Catarina's World

Apple does, maybe it would benefit you as well? In this short video Fred Reichheld, fellow and founder of the loyalty practice at Bain & Company, tells you how Apple builds loyalty:

Have you developed a system to help you focus all employees on making customers come back for more and bring their friends? If not, it is definitely worth while. Not only will your customers by happy, you and your employees will feel energized and proud of the way you treat customers.

Are you, like Apple, obsessed with enriching the lives of your customers?

And serious enough to want to measure how well you are doing in that respect? Sample customers on a daily basis and measure feedback consistency. What you need to know  is if your customers have had a good experience and would recommend you to a friend. It’s simple really. Just ask them if they are content with everything and if so why. And if they are not, find out what does not meet with their approval and why.

Apologize when necessary

With the feedback in hand you/the managers then call discontent customers and attempt to change their mind. Discuss the root of the problem and try to find a solution. If necessary apologize.

On a daily basis look at the feedback customers have given so that you can learn from the problems and celebrate successes.  Make staff that have been really appreciated by customers explain to their colleagues what they did to make their customers so content.

When you are listening and driving innovation based on customer feedback suddenly you are, like Apple, enriching peoples’ lives. Maybe the greatest gift you can give to yourself and your employees is to put them in a position where they can earn customers appreciation and be rewarded for it?

When Richard Branson a long time ago was selling records out of his car booth he had a firm belief that the customer is always right. So when someone complained and wanted to return something he gave them their money back. Sometimes it really hurt his pocket but in the long run it paid off.

Do you turn your customers into promoters? How do you find out if your customers are happy with all aspects of their experience with you and your company? When someone complains how do you handle it? Do you celebrate when customers tell you they are happy dealing with you? Are you good at apologizing? Do you have loyal customers? If not, what are you going to do about it? How have you managed to retain your customers and make them recommend you?

Video: HarvardBusiness

Wonder how many articles have been written, including by me, explaining what makes a successful entrepreneur? And rarely is the most important aspect of succeeding in business mentioned.  Watch Andy Rachleff, lecturer in strategic management at Stanford and experienced venture capitalist, in less than a minute stating what is the most important ingredient for entrepreneurial success.

To have the right product or service for the market is something so fundamental it’s easy to forget to even mention it. Wrote Entrepreneurship – do genes play a part? that has attracted a lot of readers’ comments. But neither I nor any reader thought of mentioning the crucial aspect of product- market fit. We all just overlook it even though it is a do or die issue for success.

Doesn’t matter if you are The Entrepreneur of the Decade, if you are offering the wrong product/service you will fail.

Why do so many companies fail?

Did you know that in Sweden as many companies go bankrupt every year as there are start-ups? Sure the tax system is one reason but that’s, unfortunately, not the only explanation. Quite a few of them are offering a service or product that the market, for whatever reason, has no interest in. Sometimes they are actually offering something before the market is ready for it.

How do you know if the market wants what you are offering?

It’s easier said than done unless you are offering something that there is always a demand for. Look at how Nokia laughed when Apple came up with the Iphone and regular airlines didn’t take low price airlines, like Ryanair, seriously. They failed to understand what the market wants and are hence having huge problems.

Nokia is actually a great example of a company with a lot of qualified and talented employees that have the characteristics of successful entrepreneurs. But they didn’t understand what the market wants and hence lost out.

Keep your ear to the ground

Determining what the market wants is however not as easy as it sounds. Keep your ear to the ground and do research to test if your idea is a viable one.

Long before disposable barbecues became a hit someone I know had the idea but failed. Why? It simply was too early. But that could have been overcome if the right marketing, communication, branding and promotion had been done. What would have happened to the Iphone if Apple had not been able to promote it to the market in ways that worked? Most likely Blackberry would still be considered the ultimate choice.

Do you agree with Andy Rachleff that product-market fit is the most important ingredient for entrepreneurial success? If not, why? How do you determine what the market wants? Do you keep your ear to the ground? What’s your experience when it comes to determining what product/service the market wants? How do you decide on the right timing for launching it? Are you able to promote it in ways that make consumers desire something they may not yet know that they need or want? What promotional strategies have you found work best?

Video:StanfordBusiness – You Tube

Apple, 3M and Google are prime examples of companies reaping the benefits of ideas generated by someone in their organisation. However, far too many companies still fail to benefit from the ideas of their staff.

The ideas floating around in your organisation are opportunities to develop and innovate. By listening to everyone your chances of innovating from within are unlocked.

So how do you get everybody to come forward with ideas they have for any area of the company? Could be ideas applicable to short term as well as long term benefits. Frequently management find it difficult to find out about all the different ideas employees have. They are unaware of anything from small ideas that would slightly improve their database to ideas that could result in new successful products – or even ideas that would completely change how the organisation operate. So how do you go about reaping the benefits from ideas your staff have?

