Saturday, April 10, 2010

Fear of the Customer - the Worst Feeling in Business

Increased instability and uncertainty often lead to fear. The prevalence of fear today has prompted me to focus on that emotion for my next two blog posts. While fear can motivate positive change and action, decisions motivated by fear are typically shortsighted and suboptimal.

Today, I'm going to talk about corporate fear, and my next post will talk about using fear as a marketing motivation.

Any executive with experience has been there--a meeting with a dissatisfied client, a confrontation with a business partner, or a meeting to discuss what to do with a failed initiative. Fear is a common emotion in any of these situations.

How can we avoid fear and what should we do with the fear we feel?

Fear of the Customer

I learned early in my career as a product manager that things were never good if I was afraid of my customer. There have, unfortunately, been times when I was afraid to reach out to my customers. Why? There were typically two reasons:
  1. I was aware of the pain a product or service was causing for customers and didn't know how we were going to address that pain, or
  2. I knew that the organization I was working for didn't have the will or resources to address the customers' needs.
Under either of these scenarios, talking with a customer feels a lot like going into battle without a weapon or even protective gear. You know exactly what the danger is in walking out to meet your customer and can only rely on their mercy and benevolence for your survival.

Typically, companies fear their customers when promises are not kept, expectations are not met, or policies are unfair. In short, fear is typically the result of a company falling down on their side of the value exchange with their customers.

Signs of Fear

The following are 10 signs to consider to see if your company is afraid of its customers:
  1. You focus on retention through policies and procedures that make it difficult for your customers to sever their relationship with your company.
  2. You don't provide any clear method for providing feedback on your products and services.
  3. You have problems with refunds and chargebacks or set policies or hire staff to fight these "return" transactions.
  4. You hide or do not publish your company's contact information.
  5. You obscure your company's identity with DBAs and multiple brands.
  6. Websites, groups, and clubs form to express dissatisfaction with your company or products
  7. You suddenly feel a need to censor and moderate forums or message boards designed for customers to provide feedback.
  8. You decide you don't like your over-demanding customers and decide to focus on a new target customer.
  9. You refer to your customers using derogatory terms, such as idiots, morons, etc.
  10. You primary focus on your customers is in terms of revenue and transactions rather than how you can serve or satisfy their needs.
The Way Out

If you are in this position, the only way out is to decide how you are going to delight your current customers. The solution is NOT to find "better" customers or even "more" customers. The only way to get past your fear is to take care of the customers (or clients, partners, etc.) you already have. Once you are doing your best at keeping up with your end of the value exchange and communicating what you are doing, confidence will replace your fear.

1. Assess the situation
The first step is to learn how your customers feel about your company and products. Don't try to allay fears or address unmet expectations at this point. Instead, do everything you can to understand how customers view your company, products, and policies. Don't just ask "what" they like or don't like but "why" they like or don't like those aspects of your company.

2. Weigh the options
Once you understand where how your customers feel, you can now make decisions about what you are going to do to address the needs of your customers and overcome your fears in the process. Now is the time to weigh your options and discuss possible changes and their associated costs and benefits.

3. Make a plan
The third step is to create a plan and time line. You will want to show evidence that you care about your customers and that your efforts are genuine and consistent over time. The plan should build momentum by moving from low-hanging fruit (the stuff you can "get out there" tomorrow) to the more difficult changes that are necessary.

4. Execute on the plan and communicate progress
The fourth step is communicating as things happen. Communicating before you have a strategy and plan only makes the situation worse. Don't apologize to your customers without also telling them what you are doing to make things better. When communicating, don't make promises that you can't keep. The best way to communicate is again by maintaining momentum by communicating improvements after they are made.

This isn't the time to pre-announce changes or set a time line. You're building confidence and removing your fear in the process. This isn't a time to increase your risk of failure by communicating specific tasks and deadlines--unless your customer relationships are so poor that your situation has become desperate and this style of communication is the only way to regain customers' confidence.


These steps will help you at times you become afraid of your customers, clients, investors, or partners. When fear creeps into your relationships, identify the fear and rectify the situation as quickly as possible.

Remember that fear of your customer (or any other business associate) turns your relationship from one of mutual benefit to one that is adversarial in nature. If you are fighting with your customers over time, your business has no hope for success.

Learning from Mistakes - A Case for the Humble Executive

I formulated a theory in junior high regarding two types of people: those who observe and learn from the mistakes of others and those who choose to learn from the hard knocks of life. Each of us actually learn using both of these methods, but those who are most adept at learning from the mistakes of others and avoiding those pitfalls altogether have a distinct advantage.

Marketers and business executives also have the opportunity to observe, research, and learn from the mistakes of others. Too often ego and a desire to drive a personal agenda get in the way of insight and lead to poor and avoidable business decisions.

Here are two powerful ways to minimize mistakes:

1. Understand all you can about the mistakes of others
2. Remain humble and fully experience pain for the mistakes you make

Mistakes are Largely Avoidable

Entrepreneurs and executives who take the time to evaluate their failures seldom admit they had the ability to avoid the mistakes they make. I have been in several postmortem meetings where the final stated conclusion has been, "well, at least we know what to avoid next time." While this sort of a statement sometimes indicates some learning has taken place, it seldom reflects the true nature of the most common underlying mistake: executing on a poor strategy.

Learning from the Mistakes of Others

Today, with so much information freely available, it's inexcusable to emulate another organization's previous failure. Marketing Sherpa, Harvard Business Review, marketing blogs, and other sources of case studies, catalogs of failures, and best practices are readily available. Not reviewing these sources of information when formulating and executing on strategies is in itself a huge mistake.

