SUCCESS STRATEGIES: Learning from Your Best Customers – Small Business & Entrepreneurship Council

by Raymond J. Keating –
A recent Harvard Business Review article carried the title “What Companies Can Learn from Their Biggest Fans.” That caught my attention. But the subtitle did even more so: “Your most devoted employees and customers have a lot to teach you about loyalty and performance.”
After all, how many entrepreneurs refer to their “fans”? Not too many. But “employees and customers”? Sure, we get that.
The author, Marcus Buckingham, lays out assorted challenges in the current marketplace, including where many companies have failed, and asks:
“Faced with this landscape, what can leaders do to generate sustainable high performance, loyalty, and resilience from their people and genuine commitment from their customers? And what critical capability must leaders develop to stop the drift and instead lift their teams and their customers up into a world that’s more productive for all?”
Big questions, indeed.
Buckingham argues that leaders must look at “extreme positive experiences.” Specifically, he writes:
“To truly move people toward positive outcomes, leaders must pay attention to what I call ‘extreme positive experiences’—which make employees speak with genuine passion about their work and customers not just prefer but love a product or service—and then operationalize what’s working in those experiences.”
He goes on in this article to explore ways that leaders need to shift their thinking and actions to provide extreme positive experiences for both employees and customers. This entire essay warrants reading, but I’d like to hit on a few points that really grabbed me as an entrepreneur, and should get the attention of other entrepreneurs.
Not About Fixing What’s Broken. Buckingham warns that you can’t achieve extreme positive experiences “by fixing what’s broken. You must figure out what’s already pulling a small number of people to the very top of the positive-feeling meter – and then design for that deliberately and at scale.”
Later, he offers an example of how Korger responded to a new major competitor:
“Instead of starting with what was broken, they spoke to the customers who already felt a strong attachment to their company, with the goal of uncovering the source of that love and devising new ways of building on it.”
Incremental Change Is Far From Enough. Buckingham raises serious questions about the effectiveness of incremental changes. He points out that…
“…when you dig into real data—across industries, continents, cultures, demographics, and contexts—you find that the relationship between experiences and behavior is not a straight line. It is curvilinear: There’s a big hockey stick curve, showing that the real bump in performance outcomes appears only when experiences are extremely positive. That is the case, for example, in longitudinal data collected at Gallup from 2008 to 2015. Its HumanSigma meta-analysis of data on more than 1.8 million employees and tens of millions of customers and found that (1) outcomes improve significantly only after both employee and customer experiences cross critical thresholds; and (2) incremental improvements below those thresholds produce minimal results.”
A Big Difference Between 5 Stars and 4 Stars. Based on data and research, Buckingham argues that there’s actually a big difference between a 4 star rating and a 5 star rating:
“Someone who gives a 5 out of 5 rating to something has an altogether different experience of that thing than someone who rates it a 4 does.”
A Real Human Connection. Back to the Kroger example, Buckingham explains, “The most loyal customers, they discovered, all talked about having a human connection in the store—someone who took a little extra time with them or offered to help them find a particular item, an employee whose name they knew—and whom they could ask for in an increasingly impersonal world.”
Embrace “Love.” As an economist and policy analyst, the word “love” doesn’t come up very often. The same goes in the business world. Buckingham, however, shows how important that word is to each of us as customers and employees. He notes:
“Across industries, roles, and cultures, when people reference an extreme positive experience they want to repeat, advocate for, and hold on to, the word they use instinctively is ‘love.’ It’s critical that business leaders recognize that people use the word love to convey what matters deeply to them—and what will make them change their behavior over the long term.”
As an author, it’s great if a reader says she “likes” my book, but if she “loves” it, that’s far more powerful to me as a writer and an indie publisher.
Humor Over Warnings. I’m guessing that most businesses have used the sales tactic of the jarring phrase or sign to get customers to act. Therefore, I found Buckingham’s insight here of particular value:
“Kroger uses signage to introduce harmony. It stripped away jarring signs (such as ‘Last chance’ over a shelf of marked-down items) that felt more like warnings than invitations. Instead, Kroger’s messages are funny and self-aware: ‘Oops, we baked too much’ hangs over a shelf of excess muffins and cookies, and ‘Imperfect, but perfectly delicious’ goes on a display of fresh but slightly misshapen fruit. These signs name what the customer might already be thinking, using an emotional tone that resonates rather than a bland, impersonal one.”
Time Required. And a key final point is that this isn’t a one-and-done thing. Instead, time investment matters. Buckingham writes:
“Research from psychologists Mihaly Csikszentmihalyi and Carol Ryff (among others) finds that extremely positive feelings don’t arise from a single moment or interaction. They result from deliberately designed experiences that unfold over time, with touchpoints that allow the feelings to grow and ultimately change behavior.”
The author also notes the following related point:
“Marketing research consistently shows that incentives and loyalty perks produce short-term transaction spikes but no increase in lifetime customer value.”
This HBR article was one of the most interesting that I’ve read in a long time, and it turns out that Buckingham dives more deeply into all of this and more, I assume, in a new book – Design Love In: How to Unleash the Most Powerful Force in Business. I’m grabbing the book and look forward to reading it – in fact, probably more so that any business book in quite some time.
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. He is the author of “The Weekly Economist” book series, and 10 Points from Walt Disney on Entrepreneurship.
 
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