Category: Strategic Planning

By Robert W. Bradford

Strategic planning is the process of setting an organization’s course to optimize its future results.  We define anything that revolves around one of three questions as strategic:

1. What do we do?
2. For whom do we do it?
3. How do we beat or avoid competition for resources?

These may seem like simple questions, but they are not. They are the core of every truly strategic issue and discussion you will ever have. This fundamental approach – of both questioning and understanding the reasons behind the answers to these questions – is one thing many companies miss when they attempt to do strategic planning. A good sign that you are failing to address these questions is when your team starts to see major environmental trends only as threats that you need to resist. Resisting threats rarely stops the trend – it only creates the illusion that it has been slowed down. In reality, most companies that waste their precious resources in this manner simply become increasingly irrelevant as the real world – and their customers – bypass them.

There is a second thing that is often missed, although many give it lip service. That is the concept of focus. Most of us understand the value of focus – you can do something very well if you do it over and over again. So why do so many organizations really fail at focus?  The reason focus usually only gets lip service is that there will always – ALWAYS – be some bright, shiny object sparkling just outside your current focus. These bright, shiny objects are often attractive and can, with some effort, produce some kind of results. The problem is, those results can never equal the performance of a focused player. Another way to put this is that focus is difficult – not because it’s hard to choose what you will focus on, but rather because it’s very difficult NOT to pay attention to the things you are not focusing on. In my mind, this is fine, because it makes focus difficult, and difficult things tend to be more profitable than easy things. When you do strategic planning, be acutely aware of how serious your commitment to focus is. If you only pretend to focus, your success is just as likely to be a fantasy.

I pose these two ideas because I see more and more people attempting to re-frame strategic planning as something that should be more “current”. Being current is not about forgetting the basics of strategy – it’s about paying attention to the forces that are in play in the world around you. If you think strategic planning needs to change to adapt to the new ways of doing things in your market, you have probably been doing it wrong. I hope you’ll take this nudge to think about how to get your own strategy back to basics – not by becoming old-fashioned, but by thinking strategically about how you deliver value to those you serve, and focusing on doing just that.

How are you currently doing strategic planning? Is your process yielding great ideas and solid implementation? If not, I’d encourage you to consider attending our 2-day Michigan State University seminar on Simplified Strategic Planning. And, as always, if you have any comments or questions, they are more than welcome! To learn more about our seminar, please click on Simplified Strategic Planning.

Robert Bradford is President/CEO of the Center for Simplified Strategic Planning, Inc.  He can be reached at .

By Denise Harrison, Executive Vice President & CO

For many years Sony dominated the consumer electronics scene: from its ground-breaking Sony Walkman to its Trinitron TVs, Sony innovations in the consumer electronics space were unparalleled.  Now Sony is losing money in its consumer electronics business and is having limited bottom-line success in its entertainment business.

Loss of Focus

From 60,000 feet Sony’s two major business areas entertainment and consumer electronics look like there would be synergies between the businesses.  But when it comes closer to the ground, you find that the high-level synergies are not really the key to success of either business.  What makes a blockbuster hit in the entertainment field is very different from what drives success in the consumer electronics field.  Ideally, they would have been able to leverage the respective set of skills of each unit to differentiate Sony in the market, but, alas, that leverage never emerged.  The entertainment division has had a number of blockbuster entertainment successes – but the success was on the topline and the bottom-line numbers were lackluster when compared to their entertainment business peers.  The consumer electronics business fared far worse – the once market-dominant business is now losing money.  Trying to focus on two businesses with little in common, one often finds that business decisions are made to satisfice: trying to invest so that both do well, but not invest enough so that either one is able to keep its leadership position.

Key Take Away:  When developing your strategy, ensure that your various business units are leveraging a common set of skills/priorities so that you are not trying to spread your investment over unshared and perhaps conflicting goals.

