Drilling for Diamonds

Assumptions are the mother of all stuff ups.

All companies continue to pay for making the wrong assumptions about customers.

Proctor and Gamble (P&G), one of the world’s largest and most profitable consumer companies, recently launched its highly successful Swiffer Wet Mop in Italy.

P&G researched the Italian market. Italians spend an average of 21 hours a week on household chores. Americans spend just four hours on similar chores. Italians wash their kitchen floors and bathroom four times a week or more, compared to American’s who wash their floor just once a week.

So how come the Swiffer flopped? P&G sold Swiffer as a labor saving convenience which turned out to be a big turnoff for Italians.

Italian women prefer products that are tough cleaners, not timesavers.

Italian women didn’t believe the Swiffer was tough enough for mopping, so they used the Swiffer for polishing, rather than mopping.

P&G learned from their mistake. They launched the Swiffer Duster which did a light job well with timesaving convenience. Sales took off. Italy is now the biggest European market for Swiffer.

This story taken from Robert H. Bloom’s book The Inside Advantage underscores two vitally important lessons about customers.

“First and most obvious, what works in one market or with one customer does not work with others. One size does not fit all…Second and even more important, it’s not enough to define your customer as a market statistic.”

Popularity: 15% [?]

In what has to be one of the business books of the year, Phil Rosenzweig unmasks the delusions that are commonly found in the corporate world.

These potent delusions affect the business press and academic research, as well as many bestselling books that promise to reveal the secrets of success or the path to greatness. Such books claim to be based on rigorous thinking, but operate mainly at the level of storytelling. They provide comfort and inspiration, but deceive managers about the true nature of business success.

The most persuasive delusion Rosenzweig argues is the Halo Effect. When a company’s sales and profits are up, people often conclude that it has a brilliant strategy, a visionary leader, capable employees, and a superb corporate culture.

When performance falters, they conclude that the strategy was wrong, the leader became arrogant, the people were complacent, and the culture was stagnant.

In fact, little may have changed - company performance creates a Halo that shapes the way we perceive strategy, leadership, people, culture, and more.

Rosenzweig shows how the Halo Effect is widespread. He shows how business bestsellers, In Search of Excellence, Built to Last and Good to Great use flawed data which has been corrupted by the Halo Effect.

Read the book. It will make you rethink how you look at business performance.

Popularity: 10% [?]

Most of use recognize how hard it is to change old habits and behaviors.

Change experts, J. Stewart Black and Hal B. Gregerson remind us;

“Its not that ‘an old dog can’t learn new tricks.’ Rather, it is an old dog has a devil of a time unlearning old tricks.”

Popularity: 7% [?]

Changing behaviors, cultures and systems is never easy.

In a remarkably practical and insightful book, Leading Strategic Change, J. Stewart Black and Hal B. Gregerson spell out their CBAs of change.

The CBA acronym stands for Conceive, Believe, and Achieve.

These three stages correspond with and overcome the three gravitational forces or barriers to change.

Conceive. First people must conceive or see the old way is wrong and visualize the new right way.

Believe. Second, people must believe in the path to the new promise land.

Achieve. Finally, people must achieve and know they have achieved the desired result.

Popularity: 7% [?]

With every product, service and company calling itself a brand we regularly need to remind ourselves what a brand is.

My favorite definition is one coined by Patrick Hanlon, the author of Primal Branding. He argues that;

“Brands are belief systems all belief systems have seven pieces of code that work together to make them believable. The more pieces, the more believable the belief system becomes.”

The seven pieces of code are:

1. The Creation Story. All belief systems have a story.
2. The Creed. The set of core principles.
3. The Icons. The symbols such as the Nike Swoosh.
4. The Rituals. The key ritualistic behaviors that set us apart.
5. The Pagans. The non-believers. The heathens and idolaters.
6. The Sacred Words. All belief systems have a set of specialized words which must be learned.
7. The Leader. The visionary, catalyst, risk taker who founded or defined the brand.

Popularity: 15% [?]

In the June 2007 HBR, Gail McGovern and Youngme Moon ask why companies bind customers with contracts, bleed them with fees and battle them with fine print?

Their answer is simple.

Confused customers make bad decisions and lock themselves into dumb deals.

The banking, health care and mobile phone industries are full of examples where customers lock themselves into long-term deals that make them angry and frustrated.

Beware!

Competitors who come up with customer friendly alternatives are making a killing.

Virgin Mobile USA has enticed millions of angry mobile phone customers away from incumbent carriers.

ING Direct, has quickly become the fourth largest bank by offering accounts without fees, without tiered interest rates and no minimums.

Popularity: 15% [?]

David Myers, Professor of Psychology is an expert on the psychology of fear.

Psychological science, Myers tells us, has identified four factors that drive up our perceptions of risk.

1. We fear what our ancestral history has prepared us to fear. Thats why we fear snakes and spiders.
2. We fear what we cannot control. We feel more in control when we are driving a car than we do flying an airplane.
3. We fear what is immediate. We are more concerned about the risks of taking off in a plane than the risk of dying from cancer.
4. We fear threats readily available in memory. We easily recall the 9/11 images and they make us hesitant to fly. Our brains are not designed to easily recall the fact that, mile for mile, we are 37 times more likely to die in a passenger car than on a commercial flight.

No wonder our fears drive so many behaviors.

Popularity: 6% [?]

British marketing professor Peter Doyle argues segmentation is the key to marketing.

I agree.

His reasoning is compelling.

Different groups of customers have different needs. Therefore, to satisfy customers you have to offer different solutions to different customers.

Popularity: 8% [?]