Let staff know you value their ideas

The first thing to communicate is that you are sincerely interested in any idea someone in your organisation might have. Make sure they feel welcome presenting ideas to you even if the idea isn’t yet fully developed. Find simple ways that enable anyone from the cleaner up to take their ideas further than chatting to colleagues about them during a coffee break. Give them courage to present their ideas to colleagues and management. And make sure they are not afraid of looking ridiculous or get reprimanded for having suggestions.

If you don’t know about the abundance of ideas floating around in the organisation you are missing opportunities to develop and innovate, not to mention earning money. By listening to everyone your chances of finding new strategies and opportunities increase.

Ideas lost may be money lost

The more ideas are saved, mixed and worked on the better for an organisation. And it’s time to move on from the boxes where employees dot down a few ideas for the management to read. Frequently such communication neither give credit to ideas nor does it enable colleagues to discuss and develop a seed into something that can be used.

Develop ideas during office hours

To give an idea a fair chance the person behind it should be able to come forward with it and explain the benefits. One way would be to have monthly or weekly meetings where ideas can be presented to colleagues and management. The more ideas see the light of day the more ideas will be created and developed.

Brainstorm on a regular basis

In my experience brainstorming is a wonderful way of developing ideas, not to mention whole organisations. And it’s mainly ideas that are far out, almost regarded as crazy, that turn out to be the best. It’s hence best to have as many people as possible participating so that a seed can be creatively developed. It’s also crucial that people keep an open mind and don’t discard something that may turn out to be a bestseller before it’s developed.

Develop a culture that embrace ideas

For ideas to flourish staff must feel that they are appreciated for putting forward ideas and encouraged to think, question and be innovative. Obviously not all ideas are good ideas but you will lose out on the good ones if staff don’t let you know what they would like to improve.

When a lot of people come together and give feedback a lot of good ideas are developed. Even more so when people from different cultures join forces and look at innovations from different perspectives, which is one of the key assets of companies like Google and Apple.

Once you have developed a system where everybody in the organisation are encouraged to develop their ideas and present them you will not only get a lot of ideas but a culture where staff dare communicating what they would like to improve as well as increase the creativity of the organisation enormously. The result will be an atmosphere that is fun, people like to go to work, aren’t afraid to make mistakes and new products and services will be created that otherwise would never have seen the light of day.

Jump on the Google & Apple innovation band-waggon

Far too many companies all over the world have a culture where only the management are allowed to think and have ideas. So many that it’s often assumed that’s the case, even if management would like to develop a culture where everybody contributes. If that’s the case, it’s time for you to start communicating that you are open to all ideas and let staff know that you are interested in their thoughts and ideas. They will never know if you don’t let them know.

What are you doing to encourage a creative atmosphere that breeds ideas? Does staff come to you and explain their ideas? Do you have regular brainstorming session to find and develop ideas? Or is this an area you have neglected since it seems to complicated? If so, it’s high time you follow in the footsteps of Google and Apple and create a culture that breeds success.

(Photo: PhotoXpress – Stasys Eidiejus)

It looks like a historic transition in capitalism is unfolding as a result of products like the iPod.

Wonder if the young Steve Jobs knew he and Apple would start a new era? They reinvented the consumption experience from the viewpoint of the individual, at a fraction of the old cost. And now that consumers have bitten the apple, companies will have to adapt to the "iPod syndrome".

The world is constantly changing and I believe we are at the beginning of a new era which will fundamentally change the way we consume. New demands are created that the majority of companies are not yet able to satisfy.

During the time of Henry Ford focus shifted from the elite to the masses. Today however, we are moving from mass consumption to a new era catering to the wants of the individual. People want control over what matters to them, voice their opinion and have social connections on their own terms.

Mass production becoming less homogeneous
An good example is that you can order custom made sneakers from Nike. Many sectors are starting to distribute tailormade valued assets catering to individuals, hence enabling them to determine exactly what, when and how they consume.

Obviously this will change the basics of competition between companies as well as the boundaries between producers and customers. It just a question of how long it takes before almost all businesses will have to find ways to adapt to this new world in order to grow. Most likely we will order, for instance, our car online and decide all details such as what model, engine, gearbox, tyres and so forth it will have.

Companies that are able to create individualized ways to consume goods and services, preferably at a radically reduced cost, will prosper as they discover new sources of value that remain invisible to companies still bound by conventional business models and thinking.

Apple leading the way

The mass-production business model has come under assault during the past decade. An excellent example is, in my opinion,  Apple’s iPod and its music service, iTunes.

