Imagine a modern Rip Van Winkle waking up from a twenty-year sleep, He would surely be amazed at how the world has changed: He would be bewildered by new technology, bowled over at the speed and clutter of life in 2001, dazzled by the sheer abundance being thrust at him. The torrent of new products, goods, services, ideas, and innovations vying for his attention would be shocking.
How would he react? I suspect, like people through the ages in suddenly changed circumstances, Rip would reset his bearings from his old perspective before cautiously testing the new water. Like a child who clings to a teddy bear well into adolescence, or a lottery winner who repaints the old house, he would cling to the familiar and be slow to embrace what is new.
As customers of the New Economy, we all share that shock to one degree or another. Unlike Rip or a lottery winner, we didn’t suddenly face a totally new landscape. Our horizons have expanded more gradually. And as I will explain in this article, Rip’s reaction is only one of four distinct behavior patterns we display when confronted with major changes in our environment. But for us, too, the proliferation of choices and new riches create anxiety and discomfort, as well as opportunity.
Of course, this isn’t the aspect of the New Economy that the media celebrate. Journalists searching for a fresh story focus on the opportunities, not the hesitations. Yet even the most enterprising and open-minded customers in today’s cornucopia can find themselves in a quandary No one is inclined to throw out his or her comfortable old shoes or reliable two-year-old computer simply because a new style or an improved model has appeared. They may not be sure they need a new one; they don’t necessarily want to spend the money; and they surely don’t have the time to choose between all the different-sounding yet similar-appearing alternatives.
Unfortunately, buying something doesn’t usually resolve your problems. The purchase is just the first step; then you must use and extract value from it. Will it be compatible with what you already have? If not, how hard will it be to learn how to use it? Are you buying more than you can consume? Will your view book from the on-line retailer lie unread in the pile on your bedside table? Will you feel guilt for spending money, regretful for not having enough time, or anxious about keeping up with what seems important?
These are real feelings that nearly all customers share, at least to some extent, so managers who fail to understand them or don’t take advantage of the various ways customers adjust to the new conditions will never be among the new market leaders. But this misreading of the market is pervasive. Business publications are rife with references to “fickle,” “disloyal,” and “whimsical” customers—as if it were the customers‘ fault that companies can’t sell them goods and services. In reality, the flighty customer is a self-serving rationalization for failing managers who can view the world only from their own perspective, not the client’s. Certainly, today’s customers are intolerant of shortcomings. That they have many alternatives from which to choose only makes them more demanding than ever. But to call them disloyal or fickle is merely to duck the hard work of understanding what drives them and avoids your need to adjust your operations accordingly.
The new market leaders have done just that. And they have found and attracted customers who are ahead of their competitors in resolving their quandaries. The message these customers are sending to suppliers is clear: Don’t just tout your product. Help us make the right choice, then teach us how to use it.
When uncertain, customers gravitate toward sellers who inspire trust and are committed to delivering results, not just products. These suppliers have value propositions that leave no doubt as to the benefits of their products or services, and their offerings are clearly distinguishable from their competitors the examples.
These complex relationships between buyers and sellers aren’t limited to consumer markets. Business customers feel the same ambivalence. They, too, flounder to keep up with their evolving world. Witness the revolving fashions in management concepts: from yesterday’s TQM, mission statements, service guarantees, and business reengineering to today’s customer relationship management, electronic marketplaces, virtual organizations, e-learning, and e-engineering.
Surveys indicate that the success rate of management initiatives is far from perfect: Less than half of the companies that have adopted them report feeling “extremely satisfied.” And no matter what survey I look at, the life span of new initiatives, already less than three years, is getting shorter. In other words, the majority of new concepts that companies put in place don’t last beyond three years or end up disappointing their sponsors. All of this proves, if proof were needed, that corporate customers are having as much trouble as the rest of us in absorbing change.
Customers differ in their problems. What’s daunting for some is the sheer variety of choices; for others, it is the concern that they won’t extract enough value from their purchases. So it’s important for managers to understand the varying ways their customers behave in the new marketplace. After all, there is money to be made from shoppers of all types. Insights into their motivations and shifting priorities give companies the inside track on the concerns, preferences, and comforting factors that count the most in their buying decisions.
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Posted by: eric
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