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October 25, 2006

News & Opinion: Marketing That Matters by Chip Conley and Eric Friedenwald-Fishman

By: 800-CEO-READ @ 7:53 PM – Filed under: Management & Workplace Culture




What happens when you work with your customers to build your company? Like Wild Planet who has a "Kid Inventor Challenge." Or the beautifully designed products by Method which, if you're like me, makes customers enjoy shopping for dishwasher soap. Or perhaps you work with your vendors and suppliers to make your products more environmentally friendly? Now that is Marketing that Matters to your customers.

Engage with Your Customers in Creating the Product

Most companies create their products in a vacuum, trying to imagine what their customers would appreciate. Wild Planet Toys is one of those smart companies that realizes it will probably meet the needs of its customers better if they are included in the creative process.

Wild Planet is dedicated to developing nonviolent, innovative toys that appeal to both parents and kids. It has experienced nearly a 50 percent compounded annual growth rate for the past few years, not only because of its popular products but also because of its unique approach to being close to its customers. Wild Planet tries to create toys that parents will value and kids will find cool. How does an adult toy creator know whats cool to a kid? Let the kid create the toy.

Danny Grossman, Wild Planets founder and CEO, came up with the idea for the Kid Inventor Challenge when the company was doing philanthropic work at a low-income housing project. His intention was to teach kids about toy design and involve them in the process as a way of giving back to the community. What surprised Danny was how inventive the kids could be. Nine-year-old Shahid Minapara was shown a glove toy and asked what else he could wear on his hands. Shahid imagined having a light on each finger and then drew a quick design for the Wild Planet team. The design team immediately recognized that it was feasible to produce and had that extra spark of innovation and uniqueness that Wild Planet demands from its toys. Thus, the Kid Inventor Challenge was born.

Today, there are nearly six thousand entries annually, and approximately one hundred winners who join the Kid Inventor Team as toy consultants to the company for one year. As consultants, these kids receive secret sneak peaks at new products and get to keep all of the toys Wild Planet sends them throughout the year. Five kids have even had their ideas made into real toysreceiving royalties from Wild Planet for the life of the products. The company has also created a Toy Opinion Panel as another way for their customers to provide feedback before a new product is launched.

The Kid Inventor Challenge is Wild Planets way of championing kidsespecially those in disadvantaged neighborhoods. It provides children with a positive learning experience, exposes them to a work environment in an engaging way, and makes them feel important. At the same time, Wild Planet creates a relatively inexpensive and unique means of enhancing its research and development efforts. This approach to staying close to the customer also inspires the Wild Planet employees since its a constant reminder of why theres real meaning in what they do fora living.8

Understand How Your Customer Feels about the Experience

When Eric Ryan started his company, Method, he was interested in designing household products that were not just effective for cleaning but also aesthetically pleasingso much so that his customers would prefer to keep Method products on the counter as opposed to below the sink. Eric, whose background was branding and marketing, wanted to turn this low-interest consumer category (cleaning products) into something cool. No one had tapped into the enjoyable potential of everyday chores, so Eric hired designers to create sexy packaging for dishwashing detergent and liquid hand soap.

As Eric dove further into product development with his partner Adam Lowry, a chemical engineering graduate from Stanford, he came to realize that it would be hard to ask his customers to put their pretty Method bottles on the counternext to food and within a childs reachwhen these products could be full of poison. The realization that his soon-to-be competitors produced cleaning products full of nasty chemicals led Eric to his own socially responsible conversion. He quickly turned into a more conscious entrepreneur, committed to producing Method products that would be attractive to the eye and nose while also being eco-friendly and safe.

Once Eric and his team launched Method in 2001, it became clear to him that he needed to create a means of playing up the cool factor of his brand while also engaging his core customers to see how they felt about the product. Traditional product development might have suggested that he hire cultural anthropologists to observe how his products were being used in the home. And traditional marketing might have suggested billboard advertising near grocery stores. Far from a traditionalist, Eric came up with another solution in concert with Ammo Marketing, his outside marketing agency.