Sony Loses Its Dominance in TVs

Sony’s consumer electronics business long dominated the TV space with its cathode ray tube technology (CRT).  However due to its success in this business, it was slow to move to promoting flat screen technology, even though it was one of the first to develop the LED flat screen.  Instead it wanted to capitalize on its investment in the CRT technology rather than invest in the new technology to meet emerging consumer trends.  By trying to hold onto the old technology and garner as much profit as possible before moving to the new technology, they lost their lead to Samsung, a company who, not held back by a large CRT business, saw an opening to gain market share as Sony lagged behind.

Key Take Away: While an existing business may be extremely profitable, don’t rest on your laurels.  Keep up with market trends and be sure that you are the company that moves business from a profitable core segment rather than one of your competitors stealing your business because you didn’t want to make a change.

Not Capitalizing on New Technology

Not only did Sony not capitalize on its LED technology, but it also did not capitalize on its first-to-the-market status with the e-reader.  Both technologies introduced by Sony were made popular by its competitors.  What happened?  Well, in the one case we know it was holding on to its old CRT business, but what about the e-reader?  Sony made investments in the entertainment side of the business while it let the marketing of these new technologies languish.

Key Take Away: Loss of focus and protecting turf can starve the investment needed to feed the growth of a new technology or product.  Be sure that you are vigilant in assessing how you are investing your resources to be sure you are investing to optimize your total company’s future success.

For more reading how to better develop a strategy to focus on your company’s future potential please read:  Xerox Positions Itself to Succeed in the 21st Century by clicking here.

Denise Harrison is Executive Vice President and COO of the Center for Simplified Strategic Planning, Inc.  She can be reached at  harrison@cssp.com.

© Copyright 2013 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

By M. Dana Baldwin

When you meet with your customers and prospects, you want to be perceived as a professional in your field.  What does it take to garner this respect? Broadly speaking, you need to be trusted for your knowledge, ethics and quality performance.

One of the first things you should be sure of is that you actually know as much as possible about whatever it is you are selling or representing.  Know your product or service inside out, upside down and front to back.  Be able to clearly describe not only the product or service itself, but especially what the application of that product or service will do for the customer.  The customer most often is seeking to solve some kind of problem.  If the customer actually believes your product or service will deliver the benefits you say it will, you have a higher likelihood of making the sale.  In order to have the customer believe you, you must earn his/her trust.  Knowledge is one of the keys to earning that trust.

Another key area is truly listening to the customer.  Many sales people believe they have to demonstrate how much they know to the customer, and they attempt to do this by talking entirely too much.  A much better approach is to listen to the customer’s perception of the problem, then responding with a simple explanation — talking in terms that show you know what the needs of the customer are and that you can help solve the problem for the customer. Creative questions are important to not only establish trust, but to gather information about the problem, what may have been tried already, and what the customer thinks might be solutions.

Don’t talk down your competition!  In one instance taken from my personal experience, our company, a relatively small machinery manufacturer, was going head-to-head with one of the best machinery manufacturers in the country for a large machine installation.  Our competitor met the prospect the day before we did, and the vast majority of their presentation was about how bad our design was and how it would not do what the customer wanted.  The next day, we met with the prospect, and we talked only about our own design and its performance, reliability, accuracy and effectiveness.  We got the order.  The other company shot itself in the foot, and within a year was out of that particular segment of the machinery business.

Along with not talking down your competition, drop the hard sell.  Customers don’t want to be sold, they want to make their own decision about whether to buy or not.  The last thing you should want is to make a sale with the wrong product or service, and to then suffer the loss of reputation and integrity fundamental to trust.

Speaking of integrity: you should always strive to live up to your word.  Example: We sold a machine to a customer which performed very well for them.  About five years after they received the machine, the main table cracked, and upon inspection, it was obvious that the casting had been made with an inclusion which led directly to the crack occurring.  Even though the machine was out of warranty by four years, we replaced the table and installed the new one at no charge to the customer, because, in our minds, it was the right thing to do.

Every once in a while you simply can’t make the situation come out as promised.  What should you do?  You need to come clean, and do your best to make the situation as right as possible for your customer.  Good communication and openness will allow you to keep your reputation in nearly all circumstances.  In the end, being honest with your prospects and customers will almost always pay off for both of you.

