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How Do You Build a Customer Base? Follow These Steps

Many factors will determine how good a story is. Some variables are beyond your control, such as how forthcoming your subject will be, or what (maybe dumb) headline your editor will write. But the factor you can control is how much research you conduct, the questions you ask, and the follow-ups that help you find the information that really matters.

Related: What Work Should You Outsource?

I used to joke that writing was a two-part job. First, you have to be a miner, doing the grunt work. If you want gold or diamonds, you’d better be willing to dig deep in your reporting. The second part — writing — gets all the glory, but it’s really just polishing. If you’ve already found a beautiful diamond, it’s hard to mess it up.

Growing an audience is no different. You want to tell your brand story, but before you start polishing your marketing campaigns, you need to go mining: Ask your audience so many questions that you know them inside and out.

Connecting with an audience is harder than ever because of all the noise on social media and other platforms. In order to thrive in today’s digital environment, you need to have a deep understanding of what “job” your potential customers will pay you to do. In order to get that, you must speak to people directly.

Surveys and form questions are not enough; in-person conversations allow you to gather insights by reacting to people’s responses, hearing their tone of voice, and recognizing when there is more information hiding within a shallow answer.

But most people skip this part of the marketing process because it’s time-consuming. Even if they do it, they’re not always productive. The majority of market-research interviews consist of asking customers why they bought your product or service.

But this is a mistake. People will unknowingly tell you what they think you want to hear, oftentimes repeating your marketing back to you. Moreover, they won’t be able to articulate why they feel this way — so they’ll simply invent a reason.

Related: How Much Should You Spend on Social Media Marketing?

To work around these human habits, there’s a technique called jobs to be done (JTBD), which requires you to interview potential customers in order to truly understand their needs and wants. Not everyone can do JTBD; it takes someone who is skilled in both the process of leading the interview and in drawing conclusions and providing direction for your business.

Years ago, at my consulting company, I hired the best JTBD expert I knew, and I’ve never looked back. (You can also pay for courses and learn the method yourself.) Instead of just considering the functions that people want from a product or service, JTBD digs into the multifaceted nature of decision-making.

That’s what makes it more powerful than data — it helps you understand consumers’ social and emotional drivers and paints a complete picture of what “job” people want from you.

Related: How to Make Smart Hires on a Tight Budget

Once you understand your job — and your core customers — the path forward gets easier. You’re finally in a position to polish: create effective ads, engage with platforms where you’re most likely to find additional consumers, and present them with incentives and pricing that will appeal and convert.

Growth is no longer about wondering if you know what you should do. It’s simply about how well you can execute on your plan.

Related:

How Do You Build a Customer Base? Follow These Steps.

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By: Adam Bornstein

Source: How Do You Build a Customer Base? Follow These Steps.

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Follow the Golden Rule: Treat others the way you would like to be treated. Focus on attracting your customers and spending time holding on to them. Watch this video for specific examples. Remember, there is nothing more important than a happy customer. What is the one thing you can do immediately to make your customers happier than anyone else? Download my free leadership questionnaire to get clarity on every area of your business here: http://ow.ly/LUIww

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Cyber Monday 2019 By The Numbers: A Record $9.4 Billion Haul

Topline: With the busy holiday shopping season well under way, Cyber Monday raked in a new record of more than $9 billion in sales, marking the first day in history when consumers spent over $3 billion using their smartphones, the latest report from Adobe Analytics shows.

  • Total sales hit $9.4 billion—up nearly 19% from a $7.9 billion haul last year, according to Adobe Analytics, which measures transactions from a majority of top U.S. online retailers. That’s bigger than both Black Friday ($7.4 billion) and Amazon Prime Day ($4.2 billion last year).
  • As shoppers increasingly move to digital rather than in-person spending, online sales via smartphones grew 46% from last year, accounting for 33% of all Cyber Monday sales in 2019—at a new record of $3 billion, according to Adobe Analytics data.
  • During the peak hour of shopping between 11:00 p.m. ET and midnight, consumers spent $11 million on average every minute, Adobe said.
  • The top-selling products on Monday included Frozen 2 toys, the Nintendo Switch, VR devices, Samsung TVs, LOL Surprise Dolls, Apple laptops, NERF products and video games like Madden 20 and Jedi Fallen Order, Adobe’s report shows.
  • With more competition among retailers than ever, the report also highlights the 41% growth of BOPIS (buy online, pickup in-store) services this year, as shoppers increasingly looked for maximum convenience and time saving.
  • “Customers increasingly have a bigger basket of fulfillment options,” points out Morningstar analyst Zain Akbari, with more large retailers like Walmart and Target increasingly competing to offer cheaper and more efficient pickup or delivery services.