Eric and Ammo erected a temporary pop-up shop for Method in a vacant storefront in the Union Square shopping area of San Francisco. This unique store concept became a living lab where ambassadors from the company (who werent primarily focused on sales) could educate customers about the dual benefits of Methods modern design and safe ingredients. They created smelling stations where customers could suggest their favorite scents for products. Word-of-mouth and free editorial print media about this odd little shop spread fast and eventually the likes of Robin Williams were dropping in. Conversion rates on customers were 80 percent, and the average purchase was twenty dollarspretty good for a shop exclusively focused on basic household cleaning products. Furthermore, Method hosted targeted influencer events, including a Thursday happy hour for business professionals and catered parties for specific target groups like Dwell magazine subscribers, Volvo drivers, local philanthropists, and the corporate staff of Design Within Reach.

The shop was scheduled to be open for just two months, but by mid-fall it was clear this guerrilla marketing initiative was a success, so the shop remained open through the Christmas holidays. For approximately the same price as a traditional billboard, the pop-up shop created a brand shrine for this new company. The customer could touch and feel its unique home products, and the Method team could evaluate customers reactions to the various lines of products. This was clearly better than the typical focus group behind a one-way mirror/window.

While this is a good example of how to connect intimately with your customers, it also shows how companies can lead by example. Eric Ryan didnt originally enter this business to be socially responsible, but in his research of the industry and in his early product development phase, he quickly realized he could make his product more eco-friendly and still serve the customer base he was seeking. In Methods case, its success has influenced its more established competition to start cleaning up household cleaning products such that the whole product category is becoming more environmentally sensitive.9

Tap into Your Listening Posts and Foster Word of Mouse

Ray Anderson is a captain of industry who also experienced a conversion. As founder and CEO of Interface, Inc., one of the largest carpet manufacturers in the world (with twenty-six factories on four continents), Rays company is in one of the most environmentally unsustainable industries in the world.

But in the mid-1990s, Ray made a decision that would change the course of his company. On discovering Paul Hawkens revolutionary The Ecology of Commerce he has said, I read it, and it changed my life . . . it was an epiphany. I wasnt halfway through it before the vision I sought became clear, along with a powerful sense of urgency to do something.10 Ray decided Interface would become the first fully sustainable industrial enterprise, anywhere.11 The company would no longer use virgin nylon yard to stitch its fabrics, its offices and factories would create renewable power sources, and it would have a goal of no waste by reclaiming its own products and using them as raw materials for new textiles. You can read Rays remarkable story in his book, Mid-Course Correction.

In the midst of this environmental revolution in the company, Ray and his management team also decided they needed to get closer to their suppliers and customers. Interface worked with its suppliers by insisting the products it bought be recyclable and nontoxic. And the company started sending this new message to its customers by helping them think differently about carpetingto imagine the idea of renting rather than buying carpeting or to imagine the idea of carpeting in squares as opposed to full sheets of carpet (this had been done in the commercial sector for years but had never been available to the generalretail market).

Interfaces FLOR product sprang out of this staying close to the customer. Similar to Method, the impetus behind FLOR was initially aesthetic: to give customers the ability to be a little more creative with their choice of carpet. Since FLOR is a modular carpet tile system, it allows consumers to customize a pattern for the home or office. From a sustainability perspective, FLOR tiles use a lighter adhesive and allow customers to replace one square at a time. The customer sends the square back and FLOR recycles it. People no longer have to replace an entire room of carpet because of one stain that wont go away. So sustainability can mean affordability.

While Rays revolution might not be televised, it certainly found an appropriate home on the Web. The Web was the perfect medium for Interface to get its sustainable message out far and wide. More specifically, the Interface management could use its Web site as a listening post for its new FLOR product. Go to the companys Web site and youll see an inspiring blend of marketing the product and messaging the sustainable mission. On the site, the company has taken a sophisticated approach to engaging customers in education and dialogue about FLOR. Whether its a discussion with a designer about how to use the product, customer designs and testimonials, or specifics on the socially responsible elements of its product, Interface has effectively reinvented the consumer carpet category. And with the FLOR boards blog, it has instituted a sort of democratization of designwith everyone from professional designers to DIY weekend warriors evangelizing about the fun of carpet installation and design.