Following these principles, you should be able to establish good, professional and trusted relationships with most prospects and customers, and, in the end, this should lead to better sales and better associations with those we respect.

If you would be interested in reading more on interacting with customers please click here to read “Why Do Your Customers Buy from Your Company?

M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

© Copyright 2013 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

By Denise Harrison, Executive Vice President & COO

That won’t work!  We’ve tried that before!  The idea is then rejected without consideration.  Yes, sometimes you should learn from history, but what if something has changed and history no longer reflects the potential of this idea?

We Tried This Before

As president of the research center of a Fortune 500 company, I was often faced with the “we tried it before and it didn’t work” argument.  Yes, it had been tried before, as a matter of fact, more than once, and the product had never gotten enough traction to be successful.  So why try it again?  Rather than reject the idea, I had the product team analyze current trends to see if there was anything new that would indicate that this product would be more successful this time.  Some background, this product’s success was predicated on insurance companies sharing their claims history on individuals.  The data would be stored in a third party database (this is where we came in) and could be accessed so that the insurance company could use claims history as one piece of information for a risk profile.  Historically, the insurance companies were not willing to share their proprietary information.  Why should they share now?

Well, increased claims and lower profit margins were causing insurance companies to look for ways to prevent losses.  These trends made some of the companies more amenable to sharing information.  Once the industry leaders joined, the product moved forward; it was a success with the insurance industry because they had a better understanding of the risks they were insuring and a success for us as we were now the provider of this information.

Corning: In with the Old

During its 161 year history Corning has had numerous technological breakthroughs: silica for fiber optics, ceramics for both CorningWare® and military applications.  But along with the breakthroughs, there have been innovations that did not have commercial success immediately.  So when a consumer electronics firm came to Corning looking for a durable, lightweight glass for its touch screens, Corning took a look back through history and found a 40 year old project on glass fusion and formulation and dusted it off.  Using this proprietary technology the team was able to develop Corning Gorilla® Glass – now used in many electronic devices across the world.  It is now a $1 billion business.  A technology rejected 40 years ago comes to life and adds to Corning’s success.

BNSF – Trains are Back

Oil is traditionally moved across the country in pipelines; high volume, point to point.  Recently new deposits of oil are being produced in areas not traditionally serviced by pipelines, so EOG Resources contacted BNSF to see if they could work with the railroad to develop an efficient system to move oil from the production sites in North Dakota to various refineries.  At first the railroad hesitated – was this just a short-term opportunity?  BNSF decided to take the plunge investing in infrastructure that would support the movement of oil by rail.  This new “light tight oil” now moves by rail to all three coasts (East, West and Gulf) and now more oil moves out of North Dakota on rail than it does by pipeline.

What changed to make rail an acceptable mode of transportation?

• While generally more expensive than pipeline costs, rail costs have fallen about 50% from where they were 30 years ago.
• Rail is now faster and more predictable. (No more rail cars missing in black holes!)
• Rapidly increasing domestic production along with increasing supply from Canada and transportation constraints have created price distortion that have incentivized construction of new rail capacity,  making it cost-effective to ship by rail to areas that do not have access to this lower-priced oil.
• Permitting/environmental issues with pipelines cause rail to be the only option in some cases.

Key Take-Aways

A good strategic planning process causes you to question your paradigms:

• Try to ensure your team is not locked into old paradigms.  It may not have worked last time; but maybe something has changed to make it viable now.
• Look at your facts and assumptions, what has changed?
• Casting a broader net for possibilities; e.g., should you be evaluating rail as the cost has gone down and reliability has come up?  It may give you options you need to consider; especially when the Panama Canal opens and fewer goods are traveling by rail across the country, there should be excess capacity.
• Have your customers’ needs and preferences changed?
• Is there a technological change that makes a previously unattractive option more attractive?
• Are there changes to supply constraints (e.g. availability of natural gas) that allow you to look at opportunities differently?

To learn more about strategic thinking and challenging paradigms please listen to our Strategic Thinking webinar by clicking here.  Challenging paradigms can lead to strategies that your competition has not considered enabling you to gain a competitive advantage.

