Tuned In: Uncover the extraordinary opportunities that lead to business breakthroughs.

Tuned out pricing

Can you believe how tuned out the airlines have become?  What's really sad is how predictable the results are for each move they take.

For example, they begin charging for checked bags.  Who couldn't predict that everyone is going to try to carry all their stuff on board.  Every business traveler I know groaned when they heard about the checked bag fees.  Their precious carry-on space will soon be even more stuffed.

Today on Good Morning American, they had a segment on how the airlines are now cracking down on this behavior.  There are now "carry on police" who will be looking for bags that exceed the dimensions allowable for carry on bags.  Not that I object to this enforcement of the long standing rules, but I can only imagine what the chaos will be like at the gate. "Sir, your carry on bag is too big.  We will have to check it, but first you need to pay $15."  How long is that going to take?  Are we going to delay flights as a line of people are waiting with credit cards in hand?  Are the gate personnel going to accept cash?  Has anyone at the airlines even thought about this?

On the other hand, one of my favorite airlines, and very tuned in, is Southwest.  Not only are they fee-free, but they have some of the best air fares and are clearly the most organized when it comes to loading people.  Check out how they are leveraging their no-fee competitive advantage:  Southwest No-Fee TV commercial.

When vendors focus only on price, they miss opportunity to display real distinctive competence.  Most people tell me they would rather pay a higher price than being nickel-and-dimed to death.  Southwest is providing both price and service; a winning combination.

For the love of packaging.

For me, nothing is more evident of being tuned in (or out) than packaging. Most businesses view packaging as a way to solve their own problems and maybe do some marketing on the side. The tuned in companies are the ones that put their buyers' problems first.

My hall of fame for tuned out packaging is the blister pack (rather attractive name isn't it)? You may be familiar with this clear vacu-formed packaging that allows you to see the product, but threatens you with a trip to the emergency room after trying to open it with a kitchen knife. What problems does this solve? The manufacturer gets to show off the product, include some graphics, and the retailer likes it because it inhibits shoplifting. The buyer's needs don't appear anywhere in the solution list.

Yesterday, I opened a package of screwdrivers that I bought at Costco. Mind you, the reason you buy screwdrivers is probably because you don't have one. So how do you get this snazzy package open? It requires a Philips head screwdriver! The entire clear plastic front is screwed down with lots of... screws!

Speaking of Costco, they recently changed their milk jugs. The outer cap has a security feature which works great. But they changed to a new inner seal with a little pull handle. The problem, in my experience, is that about 90% of the time, the pull handle comes off with the seal still intact. Back to the kitchen knife drawer to carve open a spout for the milk. Doesn't anyone at the factory test this stuff?

I always let out a little groan when a box arrives in the mail and upon opening it, out fly dozens of Styrofoam "peanuts." How annoying is that? I opened a huge box recently with literally bushels of peanuts. To assure I wasn't missing any small parts, I had to transfer these little shards-from-hell from one box to another. Thinking I could avoid making a mess in the house, I performed this maneuver in the driveway. In mid-transfer, the wind picked up and I had Styrofoam flying everywhere, like a rare blizzard in Scottsdale. Lovely! Peanuts solve the shipper's problems. They are cheap and easy to dispense but they create hassles for the buyer.

So who's tuned in? It's hard to name them; not because there aren't any but because the experience of opening the item is not particularly memorable. The negative experiences are seared into our mind while the positive ones are a distant memory. One great example of the right approach is Amazon. They use the little air pillows to fill their boxes. Or, they shrink wrap smaller items to a piece of cardboard and put it in a box. Another example is the orange juice vendors who replaced the old spread-fold-invert cardboard containers (which frequently failed requiring the handy kitchen knife) with a simple pour spout with a screw top.

Ironically, these vendors might even save money over conventional packaging methods but the biggest bang is the subtle user experience that subconsciously says, "I want to do business with this vendor again."

Don't make your problem my problem!

Nothing infuriates buyers more than being 'nickeled and dimed' when they are trying to do business with someone. This week, I came face-to-face with two examples of this. The landscapers at the office submitted their bill and we noticed a $20 increase.  We wondered why until we looked down at the bottom of the page and noticed a new line item for a fuel charge. I guess the drive to get to our offices is our problem now. Then there's the furor that has sprung up around American Airline's $15 a bag charge that's causing flyers all over to re-evaluate how they can drag everything with them as a carry-on.