Big number: As of December 3, the holiday season has generated a record $81.5 billion in total online sales so far, Adobe Analytics data shows. Overall holiday spending for 2019 is predicted to hit $143.8 billion, compared with $126 billion last year.

Today In: Money

Crucial quote: “Retailers unlocked sales earlier to combat a shorter shopping season, while continuing to drive up promotion of the big branded days including Black Friday and Cyber Monday,” said John Copeland, head of marketing and consumer insights at Adobe. “Consumers capitalized on deals and ramped up spending, especially on smartphones, where activity increased on days when shoppers were snowed or rained in.”

Tangent: While Cyber Monday saw the best deals on televisions, with average savings of more than 19%, December 27 will be the day with the biggest discounts on electronics (27%), according to Adobe’s findings.

Surprising Fact: U.S. shoppers will on average each spend $637 this holiday season, according to Accenture’s annual Holiday Shopping Survey.

Further Reading: Here’s What Not To Buy On Black Friday, According To Experts (Sergei Klebnikov)

Follow me on Twitter or LinkedIn. Send me a secure tip.

I am a New York—based reporter for Forbes, covering breaking news—with a focus on financial topics. Previously, I’ve reported at Money Magazine, The Villager NYC, and The East Hampton Star. I graduated from the University of St Andrews in 2018, majoring in International Relations and Modern History. Follow me on Twitter @skleb1234 or email me at sklebnikov@forbes.com

Source: Cyber Monday 2019 By The Numbers: A Record $9.4 Billion Haul

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Big-box stores including Target and Kohl’s are offering massive discounts on items such as Instapots, Roombas and doorbuster deals online. WATCH THE FULL EPISODES OF ‘WORLD NEWS TONIGHT’: https://bit.ly/2P5Snrx WATCH OTHER FULL EPISODES OF WORLD NEWS TONIGHT: http://abc.go.com/shows/world-news-to… WATCH WORLD NEWS TONIGHT ON HULU: https://hulu.tv/33iKepm #WorldNewsTonight #DavidMuir #CyberMonday #HolidayShopping

 

How’s the Consumer Doing? Financial Sector Earnings Next Week Could Help Tell Us

Key Takeaways:

  • Big banks to kick off reporting season the week of October 14
  • Earnings for sector expected to fall slightly, analysts say
  • Brexit, trade, consumer health on topic list for Financial earnings calls

During Q2 earnings season, Financial sector results helped renew investor confidence in the U.S. consumer.

The question heading into Q3 is whether banking executives still see the same kind of strength, and if they think it can continue amid trade wars, Brexit, and signs of weakness in the U.S. economy.

Over the last three months, as the broader stock market rallied to an all-time high, slammed the brakes, and then re-tested earlier peaks, consumer health arguably did much of the heavy lifting. It felt like every time stocks pulled back, they got a second wind from retail sales, housing or some other data or earnings news that showed consumers still out there buying.

Today In: Money

The banks played a huge role in setting the stage by reporting better-than-expected Q2 results that showed signs of strong consumer demand even as some of the banks’ trading divisions took a hit. Next week, six of the biggest banks come back to talk about their Q3 experience and what they expect for Q4. Analysts expect Financial sector earnings to drop slightly in Q3.

That said, most of the major banking names have done an excellent job keeping costs in check as they wrestle with fundamental industry headwinds like falling interest rates and slowing revenue from their trading divisions. This time out, it wouldn’t be surprising to see more of the same, and you can’t rule out a bit more vigor from the trading business thanks to all the volatility we saw in the markets last quarter.

Earnings growth may not be there for Financials this time around, or it could be negligible. At the end of the day, though, Financial companies are still likely to be remarkably profitable considering a yield curve that remains relatively flat and global macroeconomic concerns, according to Briefing.com. This sector knows how to make money, but it might just not make as much as it did a year ago. Earnings will likely show large banking companies still in good financial condition with the U.S. consumer generally in decent shape for now, as the U.S. economy arguably remains the best-kept house on a tough block.

Investors have started to pick up on all this, judging from the S&P 500 Financial sector’s good health over the last month and year to date. The sector is up 3.4% from a month ago to easily lead all sectors over that time period, and up 15% since the start of 2019. The 15% gain is below the SPX’s 17% year-to-date pace, but it’s an improvement after a few years when Financials generally didn’t participate as much in major market rallies.