Denise Harrison is Executive Vice President and COO of the Center for Simplified Strategic Planning, Inc.  She can be reached at  harrison@cssp.com.

© Copyright 2013 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

By M. Dana Baldwin, Senior Consultant

Good friends of mine were the fourth and fifth generation of their family in a very successful business.  I interviewed one of the fourth generation some years ago about how they went about doing succession planning for their company.  These are the “rules” that they had literally written out many years ago which governed their approach to the involvement of the next generation in the family business.

1. Any family member who wanted to come into the business had to work for another company for a minimum of five years.
2. If a family member wanted to enter the business, he or she had to make a firm commitment by age 35.  After then, there would be no opening for the individual.
3. Once a family member came into the business, if he or she decided to leave, there would be no return available.  That decision would be final.

One of the most difficult things to do in a closely held family company is to separate the personal lives of the family members from their professional lives.

1. The first principle I strongly recommend is: Keep the two lives separate!
2. Set up objective criteria for any family members who come with the company.
3. Whenever possible, use non-family members to lead, train and criticize the progress of the younger family members.
4. Monitor the progress of younger family members objectively, not being harder nor easier on them than would be appropriate for a non-family member.
5. Pay for the job, not for the family relationship
   1. Establish the career path or paths which are possible for the individual, and set out what is expected for each one.
   2. Knowledge required
   3. Skills required
   4. Experience to be gained
   5. Mentoring – where possible have this done by a non-family member
   6. Performance levels and attitudes expected
   7. Do regular performance reviews
   8. When changes are needed, make them in a professional manner, as would be done for any non-family employee.
   9. Don’t bring them into the “inner circle” until they have earned it.
   10. Don’t include them in any decision making process where the family member’s superior is not involved and responsible.

Effective succession planning is a key part of strategic planning for an organization.  Having a ‘stable’ of qualified, trained, well-educated and experienced people who can step into a higher level job can be a key to long term success as an organization.  It is neither a simple nor quick fix, but one which needs to be well-designed and implemented, with great forethought so that the process accomplishes what its aim: Having the ability to transition from one person to the next in a well-planned, well-executed process which is positive for both the individuals involved as well as for the organization itself.

FINAL THOUGHTS

One of the elements of succession planning is to decide what the key attributes are the successor needs to have for the future.  It is not enough to have the attributes of the current person.  By having a clear strategy you can see what the future leaders of the company will need to be good at and these attributes can be added to the succession plans of various leaders.

The questions to ask yourself are:

Do we have a good strategic plan that we live by?

Is succession planning a part of that plan?

Does succession planning have its own action plans to enable the company to keep the best and brightest and have them ready to step in when needed?

M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

© Copyright 2012 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

by Denise Harrison, Executive Vice President & COO

Communicating strategy and gaining buy-in enables an organization to truly execute the strategic plan. As President of a financial services firm, I communicated regularly but was stymied by the lack of understanding and buy-in of the strategic plan. What could I do differently?  I found that two-way communication is paramount to gaining the comprehension and action that I was seeking. So many use the “I talk, you listen” communication technique and fail to see the importance of having employees respond with their thoughts and ideas.

Once I understood the importance of two-way communication, I had each department communicate back their thoughts and ideas after hearing the strategic planning presentation.  They answered the question: “What are you going to do in support of the strategic plan?”  They had great ideas and now they bought into the plan, because their ideas were incorporated into the plan.

Now, as a consultant, I work with teams on strategic alignment and have found that along with two-way communication, one needs to raise the level of strategic thinking in the organization. Sounds hard?  Not really – it essentially involves understanding who your customers are, assessing your strengths and weaknesses, and developing key initiatives that tie back to the strategy. If you are interested in more detail, I have presented my thoughts in a free archived webinar – just click on: strategic alignment.

Denise Harrison is Executive Vice President and COO of the Center for Simplified Strategic Planning, Inc.  She can be reached at  harrison@cssp.com.

