See, Feel, Think, Do

Marketing

Thursday 16 February 2006

Shaun Smith

See, Feel, Think, Do: How successful business people and entrepreneurs use the power of instinct to achieve results

The British Library Conference Centre, London

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Many of today's leaders are risk-averse, dispassionate dinosaurs who outsource the job of understanding their customers to someone else. So says Shaun Smith, the management consultant and author of "See, Feel, Think, Do". As the title of his book suggests, Smith's latest manifesto for leadership prizes emotion above pragmatism. And, he says, if there's one case study that sums up why disregarding emotion in business can have disastrous consequences then "Coke is it!" When the Coca-Cola Company changed the flavour of its iconic soft drink in 1985, it didn't do so lightly. Vast amounts of market research, including 100,000 blind taste tests, were carried out to test the hypothesis that a sweeter version could boost sales and combat the sudden rise of rival firm Pepsi.

Yet "Coke II" was a commercial and PR catastrophe - a 10-12% minority of those surveyed had expressed anger at the change, and their resistance after the launch turned out to be so vociferous that it had a disproportionate effect on sales. Within three months, Coca-Cola announced the return of the original formula and rebranded it "Classic". As Donald Keough, president and chief operating officer, said at the time: "The simple fact is that all the time and money and skill poured into consumer research on the new Coca-Cola could not measure or reveal the deep and abiding emotional attachment to the original Coca-Cola felt by so many people."

You might think that, in the 20 years since this episode, major brands would spend a little less time analysing customer data and a little more time empathising with customer feelings. Yet, as Smith told a 100-strong London Business Forum crowd at the British Library Conference Centre, the reverse seems to be true. "The pendulum has swung too far towards MBAs, management, scientific research and analysis," he said. "It's time to swing back to instinct, vision, passion and leadership."

Compare the New Coke debacle with the launch of Innocent smoothies, he suggested. This fruit drink manufacturer was set up by four 25-year-old friends who quit their former "grown-up" jobs on the advice of their customer base. How? By serving their drinks at a music concert and asking their customers to drop their empty cups into bins marked "Yes" and "No", in response to the question: "Should we quit our jobs and make smoothies for a living?"

Of course, Smith acknowledged, it's difficult for the leader of an established brand to restore such a connection with their customers. Nevertheless, the great leaders make the greatest effort to do so - Jeff Bezos of Amazon.com, Richard Branson of Virgin, even Terry Leahy of Tesco. Their recipe for success, as Smith sees it, is as follows.

See

Experience your products and services through the eyes of your customers, trust your intuition, avoid the temptation to analyse customers scientifically and consider their wants and needs in the broadest possible context. When Harley Davidson was losing market share to the Japanese in the early 1980s, CEO Richard Teerlink decided to tap into the "hardcore enthusiasts who had stayed with the company through the bad times of poor quality and indifferent after-sales service". He set up the "Harley Owners Group," which today has 850,000 members worldwide, and - crucially - insisted that each of his senior directors spend at least 15 days per year riding with customers, a process dubbed "super-engagement".

Meanwhile, Philip Green of the retail group Arcadia bases his intuitive decision-making on deep experience. "He doesn't asset strip, he builds businesses through his craft," Smith said, singling out Topshop as an especially successful turnaround in Green's portfolio. "Topshop is one of the few retailers that gets to show at London Fashion Week," Smith continued, because it makes a greater effort to break new ground than its high-street rivals. "Jane Shepherdson [Topshop's brand director] recently took her team to Sao Paolo to go clubbing with Handycams," he pointed out - all for product inspiration.

Feel

Use empathy to close the gap between your feelings and those of your customers. When Tim Waterstone founded his eponymous chain of bookshops, he wanted to create a space in which people felt comfortable enough to browse, and in which the variety of books on offer went far beyond the best-seller lists. In other words, he wanted to overturn the key book-selling conventions of churning shoppers quickly and keeping space to a minimum. By contrast, the former high-street jeweller Gerald Ratner showed an "incredible lack of empathy with his lower-income customers" when, in 1991, he described one of his low-cost aspirational products as "total crap".

Think

In Smith's book, the chapter with this heading has the following subtitle: "There's no such thing as a stupid idea." Thinking as Smith defines it means to "interrogate like a child why things are the way they are," to consider what your customer's idea of the perfect experience might look like and then challenge why this ideal can't be achieved. Virgin Atlantic CEO Richard Branson used these principles in the conception of his "Upper Class" service - "He looked at the customer journey and realised it didn't start at check-in but at the point of leaving home or the office," Smith pointed out. Branson also realised that the biggest source of stress for anyone catching a flight was the fear of missing it. Accordingly, he decided: "Upper Class will pick you up on a limo bike if you haven't got any luggage or a stretched limo if you have."

Similarly, when Vodafone looked recently at their call usage patterns they realised the average mobile phone call is around two minutes long. By observing their customers actually using phones, they realised that most felt pressurised into keeping the call time down at around this point because of the perception that any mobile call had to be expensive. Consequently, Smith said, Vodafone looked for a way to remove this pressure and came up with "Stop the clock!", a tariff that would charge standard rates for the first three minutes of any off-peak call, then deliver a further 57 minutes free of charge before normal charging resumes. "There has been a 70% take-up," Smith said. "Vodafone didn't try to fight everyone else on reducing tariffs, they just thought to themselves: 'How can we make the world perfect for our customers?'"

Do

"Doing" things the Smith way means: planning how to achieve perfection; sprinkling "magic dust" (a.k.a. marketing-friendly features) over the idea to excite customers; and establishing success criteria. Smith's favourite case study that ticks all these boxes (as well as the others described above) is "Geek Squad", an IT repair services company based in Minnesota, USA.

This company was founded by an undergraduate at the University of Minnesota, Robert Stevens, when he realised that most call-out services for computer repair were awful, while consumers were getting more frustrated in line with the increased sophistication of their technology. "Stevens realised there was room for an organisation that could offer support in a different way," Smith explained. "He dressed up his team like quintessential nerds, he didn't have money so he bought a 1958 Simca Aronde Elysee [similar to a Morris Minor], and painted it like a police car." Each Geek Squad employee in the field is called a "special agent", and whenever they knock on someone's door they display what looks like a police badge. The corporate motto is: "We'll save your ass." The company aims constantly to engage with its customers at a human level, and now has 50,000 staff in 50 locations across the US.

Putting it all together

Ultimately, Smith concluded, "See, Feel, Think, Do" is a common-sense process in which you break down any barriers that make you believe you can't offer the perfect customer experience. To drum this point home, he left us with a description of a hotel at which the tradition of the bedroom "turn down" had evolved to include more than simply changed linen and a chocolate on the pillow.

The Banyan Tree chain in South-east Asia describes itself as a "sanctuary of the senses". "Their version of the bed turndown is 'Intimate Moments'," Smith explained. "They decorate the pathway to your villa with candles... they have their own branded music playing in your room and branded incense burning. The silk sheets are covered with orchid petals. And there's a hot tub run for you with petals in it, plus a bottle of wine and a complimentary massage if you want. Now, do you want that or do you still want the chocolate?"