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What a Difference a Week Makes…

May 20, 2008

Last week, I wrote my Tuesday blog post on charitable events, volunteering and how they impact the community and customer loyalty. In the opening paragraph I mentioned two companies as examples of great customer loyalty, in fact, their customers are not just loyal, they’re evangelists. They seek people out to spread the word of Apple, Starbucks. Well, I read an interesting article yesterday in the Journal concerning the latter and their recent struggles they have been enduring and I thought, hmm…what great timing to make an example of customer loyalty Andrew. Considering I don’t learn from my mistakes I will venture down that road one more time and make Starbucks again the focal point of my customer loyalty rant.

The article outlines various reasons for the recent downturn of the once skyrocketing company. Obviously, the economy is a variable that must be considered, even with Starbucks ambitious goal of being the third place in our lives, home, work, Starbucks! Perhaps it was unwise to tie its fate to our homes and work given the recent events in employment and the housing market, (like a tripod if you will.) If it were that simple then Starbucks could just retrench and weather the storm, unfortunately for Starbucks this is not the case.

It can cost up to five times more to acquire a new customer than to keep an old one. Efficiency along with customer loyalty is paramount as always, and even more so times of economic uncertainty. When belt tightening happens as it is bound to do and is happening right now people reexamine their priorities, this is when loyal customers count extra. So then, what has Starbucks done wrong recently?

Starbucks genius was how they transferred coffee from a commodity to a social experience. It was new, stylish and the product was initially superior. As in every industry imitators sprung up and business followed their model to skim off the top or try to steal market share. At first no big deal, in the early part of the decade they were opening 7 café’s a day. Starbucks was still ahead of the curve, but somewhere along the way the fell off the race track it seems. Mr. Schultz, their charismatic fearless leader stepped down in 2000, but remained Chairman where he dove into side projects like signing musicians to the Starbucks Coffee label, and marketing Hollywood films. They started diversifying too much. They weren’t coming up with new quality products that fit their core competency, but rather mindlessly adding products just to sell. They started adding drink flavors that made no sense, breakfast sandwiches that would overpower the smell of the coffee in a coffee house, and stuffed animals lining the walls of the stores. Furthermore, they weren’t keeping up with new and innovative methods of brewing and pressing coffee, (apparently you can reinvent the wheel). Their customers started to get annoyed to say the least. If you’re gonna buy a $4 dollar coffee, you want it from a place that is serious about the coffee business, not one that has gimmicks and tries to sell you something at every turn. They lost sight of their initial vision, their love of coffee.

Never bite the hand that feeds you. As stated before the customer is king or boss or is always right. They broke a rule in the Tuesday model. Their customer’s expected great coffee at a serious coffee house. When Starbucks started to get into everything under the sun to make a buck they failed their loyal customers. The customer’s understanding of Starbucks started to get foggy. Trust then eroded. The relationship and inevitably the loyalty suffered and now Starbucks is going back to the drawing board to win back their customers trust.

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Written by AndrewHamann · Filed Under Business & Leadership | 2 Comments 

Marketing in the Recommendation Age

May 15, 2008

“Why on Earth would your company want a blog?” “Aren’t you afraid of what people might say?” “What about your brand?” As the guy who championed the idea of the blog at LUCRUM, and regular blogging evangelist, I am asked this question almost daily. My answer is simple. “I trust our people to do the right thing.”

My coworkers at LUCRUM are smart - much smarter than I am. I know that when they talk about technology, they are passionate about it. They speak from experience and they speak from the heart. They are sincere, and that is different. They are interesting. They are real. They are the essence of “The Brand.”

I also trust the readers of the site. They can smell disingenuous corporate speak from a mile away. Yeah, I could hire professional writers to put together a brand strategy for our blog. We could toil endlessly on the exact wording of every phrase - but why? It would not be real. It would not be different. It would invisible.

Thankfully, it is real. And… it is really fun to be involved with.

Just today, we were contacted by a talented IT Professional who was so moved by Andy Erickson’s LinkedIn profile and the honesty of the blog site that she sent in an amazing letter with her resume expressing her desire to join the LUCRUM team.

