Tell the Truth–Is an Educated Consumer Really Your Best Customer?

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“An educated consumer is our best customer.”

That slogan stood out when Sy Syms, CEO of Syms Corporation, said it in television ads in the 1980’s. Customer empowerment wasn’t a popular notion back then.

Fast forward to social media-enabled 2009. A new book, Get Content. Get Customers. , by Joe Pulizzi and Newt Barrett, challenges the Syms ideal. According to the book, “the more informed a consumer or buyer is, the more difficult it is to sell them.” Could both statements be correct? While they don’t directly contradict, they do point in different directions. In sales, there’s no such thing as an irrefutable truth, and in my experience, there’s truth in each one.

Not everyone agrees. In metro Washington DC, where I live, major corporations employ high-dollar lobbyists to fight the risks educated consumers pose, as anyone who tracks policies of the Federal Trade Commission or Food and Drug Administration can attest.

When is an educated consumer not the best customer? When she wants to know facts about the soil that grew the carrots she ate in last night’s salad. Or when she wants to learn about the living environment of the chickens or cattle that are now in the grocery meat case. Better for the producers that she sticks to knowing generic fat, carbohydrate, and protein content, along with “sell by” date. For other foods, the lobbyists insist she also doesn’t need to see the word “imitation” on some products, that she doesn’t need to know anything about the farms her food comes from, or what pesticides were used for their production. (For a more detailed discussion about why food manufacturers benefit from disconnected supply chain information, see author Michael Pollan’s blog.)

Beyond food, The Wall Street Journal reported three related articles just this week:
FDA Says Video for Pain Drug is Misleading
SAT Coaching Found to Boost Scores—Barely
Laws Take On Financial Scams Against Seniors

What value do uneducated consumers bring to the companies profiled in these articles? Bernie Madoff won’t be reading this blog, but it’s not hard to guess how he would weigh in on this question.

Closer to where my clients live in the B2B selling world, I floated the statement from Pulizzi’s book to a few sales groups on LinkedIn and received some excellent thoughts. The consensus was that it’s preferable to sell to informed prospects. That’s good, because—like it or not—prospects are better informed than ever. But a few of the responses I received were circumspect. Informed prospects aren’t necessarily any more open minded or are better decision makers than uninformed prospects. One salesperson commented about the difficulties that occur when a prospect is well informed on price, but has a poor grasp of the complexities of the product he or she is buying.

So when it comes to prospect knowledge, information is a two-edge sword. I’ve left some sales meetings in frustration, convinced my uninformed client wouldn’t recognize a good solution if it flew in and hit him in the head. In other situations, my client did homework and told me (correctly) that he could procure reliable refurbished or off-brand equipment for one-third the cost of my proposal—information that a sane commission-driven salesperson wouldn’t typically volunteer.

But today, with social media, the information genie is already out of the bottle. It’s more fruitful to debate what to do about managing prospect information than it is to debate whether informed-slash-educated prospects are better to deal with than those who aren’t.

Here are some questions to ask:

How well-informed is your average prospect? When you begin your formal sales process, what do they already know? What don’t they know that they definitely need to know?

Where do your prospects congregate online (and offline) to get information?

For information outside of your company’s direct control, what risks and opportunities are present? What misinformation exists, and what is the impact on your sales strategy? Do you have a plan to counter significant misinformation?

What information do your prospects seek? What motivates them to seek the information, and how do they value it? Which risks are they mitigating and which opportunities do they want to capitalize on?

What information is available to them? Who contributes to that content? Who “owns” the content?

How will your prospects use the information they obtain? What portends a next step or action? What will break the buying process, and do you have ways to mitigate the risks?

Back to Syms. Whether an educated consumer really is the best customer depends on what you sell and how you sell it. Above all, be agile. If your sales process can’t adapt quickly to changes in information power, you will be debating about whether it’s better to sell to educated customers. But with social media, events move quickly. By then, it might be too late.

5 COMMENTS

  1. Andy, you ask a provocative question. I think all the information that we now have, courtesy of the Internet, has helped make the business world more competitive and customers more likely to compare and shop by price.

    On the other hand, the Internet has also help create brand new companies (Amazon.com, Zappos) and transformed others. A two-edged sword…

    As you point out, now the question is what to do, assuming that consumers will be educated. If not now, then in the near future.