When are businesses ever going to learn?  When you pass your problems on to the customer all you do is start a self-fulfilling death spiral. You think that creating small 'poor, poor, pitiful me' charges based on something you have no control over and adding them to everyone's bill is the fair thing to do but in actuality, three things almost always happen and all of them are bad:

1. You tell your customers your business is in trouble and make them wary. 
2. You let them know that you care more about your costs than their service. 
3. You make them mad and they say nasty things about you, today on blogs that reach millions. 

And, then they walk away, sometimes silently. But, walk they do and you're left with a smaller business, the same high costs and now a bad reputation. Nice. Want to try this again? 

Like it or not, we have to acknowledge a baseline premise here. Your buyers don't care about you and your problems; you're supposed to care enough about theirs to create an experience that they want to buy. When bad things happen, like out-of-control fuel costs (not our fault we're at $133 a barrel is it?), they affect everyone. When you put a nickel and dime surcharge around it though, you're pricing based on your costs vs. the value of what you do for your customer. And that's just tuned out.

The tuned in approach is stay focused on the complete experience and relationship you have with your customers. Identify areas that are not viewed as critical and reduce your costs there if your profits are being squeezed. Consider narrowing your focus to fewer persona's that you can satisfy better within the cost constraints that you have. Or, maybe even take advantage of the competitive landscape being challenged by adding new services to the experience that support an increased price.  Above all, whatever you do, communicate it in advance to your customers through a lens of why you are doing this to better serve them.   

We're going to look at alternatives for landscaping services and I'm giving up completely on American Airlines. When businesses start tuning out like this, my experience is that the miserable service and new surcharges just seem to keep on coming. I'll leave them for the other guys this time. 

 

How do you manage your time?

We started our road shows for Tuned In last week. I enjoyed the opportunity to keynote at the Software Marketing Perspectives conference in Santa Clara and the Sage Business Partner Insights conference in Washington DC. This Wednesday, I'm honored to be on a panel with Michael Port to talk about his new book, Beyond Booked Solid. Michael will be speaking about a subject we're passionate about here ... growing your business without complicating your life. You can still sign up to this free event at Author Teleseminars.   

I couldn't be more excited to get out and share Tuned In with everyone as it launches. But, as my own personal activity levels have begun to spike, it got me to begin thinking again about how and where we spend our time.  This morning, I think I got hit right between the eyes with the enemy on this. As I was sitting at my daughters gymnastics meet browsing through recent blog feeds, I hit on one from Jackie Huba at the Church of the Customer blog asking Are You Hyperconnected? 

Wow. Stopped me right in my tracks for two reasons. One because obviously I was. And second, because it was running smack into the issue we found that differentiated leaders from being tuned in to tuned out. Turns out, Jackie's question is interesting but at the end of the day largely irrelevant ... we're all hyperconnected. We get information feeds verbally, through voice messages, cell phone calls, e-mails, blog feeds, Facebook, YouTube videos, Twitter, text messages, TV and oh I don't know ... maybe 100 other sources a day! Whether we want them or not usually.

Jackie says that about 16% of us pass the test of hyperconnectivity. If you have more than 7 devices or feeds, you're hooked. And you know, it's almost expected that you do these days ... even a badge of honor. I had to laugh last week when I read an online ad that ended with the phrase:

"you can contact us through our MySpace page or Facebook or you can contact us the old fashioned way via e-mail."

All of this connectivity is supposed to be a good thing right?  Well, yes and no. Our research found that the most successful leaders and businesses were very tuned in to the signals that come from the market but that they had also developed great filters to decide which ones were important enough to spend time and which ones should just be ignored.  We found many people who fell into the tuned out trap though ... correlating hyperconnectivity with a need to be hyperresponsive in the belief that busyness would drive success. Wrong!  It's the fastest path to failure it turns out because you become totally reactive vs. proactive. 

Here's an interesting question for you. Are you more effective in the office or on the road?  I find that on average I accomplish much more on the road than at home because I filter better.  My days are divided almost by force between quality time with customers, strategic activities and the normal response to the many messages I get. But because they are compartmentalized better, I accomplish more and Tune In better.  This is really what our book is all about.  If you can develop the right perspective about what you are in business for and then spend your time wisely, tuning in becomes as natural as following traffic signals. When you allow the activities of the day and the plethora of inbound messages to consume you, you're Tuned Out and missing opportunities to improve.