What to Listen For

No one necessarily planned it, but it’s helpful in a way that banks report early in the earnings season. Few other industries have larger megaphones or the ability to set the tone like the biggest financial institutions can. The other sectors are important, too, but they often see things from their own silos. Combined, the big banks have a view of the entire economy and all the industries, as well as what consumers and investors are doing. Their positive remarks last quarter didn’t really give Financial stocks an immediate lift, but it did apparently help reassure investors who were nervous about everything from trade wars to Brexit.

Going into Q3 earnings, those same issues dog the market, and bank executives have a front-row seat. How do they see trade negotiations playing out? Can consumers hold up if trade negotiations start to go south? How’s the consumer and corporate credit situation? Will weakness in Europe spread its tentacles more into the U.S.? And is there anything bank CEOs think the Fed or Congress can do to fend off all these challenges?

On another subject closer to the banks’ own business outlook, what about the shaky initial public offering (IPO) situation? That’s getting a closer look as a few recent IPOs haven’t performed as well as some market participants had expected. One question is whether other potential IPOs might get cold feet, potentially hurting businesses for some of the major investment banks.

All the big bank calls are important, but JP Morgan Chase (JPM) on Tuesday morning might stand out. Last time, CEO Jamie Dimon said he saw positive momentum with the U.S. consumer, and his words helped ease concerns about the economic outlook. More words like that this time out might be well timed when you consider how nervous many investors seem to be right now. On the other hand, if Dimon doesn’t sound as positive, that’s worth considering, too.

While few analysts see a recession in the works—at least in the short term—bank executives might be asked if they’re starting to see any slowdown in lending, which might be a possible sign of the economy putting on the brakes. Softer manufacturing sector data over the last few months and falling capital investment by businesses could provide subject matter on the big bank earnings calls.

Regionals Vs. Multinationals

While big banks like JPM operate around the world and might be particularly attuned to the effects of trade, regional banks make most of their loans within the U.S., potentially shielding them from overseas turbulence.

Regional banks also might provide a deeper view into what consumers are doing in the housing and credit card markets. With rates still near three-year lows, we’ve seen some data suggest a bump in the housing sector lately, and that’s been backed by solid earnings data out of that industry. If regional banks report more borrowing demand, that would be another sign pointing to potential strength in consumer sentiment. Refinancing apparently got a big lift over the last few months, and now we’ll hear if banks saw any benefit.

One possible source of weakness, especially for some of the regional players, could be in the oil patch. With crude prices and Energy sector earnings both under pressure, there’s been a big drop in the number of rigs drilling for oil in places like Texas over the last few months, according to energy industry data. That could potentially weigh on borrowing demand. Also, the manufacturing sector is looking sluggish, if recent data paint an accurate picture, maybe hurting results from regional banks in the Midwest. It might be interesting to hear if bank executives are worried more about the U.S. manufacturing situation.

Another challenge for the entire sector is the rate picture. The Fed lowered rates twice since banks last reported, and the futures market is penciling in another rate cut as pretty likely for later this month. Lower rates generally squeeze banks’ margins. If rates drop, banks simply can’t make as much money.

The 10-year Treasury yield has fallen from last autumn’s high above 3.2% to recent levels just above 1.5% amid fears of economic sluggishness and widespread predictions of central bank rate cuts. The long trade standoff between China and the U.S. has also contributed to lower yields as many investors pile into defensive investments like U.S. Treasuries, cautious about the growth outlook.

Another thing on many investors’ minds is the current structure of the yield curve. The 10-year and two-year yields inverted for a stretch in Q3, typically an indication that investors believe that growth will be weak. That curve isn’t inverted now, but it remains historically narrow. Still, some analysts say the current low five-year and two-year yields might mean healthy corporate credit, maybe a good sign for banks.

Q3 Financial Sector Earnings

Analysts making their Q3 projections for the Financial sector expect a slowdown in earnings growth from Q2. Forecasting firm FactSet pegs Financial sector earnings to fall 1.8%, which is worse than its previous estimate in late September for a 0.9% drop. By comparison, Financial earnings grew 5.2% in Q2, way better than FactSet’s June 30 estimate for 0.6% growth.

Revenue for the Financial sector is expected to fall 1.6% in Q3, down from 2.6% growth in Q2, FactSet said.

While estimates are for falling earnings and revenue, the Financial sector did surprise last quarter with results that exceeded the average analyst estimate. You can’t rule out a repeat, but last time consumer strength might have taken some analysts by surprise. Now, consumer strength in Q3 seems like a given, with the mystery being whether it can last into Q4.

