Customer CEO: How to Profit from the Power of Your Customers

Praise for

Customer CEO and Chuck Wall

"I’ve felt for a long time that satisfied customers are not enough. What you need are customers who are so pleased by the way you treat them that they want to brag about you. They become part of your sales force. If you want to create those kinds of Raving Fan customers, read Customer CEO and let Chuck Wall guide your journey."

—Ken Blanchard, coauthor of The One Minute Manager® and Raving Fans

For years I’ve been teaching brands how to fascinate their customers. What I love about Chuck Wall’s approach is how vividly he illustrates that customer holds equal, if not more, power than brands. Today, marketers don’t lead the message—the market does. In this fascinating book, Chuck Wall teaches how.

—Sally Hogshead, Hall of Fame speaker and author of FASCINATE: Your 7 Triggers to Persuade and Captivate

"The 21st century’s free market capitalism obsession with maximizing shareholder value has one major flaw: the most important enterprise stake holder, the customer, does not have a seat at the table. Chuck Wall’s brilliant Customer CEO articulates why tomorrow’s successful companies must insist on the shareholders’ need to share the spotlight with a business’s prime constituency—the customer."

—Peter Georgescu, chairman emeritus, Young & Rubicam

"Customer CEO provides great vision on what truly matters in the rapidly changing world of servicing customers. Culture in an organization is strongest when there is a clear vision and a consistent message. Customer CEO is the tool needed to get everyone in your organization moving in the same direction. Chuck’s examples of successes and failures provide up-to-date insight into how to recognize the power of your customers. If your business has customers, everyone in your organization, from the C-suite to the frontline, should read this book!"

—Chris Zane, founder and president Zane’s Cycles, author of Reinventing the Wheel: The Science of Creating Lifetime Customers

"Wow, talk about ‘voice of the customer!’ Chuck Wall has come face-to-face with more than 100,000 customers in his 30-year career, along the way collecting many inspiring stories and terrific examples of great service. Customer CEO is not just entertaining, but well worth the read, no matter what part of the business you’re in."

—Don Peppers and Martha Rogers, PhD, authors of Extreme Trust: Honesty as a Competitive Advantage

"Chuck Wall has been designing a better future for his clients for a long time by teaching them the importance of first designing a better future for their own customers. Customer CEO shows every size and type of organization the best path to take to profit from the power of their customers. This will be a book that will change forever the way you think about your customers."

—Tom Cuthbert, Vistage Chair

"In Customer CEO, Chuck Wall does much more than confront and overturn longstanding but obsolete marketing strategies. He literally gives today’s customer a voice and lays out a roadmap for exactly how you must listen, act, and partner as a brand to profit in a market where power, persuasion, and media are shared with consumers."

—Simon Mainwaring, founder and CEO, WeFirst

"The internet and social media have given customers a voice as important and strong as the companies serving them. Chuck Wall showcases dozens of companies that have succeeded by putting their customers first. In Customer CEO, Chuck will focus —or refocus you —on the voice of your customers. Let him lead you through the steps you need to follow to create a lasting enterprise."

—Morris Miller, CEO of Xenex Healthcare Services and cofounder of Rackspace

Most of us hope to to succeed in one business. Chuck Wall is a master entrepreneur who has succeeded in many businesses. He succeeds because regardless of his business, he’s understood his customers and treated them like they were in charge. Chuck understands that the customer is CEO and what business owners need to do about it. You’ll like the wisdom he shares in this book.

—Brad Aronson, entrepreneur and investor

First published by Bibliomotion, Inc.

33 Manchester Road

Brookline, MA 02446

Tel: 617-934-2427

www.bibliomotion.com

Customer CEO™, Profit from the Power of Your Customers™, and

Customer Thinking™ are trademarks of Charles B. Wall.

Copyright © 2013 Chuck Wall

All rights reserved. No part of this publication may be reproduced in any manner whatsoever without written permission from the publisher, except in the case of brief quotations embodied in critical articles or reviews.

Printed in the United States of America

Library of Congress Cataloging-in-Publication Data

Wall, Chuck.

