Greetings!
The customer is not always right..." was a teaser to a an article that appeared in the Saturday edition of The New York Times (http://tinyurl.com/4dxvlzt) on a trend in some "trendy" restaurants to refuse special orders, menu substitutions and even use of some condiments despite customers' requests for them. My initial response was to scoff at what seemed to be an obvious affront on customer service. But as I read on I began to recall some truths about marketing I learned in my days running an advertising agency: if you ask a customer what they think they want - it will usually be something in the general range of what they already have. In myriad focus groups I witnessed, it was astonishing to realize that most consumers can't imagine what they don't know. Customers can rarely be depended upon to think "outside of the box." Instead they want more or fewer features, choices of colors and improvements in perceived value, but asking a focus group to assess a disruptive new technology or a breakthrough product is often no more useful than asking my golden retriever. I'm fairly certain the iPad was not borne of a consumer study. Innovation, it appears, is for the daring and those willing to stand alone at the edge of a dark, deep abyss. The former CEO of Porsche, Peter Schutz is a highly regarded Vistage speaker. Schutz says, "If you listen, your customers will explain your business to you." While they will explain what business you are in - they will not tell you how to run it - or how to outpace your competition. Clearly, not understanding who your customer is and why they buy are among the deadliest of sins. However, sometimes you have to set standards that set you apart from your competition if you want to command a premium pricing strategy. (Most successful, small to mid-size companies should and can be commanding premium pricing for their products and services - of you're not sure why, please read my blog post "The Price of Deliberate Leadership") Knowing who you customers aren't can be just as important as knowing who are - especially when it comes your pricing strategy. In the January 3rd edition of Monday Morning CEO I referred to a video entitled "The Paradox of Choice" by Dr. Barry Schwartz on TED.com (http://www.youtube.com/watch?v=VO6XEQIsCoM). He explains that simply expanding the range of choices we offer customers can actually increase their sense of dissatisfaction, yet I would bet that few customers would actually tell you they would prefer to choose from three rather than thirty-six flavors of ice cream. It isn't only making a selection that can flummox a customer and turn them dead in their tracks. Sometimes it is simply a matter expecting that they can imagine something they cannot touch. My brother is a furniture designer/maker. He custom designs and hand builds exquisite wooden furniture. (You can see samples of his work at www.jlfurniture.com) His furniture costs no more than high-end factory-built pieces yet is of a much higher quality than even the top name factory brands, each piece is a signed work of art and can literally be customized to any level of detail and specifications. It's hard to understand why people aren't beating down the doors of his studio to commission custom pieces, but when you understand how customers behave, the answer isn't entirely surprising. It's not price or concern over quality-and it's not competition from other craftspeople. It's that most people are just uncomfortable using their imagination to co-create a furniture design, something that doesn't already exist, and be confident enough that they will like the final product. More than just a "fear of the unknown" it's not being comfortable with their own ability to make choices on something they are unfamiliar at doing. Instead it's more desirable to shop at a furniture store, look at a piece in the showroom and decide that they like what they see. In this case, understanding who Joel's customers are and are not, is the difference between his spinning his wheels creating possibilities for people who will never buy- and creating furniture for people who will cherish the personal future-heirloom they commissioned and refer their friends to Joel. (Next week I will explain implementing "risk reversal" can help you overcome the fears that prevent customers from buying from you.) So, who are your customers? What can they tell you about the business you are in? Why do they buy and what makes buying from you worth their while? And now ask yourself, "What will my customers buy that they don't yet know they need?" Perhaps the important question (borrowing from the Drucker quote above) is: What are you doing to innovate? If you want to lead your company and your customers into the future and create both value and wealth, you will need to find the answer. This week's Monday Morning CEO also looks at some important insight on both the economy and the events in the Middle East in order to bring some perspective that will be helpful to the decisions you are perhaps facing right now. As always, wishing you a great and successful week ahead. 
Philip R. Liebman Managing Director, Strat 4 Group Chair, Vistage International P.S. Tomorrow is the Vistage All-Cities CEO conference in New Jersey featuring Alan Beaulieu. I will update you next week on what you can expect from the current state of the economy - and how it may directly impact the decisions you will be making in the near future. More than 20 guests have signed-up to attend Allan's morning session and a special "Experience Vistage" roundtable. In case you would have liked to attend, contact me and I will send you recorded audio highlights of Alan Beaulieu's presentation along with my write-up. There will also be another opportunity to attend an Experience Vistage CEO Peer Group Roundtable on March 23rd. .
| 