Even more inexcusable is a tendency to ignore institutional knowledge related to previous business failures. When I was a marketing director at, a new commerce manager suggested we create a product catalog for the 30 to 40 products we had at the time. Realizing I was being recruited to the project, I asked about the catalog's purpose and the expected impact it would have on sales.

The answers I received weren't very convincing, so I approached the publishing team to ask what they thought. In the process I learned they had created a catalog the year before. The catalog had been a lot of work and generated no measurable impact on sales. Not only had the project been a financial failure, it has also cost the company other publishing opportunities.

Although I recommended we not publish a new catalog, the project moved on without me. The result was  spending more than $10,000 on a catalog that was outdated as soon as it rolled of the press because of pricing changes and the introduction of new products. Copies of the catalog traveled to genealogy conferences (where no catalog was necessary because our products were already on display),  but the main point of distribution was our office's reception desk, which received virtually no walk-in business from our customers.

The website, on the other hand, had an e-commerce product catalog that was viewed by millions of people each month with a cost of less than a penny per visit. Printing the catalog was an obvious and avoidable mistake, but a new commerce manager was more enamored with the project than in pursuing measurable objectives.

Countless case studies now exist related to the effectiveness of print vs. online catalogs, especially for companies that are online. Could you imagine coming out with a print catalog tomorrow? (If you work at and have been pushing for this project, please reconsider.) Ignoring these case studies is foolishness. But some people do everything they can to avoid information that contradicts their own desires.

Knowing ahead that it may not be a good idea to create a print catalog for a website that is primarily promoted through email and has no offline presence might make others question the strategy. Why risk presenting information that might lead anyone to suggest your brainchild might be a bad idea? Maybe the last 10 companies that failed with your strategy had poorly executed on the concept, right? When you emerge from the smoldering ashes and charred chaos of your predictable failure, you can always exalt the learning that has taken place and say, "well, at least we know what to avoid next time."

On Being Teachable

Closely related to selective ignorance, the second cause of avoidable failure is pride--a lack of humility that obscures good judgment and prevents many executives from accepting responsibility for their actions. Failure hurts, and it should.

I have a problem when people internalize mistakes by claiming they have "no regrets" or that they would "not change a thing" or if given the chance they would "do it again." These people often say they are grateful for their mistakes because they "made me who I am today." If addressed properly, mistakes do give us insights, expose our weaknesses, and allow us the opportunity to change; however, the lesson learned should be how to avoid mistakes rather than how to embrace them as part of our identity.

To illustrate this point, I'd like to draw from two examples in popular culture: Mark McGuire and Jude Law.

The following is Mark McGuire's apology in January 2010 for steroid use during the his baseball career in the mid-90s:
"I'm sure people will wonder if I could have hit all those home runs had I never taken steroids. I had good years when I didn't take any and I had bad years when I didn't take any. I had good years when I took steroids and I had bad years when I took steroids. But no matter what, I shouldn't have done it and for that I'm truly sorry."
While not the most humble apology, his admission of steroid use was and associated remorse were clear. He was unequivocal in saying he should not have taken steroids, although he also made the argument that the steroids didn't really help him hit all those home runs. In the end, he got across the point that he regretted his actions and not coming forward earlier. That sounds pretty sincere. After his admission the story played in the media for a couple of days and nearly immediately died down.

Now contrast that with so many celebrities who make mistakes and never have remorse or take responsibility for their actions. Here's a quote from Jude Law on his past infidelity:
"There's no regret, you can't regret. I mean, I've felt regret but I've also refused to allow regret to sow a seed and live in me because I don't believe it. You feel it, it's like guilt, it's like jealousy, it's like all those horrible things and ... you've just got to snip them and get them out, because they're no good. Because if you regret, in a way, have you learnt and moved on?"
Wow! He says he "learned" and "moved on." Isn't it OK to regret mistakes? Or do we have to internalize them and say, "that's just part of who I am"? Mistakes don't make us failures; they make us human. But they also provide us with the opportunity to learn from the pain and discomfort they create. Why should we avoid the pain of our mistakes? Ultimately, isn't it the fact that we regret our mistakes that demonstrates that we have actually learned from them?

Remorse and of regret of our mistakes generates the pain that serves as a reminder that we don't want to repeat a poor decision. It's a natural consequence. How can we sincerely apologize and "feel sorry" if we try to avoid regret altogether?

Now I'm not saying we should have everyone who commits adultery walk around wearing a letter "A" sewn into their clothes. That's not what I'm suggesting here. What I am suggesting is that learning from our mistakes requires us to "own" our mistakes. That's the only way to move on. It's not good enough to say, "I have no regrets. Those mistakes made me who I am today."

A statement that shows true learning has taken place would be something like this: "I'm glad I learned from my mistake. I wish I hadn't done it, and I will do everything I can to avoid that mistake in the future."

Too many executives are unwilling or unable to face their mistakes and learn from them. Far too many excuses are made for mistakes that could have been easily avoided if only the executive had listened or learned from the insights and experiences of others.

When mistakes are made, it's more important to understand "why" the mistake happened than "what" the mistake was. The "what" is already obvious, but the root cause is the "why.". Understanding and coming to terms with "why" a mistake was made--the circumstances and process that allowed the mistake to be made--is the learning that helps us avoid the mistake in the future. That's the part that requires humility to learn.

I have found that working with executives who are humble and willing to admit and take responsibility for mistakes is not only refreshing but actually inspiring. It's amazing to see people actually own up and take responsibility for poor decisions. And when executives take responsibility for mistakes, those around them have more confidence that the executives and the organizations they lead will be able to avoid similar mistakes in the future.

So, let's learn from our mistakes and the mistakes of others. Let's allow the pain of regret to motivate us to improve the processes and scenarios by which decisions are made and overcome our blind spots to avoid repeating the same mistakes in the future.