It’s
all about we and free Although we act as if it’s still alive and successful, it’s dead. You make or create something and if the rest of us want it, we pay you for it. If someone else comes along and improves it and offers it for a lower price, we buy it instead. Then, along came the Internet and blew the stuffin’ out of this “exchange” model that served us so well for so long. Seven years ago when insurance executives Preston Diamond and Frank Pennachio founded the Institute of WorkComp Professionals, Frank, who had once been a teacher, took the title of director of curriculum, another example of the “exchange” mentality. He was in charge of knowledge and those who paid a fee were allowed to drink the Kool-Aid. And drink they did because Frank Pennachio is a highly regarded workers’ compensation expert. Today, Frank has a different title; again, one of his own choosing. It’s director of learning. He sees himself more as moderator than teacher, more a facilitator than custodian of information. “The Institute has become a community where the members learn from each other — the whole continues to become greater than the sum of the parts,” says Pennachio. The Institute’s original value was based more on the exchange model. “We have something that will make you money and here’s the price you pay for it.” Currently, the community model says, “You can be part of something where you set the direction, share your knowledge and have the opportunity to learn from the community. It that has value for you, there is a cost to being part of the experience.” The exchange model says, “We are dispensers of knowledge,” while the community model says, “Be part of something without boundaries.” Where is this dramatic change from “exchange” to “interaction” taking us in marketing and sales? 1. Customer designed experiences. A recent press release from an insurance company and a worksite marketing distribution firm proclaimed a new life insurance product designed by insurance salespeople. “The whole product development process was very collaborative,” said one official. An official of one company said this could be “the wave of the future.” While to some the idea of letting salespeople into the manufacturing process may seem like leading edge thinking, it’s actually just another example of the old “exchange” model. In other words, “We build it; you buy it.” In a recent Wall Street Journal, the writer asks a telling question: “Since we have so many more choices today, why are we less satisfied?” The problem isn’t the number of choices; more isn’t necessarily better today. The consumer mindset is disappearing. We want to feel that we are actually creating what we buy. “No substitutions” on a restaurant menu is deadly. We want our meals our way or we go away. A large regional dry cleaning chain receives a growing number of requests from customers to have its stores open on Sunday. We go nuts if we can’t access the computer company’s help line at 3 a.m. With life insurance sales flat for many years, it might just make a difference if customers were invited to participate in designing their own life insurance policies. 2. Community builds loyalty. While it took a number of years to see positive sales results, Apple got it right from the beginning. “The computer for the rest of us” advertising campaign was incredibly perceptive in that it defined Apple as a community and not just a computer company. Through ups and downs and near death, the core of Apple’s strength was its incredibly loyal community that put up with problems and high prices. Apple, perhaps like no other, understood community and has rewarded its customers (read members) with incredibly brilliant (read intuitive) products. Every Apple store is a “community center” and every member is personally welcomed in a meaningful way (not like Wal-Mart). It’s not a just a matter of feeling at home; it’s like being at home. When a member had trouble syncing his iPhone with his Mac computer, a Genius Bar technician at the local Apple store worked on the problem (at no charge, since that’s being part of the community) for several hours, but ultimately could not resolve the problem. While the customer was disappointed, he wasn’t upset or angry. He knew there would be a solution, since that’s what the Apple community is all about. There was! Who else but Apple could reduce the price of a product $200 two months after its introduction and not have a customer revolt on its hands? Community builds loyalty. 3. Information is free. It’s increasingly difficult to charge for information, a trend will become even more pervasive. For the past 30 or more years, charging for seminars was a lucrative business. We were told that unless people paid to attend a two- or three-hour session, they wouldn’t come. That’s changing rapidly. A large mid-western insurance agency reported attendance of 70 at three free 7-10 a.m. breakfast workshops, while a Florida-based material handling integrator sponsored a free seminar that attracted so many attendees the event was moved to a larger facility and a second seminar was scheduled for another part of the state. Both of these companies developed valuable leads from their sessions. Encyclopedia Britannica owned a major source of knowledge for more than 200 years. They let us have a hard copy in exchange for a few bucks a month for what must have seemed like a lifetime. When the Internet arrived, EB took its huge set of books and put them online and said they would give us access in exchange for a fee of $5 a month. Only a handful of consumers signed up. Today, the EB is free online. It didn’t work because the Internet model is about sharing, not exchange. And sharing means “free.” 4. Applying the power of pull. As a whole new mindset, “we” creates “pull,” rather than “push” or “persuade” as with the exchange model. For example, a well-known New York-based marketing guru, who has worked with a number of Fortune 500 companies, says that General Motors’ problem is poor marketing, not quality. Although many of its products now receive high customer satisfaction ratings from J. D. Power, sales continue spiraling downward. He states that GM has not done a good job of marketing, of shaping the public’s perception of its products. That’s nonsense, at best. Persuading doesn’t do it today. Facts, no matter how subtle or cleverly contrived, don’t change behavior. While GM spent 20 years foisting off inferior products on the public, consumers found Toyota, Honda and, later, Hyundai, companies that produced quality, affordable and reliable vehicles that captured their imagination. Over time, hordes of vehicle buyers were “pulled” to these products by their performance. And, now, GM, Ford and Chrysler are paying dearly for acting as if they could control buyer behavior. Unlike 30 years ago, the disappearance of these three automakers would go almost unnoticed, as consumers have emotionally moved to manufacturers that build cars for “us.” Unfortunately, salespeople still try to get through the door and attempt to set up meetings, failing to understand that “push” has been replaced by “pull.” By taking these unyielding trends as guidelines for understanding customer expectations, the adroit marketers and salespeople will find doors opening to them. About the author: John R. Graham
is president of Graham Communications, a marketing services and sales
consulting firm. He is the author of The New Magnet Marketing and Break
the Rules Selling, writes for a variety of business publications, and
speaks on business, marketing and sales issues. Contact him at 40 Oval
Road, Quincy, MA 02170; 617-328-0069; |
.
The company’s Web site is grahamcomm.com. 