   Customer CEO : how to profit from the power of your customers / Chuck Wall.

      pages cm

   Includes bibliographical references and index.

   ISBN 978-1-937134-37-2 (hardcover : alk. paper)—ISBN 978-1-937134-38-9 (ebook)—ISBN 978-1-937134-39-6 (enhanced ebook)

   1.   Customer services.   2.   Customer relations.   I.   Title.

    HF5415.5.W343 2013

    658.8'12—dc23

                                   2012047158

To Franze, Martha, Chuck, and Alex. All my love and gratitude for keeping me humble and focused on what truly matters more than myself.

FOREWORD

If you are in business today it’s not news that every customer is more demanding than ever before. They expect perfection and can be utterly brutal in their assessment of your performance. Between texting, tweeting, and talking to their tribes of friends and followers they can create utter chaos.

The question is what are you going to do about it?

I believe Chuck Wall couldn’t have written his first book, Customer CEO, at a more opportune time. Chuck is a successful entrepreneur, having started seven different companies in several different industries. He is an expert marketer who has never been satisfied with the status quo; he recognized he had to find innovative ways to differentiate his own enterprises as well as the clients he has helped during his career. That’s why he became an expert at what is now called Big Data; using business intelligence analytics to understand what people did. But, Chuck recognized that reams of data were just a small part of the equation. The secret to successfully acquiring and retaining customers in this hypercompetitive world is to also intimately understand customer goals, frustrations, and obstacles in life. It’s not enough to just add a few new features or services to your business offerings. The central question is how to help people accomplish the jobs that will improve their lives. To discover this, Chuck began interviewing and surveying customers from every walk of life. He’s listened to well over 100,000 of them in order to climb inside their heads to understand their why. His primary research has shown him that customer’s possess nine powers that you must actively engage if you want to win their minds, hearts, and wallets.

Customer CEO is a perfect metaphor for today’s customer. Businesses used to be in control and could dictate terms, price, and features in the transaction. But, now transactions have given way to relationships and the customer is in charge. Social media means having 24/7 relationships whether you want them or not. Customer CEO is stuffed full of real-life business stories from dozens of companies that understand this new reality. Chuck’s stories will instruct and inspire you, no matter what size your company. There is practical advice on every page.

Chuck ties it all together with his unique method of linking Big Data and customer insight. This is what he calls Customer Thinking. He lays out a straightforward way for every company to do the work that will allow them to profitably grow by truly understanding their customers. Instead of being adversaries, the book shows you how to build long-lasting relationships with them. Customer CEO is truly your secret weapon to show you how to do exactly that: profit from the power of your customers.

Finally, Chuck has a real passion for people. I am particularly pleased to see that he is engaging you the reader directly through what he calls the Power of Purpose by donating a portion of the proceeds for every copy of Customer CEO to support the worthwhile mission of Compassion’s Water of Life efforts to provide a lifetime’s worth of clean water to a family in the developing world.

Customer CEO provides you with many of the answers you’ve long been searching for. I believe it will transform both you and your customers for good.

Michael Port

AUTHOR’S NOTE

I know you could have selected many other fine business books to read so I am deeply honored you have chosen to spend some of your valuable time with Customer CEO. I trust that some of the stories I will tell you, and the ideas in them, will help you know your customers better. If you do, I guarantee you will profit by building a deeper relationship with them.

By purchasing this book, you are also partnering with me to help provide the equivalent of a lifetime of fresh drinking water to a family in desperate need of safe water in the developing world. Did you realize that more than 1.1 billion people (around one in eight of the world’s population) are without access to safe water? Every day, women and children face the hardship of collecting water from long distances for their families. This filthy, contaminated water endangers lives and prevents children from growing up into strong, healthy adults. For every 500 copies of Customer CEO sold, I will provide a family with a Compassion’s Water of Life clean water system. That’s over 1 million gallons for a child and his or her family. Read more about this lifesaving mission at our website customerceoconsulting.com/water.