This is the result of conversation.

What we hope to achieve is not just conversation, but also recommendation. In this day and age reputation is so important. What you do is far more important than what you say you do. What you do IS the marketing. It is about customer service, employee relations, innovative thinking, and delivering real value for Clients each and every day.

We are working on building a tribe. A loyal group of eager participants, fully engaged in the experience of LUCRUM. We want to create evangelists. We aspire to deliver greatness. That aspiration lives in each of us, and thus the blog serves as the platform for sharing our honest hopes and dreams for the firm. It is a metaphor for the business as a whole. It is about being “recommendable” or perhaps more properly put “remarkable.”

Are we there yet? Nope. But we have taken the steps necessary to start the journey. Each and every day we learn. Each and every day we evolve. Hopefully, we listen, we grow, and we improve along the way.

Why blog? Well if what we do is to solve business problems by using technology, than why not embrace technology to identify those problems and uncover the solutions? Why not engage our people to drive innovation at every level of the organization? Why not give everyone, including our clients and the world at large, a voice in the conversation. Why not become recommendable?

Check out the link below for a great article about marketing in the recommendation age.

Marketing in the Recommendation Age | Small Business Solutions - TheStreet.com

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Written by DAVIDeBOWMAN · Filed Under Culture | 1 Comment 

Tuesday and The Right Investments

May 13, 2008

Another week and another Tuesday is upon us, and that means another Tuesday blog. This Tuesday I started off my day at Starbucks, talk about customer loyalty. Planet Starbucks, the cult of Apple, these companies owe a lot of their ascent to this very concept, (and a superior product their customers would say, thus proving my point). At any rate, Starbucks seemed like an appropriate place to get the wheels turning concerning customer loyalty.

Truth be told, I rarely ever go to Starbucks, and as a matter of fact don’t have a Mac but I see where their success lies. I digress though. The reason that I was at Starbucks on this beautiful May morning was to meet Jill Morrison from The United Way. She was outlining certain activities and going over the capabilities of the United Way, what they had to offer to the community, and more importantly how LUCRUM could get involved.

Many of us might think that charitable work is not related to customer loyalty at first but I assure you it is. In the modern era of Globalization, the flat world if you will, this “think globally and act locally” mantra is very pertinent concept. Companies cannot and do not operate in a vacuum outside their communities, and if they do, the community will suffer and inevitably the company will too. No, organizations are living entities that operate within a community, the community draws from the company and vice versa, it’ a symbiotic relationship, or at least it should be.

Investing in the community around us indirectly benefits the company. Like the old saying, “the rising tide raises all the ships” well, if our community is doing better, it can only help a business. Moreover, those in the community will take notice and see that the company is not just trying to sell them something. Then they will realize that the company is just as invested in the community future as they are, and thus they will invest back into the company. It all comes back down to the Tuesday Model really. This part gets to the backbone of every relationship, which if you remember is trust. Beyond the good feeling we all get from helping others out, charitable works foster trust. Our customers will understand then that we are invested in their community, because we are meeting their expectations of giving back. Everything is integrated, the Milton Friedman concept that business sole responsibility is to maximize shareholder value is outdated and too simplistic. If we dehumanize ourselves then our customers won’t be able to relate. You can’t be loyal to what you can’t relate to. Investing back in the community feels right because it is right. It makes economic and social sense, and I am glad to see LUCRUM committing to such causes.

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Written by AndrewHamann · Filed Under Business & Leadership | Leave a Comment 

Treat the Customer Like a Prince…

May 6, 2008

Is it better to be loved or to be feared? The ends justify the means. One must be a fox as well as a lion etc. AH The Prince, great book, a lot of interesting concepts, but why am I writing about a book most people were forced to read in college? Well for one, I like it. But the real reason why I am thinking about Niccolo Machiavelli, is because of work.