Upcoming Earnings Dates:

  • Citigroup (C) – Tuesday, October 15
  • JPMorgan Chase & Co. (JPM) – Tuesday, October 15
  • Wells Fargo (WFC) – Tuesday, Oct. 15, (B)
  • Goldman Sachs (GS) – Tuesday, October 15
  • Bank of America (BAC) – Wednesday, October 16
  • Morgan Stanley (MS) – Thursday, October 17

TD Ameritrade® commentary for educational purposes only. Member SIPC.

I am Chief Market Strategist for TD Ameritrade and began my career as a Chicago Board Options Exchange market maker, trading primarily in the S&P 100 and S&P 500 pits. I’ve also worked for ING Bank, Blue Capital and was Managing Director of Option Trading for Van Der Moolen, USA. In 2006, I joined the thinkorswim Group, which was eventually acquired by TD Ameritrade. I am a 30-year trading veteran and a regular CNBC guest, as well as a member of the Board of Directors at NYSE ARCA and a member of the Arbitration Committee at the CBOE. My licenses include the 3, 4, 7, 24 and 66.

Source: How’s the Consumer Doing? Financial Sector Earnings Next Week Could Help Tell Us

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JP Morgan Chase: https://www.zacks.com/stock/quote/JPM… PNC Bank: https://www.zacks.com/stock/quote/PNC… US Bank: https://www.zacks.com/stock/quote/USB… Banks are usually at the front of earnings season and help to set the tone for the rest of the market. However, with a terrible interest rate outlook, can the space still post good profits and give us a positive lead-off for this earnings season? Follow us on StockTwits: http://stocktwits.com/ZacksResearch Follow us on Twitter: https://twitter.com/ZacksResearch Like us on Facebook: https://www.facebook.com/ZacksInvestm…

A Simple Hack to Discover What Your Customers Really Want

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As a business owner, you think about your customers every day. Still, it’s a good idea to make time to regularly reflect on how your products and services meet their current needs. This begs the question to small business owners and entrepreneurs alike: “What do my customers really want?”

 

There’s no single way to answer this question. How you gather your data will depend on your business, and it may change over time. Kabbage customers explain below a simple hack to getting to know your customers better: simply asking them.

 

Ongoing survey data guides bakery choices

The humble suggestion box used to be a fixture in many businesses seeking input from customers. Today, business owners have digital tools for gathering suggestions, making it easy to find out what customers want. Laura and Johnny Hobson, owners of Serendipity Cafe in Maynard, Massachusetts, make a habit of surveying customers on everything from bread preferences to cafe hours.

 

“We really try to connect with the community,” Laura says. When she and Johnny started out with a farmers market stand, they collected customer email addresses; in the cafe, customers can add addresses in the point-of-sale system. Laura and Johnny then use online tools like SurveyMonkey to ask for feedback.

 

The survey results guidedthe couple when they launched the cafe and new data helps them ponder new products and services. “When we were outgrowing the farmers market, we asked really specific questions about how often people would come to a cafe, what products they would buy, and what the town already had enough of,” Laura says.

Adjusting pricing and creating a welcoming vibe

 

For Michelle Baker, owner of Next Level Fitness and Personal Training in Kansas City, Missouri, asking, listening and observing is key to understanding what local residents needed. She worked for another personal trainer before opening her own gym, and heard clients complain about high prices for classes and personal training sessions.

As a 23-year resident of her moderate-income neighborhood, Baker knew that locals couldn’t afford hundreds of dollars a month for training. She also knew that her neighbors had unique wellness challenges, like diabetes and weight control, which might make them hesitant to work out in a crowded gym with body-building regulars. For many people in her community, fitness is about developing healthier habits.

 

When Baker launched Next Level Fitness with her husband in 2009, she knew that affordability and an inclusive, welcoming gym environment were key to growing the business. “We had to keep prices low enough so that the average person would come to us,” Baker says. Next Level offers an introductory six-week program of training sessions for $99, an accessible price point for her customers.

 

Baker and her husband boost cash flow by teaching small group training sessions. “That way we maximize the time we spend training,” she says. She’s also added services that will help her customers achieve their fitness and health goals, like nutritious ready-to-cook meals.

 

To ease customer concerns about working out with others, Baker posts regular videos on her Facebook page showing the diversity of body types, fitness levels and ages of her clients. “When people see the videos, they think ‘I see people who look like me,'” Baker says. “They know no one’s going to make them feel uncomfortable. We’re a smaller, friendly gym where everyone knows everyone, and no one feels out of place.”

