Coverage of this session by Kristen Platt of SocialMedia.org. Connect with her by following her on Twitter.

1:30 — SocialMedia.org’s Megan Uithoven introduces Mark Hurst, author of Customers Included.

1:31 — Mark’s full agenda is for you to read his book, Customers Included.

1:32 — Mark asks, “Why do companies so often fail to ask and give what customers want?” In this presentation, he’s going to try and answer that question.

1:33 — Story #1: Do organizations actually completely ignore their customers? Mark tells a story about a device from Playpump Intl that brought clean water to third-world countries as a result of children’s play. The pumps were connected to a playground-type device, so that when kids would use the device, water would be pumped from the ground.

1:34 — Playpump was funded $16 million to execute and they still failed. But why did they fail?

1:35 — Mark explains: Customers posted a video using the Playpumps that took 3 min, 7 seconds to pump water. Then, they compared it to another existing water pump in the market and it only took 28 seconds to pump water from the ground.

1:36 — When the Playpump customers were asked what they thought about the product, they answered, “Stop immediately.” After further investigation, they found no signs that the communities had been consulted about the product prior to installation.

1:37 — Mark concludes the story with the first lesson of customer experience: Include the customer in decisions. The members of the community had no say in the pump’s installation, and other pumps that were not made available to them were six times more efficient.

1:39 — The final fail in this story: Most of the pumps that were delivered to these communities arrived broken.

1:40 —  Mark: It matters whether we include our customers or not. The nature of innovation is: “Are we doing something that improves the lives of the people we want to be serving?”

1:42 — Story #2: Netflix case study: Measuring the impact of whether we include or don’t include our customers.

1:43 — Netflix was doing great until they decided to introduce plans to raise prices and change the renting packages. They even went on to say all this was a “terrific value.” However, their customers thought differently and took the time to post online about their decision — which resulted in 15,573 angry posts.

1:44 — Netflix issued a response to all of these negative comments, except they didn’t really apologize and instead went on to change the program further by splitting the company in two: Netflix and Quickster.

1:45 — This time the response was worse: 30,000 angry customers decided to make their thoughts heard online by responding to Netflix.

1:47 — Mark discusses the impact of Netflix’s actions: They lost hundreds of thousands subscribers and lost millions of dollars. Netflix almost went out of business.

1:48 — Reed Hastings (Netflix CEO) on how they revived Netflix after all of that: “Don’t get distracted by the shiny object. Execute on the fundamentals.”

1:49 — Story #3: Walmart case study: Executives noticed employees and customers were leaving for Target.

1:50 — Mark: Walmart executives decided clutter was the reason for people choosing Target over Walmart (without surveying the actual customers and employees about the reason why they were leaving). So Walmart removed the clutter from their stores.

1:52 — Mark: In removing the clutter, they also removed the variety of brands they carried. This made a large negative impact on sales and they lost billions of dollars.

1:54 — Mark shares one weird trick to include customers: He talks about the transformation of Prospect Park in Brooklyn as an example. The woman responsible for turning the park’s customer experience around by interviewing people who visited the park. She talked to dog walkers and she discovered the main thing they wanted was leash laws.

1:56 — She got the laws passed and made the park experience better for the dog walkers. It made a huge impact. First more dog walkers showed up, then more joggers showed up, and then ball players, etc. and the park was thriving again. Instead of assuming what the customers wanted, she went straight to the source and created a positive change.

1:58 — Mark answers the question about Apple and Steve Jobs before anyone in the audience can ask it: “But Steve Jobs always ignored customers and didn’t buy into focus groups…” Mark says this is actually false. Steve Jobs did spend time with customers. In fact, when Apple was first starting out, Jobs said, “You’ve gotta start with the customer experience and work backward to the technology.”

2:00 — Mark shares some final lessons:

  1. Spend time with customers
  2. Find out what they want (don’t ask)
  3. Execute on the fundamentals:

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