The Pain Papers
8/31/2001
The Pain Papers
Newsletter #6 - August 31, 2001
Copyright (c) 2001 Christopher K. O'Leary
All Rights Reserved
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THOUGHTS
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nonCRM
One of my favorite books is Clayton Christensen's "The
Innovator's Dilemma." In it Christensen describes a phenomenon
that he calls The Innovator's Dilemma. Here's how he described
it to Business Week Online...
"The dilemma is that the criteria that managers use to make
the decisions that keep their present businesses healthy make it
impossible for them to do the right thing for their future.
What's best for your current business could ruin you for the
long term. They've been trained to listen closely to customers
and do things that improve their margins. Those things are
mandatory to keep your present business healthy and stock price
high. But they can prevent you from addressing the Internet."
One of the processes that managers have seized upon to keep
their businesses healthy and stay close to their customers is
Customer Relationship Management (CRM). This means tightly
integrating the sales, marketing, and customer service functions
of an organization.
However, on page 4 of The Innovator's Dilemma, Christensen
points out the problem with the "stay close to your customer"
philosophy upon which CRM is based...
"This is one of the innovator's dilemmas: blindly following
the maxim that good managers should keep close to their
customers can sometimes be a fatal mistake."
...and reiterates this point on page 48 by saying...
"The popular slogan 'stay close to your customers' appears
not always to be robust advice."
What is going on here?
The problem is that, as The Innovator's Dilemma makes
it clear, while your current customers may be the key to your
present, they are usually not the key to your future. In fact,
and more importantly, Christensen points out that your current
customers are probably the thing that will keep you from getting
to the future.
The obvious implication is that your future lies in
people who are not your customers. As a result, to secure their
future companies must begin to develop a new type of process
that helps them understand and service their non-customers.
I call this process non-Customer Relationship
Management or nonCRM.
So how would this work?
First of all, you have to recognize that one of the
reasons that the Innovator's Dilemma exists is because of how we
tend to treat people. It's very human to reject or disregard
people who have rejected us. You cut them off and hang out with
the people who like you.
Similarly, if you are a company and someone does not
like your company or your products you tend to treat them in the
same manner. You reject those who have rejected you and focus
your attention on the people who like you. They become the
targets of your satisfaction surveys.
This is especially the case when it comes to people whom you
have tried to turn into customers and who have rejected you.
Once someone has turned us down, then that tends to be it.
I would submit that this represents a tremendous missed
opportunity.
What smart companies will do is contact people who have
never been, used to be, or have declined to be your customers.
They will conduct non-customer dissatisfaction surveys.
The goal is to understand why different people have
chosen not to be your customers.
In many cases, this means understanding the pain that
non-customers feel that is inherent in your company's products
and services. In many cases, it is this actual or perceived pain
that is keeping people from being your customers, so it is in
your best interest to understand how your non-customers regard
your products.
So how do you do this?
Well, the obvious first step is to contact and stay in
touch with people who used to be your customers. How many
companies even think to do this? I know that some of the Big 5
consulting firms have very active alumni networks because the
recognize the value in maintaining relationships with their
former employees instead of treating them like pariahs.
Another idea is to contact companies that you tried to
sell to but lost in a bidding process. Simply ask them why you
lost. This has the benefit of gathering vital information as
well as giving your company a shot in the future if the current
winner ends up having problems.
You must also make non-Customer Relationship Management
a priority within your organization by dedicating people to the
task - and ensuring that the people who manage your customers
and the people who manage your non-customers belong to different
groups. Non-Customer Relationship Management people must have
thick skins and understand what they are looking for and why.
They must be trained to look for the root causes and
opportunities that lay beneath a person's dissatisfaction.
These nonCRM people can be organized into scout teams
that are designed to talk to non-customers or conduct focus
groups with people who do not like your products. The goal is to
look for the pain that may be behind this dislike. These scout
teams can also be tasked with monitoring what is going on in
call centers and mining customer complaint data for ideas for
new products and services. They can also monitor Internet
discussion lists for customer dissatisfaction information.
Finally, they can look for those cases where people ask you
about products that you don't make or communicate needs that you
can't currently solve. The goal is to use, not lose, all of this
incredibly valuable non-customer information.
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INTERVIEWS
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ART FRY
As part of my research for the book, I had a conversation with
Art Fry, the inventor of 3M's Post-it Notes. I wanted to give
you an idea of what we talked about. Art talked about the role
that pain played in the invention of the Post-it Note...
"Although it wasn't too painful, it was an aggravation to
have had the bookmark fall out before it was time to sing in the
choir. Since my work at 3M was to find new products and build
businesses around them, folks like me welcome these sorts of
situations.
So pain is one source of inspiration.
Curiosity about how something works and the quest for
better ways to do it is another source. Misdirected laziness is
another prod. I know of a lot of inventors who will spend
countless hours devising a system to make a task simpler and
easier, when it would have been much faster just to do it the
old way. A love of problems is another source of inspiration. A
lot of my type of folks just love problems that have stumped
others or that have not even been recognized by others as a
problem. So pain, love, hunger, warfare, and any other human
emotion or predicament can be a source of inspiration. People
just love to create things and they tend to love an nourish what
they create."