The 10 Most Customer Focused Companies In Asia -Blake Morgan

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All over the world customers are king. But it’s especially true in Asia. Customers in Asia are unlike any others in the world. They tend to be more connected to their mobile devices and are eager to spend and connect with brands. Many of the most successful companies are those that are completely focused on their customers. Here are 10 of the most customer-focused companies in Asia. Customers are front and center at Singapore-based DBS Bank. The company has a Customer Experience Council, chaired by the CEO, which proactively anticipates and addresses customer needs……………

 

 

 

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5 Powerful Examples Of Social Media Customer Care – Alina Gorbatch

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Social media customer care doesn’t sound like something worth an entire article. After all, social media has been with us for a while. We know that customer care is important, we have business pages on multiple platforms, we reply to messages and direct tweets, solve tickets, and gradually forget how to use a phone. What else is there to do? Unfortunately, it turns out that most of us don’t do even that. Social media customer care suffers from a sheer lack of attention. Research shows that brands reply to only 11% of customers…….

Read more: https://www.jeffbullas.com/social-media-customer-care/

 

 

 

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Why Customer Service Is Important To The Success Of Your Business – Salesforce

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Great customer support drives an amazing customer experience, especially when your support team moves beyond just reacting to problems and toward anticipating customers’ problems. When support agents are empowered to go above-and-beyond with customers, or have a help desk solution that makes it easy for them to upsell or cross-sell relevant services, they can create winning experiences that help you stand out from the competition……

Read more: https://www.salesforce.com/products/service-cloud/what-is-customer-service/?d=7010M000000uOnuQAE&ban=US_Pocket&dclid=CLD6rPvTnN4CFQFODAodGZsAwg

 

 

 

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How to Design a Customer Experience Strategy

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According to a report by the customer experience consulting firm Walker, by 2020 customer experience will overtake price and product as the key brand differentiator. While companies understand the importance of customer experience, many don’t know how to make improvements.

Preparing for Customer Experience Design

Customer research is the first thing you should focus on when designing your customer experience strategy. How can you design a customer experience if you don’t know who your customers are?

Personas

Developing a persona is the first step in the research process. A persona is a ‘character’ developed through research, to represent a common group of people. By developing 1-5 personas of your customer base, you can better understand the psyche of your customers and build experiences for your most valuable segments. If you start with building empathy and understanding the profile of your key customer segments, you have a way to connect with them so that everyone has a shared understanding of their demographic profile, behaviors, and pain points. The persona should include an image of the imaginary customer, demographic profile, attributes and motivations, needs, pain points, and actual customer quotes. To create the persona(s) you should conduct customer interviews and analyze and theme your data to draw meaningful insights that relate to various customer types.

Empathy Mapping

An empathy map is a tool used to better understand the needs of customers. It allows teams to provide a complete picture of the customer and what actions they might take as a result of their beliefs, emotions, and behaviors. Empathy mapping uses 4 quadrants labeled as ‘think’, ‘feel’, ‘say’, ‘do’ to help make sense of different aspects of the customer’s experience and preferences.

Stakeholder Mapping

Stakeholder management is the process of understanding the attitudes of stakeholders before initiating a potential change with the goal of developing alignment and collaboration between the various groups. Stakeholder planning helps to identify stakeholders’ needs and interests, mechanisms to influence stakeholders, potential risks, key people to keep informed about changes, and negative stakeholders and their adverse effects on the change. Map stakeholders into the 4 quadrants to determine the best engagement strategy:

  • Supporters (high support, low influence) Involve supporters with the project team to leverage their enthusiasm
  • Champions (high support, high influence) Keep champions close as project partners who can help to influence other stakeholders
  • Gatekeepers: Major Risks (low support, high influence) Investigate concerns from this group and leverage champions to improve their support
  • Bystanders (low support, low influence) Keep this group well informed via mass communications

Mapping the Customer Experience

Once you fully understand your customer you’re ready to start mapping out the customer journey. This is when you get into the customer’s mind as they’re interacting with your product/service.

Focusing Challenge

Before you set up a customer project, you need to align your stakeholders on the primary intent., so you can clearly define the set boundaries to explore. This enables you to focus your team’s thinking to drive the right action. It removes any assumptions within a project statement to guide clear direction. To set up a customer project or initiative, you need to spend time understanding and defining your customer challenge. A focusing challenge will help you to clearly define your future state vision or challenge and communicate the intent across the business. Use this formula: (Who) can (do what) so that (why: the outcome).