Here’s to your great success in the coming years. May you have as much fun reading Customer CEO as I did writing it. And thank you for also making a real difference with Water of Life. Thanks.

Chuck Wall

February 2013

Consumers are statistics. Customers are people.

—STANLEY MARCUS

CONTENTS

Foreword by Michael Port

Author’s Note

Prologue

Chapter 1:

Stop, Look, and Listen

Chapter 2:

I Am Your Customer CEO

Chapter 3:

The Power of Me

Chapter 4:

The Power of Value

Chapter 5:

The Power of Performance

Chapter 6:

The Power of the Heart

Chapter 7:

The Power of Simple

Chapter 8:

The Power of Yes

Chapter 9:

The Power of the Platform

Chapter 10:

The Power of Rebellion

Chapter 11:

The Power of Purpose

Chapter 12:

The Customer Thinking Solution

Chapter 13:

Becoming the Customer CEO Champion

Epilogue

Notes

Acknowledgments

Index

PROLOGUE

An open letter to company executives everywhere:

I have been your customer for a long time, and I want you to listen to me.

You’ve taken me for granted as you’ve happily taken my money. You don’t care to understand what I need to make my hectic life just a little bit better. Your products are a shadow of what they used to be, with shoddy workmanship. Your customer service is outsourced or nonexistent. You expect me to be loyal to you but you will cancel my account in a flash and later explain it was all in the fine print.

In the unlikely event you ask my opinion, you always ignore it. You continue to interrupt me with your inane ads and ridiculous offers. The only choices you really offer me anymore are lame, bad, and worse. Your values, which I once respected, have become suspect and focused on the wrong things. I’ve seen how you mistreat your employees, too. It seems like you now put profits over people. I don’t really trust you anymore because I have become just another number you think you can spin and manipulate with your corporate speak. I am a pretty piece of data on your journey to oblivion. You don’t know me, respect me, or need me.

I have given you chance after chance to listen to me and fix these things. But you don’t really care. Thankfully, I have plenty of other choices of where to spend my hard-earned money. In case you hadn’t noticed, there are upstart companies stepping forward to take your place every day.

And now I have a really big soapbox called the Internet. In just a few seconds thousands of like-minded people will hear me say so long, farewell, and hasta la vista, baby. I am your Customer CEO and I don’t need you anymore.

Sincerely,

The Customer CEO

1

Stop, Look, and Listen

Key Customer CEO Question:

What would you do if you had lost eight hundred thousand customers and $11 billion of your investors’ money in a period of a few short weeks? Hold a press conference to issue a heartfelt apology? Relocate to an undisclosed location? Resign in disgrace?

None of those were viable options for Reed Hastings, founder and CEO of Netflix. Upon suffering one of the worst business debacles in recent history, he chose to provide a nonresponse via an unfunny joke he posted on his Facebook page: In Wyoming with 10 investors at a ranch/retreat. I think I might need a food taster. I can hardly blame them.¹

Rather than soothing the nerves of outraged stockholders, employees, and customers, Hastings enraged them even more. After raising prices a whopping 60 percent and trying to split his company into two pieces with no advance notice, Netflix saw its stock price plummet over 75 percent. Later, in the understatement of the business year, Hastings told ABC News, We moved too quickly. We didn’t give it enough thought. We didn’t give it enough explanation, enough integration, and you know, that’s legitimately caused our customers to be angry.²

Somewhere along the way, Hastings’ arrogance went into overdrive. He quit listening to his paying customers and stopped trying to understand what they wanted or needed. Not content with just two disastrous decisions, he compounded matters by failing to communicate with customers in a timely way. He never explained why he thought raising fees so much at one time was a good idea. His late apology seemed insincere and disingenuous. He didn’t give his customers anything other than cheap talk. And he didn’t bother to provide a way to communicate with the company. In the eyes of those affected by Hastings’ poor decisions, the CEO was missing in action.

