I was asked an interesting question the other day during a presentation I was giving regarding the importance of branding, consumer loyalty and word of mouth: Why in the world would you want to focus on a few customers instead of going after all of them? This is an excellent question and it got me to thinking about another situation we can all relate to – dating. So, instead of spending a lot of time discussing the ins and outs of differentiation, positioning, and why focusing on a specific consumers is important, let’s take a look at this issue from a whole new perspective.
I have a couple of friends that are currently dating. Let’s call them Mike and Sam. Both of them are great guys. They have been to college, are good looking, have decent jobs and have a lot going for them. But when it comes to their approaches to dating, they could not be more dissimilar.
The Problems of Casting Your Net Far and Wide
Mike is a player. Though he is interested in finding Mrs. Right, he thinks dating anything on two legs that wears a skirt is acceptable. All judgments aside, he has chosen to cast his net far and wide. He is often frustrated and has not made much progress. Here are some of the problems he runs into.
Problem 1: Limited Resources
First of all, Mike dates a lot. Because of this, he seems to always be stressed about money and how little time he has. As he puts it, “There are too many women and not enough time or money to go around.” What a problem to have, right? What this really leads to is a watered-down effort. Mike cannot spend any quality time with his many women and even when he tries, he fails impress them because he has already spent his money on his many dates.
The same goes for businesses. Sure, it would be nice to advertise to everyone and try and draw them all into your business. Many companies try. Just look at how much money is spent buying media during the Super Bowl. If you are a large, multinational corporation, like Walmark, Coke, or Budweiser, you can afford this approach, but for the vast majority of business owners, they just don’t have the resources to do this. There’s only so much time in the day and we all have budgets to live by.
Problem 2: Having a Story to Tell Is Important
Mike has a second problem. He is a very confident guy and he is convinced that he can keep the many stories he tells to the many women he dates straight. Sure, the some of these women have a few similarities, but their interests and preferences seem to be all over the board. Mike’s approach to the situation is simple – he tells them what he thinks they want to hear and in the process, you end up thinking there are 20 to 30 different versions of him. I’m not sure how he keeps himself straight. As you might have guessed, this has got him into trouble on more than one occasion. But there is a bigger problem.
In the process of creating all of these versions of himself, he has actually never taken the time to figure out who he is and what he really wants. He lacks passion and vision. As such, there is a hollowness to his stories and his motives always seem to be in question.
Businesses encounter this problem all the time. Consider Walmart. They are a wildly successful company with deep pockets. Because of their success, they are able to overcome the problem of limited resources. This allow the company to go after a wide range of customers. While this might look like an advantage, I would actually argue that it is not.
Walmart tells a variety of great stories. Just take a look at their newest advertising campaign. They are gobbling up prime time coverage wherever they can and in the process they are talking to people across almost every social economic status. For those of us that are feeling the economic crunch, they promise to save us thousands of dollars every year. They are going after the middle and upper class shopper as well with their “live better” message. And they have attempted to give many of their clothing and house ware items a modern, hip design in an attempt to draw in the upper-middle class and upper-class Target shoppers. But here is the problem, despite the many promises and stories they tell, their in-store experience stinks.
Walmart is a victim of its own success. By promising to offer the lowest prices, they have to run their stores with minimal staff and as a result their customer service sucks; the stores are often dirty; and their product selection is fairly lean within the many categories they carry. Despite efforts to spruce up their overall image, quality still seems to be a major issue.
The same goes for many other large companies – telling too many stories leads to a watered-down customer relations efforts.
Problem 3: Negative Word of Mouth
Mike is actually fairly good at keeping his stories straight. Sure, he has messed up from time to time, but in the end, he is a smart guy and can keep track of where to be, what to say, etc. It’s an impressive site to watch. His biggest undoing is that many of these women know one another.