Recently, I wrote a blog post on a project that I was working on for my supervisior. It was concerning Tuesdays, and customer loyalty. Customer Loyalty, seems pretty important no? If your customers aren’t loyal, it’s probably because of something you did, or perhaps didn’t do. Referrals are one the best forms of marketing or advertisement, you only refer who you enjoyed working with in one capacity or another. Also we tend to work and or buy things from people we like. This is why networking is so vital. That’s all I ever heard about at the Williams College of Business at Xavier- “networking-networking-networking.” Given the aforementioned, I think that customer service, and to be more precise, customer loyalty is paramount. So then, why The Prince as a preamble.

As the first line of my rant goes, is it better to be feared or loved? According to Niccolo Machiavelli, it is best be both, but seeing how this is rarely accomplished, it is better that you are feared than loved. There is no real concise way to put his explanation on why, but he does give his reasons. Again, why am I writing this? I tend to read a lot of philosophy and I find that it inspires me. Not that I think that our customers should be loyal due to fear of retribution. Personally, I say neither answer is right. I say that, better than being feared or loved is being respected. If people fear you, they will due only what is necessary to not be punished, which will render you moderate at best results. Love on the other hand can, at times, skew people’s judgment, which can lead to a lack of necessary constructive criticism. If I was starting a business, the last thing that I would want is a bunch of “yes men” to back me up or take point. R-E-S-P-E-C-T is king, people want to do good for those they admire, they want to work with those they admire, they are loyal to those they admire. This is why Fortune, ranks the “most admired companies.”

Now considering my recent project, in my humble opinion, customer loyalty comes down to respect. Given to and received from customer to business. It’s a two-way street. Respect comes down to relationships, and relationships come down to the Tuesday Model or The Tuesday(superscript C) Model. It’s linear. If the customer is simply a means to an end, then the relationship will end quicker than you think. We must remember that ultimately the customer is our “boss” and not vice versa.

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Written by AndrewHamann · Filed Under Business & Leadership | 1 Comment 

The Tuesday Model

April 29, 2008

Tuesday, not as bad as Monday, and not as good as Wednesday. Its a forgotten day to most people. If you have an average and dull life, then you could say that your life is a bunch of Tuesdays I guess. Is there any way that Tuesday could mean…a little more…here’s something that I use to get me through the Tuesdays of my life.

I have been at LÛCRUM now for about three weeks, and one of the first projects I have been asked to participate in is concerning customer loyalty. So I thought to myself, customer loyalty, how to get it, and obviously how to retain it, when it hit me….Tuesday!

What does Tuesday have to do with customer loyalty, and what is the Tuesday model, you ask? The Tuesday model is a little bit of advice that was given to me by my mentor in College. A successful venture capitalist, and entrepreneur, a man that I respect. Anyways, one day we were out at dinner and I was picking his brain about business, life, etc. when he told me this. “Andrew, all relationships, business or personal, are based on three criteria. Expectations, understanding and trust.” E.U.T or T.U.E the prefix of Tuesday as a way to remember it. “These are the building blocks of relationships” he explained. His logic was that, once expectations are not met, then understanding becomes clouded and thus, trust falls apart. Naturally he concluded “that trust is the backbone or all relationships.” I listened to my mentor and it made sense, moreover, this was a man that I respected and I could see he was great a forging strong ties in every aspect of his life and this was the secret ingredient behind his success.

Since that day I have implemented the Tuesday Model into everything relationship I in my life; family, friends, work and girlfriends. It helps you empathize, which fosters understanding and clarity. I have also amended the model itself. Trust, Understanding and Expectations is how it was originally conceived, but a sub note to expectations is communication. Only if communication is clear can expectations be derived and met. Of course this screws up the acronym but it’s worth it.

So now that I have acquainted you with my philosophy (something that I will do a lot if you let me), it is time to implement the Tuesday Model with my tasks here at LÛCRUM. Going along with the theme of Tuesday, you can find further “rants” if you so desire every Tuesday from here on out. If you agree with me great, if you have anything to add, I’m all ears, or perhaps you think I’m insane, either way, discourse is always welcome.

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Written by AndrewHamann · Filed Under Business & Leadership | 2 Comments