© Copyright 2013 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

by M. Dana Baldwin, Senior Consultant

Many companies have a stable, often diversified, list of B2B customers who repeatedly do business with them.  Their strategies are focused on satisfying the needs and preferences of those core companies.  They often take particular care in their strategic planning to be sure they satisfy their repeat customers.  But how deeply do they analyze why their customers actually buy from them.  Is it just the products and services offered?  Is that sufficient to explain why those customers are repeat customers?  Probably not, so let’s analyze the “other” side of the picture.

I would suggest that there is another aspect of the buying decision that some companies don’t directly think about regarding the retention of long-term customers.  That is TRUST. Do these customers trust their supplier enough to want a long-term relationship that benefits both parties?  If so, what are the elements of that trust?

While there can be many sides to this discussion, I would suggest this boils down to three key elements:

3.         Your company is easy to do business with and has a history of offering the products and services that your key customers need on an ongoing basis.  Obvious, of course, but it is a necessary element of the equation.  It is likely that the products and services that you offer today are not exactly the same as those your customer bought in their past.  This implies that you have been ready and willing to change with your customers as they and their markets have changed in the past and must continue to do so in the future.  Sounds simple, but it may not be so easy.

2.         Your company has demonstrated a long-term view of your relationships with core customers.  Winning companies pay attention to these customers whether they are currently buying from them or not.  Ongoing contact and customer service is key to maintaining the relationship your company has established over time.  If you were to neglect constant contact with key people in the customer company, soon your rapport would likely deteriorate and could eventually disappear.  Unless your customer service people are aware of the depth and longevity of the relationship, short-term lack of business could influence them to lower the level of service to that customer.  The result could be a lower level of orders in the future, which could be the beginning of a “death-spiral” of lower service, then lower order levels, lower service levels yet and eventually no orders.  Worst case, yes, but it does highlight the need for proactive interaction with customers to maintain relationships.

l.         As a winning company, make a special effort to engage your customers deeply and personally, whenever possible.  You make a strategic judgment that you not only want to be the supplier of choice but also want to be considered a part of their customers’ resources for the future. Your goal is to be included in the planning of new products or services as the customer plans and develops them.  Your company can be an integral part of your customer’s future, if you have invested in building the rapport, the trust that is a prerequisite for being viewed as a partner.  Why and how does this happen?  It is actually quite simple in concept:

1. You listen much more than you talk.
2. You respond with good ideas, concepts and customer service.
3. You have built trust over the years with your products and services, your customer relationship and your rapport.

With this positive approach, your company can be a valued, trusted supplier with great relationships and a lasting, mutually profitable business.  To read more on customer intimacy click here.

M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

© Copyright 2012 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

By Robert W. Bradford

Estimates are, simply put, numerical assumptions.  In strategic planning, we must deal with a variety of estimates.  Some of these estimates are partially under our control (such as our sales number for the coming year) and some of them are completely out of our control (such as the growth rate in the domestic economy).

In strategic planning exercises, I often notice that participants are troubled by estimates.  Some attempt to side-step their discomfort by avoiding the use of estimates, while others make estimates but make mistakes in their treatment in planning.

Those who avoid the use of estimates in strategic planning are pretending they are avoiding error.  Nothing could be farther from the truth.  The underlying reality of many estimates is critical to proper strategic decision making, and by avoiding their use, one inadvertently commits the error of pretending that no estimates are needed – and that none have been made.  This is often covered up by the use of the assumption that nothing will change, or by the use of naïve projection (the assumption that past trends will continue in the future).  By pretending that no estimate has been made, the transgressor opens the planning process up to some of the most common causes of assumption errors, which can lead to nasty surprises.

The fear of estimates lies rooted in the fact that we treat numbers differently than other data points.  Some fear to quantify assumptions because quantification implies a certain type of accountability, which only adds to the stress felt when making decisions using uncertain information.  While this higher level of accountability does exist, to some extent, it is not something to be avoided – especially in a learning organization.  Treated properly, numerical assumptions create a greater opportunity to learn and hone one’s predictive skills, which is a very desirable result in strategic planning.  When people seek to avoid the accountability of estimates on strategic planning homework, it’s a good idea to point out gently – but firmly – that we will have the estimate requested, but that no one will be punished for making an incorrect prediction.

