Consumers Shop for Solutions

CU360
February 3, 2010 | COMMENTS

Consider the treatment customers get from companies in the headlines these days. Wall Street financial firms and others might have avoided their monumental stumbles if they had focused on the needs and wants of their customers. It's a good time to remind ourselves, advises a Business Week columnist, of practices that win the hearts and minds of customers.

New marketing truths have emerged from the ongoing information revolution. But the fundamental principles haven't changed, according to Jeneanne Rae co-founder and president of consulting firm Peer Insight. Here are five ideas to help keep customers—or members—front and center:

Customers want solutions. In the words of marketing guru Ted Levitt: "People don't want a quarter-inch drill; they want a quarter-inch hole." All products and services should fall into the category of getting a job done, solving a problem, filling a need. Companies need to expand their thinking, and their product portfolios, to be more solution-centric.

A range of products—pharmaceuticals, for example—now try to market retail products as comprehensive programs that include professional coaching, support tools, online networks, and communities to connect customers with others on the program. Ultimately, sales depend on customer success stories, so making it easier for people to share stories is in a firm's own interest.

Customers take longer to find a solution than we think. Companies tend to focus on their initial contact with customers, believing that shoppers' experience with a product or service begins when they walk into a store or visit a Web site. In fact, their journey begins much, much earlier. Customers form opinions from countless sources, including conversations on Facebook, e-mail, and discussion boards—well before companies have had a chance to pitch their product or service. That means companies must search out customers sooner.

A customer journey is a circle, not a straight line. Companies that really understand customers know their journey never ends. Consumers circle back continuously, potentially using your products and services many times. Why drop the conversation after working so hard to get them in the door? Continue to give customers reasons and ways to maintain involvement. Companies that offer lifestyle brands as opposed to brands linked to one-off products or services can keep customers loyal over lifetimes.

Your competition isn't who you think it is. Remember, customers want solutions, and the cast of companies that can help fill those needs extend beyond your direct competitors. In financial services, credit unions know that consumer options aren't limited to other institutions within a 5-mile radius. Companies that see their competition from a broader viewpoint will find new ways to stay relevant and imagine more comprehensive solutions.

Customers are part of a collective. The information revolution has connected people in powerful ways; it's never been easier for customers to find the opinions of others to validate their product and service choices. Rae relates a colleague's story of shopping with his teenage daughter for her prom dress. In each new outfit, she snapped and sent pictures of herself with her iPhone, asking for feedback from her Facebook friends, and getting it in real time. He was amazed by this new decision-making behavior.

These five points beg the question, what's next? Don't leave things entirely up to marketing, says Rae. It takes a serious cross-functional effort to turn people into customers and then keep them coming back. It takes that same comprehensive effort to transform individual products or services into winning solutions. In other words, think of the hole, not the drill.