Wish us luck as we venture out with Tuned In. We'll try to stay connected ... and relevant.   

What's wrong with Sam's?

I live in Scottsdale, Arizona where we have two big box retailers, Costco and Sam's, only about 1,000 feet apart. Add to that a Walmart and a Target all within a half-mile as the crows fly and you have a buyer's market when it comes to discount retailing.

Ironically, of the four, the Sam's Club is the distant laggard. It would appear that the Costco, which carries virtually the same inventory, does about ten-fold the business. My preference is Costco but I keep my membership at Sam's when I want to make a quick purchase as I can count on their store being mostly devoid of customers.

So why does one store thrive and another falter in the same geographic area with similar offerings and prices?  From my experience, it is a collection of Tuned Out attitudes in management at Sam's. There have been numerous times that I have filled my cart, rolled up to check out, and found long lines at the cashier stands. With well over a dozen check-out stands, management rarely staffs with more than two cashiers. Instead of waiting 10 minutes to check out, I just leave the cart at the front of the store, mention my disgust to the supervisor, and walk out. I figure if they have to replace my items on the shelves, they will get the message. 

They haven't so far. In fact, in one incident, the supervisor argued with me that their cashiers were "busy doing other things."

So yesterday, they actually had an open cashier and I was being rung up in no time. But before I could pay, the cashier stopped and asked if I wanted to upgrade my membership. I asked, "What is that going to do for me?"

She replied, "Well it normally is $100 but we can pro-rate it for the year and it will only be $68." As I observed the line of customers waiting to checkout behind me begin to swell, I asked, "Well that doesn't solve any problems for me; why should I give you even $68?" I won't bore you with the entire list of meaningless benefits that she stumbled through including "Discount roadside assistance" but suffice it to say that I didn't buy the upgrade. I don't know if anyone abandoned their cart as this sales pitch transpired but I'm sure I would have. 

Not only was there no compelling problem solved by their offering, but they were selling in a stressful scenario and at the expense of other clients by a "salesperson" not prepared to communicate with me. If they had asked, I would have suggested that they set up a stand as you enter the store, staffed with someone who can relate what the upgrade will do for me, and allow me to ask questions at my leisure.  But knowing Sam's, they'd take a cashier off duty to "man the booth."

Why does the average CMO last only 26 months?

A few weeks ago I get a call from Gary Stern, a columnist for Investors Business Daily.

Gary says, “I’m doing a story on the average tenure of Chief Marketing Officers, which is only 26 months. This is much shorter than 44 months, which is how long CEOs last. Can you comment?”

“Oh, boy can I,” I say. “How much time do you have?”

(I could talk about this subject all day.)

My first comment? "CMOs are not tuned in!"

We ended up talking for about a half hour.

Gary did a terrific job with the article. It is slated for the print edition of IBD on Monday February 4. But here is a sneak peek via CNN online:

How To Move CMOs Out Of Harm's Way

Why do some vendors refuse to listen to the market?

I received an offer today from Pinnacle Systems via email to pre-order their new Video Transfer product. It looked worth trying so I clicked through to their shopping cart. The price was good but the free shipping, upon investigation, was described as 7 to 10 working days. That’s upwards of two calendar weeks! If I upgraded to UPS shipping (5 working days max), it would cost another $10.

Given that UPS ground is the slowest shipping that I am aware of, I abandoned the shopping cart and tried to send them an email to explain why I decided not to order. There was no email address so the first obstacle I had to cross was a series of dropdowns to define the nature of my correspondence. I played along until I discovered that there was no dropdown for “Why do you apparently ship via some guy on a bicycle?” Since they didn’t have a generic category, I was forced to choose the closest scenario I could find, “How do I change my shipping choice?”

They gave me 2,000 characters to vent my discontent. I explained that I could buy their product after it is released from Amazon and get free two-day shipping which would probably arrive before their guy on the bike.

Insult on to injury came when I get an email, about 30 minutes later, saying that this is an automated message and, no, you cannot change you method of shipping. Lots of expletives here! Have we finally arrived at 1984? Or is it 2000 and I must I ask Hal for permission to speak? Aren’t there any humans out there anymore? I hope their computer enjoyed my pithy and somewhat sarcastic 2,000 characters. At this point, “Billy” in India is looking pretty good.

