic.

This, just a partial list, culled from my new-found collection. Coincidence? As I read through these findings, it’s hard not to suspect a hidden purpose for this alleged precision. A revenue purpose. After all, in a persuasive argument, 73% has more gravitas than its homelier cousin, around ¾. 73% connotes that the provider has paid rigorous attention to detail, and has the chops to grant statistical granularity. I’d use it with my teenaged son regarding how we interact when I ask him to clean his room. “Over the past three months when I made this request, you acted sullen 73% of the time.” He might just reply, “You know, Dad, no need to fact-check. You must be right. Again.”

In this age of lauding data analytics, performance and productivity measurements, and statistical exactitude, no one wants to say, “A whole bunch of the time it seems like . . .” – at least not among peers. But often, I think vagueness is more reasonable and appropriate. Maybe, even more credible. In the meantime, if anyone asks me to speculate on what percentage of CMO’s will leave their jobs for better pay in the year 2020, I know what number I’m using. And I’m guessing there’s a 73% probability I’ll be correct.

Oh – one final note that I promise to keep brief: The SiriusDecisions prediction that by 2020, 73% of the B2B sales process will be complete before a sales person is ever engaged? I never did find the detail that became the genesis of this article. If anyone knows of a study that was conducted, please send an email to arudin (at) contrarydomino (dot) com.

Tell the Truth – Is an Educated Consumer Your Best Customer?

“An educated consumer is our best customer.”

Sy Syms, CEO of Syms Corporation, a now-defunct clothing retailer, made that slogan famous. Seems blandish today, but it was a radical idea when Syms commercials aired on TV in the 1980’s. Customer empowerment wasn’t a popular notion at the time.

Fast forward to our present social media-powered age. A book, Get Content. Get Customers , by Joe Pulizzi and Newt Barrett, challenges the Syms ideal. “The more informed a consumer or buyer is, the more difficult it is to sell them.” Hmmmm. Which statement is true? In selling, as with most things, there’s no such thing as an irrefutable truth.

Not everyone agrees with Syms, however. In metro Washington DC, where I live, industries and large corporations employ hundreds of high-dollar lobbyists to fight the revenue threats that educated consumers pose. If you don’t believe me, check out the websites for the Federal Trade Commission and Food and Drug Administration .

When is an educated consumer not the best customer? When she wants the lowdown about the carrots she ate in last night’s salad, and the chemicals contained in the soil that nourished them. Or, when she wants to learn about the living environment of the chickens or cattle that are now in the grocery meat case. Far better for the producers that she keeps to knowing just the generic fat, carbohydrate, and protein content, along with “sell by” date. For other foods, the lobbyists insist she also doesn’t need to see the word “imitation” on some products, that she doesn’t need to know anything about the farm workers who harvested her food, or what pesticides were used in their production. (For a more detailed discussion about why food manufacturers benefit from disconnected supply chain information, see author Michael Pollan’s blog.)

Consider these headlines from The Wall Street Journal:
FDA Says Video for Pain Drug is Misleading
SAT Coaching Found to Boost Scores—Barely
Laws Take On Financial Scams Against Seniors

You don’t need to think long or hard to know that uneducated consumers bring great value to many companies.

I floated the statement from Pulizzi’s book to a few sales groups on LinkedIn and received some intriguing thoughts. The consensus was that it’s preferable to sell to informed prospects. That’s good, because—like it or not—prospects generally are better informed than they were pre-Internet.

But a few of the responses I received were circumspect. Informed prospects aren’t necessarily any more open-minded or are better at making nuanced decisions than uninformed prospects. One salesperson commented about the difficulties that occur when a prospect is well-informed on price, but under-informed about everything else.

So when it comes to prospect knowledge, information is a two-edge sword. I’ve left some sales meetings frustrated, convinced my prospective client wouldn’t recognize a good solution if it flew in and hit him squarely in the head. In other situations, my client did some basic research and correctly told me that he could procure reliable used or off-brand equipment for substantially less than what my company was charging—information that most quota-driven salespeople don’t typically volunteer.