I Should Have Listened

Back in the 1970s there was an ad campaign for Southwestern Bell Telephone, one of the so-called Baby Bells that proliferated in the days before deregulation. Southwestern Bell emblazoned its service trucks and billboards with the letters WMBTOPCINTBWTNTALI, which stood for We May Be The Only Phone Company In Town But We Try Not To Act Like It. The campaign was a disaster because it was idiotic for a monopoly to pretend that it provided a great customer experience. It acted like the only phone company in town because it was. Today, companies like Netflix revel in their ability to foretell what their customers want and need based on what is now called big data.

A modern version of the old Bell campaign might be expressed as WKEAYTYRDWUTK, for We Know Everything About You That You Really Don’t Want Us To Know. Tens of billions of dollars have been spent by companies tracking, collating, summarizing, dashboarding, and predicting customer activity. But the problem is that the information is the size of a tsunami, too vast for companies to analyze and use efficiently. This wave of information is killing both IT and marketing departments that have to try to keep up. But, in the end, big data merely reflects the what, not the why of the customer experience. In other words, there has never been a time in human history when people knew so much about other people that was incomplete. It’s like having a jigsaw puzzle with many missing pieces. I believe understanding why people do the things they do is the most important part of the customer experience equation.

Fortunately, I haven’t been in Reed Hastings’ shoes. I’ve had the good fortune to help great people solve some big business problems along the way. To be fair, I have made my share of mistakes as well. Some of them have been small detours; others have been bigger bumps in the road. But I can say that my biggest mistake was wasting too many years listening only to my own ideas. I liked the sound of my own voice way too much.

I should have been listening to my customers instead.

Admittedly, my radical view of hyper-listening is considered heresy in many business circles. There are business leaders, academics, and consultants who regularly warn their audiences of the folly of wasting time gathering insight from customers. What do they know? is the unwritten theme of many business and innovation conferences and white papers, as the experts sniff at the inability of the masses to have any clue whatsoever. The gurus sternly admonish their audiences and readers that customers don’t know what they want, and wouldn’t know if it hit them in the gluteus maximus. Their message is to quit wasting valuable time and money asking customers for their opinions. They believe customers are incapable of sharing anything meaningful enough to result in product innovations. They remind us that customers don’t know what they don’t know. To many in this prevailing business culture, customers only exist to keep consuming stuff and sending along their money; they are not to be consulted about why a company might actually keep deserving it.

Faster Horses and Fickle Customers

Two business icons are often used to support the theory that customers don’t truly understand what they need. If this Ignore the customer philosophy was good enough for Henry Ford and Steve Jobs, shouldn’t it be good enough for you? Experts often attribute this statement to Ford: If I had asked my customers what they wanted, they would have said a faster horse.³ They also point to various rehashed versions of statements by Jobs. Here’s a quote from a 1989 interview Jobs did with Inc. magazine, in which he explained, You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.⁴

Who am I to question the genius of Henry Ford and Steve Jobs? In my opinion, both were visionaries who saw things the average person could not. But there are two problems with these quotes, other than the fact that they oversimplify a complex subject. While the faster horses line is very clever, there is actually no record that Ford ever said such a thing. In his blog, Quote Investigator, researcher Garson O’Toole casts doubt on Ford as originator of the remark.⁵ But the Ford quote makes a great presentation slide; everyone can nod his head in agreement.

In Jobs’ case, it is true that he made various versions of this statement about customers’ wants over a long and prosperous career. But the irony is that, because of the vision of Jobs and other technologists, nearly everything in the business world has changed since 1989. At that time, the flow of information went only one way. Technology companies’ creations have empowered a new world of customers who rule companies with an iron fist. As Reed Hastings learned, today’s customers can wreak havoc by destroying your carefully constructed business model in only a few hours, days, or weeks. Customers are no longer pigs at the trough, waiting to be slaughtered.

It is a myth, however, that Jobs was a one-man band. In addition to the hundreds of Apple designers who contributed to the company’s success, Apple Store staff monitor the daily, almost real-time barometer of customer opinion. Also, public filings in Apple’s 2012 Samsung patent lawsuit revealed that the company actually did customer research. Apparently, the research was a decisive factor in key strategic business decisions. Phil Schiller, Apple’s senior vice president of global