Customer Journey Mapping

A Customer Journey Map is a design tool that provides a view of the end-to-end experience of your customers. It is a way of visually illustrating customers’ processes, needs & perceptions throughout their interaction and relationship with your organization. The Customer Journey Map outlines customer needs, pain points, opportunities and different interaction points which accumulate to build a comprehensive “journey” based on their experiences. To create a customer journey map, pick a persona and map out the key steps across the journey. Once you fully map the customer experience, identify pain points and use the 5 Why’s model below to determine the root cause.

5 A’s Customer Journey Mapping Framework

The 5 A’s Customer Journey Framework is a way of depicting the key interactions throughout the end-to-end customer lifecycle. It is an engaging framework used to organize the key stages a customer goes through as they become aware of your organization right through to exiting or extending the relationship. This alternate approach to Customer Journey Mapping helps organize the themes for analysis through both the eyes of the Customer (above the line) and your organization (below the line) – exploring key touch points, systems, processes, pain points and opportunities.

The 5 A’s are:

  • Attract– How are customers attracted to and informed of the service or product?
  • Accept– How does the customer enter into dealings with your organization?
  • Adopt– How does the customer interact throughout the entire experience?
  • Amplify– How do you leave the customer feeling at the end of the interaction?
  • Advance– How do you follow up with customers and extend the current relationship?

Building the Future State Experience

The future state experience is crucial because it allows you to envision what you want your customers to think and feel when they’re experiencing your product.

5 Why’s

The 5 Why’s is a simple, yet powerful problem-solving tool that works to engage teams in understanding the root cause of simple issues. Once you have identified your root cause, you still need to prove or disprove it using data. When you investigate you might find that it’s not what you thought. Start by writing down a specific problem statement or pain point your team is trying to solve, ask the question of ‘why’ the problem occurs, and write down the answer below the problem. Then keep using the why question to the previous answer, until you get to the real cause of the problem.

Brainstorming

Brainstorming is a structured technique used to apply a different way of thinking to generate and explore new ideas. Brainstorming is traditionally done as a collaborative effort, by bringing together the right people with the right knowledge to help solve your problem. To get the most out the session and the people involved, brainstorming works best when you first apply divergent thinking without limitations, then converge on appropriate ideas to explore in more detail. This means considering all angles, before narrowing on designing a solution that best meets the needs of your customers.

The four main brainstorm techniques are:

  • Classic– Generate as many ideas as possible and score all
  • What If?– Ask “what if” three times. For example, for a problem of high customer turnover ask “what if we halved the price?”
  • Wrong Way– Deliberately try to generate bad ideas. For example, if you were trying to improve customer retention, ask “what could we do to drive our customers away?
  • Risky Options– Concentrate on the issues that matter most, and thus generate better ideas. People are often discouraged from suggesting seemingly wild or risky ideas which might lead to the best solution because they fear failure or group criticism.

Experience Design Development

The experience design process is a method to further develop initiatives subsequent to your customer journey mapping and opportunities brainstorming session. This agile process ensures unproven ideas are stopped and retired, and viable ideas are further developed into a business case to incite action. The methodology is: we believe (describe the new experience), will solve (customer’s needs and organizations issue/opportunity), enabled by (full solution), resulting in (new attitude/behavior/result). Run each opportunity through the design tool to further develop each opportunity and then rank each opportunity in terms of its customer and business value.

By designing a CX strategy for your business you can better understand the customer and meet their needs. To learn more about designing a CX strategy for your business, download the Customer Experience Design Toolkit.

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What to do When Your Customers Ask For a Discount & Why You Shouldn’t Give Them – Steli Efti

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Everybody wants a deal. Especially your prospects. And while you probably think giving 10% or 20% off isn’t a big deal, giving discounts just to win business can cost you more than money. It can kill your company.

Sure, you probably think I’m being dramatic. You’ve been giving discounts for ages and your revenue and customers are still growing. Right?

The problem is, when your company culture is a discount culture you might win a few battles, but you’ve already lost the war.

SaaS companies today don’t win on being cheap. They win on being valuable.

Let’s start off with the obvious: The SaaS landscape today is more crowded and competitive than ever. You know that when a prospect is talking to you, they’re also talking to your competition. And somewhere in the negotiation, that prospect is going to ask you for a discount.

And so you think “If this customer is willing to offer their solution at that price, I can too, or even a little lower. Just to win the business.” The problem is, once you start down this path, it’s almost impossible to get off it.

You’ve positioned your company as being the cheapest solution, rather than the most valuable.

Want to get better at handling discount requests and other objections? Get our free objection management template!