But today, there’s no point in debating whether it’s better to sell to informed prospects or uninformed ones. The information genie is already out of the bottle.

Here are some questions to ask:

How well-informed are your prospects? When you begin your selling engagement, what do they already know? What don’t they know that they definitely need to know?

What information do your prospects seek? What motivates them to seek the information, and how do they value it? Which risks are they mitigating and which opportunities do they want to capitalize on?

Where and how do your prospects get information?

What information is available to them? Who contributes to that content? Who “owns” the content?

How will your prospects use and share the information they get? What portends a next step or action in the buying process? What will break the buying process, and do you have ways to mitigate the risks?

For information your company doesn’t directly control, such as product reviews and user forums, which risks and opportunities are present for you? What misinformation exists, and what is the impact on your sales strategy? Do you know when misinformation is consequential, and do you have a plan to address it?

Back to Syms. Whether an educated consumer really is the best customer depends on what you sell, how you intend to sell it.

Nobody Cares About Your Stinking Market Share!

Market share: when it’s big and beautiful, be proud!  But do your customers care?

Here’s what market-share hype sounds like in a sales call:

Salesperson: Our company has 45% of the fast-growing Tetra Pixel market!

Prospect: (silence) Oh. What does that mean for me?

Salesperson: It means that twice as many companies have selected us as their Tetra Pixel provider versus our closest competitor.

Prospect: Your competitor told me the same thing. I’m not sure what to make of that. Is your product twice as good?

Market share bombast can be hollow, and claims are easily fudged. “We’re number one (for unit growth in Latin America)!” “We have fifty percent share for revenue (in the healthcare market)!” “Numero uno for market share (in the Small-to-medium sized business segment)!” Add your own fine print and disclaimers. We’ve all trumpeted these platitudes at one time or another, and each one needs an asterisk.

In a sales call, crowing about market share can land with an ineffective thud. Or, it can even backfire. For example, when your prospect asks, “If you have the largest share of the Tetra Pixel market, how do I know my business is really important to you?” Market share claims are a two-edged sword, something biz-dev experts often don’t tell you. One webinar slide I read communicated the market share ideal using an odd equation:

“Collaboration is required to keep new people = productivity = market share.”

I couldn’t follow the presenter’s mathematical equation, so I asked him. He told me that  that senior executives often designate a specific market share as a strategic objective, and there’s a connection between that and employee retention and productivity. I’m not clear what that connection is, and based on his use of equality signs, and his lame “explanation,” it’s evident that he doesn’t have a clue, either. “Follow my advice, not my logic” is the inference here.  They don’t call it Death-by-Powerpoint for nothing.

The more useful, and in my mind, more intriguing question is, what value does market share provide companies and prospects? If an answer exists, it’s snarled in a messy knot of personal ego and cold numerical logic.

Sure, the vendor with highest market share can enjoy purchasing clout that enables higher production volumes, lower unit costs, and the profits that accompany them. But I can’t help but think of two well-known companies that relentlessly pursued market share bragging rights, and suffered miserably. One rebounded after a government bailout, and the other sustained a serious blow to its brand and reputation. Of course, I’m speaking of General Motors and Toyota. Both have proven that the top of the market-share pedestal is coated with slippery motor oil.

Lately, Volkswagen fell victim to the seductive powers of market share bragging rights. A few years ago, Volkswagen Chairman Martin Winterkorn tied his US sales team to an annual unit goal of 800,000 by 2018, part of an effort to overtake Toyota as the world’s biggest carmaker. And we all know where that effort ended up. Right now, most VW owners don’t care how big VW is. They would rather just recoup the lost resale value on their CO2-spewing diesels.

No doubt that trumpeting feels good, but it’s just marketing fluff—cotton candy for Sales that provides a sugar high – but no protein, no octane, no sales traction – and no clear value for customers and prospects.

Even when market share claims are concrete and verifiable, they fail the so-what test. Remember, your customers aren’t automatically wowed by market share.   They just want value, and not a market-share percentage.