Apple rescued musical assets from a faltering business model, the compact disc, and bypassed the industry’s costly legacy systems and routes to the market. It enabled users to reconfigure their music as they saw fit. Apple is hence today the largest music retailer in the United States. But the reason for the success, which had been invisible to the music industry, was Apple’s ability to reinvent the consumption experience from the point of view of the individual, at a fraction of the old cost.

Identify the assets that represent value for each individual

The old focus of wealth creation worked from the perspective of the organization and its requirements. The new logic starts with the individual end user. Instead of “What do we have and how can we sell it to you?” good business practices will start by asking “Who are you?” “What do you need?” and “How can we help?” This inverted thinking will make it possible to identify what represent real value for each individual. And that’s how companies will make money.

Power really shifting from companies to consumers

The new sources of economic value can be discovered and realized only when consumption strengthens the sense of personal control, delivers opportunities for voicing ideas, and enables freely chosen social connections. The emerging logic of distributed capitalism will reward companies that realign their practices with the interests of the consumer and punish corporations that try to impose their own requirements or maximize their own benefit at the expense of the individual end user.

So what should executives do to ensure that their organizations will grow in this new world? For starters, it’s critical to question the old logic and vocabulary of competitive strategy. There will be an abundance of opportunities for companies that are able to decipher the emerging pattern and convert it into new business models that support the needs of the 21-century individual. Do you agree with me that the “iPod syndrome” will have a profound impact on all businesses and how we consume? If so, how do you believe the new consumer oriented capitalism will evolve? Will it take long before consumers are completely in control of what, when and how they consume? Obviously this new pattern will have a tremendous impact on the way we do business. How do you think companies will be restructured when we move from mass consumption to individual needs?

Photo: Flickr - Sigalakos

An increasing number of Western brands are launching new products, or even brands, catering to consumers in emerging markets.

Are you developing products catering to the needs and likes of well to do Chinese customers?

That’s where the money is right now, and Western brands are still favored over local ones.The combination of perceived quality with a bit of local tailoring, love or exclusivity is hence an intelligent way of finding new customers.

Products tailored to their needs and wants

Like all consumers, Chinese, Indian, Brazilian, Russian and Middle Eastern consumers are keen on products tailored to their needs, wants and desires, either for practical reasons or simply because of cultural pride.

Affluent Chinese prefer foreign brands

This phenomenon is spawned by the fact that economic and consumption power is shifting towards emerging markets. And considering that, according to McKinsey, affluent Chinese consumers prefer foreign brands to Chinese ones it’s clear that it’s worth while for Western companies to focus on Chinese customers. Add to that the fact that China’s retail sales may outstrip those of the United States already in 2016 and it makes even more sense to cater to the new Chinese middle class.

Shift to emerging markets

China’s wealthy shrugged off the recession. Actually only 8% of them changed their luxury shopping behavior in 2009 (46% of Americans and 51% of Europeans, however did) . Forty four percent of China’s wealthy instead increased their spending during the global downturn.

Global growth moving to BRIC

About 80% of global growth is likely to take place in emerging markets. The figure could go even higher if India were to facilitate imports of luxury goods. Not to mention if commodity prices go even higher which will increase wealth in Russia. So there is a need for Western companies to create both uniqueness and make consumers in emerging markets feel they belong. For companies who manage to do so, the new rich in BRICs offer a world of opportunity.

Some Made for China products

Trendwatching, one of the world’s leading trend firms have singled out some products created by Western companies for Chinese customers. Levi’s dENIZEN, a new jeans brand for Asian/Chinese customers with slimmer fits. For wealthy customers in Shanghai Dior offer very expensive Shanghai Blue Phones. Shang Xia is Hermés’ Chinese brand of ready-to-wear and decorative arts inspired by Chinese culture. When Cloé celebrated five years in China they created a limited edition of Marchi handbags to mark the occasion. The limited edition of BMW’s orange metallic M3 Tiger was very popular in China. Not least since it was released to coincide with the Chinese year of the Tiger.

Apple’s “Designed in California, Made for China”

In Apple’s Shanghai store staff started wearing red t-shirts with that slogan in Mandarin. A play on the words on the back of all iPhones “Designed by Apple in California, assembled in China”. And the Chinese loved it.

Introducing cheaper brands in China

Honda (Li Nian), Nissan (Venucia) and GM (Baojun) are creating and introducing less expensive cars for China since many customers in emerging markets still have less to spend than their counterparts in the West.

So have you jumped on the Made for China bandwagon yet? Or are you aiming for the Indian, Russian, Brazilian or Middle Eastern markets instead – or – as well? If so, what markets have been most successful for you? What new products have proved to be hits in the different countries? If not, can you really afford to ignore the new emerging middle classes?

(Photo: PhotoXpress – chinatiger)