When you offer discounts, that’s all people think about your company. We’ve seen this exact situation happen in the consumer goods space. The market gets so crowded and undifferentiated that customers will only pick either the cheapest option or the brand they know and trust.

In SaaS, the only way to win on price is to be free. And you can’t build a company like that.

Instead, I truly believe the winning SaaS companies of today and tomorrow will win on value and they’ll win on brand. And you can’t have either if you’re just trying to be the cheapest.

Discount culture creates a weak sales force (and a weak brand)

When you give discounts, you’re setting the wrong example for your team. Instead of going out and selling on your solution’s value and your brand, your salespeople will become transactional. They’ll just give the prospect information and then offer them whatever they want.

Worse than that, your sales team will start offering discounts without even being asked! I’ve seen this happen so many times at SaaS companies and it drives me crazy.

A sales rep is talking to a prospect, they qualify them, there’s a match, they can really deliver value. And when the prospect asks about pricing, the sales rep preemptively goes: “Well, this is our price. But I would give you a good discount.”

Wait a minute. Nobody asked about a discount!

This is a weak sales culture. Your sales reps will always use the easiest tools available, and when they see discounts being given they’ll start to abuse them. They’ll start to think: “Everybody thinks everything is too expensive. Every buyer wants the cheapest, so before they ask, let me just tell them I’m going to give them a discount.”

All of a sudden one of the most vocal voices of your brand—your salespeople—are weak. They’re cheap. And that’s going to reflect on your brand at the end of the day.

You can’t scale because you don’t know what a customer’s actually worth

The other huge issue with discounts is that they make your business completely unpredictable and unscalable.

Instead of a Basic, Pro, and Business plan where you know how much revenue you make for each, you’ve got Customer A with a 12% discount, Customer B with 14%, and Customer C with 2 free user accounts. Good luck trying to build models or forecast your future revenue or even figure out what’s going on with churn.

Those discounts are going to undermine your entire financial structure because you don’t know what a customer’s actually worth. If they remove or add seats, you have no idea what that means in true revenue or churn.

It’s going to cause problems for your support team, your success team, and your marketing team. Even your product people are going to get angry because they’ll have to build all these backend solutions to keep track of billing on all your different discount cases.

You’ll piss off your customers when they find out you’re charging them more than others

Let’s say a slightly larger company aggressively negotiates a big discount. A few months later, a smaller company comes are your sales rep says “this is the best discount we can give. I can’t go any lower.” I guarantee at some point your customers are going to talk to each other. And when they do, the second customer is going to be pissed.

And rightfully so. You lied to them. You betrayed them. And they have every right to get loud and aggressive and drag your brand through the dirt and tell everyone they know about how terrible you are.

This doesn’t mean you can’t give discounts. You just have to do them right.

If you’re just giving our discounts willy nilly, you’re going to get burned. You’re going to destroy your brand, piss off your customers, and create more headaches than that little bit of extra business is worth.

But this doesn’t mean you can’t give out any discounts. You just have to make sure when you do, you do these two things.

First, make sure you’re getting something in return

The problem with discounts is they create abusive customer relationships. Your customer comes in, demands a bunch of things, and you give it to them just for a bit of business. Instead, you need to ask for something in return. This creates a healthy, reciprocal relationship.

In SaaS, that means asking for:

    1. Prepayment: When a customer agrees to sign a long-term contract or prepays for an entire year, you can absolutely give them a discount. You get guaranteed income and predictable cashflow and they get a break on the monthly price. We offer customers of our inside sales CRM a 10% discount if they pay annually instead of monthly.
    2. Case Studies: Trading a bit of a discount for marketing materials is also a good deal. Feel free to offer a discount if a customer is willing to spend a few hours on the phone with your sales team to make a great case study and do some co-promotion.
    3. Referrals and reviews: You can also offer discounts for connections and leads. Ask for a positive review on a specific platform or give discounts if they connect you with other people in the industry who could be strong prospects.

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Second, make sure your discounts are standardized

If you are giving out discounts, you can’t have any flexibility or offer customization. Your sales reps can’t just give them out however they want. You need to have set, predetermined discounts for each of the deals you’re offering.

For example, you could offer 10% for a case study, 15% for prepayment, and 20% for a referral that leads to a new customer. That’s it. There’s no 12% or free seats on offer.

But Steli, what do I do if a customer says they’re not going to buy if I don’t give them a bigger discount than I want to?

There’s always going to be someone who wants more. But you have to draw a line in the sand.