Pinnacle doesn’t have a lock on this practice. A colleague just yesterday expressed his frustration in dealing with Amazon. He was trying to get some questions answered regarding their B2B drop shipping services. For several days he struggled via email, the only offered method of communicating, without getting a complete set of answers. Finally, in desperation, he sent an email saying, “We could resolve this in 15 minutes if you would just call me.”  The phone rang minutes later and the issue was promptly resolved.

When a client goes out of their way to proactively communicate, you shouldn’t build moats around your ability to listen. Otherwise, you are just Tuned Out.

Low price doesn't excuse poor experiences

Ask almost any consumer what factor price plays in their decision to purchase and they'll almost always prioritize it highly. In more cases than not, at the top of the list. So, is it any wonder that in every category someone eventually steps in to claim 'lowest price' as their distinctive competence.

For those where that choice is the end of the experience, failure is just around the corner. 

A collegue and good friend of mine proved this point last week. We just held our annual President's Club gathering in the Grand Caymans. Great way to celebrate a banner year for the business. Since we were all coming from different parts of the world, we made our own reservations. My friend chose Spirit Airlines to save the company some money on the trip there. Awesome fare from the an airline that offers them as low as $9 a leg for frequent travelers. Of course, nothing is included. You pay to check baggage, buy a beverage or some peanunts, even to pick a big comfortable seat. You don't expect much, but you do expect the basics.

When he and his wife arrived in the Caymans, they were told that their bags hadn't made it on the flight. Usually a minor inconvenience right? In our experience, they come in a couple of hours later and someone from the airline brings them to your hotel. No worries. Unless you fly Spirit! Unbelievably, they were told that their bags wouldn't be sent to the island until 5 days later ... the day we were leaving! Why?  Because they only flew to the Caymans once a week and that was the next time they could send the bags. 

Could they forward them on another airline?  No. 

Could someone Fed Ex them at our expense to the hotel?  No. 

Would they cover their expenses to buy some clothes for the week?  No. 

Did they know where the bags actually were?  Well, no but here is an 800 # you can call to find out and maybe they'll know how to help you.

Except that noone ever answered the 800 #.  All you got was a message that noone was available to take your call, please call back later. After a dozen or so of these at $4 a connection, my collegue gave up. Then in rummaging through the website, he found a really funny thing ... turns out the 800 # was actually the only one they had and it was for reservations. So, not only were they turning away service requests, they pretty much ignored buyers as well!

It get's better.

When the time for our return actually came, we all went to the airport early to help greet the plane with the missing luggage (sort of an obscure island ritual we thought we'd make up and follow).  Only to find out the bags weren't on that plane. No, they would be coming on a later flight on another airline ... the one they refused to send it on all week and a plane that was arriving one hour before the return! 

Would they re-check them for him back onto the airline?  No. 

Would they hold his seat while he manually gathered the luggage from baggage and then race back through checking them and security?  No.  He and his wife were pretty much left to handle it themselves. Amazing. 

The point of this story isn't to create a pity party. We were in the Caymans after all. They bought clothes for the week and we all enjoyed a great trip together. Today, everyone is home safe and sound and very refreshed for the New Year. The real point is guess who'll they'll never fly again. Worse than the loss of one customer though, guess how many times we'll all tell this story in our seminars, keynotes, blogs and othere mediums this year. And how many people we'll reach with free negative PR for Spirit? 

Selling something for a low price is never an excuse to deliver low quality and lousy experiences. All buyers have an expectation that they'll be treated with respect and serviced as if their business actually means something to the vendor providing it. In Spirit's case, they've missed the boat completely. Right idea on the novelty of ala carte pricing of their service, horrible execution. At this point, free wouldn't help. In fact, paying me to fly them wouldn't help. There are many other better alternatives including low-cost carriers like Southwest who actually provide superior service.

Uncovering business breakthroughs doesn't start with price. It's always only a component of the total customer experience. Making it all work is what creates the real winners. Spirit Airlines has more than a little work to do in our opinion if they want to survive, let alone get to the winners circle.   

 

Sony confirms that they are tuned out.

After writing in September about Sony appearing to be tuned out, I came across a great article published in 2004 by the Wharton School on "identifying new products that consumers actually want." The article covers a panel held at the Wharton Marketing Conference with executive participants representing Campbell Soup, Merck, Coca-Cola and Sony.