I wanted to make a few points about what Art has to say.
First of all, Art makes the point (that I will hit in
an upcoming newsletter) that there is really a continuum of
pain. Some pain is of the raging "This is driving me crazy"
nature while others is of the "This kind of bugs me" nature.
Obviously, the nature of the pain will impact the adoption rate
of the innovation.
Second, Art points out the problem with traditional
research and development. In an upcoming column I will talk
about Research, Development, and Pain and discuss the difference
between R&D that looks cool but produces no results and R&D that
makes the world a better place.
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READER COMMENTS
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I had the following exchange with Todd Jamieson the other
day. Todd asked...
"We constantly run into problems in positioning the firm when
trying to build value for our work. As you know, many executives
are non-technical, and do not use the Internet. It has become
very frustrating as we have a hard time even explaining what it
is that we do."
Instead of talking about what you do, you might have more
luck in probing them for problems that they are facing. They are
asking you the "Who cares" question and you don't have a good
answer. You need to query them for problems that they are facing
(and most small businesses have similar problems) and solve
those. Once you do it for one company then you can sell that
skill to others - "Do you have this problem? Well, this is how
we helped ___ solve that problem." Position yourselves as
problem solvers and not techies.
"Our sales people have consistently come across the following
problems:
1. Trying to explain what it is that we do.
2. How we are different from their neighbor who does web design
in their basement (and charges significantly less than us!)
3. Why we charge the amounts that we do."
The obvious answer is that they get what they pay for. What
problems would someone get with a garage firm? How do your
processes eliminate that risk?
"From our research, the companies we pitch do not lack funds,
I believe it is a perception of the industry and possibly how we
position our company."
The industry never answered the "Who cares" question and is
paying for it.
"My question for you Chris, is do you have any ideas or
advice for 'educating' these old-school people on how they can
actually save money (by automating their business), collect
marketing data and manage their business from anywhere ...
simply by using our firm to develop a web application or web
site. We consistently see these same companies willing to but a
$100K software solution but only allocating a budget of $5 -
$10K for ours."
Educating your customers isn't your problem. Your problem is
that you aren't talking the same language. Change your language,
don't count on changing their minds - because you won't. You
need to talk their language, which is the language of "How much
money will this cost me vs. save me and how will it make my life
easier."
I also had the following exchange with Eric Martineau
the other day. Eric asked...
"Thanks for your thoughts on pain. My company has a
revolutionary product they attempted to sell into existent
evolutionary channels. They just killed the product because no
one is buying it. Yet as you pointed out, I have tons of people
asking to demo the product, only not in the initial market the
product was intended for so the company does not see this a
valid. Oh well."
Question. Did you try to sell the revolutionaries first? It
sounds like you targeted mainstream customers before you
targeted early adopters. By definition, the mainstream will be
years late in adopting.
"I assume that:
a. for most 'perception is reality,'
b. the Pygmalion effect does cause both positive and negative
realities to occur,
c. Most of us don't have the funds needed to 'go it alone' with
our new ideas and are thus dependent upon outside organizational
monetary support,
d. Revolutionaries and Evangineers cause paradoxical
relationships.
e. at the end of the day how you're perceived by your peers has
more impact on whether your ideas will take hold within an
organization.
Thus: How can revolutionaries increase the odds of winning over
the pragmatic herd they work with so their ideas can obtain
needed funding? Or in other words, How do you fight for
Revolutionary ideas without alienating co-workers? If the answer
is 'Evangelize them,' I would argue that only a very few
individuals are willing to be enthusiastic supporters when they
don't have the skills needed in the market place which allows
them from a pragmatic standpoint to 'rock the boat' if you will,
and hence jeopardize their livelihood."
Evangelizing them isn't enough. You first need to find a
message that will resonate. In my mind, that message must be
built around pain. People understand that people will move from
point A to point B if they are feeling pain. That is rational
and obvious to most people. What I do is focus my message around
the pain that the idea is solving. Screaming customers are the
best tools since they make it clear that pain exists. If you can
get others to understand the pain that exists, they will view
the leap as less risky. Also, if you build your arguments around
the pain that is being felt by the marketplace, then others
cannot accuse you of being overly enthusiastic. Pain is hard to
dispute, so what you need are good case studies of pain and how
you can solve that pain.
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COMPANIES TO START AND PRODUCTS TO BUILD
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AUTO REPAIR
Can I just say that I hate the auto repair industry? I have yet
to find a place that doesn't leave me with the feeling that I am
getting screwed.
I believe that there is a huge opportunity for someone
to pull a Blockbuster on this industry. Create a national brand
that stands for trust and fairness. You might even be able to do
a national roll-up, but you would have to re-brand any
acquisitions.
The reason that this hasn't been done is that to date
people have tried to do it using advertising. I point out the
problems with this approach in my column "The Trouble with
Advertising."
The bottom line is that people trust other people, not
ads.
What the winner will do is build a brand from the
ground up. They will focus on the entire experience and ensuring
that it is infused with the concept of integrity. They will
build their business using word-of-mouth and referrals.
And they will make a ton of money
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