As I said, Mike is a nice guy. Women talk about him and they inevitably figure out that there are some major inconsistencies and in his many stories. He is a pet lover; he hates pets. He is well mannered; he has the manners of a pig. He hates sports; he lives and breathes football. He loves learning; the last time he picked up a book was ten years ago. You get the picture. As you might have guessed, Mike’s reputation suffers from some major negative word-of-mouth issues. It’s unavoidable.
Businesses suffer from this as well. They make too many promises to too many customers. Despite their efforts, they cannot be something to everyone. When consumers interact with companies, they figure this out quickly, then they talk to their friends and family; they blog about it; they make YouTube videos. The list goes on. When we have relationships with others, whether it be as friends, potential mates, business associates or as customers, we tend create a set of expectations.
Mike is no different than any other company that is trying to attract everyone:
- Creating authentic, meaningful relationships with broad audiences is limited by finite time and budgets.
- Managing multiple stories about products and services causes confusion and leads to integrity issues.
- Failure to live up to expectations leads customers (and girlfriends) spreading negative word of mouth.
Focused Efforts Lead to Better Results
Sam takes a completely different approach to dating. Let’s take a look.
Solution 1: Focused efforts require less resources
Sam only dates a few women at a time. He actually used to be a lot like Mike; however, somewhere along the line he figured out that he was not getting anywhere by dating dozens of women. So he switched tactics and is happier now. He spends less money on dating and is able to spend more quality time with the 2-3 women he is seeing. In fact, if I heard right, he might actually be narrowing his options down even further sometime in the near future.
Great businesses know who their best customers and prospective customer are. They focus the efforts on them. Apple, Starbucks and Zappos are all great examples. Apple isn’t interested in selling my Dad a computer. Sure, they will sell him one if he wants it, but they are much more interested in targeting the artsy, creative, well educated, hipsters of the world. Starbucks focuses on a very similar demographic – urban professionals that are educated, hip, etc. Zappos actually has a broader approach, but they have built in triggers that allow them to target loyal Zappos customers and advocates.
Solution 2: Telling One Story Leads to Integrity; Integrity Leads to Loyalty
Sam knows who he is. He has learned from past mistakes and is not afraid to admit it. And when he meets a woman, he is very clear about who he is, what he is about and what he wants in life. Sam is very well respected for this, both by the women he dates and his friends.
Great businesses operate in the same way. They have integrity. They have a simple story to tell and are proud of it. They are open to criticism and often seek feedback from their loyal customers. They build amazing cultures, treat their employees with respect and have a knack for turning their team members and customers into evangelists. This requires hard work and long-term strategic planning, but the results are well worth the effort. Just ask a loyal shopper at Nordstroms, Trader Joes, Wegmans, Disney, Zappos, Starbucks, Cabellas, Toyota, Honda, Amazon, Apple, etc.
Solution 3: The Power of Positive Word of Mouth
Though Sam dates fewer women, his options are always good. The women he dates and even the ones he is no longer seeing talk about him with great respect. Studies say that on average, one person tells three others when they have a good experience.
Word of Mouth works both in the positive and negative directions. You can’t control word of mouth and you definitely cannot stop it. But you can influence it. You should make a concerted effort to participate and engage with customers as often as you can.
I’ve written about my personal experiences with Zappos. Great companies understand that if they want their customers to be talking about them in a positive manner, they have to do something remarkable. They have to give them a reason to talk. South West Airlines allows their stewards and stewardesses to have fun, say quirky things while making in-flight announcements, and try to make a typically unpleasant experience a little more fun. Starbucks trains their baristas to make great coffee. Better yet, they train them t0 talk about it with customers. Costco offers a “no questions asked, 365-day return policy” on most items in the store.
Sam, like well-branded companies, benefits from focusing on a specific audience:
- They are more efficient with their resources (time and money).
- They tell one story at a time and have integrity.
- They consciously strive to influence word of mouth to their advantage and develop a great reputation.
Great marketing is just like great dating. They are both about developing positive, long-term relationships. There are poor versions of both, but in the end, those of us that concentrate on the positive will have the best results.