What jumped out at me in this article was a comment made Chris Gaebler, director of market research and strategy for Sony Electronics, US. From the article, "I would like 10% of our products to be market driven", said Sony's Gaebler. "But I would say that 90% is market driving. This might be heresy on this panel, but I think true innovators often don't look for inspiration from (consumers). I think they look for it from design sources, technology sources."

Beverly Lybrand, Merck's vice president of marketing, HPV and new product franchise for the Vaccine Division got it right with her response. "I'm wondering if they both aren't the same thing. While your customers may not be able to articulate in exact words what they need, there is - in their underlying behaviors, attitudes and influences - the kernel of the idea. It's our job as marketers to draw that from them. It will appear as though you have driven this yourself, but you haven't."

Sony doesn't seem to understand that innovation for innovation's sake creates high risk. Maybe they have enough momentum that they can afford the risk and have, therefore, become complacent. The same company that pioneered the portable music market in the 80's with the Sony Walkman by solving a market problem "we saw people walking around with boom boxes on their shoulders" then subsequently missed the opportunity capatalized on by Apple with the ipod. Maybe if Sony spent less time "driving" the market, they would create more Walkmans and fewer product failures.

Forgetting that Simple is Smart

Too many companies try to outsmart themselves and end up with bigger problems than they started out with. Verizon Wireless just lost me. I've been a loyal Verizon customer for about 5 years now. They provide the best service in the area I live in and we've had a pretty economical family plan we've worked under for myself, my wife and our two college-age children. Up until this month, nothing but positive things to say. 

Then of course, we all discovered we needed new phones.   

My oldest son wanted an iPhone. Who wouldn't? All his friends at school had one and being the last on your dorm floor to get with the times is a minor catastrophe. And I was getting tired of my Treo (more Microsoft Mobile but that's a rant for another day). So, I decided it was time for me to upgrade as well. And my wife's phone was showing its age as well. So, we started thinking about iPhone's for the whole clan. The problem of course is that iPhone is limited to AT&T and we really didn't want to change carriers and plans.

Not to worry our friendly Verizon rep told us. We're introducing the Voyager and it's just as good. In fact, it's our iPhone killer! Why, you can even watch TV on this thing. There's something the iPhone can't do! I asked a few qualifying questions ... can it handle my basic e-mail needs? No problem was the answer. It's an Internet device and we'll just upgrade your plan to include enough Internet access to take care of all that stuff. 

Being the suspicious sort, I decided to be a guinea pig for the phone and try it out first before I bought one for myself, my wife and my son. 24 hours later, I own a new Blackberry, he's got his iPhone and my wife is still on the market. What a disaster.

The phone is sleek and cool as can be (looks just like an iPhone and the form factor is in many ways better). Problem is it does next to nothing well and the support team is terrible. When I asked how to get my e-mail, contacts and calendar synched, it was like I'd asked NASA about the secrets to flying the space shuttle. After I got disconnected and/or misled on how to set things up five times, I gave up. Digging in a little more on my own this morning, I was able to figure out how to do a bunch of things their support team actually told me I couldn't do (like retrieve e-mail from our corporate server) but by then the whole experience was in perspective for me and I'd realized the Voyager was a loser. It doesn't do e-mail well at all. It's inconvenient as a phone. The video and the games are pretty cool but who cares!

Another example of what happens when developers forget that simple is smart. 

Apple and RIM have it right. They've designed solutions for distinct audiences that are simple to use and serve their needs completely. I'm not sure what niche the Voyager is going after but it seems to me its just another rushed to market copy-cat product with lots of built-in complexity. Lots of marketing dollars going into this thing but my fear is they forgot the basics. I may have 'wanted to buy' this thing but when I discovered a bad experience, they've lost me as a customer.    

The Resonator Index

We get asked often how leaders measure their progress towards being tuned in. One of the interesting things we found was that only three factors really mattered -- unit sales growth, customer satisfaction and profitability. The best don't obsess over the details (there were plenty gathered but they largely ignore them all). Instead, they focused on the results that were the true indicators of success.

This knowledge still begged the question for us though of 'how do you get there?'  So, we dug a little deeper and found some characteristics that we ended up calling a Resonator Index.

