Jul 5, 2009
A new problem to be solved? Dannon chooses wisely & gets a performance payoff
Every customer experience begins with a person who has a need that’s worth solving. Organizations whose customer experience is generating a performance payoff focus on a problem they can solve well. Ideally this problem is important enough that those who have it will pay meaningful money to solve it, and a lot of people have the need. Let’s continue the conversation I began a few days ago in this post about how to use the business metrics you already monitor to decide if your customer experience is making or costing your company money.
Top performers deliberately decide what, if anything, they can do and should be doing to actually trigger prospects to realize the need. They proactively stir new demand instead of passively reacting to what arises.
I couldn’t help but notice, as a female consumer who at least occasionally watches TV and shops at a grocery store, how well Group Danone is doing at this first step. In 2006, the company (Dannon for those of us in the United States) launched a new brand of yogurt into the U.S. marketplace, called Activia. It’s promise to consumers? It “helps to naturally regulate your slow intestinal transit,” by containing something called Bifidus Regularis.
Hmm. If I had polled 100 percent of my female friends, family, and colleagues in 2006 to ask, “How is your intestinal transit these days?” or, even, “do you think you need help with your digestion?” I’m relatively certain I would not have heard a resounding chorus of complaints.
Women are so often on a (vocal) mission to lose a few pounds or make sure they’re getting enough calcium – two very present and logical reasons to look for yogurt on the grocery shelf. But digestion? Many of us may have never considered we have that problem, let alone that we needed a yogurt to solve it.
And yet, apparently, we do have that problem now that we’ve been asked to think about it.
In its short three-year life, Activia has become one of the best-selling yogurts in this country. Globally it is a brand worth more than $2 million. Actress Jamie Lee Curtis was recruited in 2008 for an advertising campaign to tell us the hard truth about our rumbling systems: “I am not afraid to talk about bowel issues – there I said it – and I’m very committed to help people find solutions, like a balanced diet and Activia,” she was quoted in a news release.
Our lower intestines are heaving a collective sigh of relief, literally, as Danone sales continue to grow. Activia and another new Danone line, DanActive (a yogurt that Dannon claims will boost your immunity) now make up 40% of Dannon’s U.S. yogurt sales.
Danone’s sales are growing explicitly because it chooses wisely in the triggering needs it solves for clearly defined target consumers. It could have stuck with the needs that the public naturally brought to it – weight loss and calcium intake among them. But Dannon reported in 2007 that U.S. consumers eat 75% less yogurt than their counterparts in Europe; the company was not satisfied with the size of its target market. So it educated the public on the presence of a need and suggested a solution, a new problem to be solved with a spin on an existing product.
Once you can see this connection between customer experience and your financial performance, you can DO SOMETHING. The common metrics that you already monitor can easily be mapped to the steps that make up your customer experience. In this case, to the very first step: your choice of which problem (and for which target customer) you will solve.
Look at these metrics to know: Size of your target market. Size of your sales pipeline. Growth rate of the target market. Growth rate of the sales pipeline. Overall profitability per customer. Each of these common performance metrics are great indicators of whether your choice of target customer and the need you can solve for them is making or costing your organization money.
If you are dissatisfied with the size or growth rate of your sales pipeline, or if you survey the volume of your potential market and come up short, consider what your organization does to trigger the need among consumers. You may even need to take a step farther back, and re-set the problem your product, service, brand or company exists to solve, and the determine whether that problem is large enough to generate growth.
My definition of customer experience starts with a triggering need or problem. In this step you use your product or service to solve a problem.
Is that easy to digest?

