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Live From the CRMC: Phil Terry on Including the Customers

$html.esc($author.firstName) Biank Fasig By Lisa Biank Fasig on June 5, 2015

Phil Terry began his presentation by challenging the audience to create a company that people hate.

The attendees at the 2015 Customer Relationship Management Conference advised on several fronts: overpriced products, dirty stores, hidden fees, unattainable loyalty program benefits, rude sales teams, poorly performing websites, irrelevant messaging, ill-conceived products.

The exercise was a thinking tool, said Terry, CEO of Collaborative Gain and author of the new book “Customers Included.” When trying to improve a company service or feature, sometimes it makes sense to first ask how to make it break. “Sometimes it is at least as important as learning what you do want to do,” he said.

Terry illustrated how things can go wrong through outtakes from his book, which documents his work with more than 300 brands from the early days of the web to mobile and social computing.

One example included efforts to bring water to sub-Saharan Africa. Organizers created a merry-go-round that served as a pump that would draw water when children use it. Government and celebrities backed it, from Bill Clinton to Jay-Z. But the communities were not consulted beforehand, so it failed. The children didn’t like the merry-go-round; it made them dizzy. And advertisers did not come to sub-Saharan Africa to help support it.

On the corporate front he shared the story of how Netflix, following its price-hike recovery, tried to improve the viewing experience. Realizing customers spent too much time looking for programs, it created 76,000 helpful sub-genres, ranging from “quirky crime TV dramas” to “comedies featuring a strong female character.” These efforts revealed the issue was not getting to the right content, but that there was not enough appealing content.

So Netflix created its own, with the introduction of “House of Cards,” “Orange is the New Black” and other exclusives. Sales rose to $5.5 billion in 2014 from $4.4 billion in 2013.

Lastly, Terry described Walmart’s recent, failed efforts to be more like Target, resulting in cleaner, less cluttered stores. But to get to cleaner, it had to cut 15% of its products. Quarter after quarter, same-store sales declined. “Customers said they loved clean aisles. Then they stopped shopping here,” an executive said.

“Sam Walton would not have done this, in large part because he was in the stores all the time,” Terry said.

The later managers, however, were jealous of Target and disdainful of their customers.

Terry closed on one key lesson learned over his 15 years of research – one small thing he said many companies miss: Watch the customer.

“I am imploring you to do this,” he said. “There is not a replacement for spending real time with real people. Data is fantastic. It’s not enough.”