If they’re not willing to work with you, they’re most likely not your ideal customer. At Close.io, we’ve told thousands of businesses “No” when they asked for bigger discounts.

And you know what’s funny? They all get angry. They all scream and yell and tell you there’s no way in Hell they’re going to buy from you at that price. But in my experience, about 50% of the time, they become customers anyways.

It’s just the way they negotiate. They’re trying to get the best deal for their business and you have to respect that. If you have a strong brand and can show the value you provide, there’s a very good chance they’ll choose you anyways.

Of course, there’s one big exception to all of this: Enterprise

As you can tell, I’m sick of seeing discount culture in SaaS companies. But there is one big exception.

If you’re selling to enterprise clients, the way you handle discounts is going to be completely different. You can’t just give them a price and say “this is what it is,” because that’s just not how they work.

Most enterprise companies have a procurement department whose entire job is to get discounts. They have a discount quota to meet, and if you won’t play ball, they’re not even going to consider you.

That’s just the way their organization is built and you’re going to have to go with it if those are your ideal customers.

If you’re trying to win with discounts, you’ve already lost

If you don’t value your solution, your customers won’t either.

So, if you feel like you absolutely have to offer some sort of discount, make sure:

  1. They’re standardized (and don’t budge!)
  2. You’re getting something equally as valuable in return

Sell your prospects on value first and make the discount an added bonus. Not only will this give you a stronger brand, but it will set you down the right path for real, sustainable growth.

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Starbucks Is Now Open for Loitering and It’s a Terrible Business Decision – Gene Marks

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Starbucks, in an effort to walk back from the recent bad press it received, has just made a terrible business decision. Did you catch it? According other reports, the company, in a letter to its employees this past weekend, said that “any person who enters our spaces, including patios, cafes and restrooms, regardless of whether they make a purchase, is considered a customer.”

Starbucks employees were told to follow company procedures for people that are acting in a “disruptive manner,” particularly when there’s a potential safety concern. The company is also asking its customers to “behave in a manner that maintains a warm and welcoming environment by using spaces as intended, being considerate of others and communicating with respect.” That’s fine for “customers.” But if a guy’s not buying any coffee how can you call him a customer?

It’s a terrible mistake and it should be a fascinating business lesson, not only for the giant coffee chain but for the thousands of smaller, independent coffee shops, merchants and restaurant owners that operate around the country. Why?

First of all, consider my local Starbucks (which by coincidence is the one located at 18th and Spruce Streets in Philadelphia, where the now infamous racial incident that occurred last month). I go there all the time. Unfortunately, so do lots and lots of homeless people who sleep the nights in nearby Rittenhouse Square looking to use their bathroom or to get a cup of water.

The employees at that location are great — always providing but then politely moving them along. (Let’s please not get into a homeless debate here: It’s a terrible and sad problem. But anyone who lives in a city like me knows the best thing to do is to contribute to organizations who can provide food, clothing and medical care for this population.)

Once word of this new policy spreads — and it will spread quickly — my expectation is that this location will be residence for many indigent people…all day long. If you were homeless, wouldn’t you do the same? As long as you’re “considerate of others” and “communicating with respect” (whatever that means) you can sit there from opening to closing and enjoy warmth, security, a bathroom and as much water as you can drink.

It’ll be interesting to see the impact this has on all the other customers who use that location as a place to meet friends, study or relax with a latte and a book. My prediction: Bye-bye, Starbucks.Secondly, what will Starbucks do if the policy fails? Has this really been thought through? Was it even tested during this past month? Please, don’t ever do this in your business.

Yes, we all sympathize with the homeless, but do you sympathize so much that you would sit next to someone who’s been living rough (and smells like it) after spending six bucks on a Frappuccino? And what about their employees? Does the company realize just how much more difficult their jobs will become? Will Starbucks lose valuable people due to the added stress from adding “policeman” and “psychiatrist” to their already long list of job duties? I think so.

There is potentially good news from this decision, particularly if you’re one of the thousands of coffee shop, store or restaurant owners around the country. It’s quite possible that the influx of homeless or other people who aren’t paying but use Starbucks like a bus station waiting room will drive existing Starbucks customers to you.

But then again, it’s possible that the Seattle chain’s supposed “benevolence” may force you into doing the same — or bear the wrath of activist groups, social media trolls and bad headlines. Will this force the many independent business of chains like Subway and Dunkin’ Donuts to do the same? Ugh.

So let’s see how this plays out. I’m ready to buy my coffee at any of the dozens of local merchants nearby if my local Starbucks becomes uncomfortable or undesirable. You know what? I should be doing that already.

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