A Resonator Index is your measurement of how tuned in or tuned out you are based on the factors that are the best indicators of whether you (or your company) work from an outside-in perspective or an inside-out perspective. They identify how likely it is that you will create products or services that the market will view as breakthrough (perfect solutions to a problem that is urgent). Five areas of competency emerged in determining this:

1. Market Sensing - how effective are you at uncovering extraordinary opportunities?
   * Tuned in companies are active at searching for and evaluating market problems.
   * Tuned out companies are relying on their own intuition and experience of internal teams.
2. Target Personas -- do you understand and map unique buyers?
   * Tuned In companies identify dozens of unique profiles and establish speciality channels.
   * Tuned Out companies generalize and communicate through network-style broadcasts.
3. Experience Creation -- how sophisticated are you at addressing all customer touch points?
   * Tuned In companies offer personalized solutions for discovery, buying, using & servicing.
   * Tuned Out companies focus only on delivery of a product and ask the buyer to fill in the gaps.
4. Positioning -- is your association in the marketplace valued?
   * Tuned In companies establish authentic links that buyers trust as thought leading. 
   * Tuned Out companies push promotions that are noisy to solicit sales interactions.   
5. Market Adoption -- can you quickly create market pull?
   * Tuned In companies grow rapidly through referrals from existing customers. 
   * Tuned Out companies grow slowly based only on direct connections to create awareness.   

You can score yourself on a normal 1-10 scale across these factors, with 10 rating how close you are to the tuned in dial and 1 signifying your nearness to being tuned out.

There are lots of underlying reasons why this Index works but the simple justification for it is that best-in-class businesses that lead their industries will almost always be able to rate themselves at 80% or above with most in the 90% range. For those companies, these characteristics are ingrained in the culture and daily operating styles. This foundation enables them to turn their full attention to programs and activities that will achieve higher growth, satisfaction and profit rates because they have the confidence that they are 'doing things right' at the core. 

What's your Resonator Index? A great way to end 2007 and prepare for 2008 is to measure it. When you find gaps that you'd rather not have, you've identified an area for improvement that will have a sustainable impact on your success. 

Classic Tuned Out Software

I have this really annoying problem with my new PC and with some Googling, I find that it is a well known problem. I love the tuned out response from Microsoft on the issue from Emily Price's blog post on downloadsquad.com:

Microsoft speeds up Outlook 2007
Posted Apr 14th 2007 5:00PM by Emily Price

Yesterday Microsoft released an update to Outlook 2007 to help speed up the downloading of messages and reduce the annoying and highly criticized freezing associated with moving or deleting messages. Microsoft indicated that the problem stemmed from RSS feeds, email, and calendar files all being stored in the same .PST file which as one might imagine could grow in size rather quickly depending on the user. The problem lies not with the software, but how users are using the software. Jessica Arnold Outlook's Program Manager told ComputerWorld "Outlook wasn't designed to be a file dump, it was meant to be a communications tool...There is that fine line, but we don't necessarily want to optimize the software for people that store their e-mail in the same .PST file for ten years."

Hey there Jessica, maybe your customers want to save all their emails. Quit being a snob and get tuned in!!!

A better mousetrap? When was the last time you bought your company's product?

In the late 1960s, Woodstream Corporation, parent company of The Animal Trap Company of America announced that it had built a better mousetrap. With great fanfare, the company launched the new product into the marketplace saying that it was even better than their own classic Victor brand spring based wooden mousetrap. At the time, the Victor model had sold over one billion units in the nearly 80 years since its introduction way back in 1890.

Alas, the world did not beat a path to the company’s door. The new, "better" mousetrap was a flop and the company had to revert back to its "old fashioned" wooden model.

A company spokesperson said: "We should have spent more time researching housewives, and less time researching mice." Today, the product that people want to buy—the Victor mousetrap—is still the most recognized brand name in rodent control.

Executives, product development people, and marketers all want to believe that they've got all the answers. They're like the guys at Woodstream Corporation who thought that they could make a better mousetrap because they're the experts.

The entrepreneur wants to go with her gut. The product manager wants to re-create a past success. The marketer wants to rely on expensive advertising to buy market share, or to gamble on a huge Wall Street Journal, Today Show, or Time Magazine media hit.

But these seat-of-your-pants approaches involve much more risk. Going on intuition, buying your way in with expensive advertising, or begging your way in with the media coverage simply does not work as often or as well as being tuned in.

