ChrisOLeary.com > Projects > The Pain Papers > Issue 6

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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