Another issue noted above is when estimates are treated like facts.  Some estimates – notably sales forecasts – are notoriously unreliable, and should be treated with great caution.  Just because someone has quantified their assumptions does not mean that the assumptions have taken on greater weight or veracity.  What it does mean is that you have the valuable ability to monitor the assumption for correctness and make necessary changes in your plans if the assumption turns out to be inaccurate.

In my experience, one of the greatest tools for managing and using estimates is systems thinking.  Simply put, this approach to making assumptions calls for us to formulate a simple (or sometimes not so simple) flowchart of the variables that might cause numbers to change, and use this flowchart to test and often improve upon the numerical assumptions we are using.

How do you make the estimates called for in your strategic planning?  Do you notice any of the errors identified in this article?  What steps might you take to reduce the likelihood of these errors?  To learn how success can sometimes lead to assumption errors please click on success.

By M. Dana Baldwin, Senior Consultant

Experts estimate that American industry could improve its bottom line results by about $350 billion per year by getting everyone to truly buy in to the mission and culture of their companies. While the absolute number could be debated, the principle is sound: A great culture leads to increased profitability.

What is the atmosphere in your company?  Is the culture good?  Do your people know what is expected of them and feel that they are supporting and executing the strategies to which your company has committed?

How can you be sure that your people have “bought in” to your vision of the course and direction of your company?  Well, much of that “buy-in” will be a result of the culture within the company and the management style of your executive leadership team.

There are many factors which influence the attitudes of your people.  Leadership style, mentorship, willingness to build the strengths and sense of self-worth of your people are some of the key factors which should be included in your analysis of your situation.

Leadership style: How do you lead your people?  Do you lead by example or directive?  Do you believe in your people or do you not trust them to do their jobs properly?  Do you encourage initiative, or do you prescribe exactly what they must do, without deviation or thought?

What about those managers who insist on a command and control style of management?  Each of them should step back, review their results and the actual atmosphere inside their company to see whether their people are truly “bought-in” to their company, or are simply putting in their time, collecting a paycheck and getting by with the minimum they can in order to be able to keep their heads out of the line of fire?

Mentorship: Do you attempt to help your people develop their talents and knowledge and operate in their “sweet spot”?  Do you try to have a positive influence on your associates?  Do you go the extra step of recognizing the accomplishments of your people, so they will know you see and appreciate their results?

Why is all this important?  With the appropriate leadership style, your company can earn the trust and confidence of your people, which results in higher levels of performance. With an effective mentorship atmosphere, people will likely make a greater effort to contribute to the success of your company.

What kind of atmosphere would you prefer at your company?  One which encourages people to contribute and use their own initiative and ideas, or one in which people are afraid to speak up and unwilling to expend the energy and take the risk to make things happen?

Is this all “fluff”?  Do you really need to concern yourself with making people feel positive about themselves, their bosses, their company and the culture in which they are working?  Will there really be enough positive results to warrant the effort needed to achieve the kind of culture described above?

There are lessons to be learned from the results of those companies which have decided to improve their internal environment and culture.  Look at the many companies in Silicon Valley which have a culture very different than many, more traditional companies.  They have gyms, restaurants, coffee shops, variable hours and a lot of individual autonomy, as well as highly supportive leadership teams.  The resulting atmosphere has led to high profits as well as high morale and “buy-in”.  Is it worth the effort for your company to explore changing if your people are not as involved as you would like?  If you would like help in analyzing and possibly changing your team’s buy-in, please contact me at baldwin@cssp.com.

To learn more about our strategic alignment book please click here.  To learn more about our strategic alignment workshop please click here.