Tuned Out - Parking at shopping malls

When customers arrive at shopping malls in the morning, they often find the lots already filled with hundreds of cars crowded around the entrances.

Why the customers wonder? The stores aren’t even open yet!

It turns out that many shopping malls allow employees of the many stores and restaurants to park in the choice spots.

How easy would it be for mall operators to create a policy that encourages store employees to tune in to their potential customers’ problem of finding a decent place to park?

Why should we get tuned in? We're the experts!

Of all the causes of tuned out behavior, the most common we've observed is the logical (but incorrect) assumption that, because you're an expert in a market or industry, you therefore know more than your buyers about how your product can solve their problems. It's natural, for instance, for twenty-year auto industry veterans to assume they know more than 100 mothers about how to drive preschool-age children around town each day. Too often, these Detroit product development experts just design the radio (or keyless entry system, or cupholder layout) that they themselves would want to buy.

When was the last time you bought your company’s product?

Executives, product development people, and marketers all want to believe that they've got all the answers. The entrepreneur wants to go with her gut. The product manager wants to re-create a past success. The marketer wants to rely on expensive advertising to buy market share, or to gamble on a huge Wall Street Journal, Today Show, or Time Magazine media hit.

But these seat-of-your-pants approaches involve much more risk.

Going on intuition, buying your way in with expensive advertising, or begging your way in with the media coverage simply does not work as often or as well as being tuned in.

There's good service and then there's I don't care

Sometimes I just have to shake my head at the things I see. I'm noticing more and more tuned out behaviors everyday.

It was another beautiful day here in in Scottsdale. A nice warm 85 degrees but pretty pleasant for us desert dwellers. So my wife and I took my daughter out for a little family lunch at a new restaurant in town. Kind of a marketplace atmosphere where you pick from multiple options and then find an open seat.

The food was great but the place was packed so we had to look for a table outside. The only ones open were out in the sun which wasn't bad for the first five minutes. After that it was hot though. And what really got me hot was seeing two of the restaurants employees sitting down at the only shaded table. What were thinking?

I'm starting to see these kinds of things all the time. Employees of shops at the mall taking all the prime parking spots. Shops that refuse returns. Getting put on hold for 30 minutes when I'm trying to buy medical supplies and then being told I have to make two more calls to my physician and my insurance company before I can get my order refilled. Having to provide my account information and profile each time I call one of the vendors where I'm supposed to be a preferred customer.

Is it just me or is everyone putting up big neon light signs saying 'Please go away'? To me it really does sound like 'we do not want your business so we're going to make this as difficult and annoying for you as we possibly can so that you won't come back'. Well, they're getting their wish because I'm getting pretty religious about putting tuned out businesses on my never coming back list.

We've come up with a simple definition for behaviors that are tuned out. When you do something that is easier for you (the company) than your customer, you're tuned out. Like the restaurant we visited today.

Do you have any tuned out stories you'd like to share? We'd love to hear them.

Top two reasons why new products and services fail

Why do most new products fail?

1. Organizations base new products on what their current customers request rather than an understanding of the unresolved problems that people will pay money to solve.

2. Organizations try to create a need in the market through expensive advertising or relying on an army of salespeople instead of building products that the market wants to buy. 

The most successful organizations tune in to their markets.

In this blog and in our upcoming book, we’ll introduce you to dozens of tuned in organizations that develop products and services that resonate with buyers and help them to achieve success.

People who run tuned in companies largely ignore the competition. Instead they focus their energies on the problems that buyers are willing to spend money to solve. By first understanding market problems, then building the products people want to buy, and communicating to buyers that we solve their problems, everything else falls into place.

Sounds easy.

Actually, it is...

…if you’re tuned in.

Is Steve Jobs Tuned In or Tuned Out on the iPhone price change?

Steve Jobs hasn’t made many mistakes since taking back over the reins at Apple. In fact, he’s transformed a struggling business into a juggernaut.  Without a doubt, I consider him to be #1 on my list of Tuned In CEO’s right now. But, I’ve got to take issue with his marketing department’s decision to drop prices on the iPhone from $599 to $399 a little over two months after its introduction. 

It’s not what you think.  Sure, there is an ethical dilemma with taking advantage of your core customer base by charging them more for supporting you in the early days.  And yes, Apple bungled the announcement by not having this accounted for in the first place.  It will have an impact on them as a brand is built on trust and they just breached it.  But, that’s a topic for the communications industry to obsess on. 