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  2. Andy…great question and thanks for the shout out.

    I agree with Bob here, and would say that, although the customer is more educated than ever, those companies that develop valuable, consistent, relevant, compelling content to their customers and prospects are the ones that will shine.

    To truly create engagement, you either need to give customers great content or show them a good time. Are there any other options today?

    Keep it comin’ Andy!

  3. A recent article from The New York Times supports the idea that we’re a long way from the democratization of information power (What Does Your Credit-Card Company Know About You?” by Charles Duhigg, May 17, 2009)

    ” . . . One Bank of America executive acknowledged that (Donna) Tiff (a B of A customer whose credit card account had been processed for collections)–and the caller on the recording in the training course–probably could have cut her debt in half just by asking. Much of what they’re paying, after all, is fees and interest that Bank of America itself tacked on. ‘Some cardholders are not as savvy as others,’ said Tony Allen, a company spokesman, who added that the company tries to educate cardholders about their options. ‘I’m sure some people feel like we have conflicted interests and that we’ll only educate as much as it helps us get paid. But we take our responsibility seriously.’ I asked Tiff if she ever asked (the Bank of America Representative) to write off the late fees and interest charges. ‘Oh, no,’ she told me. ‘She was so kind to me. How could I ask her for something like that?'”

  4. Andy, Is an Educated Consumer Really Your Best Customer? I’ll answer your question with a question. Educated about what and why do they need to be educated?

    Many businesses fail or loose sales or customers due to the lack of practicing business etiquette. So that you do not think that I’m talking about the proper way to hold a tea cup, let me define the noun “etiquette” as it applies to both business and social etiquette. Etiquette is making the unfamiliar familiar. Anything left unfamiliar become intangible and people will not buy intangibles if they are not put in tangible form.

    That said, all customers need to be educated with the answers to questions that they have or will be asked before the questions are asked in addition to asking mentally, the questions you stated in your article. I call these the “Prior Conversations” – right or wrong, they took place. There had to be a reason why they let the resource in the door or the customer went to the resources place of business.

    The second step is making sure customers are comfortable with the information being handed them. That means answering the question they’ve been asked or may be asked later . . . and they will be asked question later. With this information in hand in a format a customer can use in their environment that is logical to the level of knowledge or understanding others have. At this point, customers become the resource’s/vendor’s “uupaid salesperson” i.e. customers are being asked to take the information forward. Remember, customers have have to justify or get confirmation on their decision even if they decide not to proceed. But, it does not stop there as the decision and what was under consideration will take on a life of its own as family, friends, associates, acquaintances, customers/clients or the customer’s own conscience will pass it on, etc

    So, I’ll ask another question. What business would send an uneducated paid salesperson out to make sales? For sure sales will not be made. Why, then, should a busienss; send an uneducated unpaid salesperson out to make the sale? I doubt that the sale will not be made. Because of this, educated customers with the answers to the questions they have or will be asked is why educated customers are the best type of customers any business can have.

    Alan

    Alan J. Zell, Ambassador of Selling, Attitudes for Selling offer consulting, workshops, speaking on all business topics that affect sales. He can be reached at [email protected] For more information, please visit his website, http://www.sellingselling.com Mr. Zell is the recipient of the the Murray Award for Marketing Excellence, He is a member of PNW Sales & Marketing Group, Institute of Management Consultants, and Linkedin.com

  5. Nicely written and provocative article!

    For us bootstrapped companies that put most of our revenue towards product development and customer care rather than creating marketing hype, the more detailed information a prospect has and wants to get the better. We love it when they have completed careful analysis, chatted with lots of folks experienced with the alternatives and want to do a real-world pilot.

    Sales folks like to control the analysis and conversation towards where marketing dollars have been placed (including towards awards and analyst coverage) and have little interest in truly evaluating how well their product or service will create a sustainable, effective and efficient value proposition for the prospect. Bring up tough questions about true fit and jeopardize the sale, I don’t think so. I saw this commission-driven mindset for years while on the other side of the fence as a CIO and in the end an unhappy customer is not good for anyone involved.

    We at Fuze welcome the world where the steak is more important than the sizzle!

    http://www.fuze.com
    Enterprise-grade customer care and knowledge sharing without the enterprise price.

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