Chip DeGrace, vice president of Marketing for Interface- FLOR, says, The FLOR boards community has developed a new design vocabulary . . . the site helps us to not only take the pulse of our customer, but fosters ideas that are instrumental in new product development.12

NEW SEASONS MARKET

KNOW YOUR AUDIENCE

New Seasons Market sees engagement with its customers as an ongoing dialogue that creates strong relationships. The owners of New Seasons looked at what they had learned from customers over years in the grocery and natural foods industries. Two key lessons were that customers wanted shopping to be easy and fun and that customers want to be treated as individuals. As we discussed in chapter 1, New Seasons had designed the mix of its product offerings based upon understanding its customers needs for natural foods and conventional products. New Seasons also used its knowledge of its customers to design the shopping experience. New Seasons asked,What are the things that dont make shopping fun and easy?What it came up with was a list of the many little annoyances typical to grocery shopping that stood in the way. From this list of the most typical shoppers complaintsand requestsNew Seasons created a set of policies that it calls the fine print. New Seasons made a pledge to its customers, posted it in every store and printed it on every grocery bag and on its Web site. The pledge states:

  • Open the Next Register Policy More than 2 people in line? Well open another check stand right away.
  • Staffing Policy We hire people who really mean it when they say, Have a nice day.We treat them as well as we want them to treat you.
  • Helping You Find it
    Policy Well escort you to the spot (unless you just want directions).
  • Product Returns Policy
    If its not exactly what you want, or if you dont like it for any reason, bring it back for a no hassle return.Well replace it or refund your money with a smile.We promise.
  • Eating in the Store Policy
    Go for it. Please pay for it on the way out.
  • Discount Policy
    Enjoy a senior discount every Wednesday 10 percent off almost everything for those 65 or better.
  • You Break It Policy
    If you break it . . . dont worry. Accidents happen.
  • Problems Policy
    We have, find and make solutions. Visit the Solutions Counter at the front of the store.
  • Special Request Policy
    Yes.
  • Squeaky Wheel Policy
    Our shopping carts will be oiled and maintained so they dont drag, squeak, or otherwise annoy you.

New Seasons walks the talk of the fine print every day. It also has established listening posts to continually learn about and be responsive to its customers. The Solutions Counter (mentioned above in the Problems Policy) is located at the front of every store and is staffed by someone whose main job is to answer customer questions, solve problems, and otherwise listen to customers. New Seasons provides suggestion cards, responds directly to the customer who submitted the suggestion, and posts the cards in the store with New Seasonss answer or solution written right on them. Often, suggestions from customers result in immediate action. A customer card expressed that the many labels on eggs (cagefree, ova-free, grain-fed, etc.) are confusing. New Seasons developed a glossary that explains each term and posted it on the egg case in every store. The bulletin board at the front of each store is full of cards from customers and solutions from New Seasons. There are no layers between us and the customer, explains Brian Rohter. People are blown away when we respond, and we learn a lot by reading and listening to what customers are saying.13 By listening to, learning from, and visibly acting upon customers suggestions, New Seasons Market meets shoppers needs and desires, build a relationship of trust, and lives up to its promise of being a place where its easy and fun to shop.14

Know Your Audience

To be truly customer centered is to place your customers needs and desires at the top of your business goals (your own hierarchy of needs pyramid). If you meet these goals, you will find yourself well on your way to building the lasting relationships that can transform a run-of-the-mill venture into a successful and socially responsiblebusiness.

Now were going to ask you to step outside of your comfort zone and question conventional wisdom while you expand your customer base and your vision for your business.

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This excerpt comes from Marketing That Matters: 10 Practices to Profit Your Business And Change the World10 Practices to Profit Your Business And Change the World by Chip Conley and Eric Friedenwald-Fishman, Berrett-Koehler, September 2006.