I’m wondering who is in charge of pricing and strategy over at Apple? 

Wow.  What happened here?  There are only two reasons for a move like this typically.  You’re getting the pants beat off of you competitively.  Or, you missed the mark on your original price point for your target buyer.  The whole argument of the Christmas season doesn’t hold much water with me.  That could have been accounted for just as easily in July as it was in September.   

So, that pretty much leaves a failure to plan the strategic positioning of a new product.  If you know who you target buyer is, what problems they have and what options they will compare you to, pricing is choice of ladders – low-end, comparable or premium.   You pick your position and stick with it.  It seemed the launch of iPhone was consistent with Apple’s philosophy of premium which is fine.  I’m still looking for the same kind of value that I got with the iPod from a premium service perspective but assumed it would come.  Now with the switch in strategy, I’m confused. 

Is this thing not as good as the Blackberry?  Or other new entrants from Motorolla?   Are they going to lower it again if sales decline?   Are there some bad reviews coming?   I don’t know.  I’m sure sales will go fine for awhile but this is a major misstep for Apple that will bite them at some point.   

iPhone pricing.  Tuned out. 

Sony's style of Tuned Out

I once was a Sony bigot. My house was full of Sony products including computers, TV’s, VCR’s, and DVD players. I even owned an Aibo robotic dog.  Whenever given the option, I chose Sony because the brand, to me, was a promise of superior design combined with consistent quality. These days, you won’t find many Sony products in my home. I bought the message but they didn’t live up to their promise because they were “tuned out” to my needs.

I like to divide products and services into two groups. Those that are successful because the vendor designs products based on a thorough understanding of the market’s needs which we refer to “tuned in” and those that are successful only due to dumb luck. I believe that Sony is a great example of the latter.

Compare their product complexity with robust mind-numbing user manuals and remote controls with dozens of buttons in comparison with just about any Apple product with virtually no user manual (a good design obviates the need for a manual) and simplistic ergonomics. And, for me, reliability has been a problem with my Sony products. Combine that with a not so generous 90 day warranty and I’m feeling like they haven’t kept their brand promise.

For every successful product that Sony introduces, they have dozens, even hundreds of products that are lackluster or outright failures. They remain prominent in the industry because they have tremendous momentum. Sony can afford to create a product that they hope will be successful, produce a limited number of them, put them on the retail shelves and see what happens. If people buy them, they make more. If people don’t buy them, they kill the product.

Many of these products you never even see unless you go out of your way to find them. A few years ago, Sony printed a magazine called “Sony Style” which has been replaced by www.sonystyle.com. Here you will see some of the gems that Sony is trying to foist on the market. You gotta look quick though because the losers will be shuffled off to the Sony graveyard which is beginning to look like Arlington cemetery.

Occasionally, dumb luck produces a winner. The Sony Walkman was introduced in 1979 to solve one man’s problem. Sony’s co-chairman Akio Morita wanted a way to listen to opera on his transoceanic flights. How’s that for market research?  So now that we have it, let’s make some more and see if anyone buys them! And the market did; lots of them. Even a blind squirrel finds a nut once in a while.

The problem with this approach is that most of us don’t have the resources and the momentum to afford the try-it-you-might-like-it approach. We need a better batting average than Sony. We need to introduce a product like it is a life-or-death decision because, for many companies, it is.

Tuned Out: US Airways flight attendants paid $50 commissions to interrupt us in flight

Companies that you already do business with that deem it important to interrupt you with unwelcome marketing messages that you cannot stop and that annoy you are tuned out.

Many of the companies I deal with online send email marketing messages. You know the sort: "Special sale on XYZ – get free shipping today only." This is OK with me because I can either opt out of the list or take less than a second to delete the individual email. And many companies put me on print mail lists—again I'm OK with that because I just toss the mail into the recycling bin.

However, recently I have noticed more and more organizations using video (which is OK by itself because it can be ignored) with loud associated audio messages that are inescapable (which is definitely not OK because it cannot be ignored). This is a tuned out approach to marketing and communications.

US Airways has taken this tuned out behavior to a new level by paying flight attendants a $50 commission for each successful sale of its Signature Visa Card. This availability of commissions means loud interruptions during flight as the flight attendants try to drum up more business.

More here.