Some additional  articles you may want to consider:

Know Thyself – Culture in Strategic Management

http://www.strategyletter.com/CD1205/featured_article.php

Winning the High Way — Organizational Success by the Golden Rule

http://www.strategyletter.com/CD0304/featured_article.php

A Culture of Discipline — Building Toward Great http://www.cssp.com/CD0207a/SustainingGreatResults/

M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

© Copyright 2012 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

By Denise Harrison, Executive Vice President & COO

Too often we are so myopically focused on the product or service we are trying to sell, that we don’t listen to what our customer is saying.  The product or service may be great – but something around the buying experience or the initial purchase experience may be preventing our customer from saying “Yes.” If you truly understand these issues, you can gain significant customer loyalty and market share.

Package Delivery

As a frequent traveler, I am often not at home to receive deliveries.  I live in an urban area where packages left on my door step have a habit of walking away – apparently by themselves.  Many people have similar problems when receiving packages:

• No way to receive packages when away from home (or even receive a notice that there has been a delivery attempt)
• No way to receive packages because job requirements do not allow you to be home during the day
• Packages stolen if left at the door

For many years I have requested people sending me packages to send them UPS – my UPS person, knocks on the door (not sure why the others don’t); then if I am not home, he wraps my package up in the door mat and puts it between the storm door and the front door.  This technique has prevented theft over the years.  How hard is it to try something like this for the other carriers?

Recently, though, someone sent me wine, which requires a signature – even my UPS person was stymied by this one.  I was out for the week and UPS has instituted a rule that, if not delivered in 3 days, it is sent back to the shipper. (This is not a new rule, just loosely enforced previously.)  So the wine was on its way across the country again. Who is happy about this?  Not me, not the shipper, and not UPS, because I made sure they knew I was not happy.

Changes – Somewhat Better

Being the quiet, mild consultant that I am, I vociferously complained over the years about this problem.  I had sent all of the carriers (UPS, FedEx, and USPS) suggestions that they should have recipient email addresses on file so that I could be notified when a package was on its way to me. I mean really, this is the 21^st century. This notification would enable me to make arrangements or request a hold.  (While there has been some package notification, it has generally always been done at the shipper’s site – if the shipper has the capability and knows the email address.) Thus, if this service were offered – you can usually make arrangements; but not always – when you are out of town for a long period of time, this may still be problematic.  (I often wonder what changes would be made if the package carriers rated themselves on successful delivery rather than just efficiency.)  Do you think that they really look at solving the problem from the recipient’s viewpoint?

Amazon Takes Charge

Online retailers certainly have to deal with this problem; Amazon’s frustration with the problem has led to the next step up in providing a solution: lockers.  When something is shipped (and locker is requested) you receive an email when it arrives, with the code to open the locker.  You can then pick up the package at your convenience at a third-party site (e.g., 7 Eleven) where you have greater pick-up flexibility around date and time.  This is new, so only available in a few cities – but it provides a good solution.  Amazon made it easier for a certain segment of their customers to buy from it.

Package Carriers – Are you Listening?

How about lockers for your customers?  If a package cannot be delivered, send an email that asks about locker pickup.  If desired, send the code and let the recipient tell you when the package will be picked up.  Ideally this will help with customer/recipient satisfaction.  It will also help with efficiency; the carrier will not continue to try to deliver a package when the recipient is not home. As many of the carriers have locations already setup, this should be an easy fix – although they will need to make the lockers accessible during a wider timeframe.  (Ideally, this would be some kind of setup like Post Office boxes where box holders can pick up their mail at any time.) Might there be some sort of niche business opportunity here, operating a readily accessible “locker-room” or “package depot”?  Could USPS pick this up as an additional business?

What Can We Learn From This?

Look at the product or service from your customers’ viewpoint.  What barriers exist that prevent purchase that may have nothing to do with the actual product or service – but have everything to do with whether or not the customer buys?  Take the time to truly understand your customers’ full buying experience, including perhaps, even its disposal experience, and you can uncover barriers that, if overcome, will open doors and allow you to gain market share.

Interested in how WD-40 doubled its business by listening to customers? Click on WD-40http://www.strategyletter.com/CD0108a/featured_article.php.

Denise Harrison is Executive Vice President and COO of the Center for Simplified Strategic Planning, Inc.  She can be reached at  harrison@cssp.com.

© Copyright 2012 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.