However, the next 12 months will be particularly difficult for businesses of every type, size, and location because:

• Customer loyalty, long in decline, has virtually disappeared: In 2009, only 36 percent of business travelers were brand loyal, compared to 42 percent in 2007 and only 20 percent of US car buyers were brand loyal, compared to 80 percent in the 1980s. (NYT, December 1, 2009; October 20, 2009).
• Customer buying behavior has been irreversibly transformed by technology: There is no longer a difference in the purchase behavior of “online customers” and “offline customers”. Most of today’s prospective customers are addicted to sites that instantly compare choice, availability, quality, service, and the most dangerous comparison of all – price. These customers are a generation of “new experts” – confident and determined because they are equipped with purchasing firepower unavailable to any previous generation.

What follows are the five most serious challenges of 2011 and the practical ways that CEO’s can combat the damaging effects of each on their financial performance. All five challenges focus on the single most valuable corporate asset – customers.

Challenge #1:  Retain current customers and generate repurchase, advocacy, and referral.

The obvious, but all-too-frequently forgotten challenge in difficult economic times is an aggressive initiative to maintain the company’s current customer base. An exclusive focus on new customers is counter-productive because motivating current customer retention, repurchase, advocacy, and referral is more promising and profitable.

Moreover, meeting current customers’ expectations is more challenging than ever before because today’s CEO’s live in glass houses constructed by social media. A single posting on Facebook or Twitter about a customer’s experience with the firm, real or perceived – positive or negative, will influence millions of other customers and prospects.

In a world of eroding customer loyalty, customer retention must be a top-down, high priority, company-wide mission. Reliable metrics to assure continuous improvement in customer retention is critical to survival and profitable growth in 2011.

Challenge #2:  Consistently improve prospect-to-customer conversion

Today’s customers are empowered by vast information on the internet about all products and services and benefit from the immense choice of sellers in every category.

Moreover, these “new experts” realize enormous financial and psychic rewards by using their ever-smarter, smart phones to compare competitive prices. This huge population of often-ruthless buyers (28 % of US mobile phone subscribers in 2010 according to Nielsen Company) will grow exponentially in 2011 and will exploit this profit-destructive instrument in every consumer channel, and increasingly, in every industrial channel.

CEO’s must anticipate this severe challenge, define a smart response strategy that will satisfy the prospect’s appetite for value, and create organizational alignment behind prospect-to-customer conversion.

Challenge #3: Create enduring customer preference.

In 2011, CEO’s must disregard the seductive appeal of “brand building” because, for large and small companies alike, this extravagant investment is both unaffordable and unproductive. Moreover, in the digital age, conventional media advertising is viewed by most customers as yesterday’s recipe for hype.

Given the intense challenge of creating customer preference for a business or brand, a far more productive investment option is an improved website because today’s prospect’s initial contact is almost always online, whether the customer intends to by online or offline. A site that compels interest, differentiates the seller, and facilitates navigation will create customer preference.

In today’s world where customers seldom care where they buy, customer preference is choosing one seller over all other options – becoming the customer’s 1^st Choice.

In 2011, being the 1^st choice of the “new experts” is a far more influential than being well known.

Challenge #4: Identify a source of profitable new customer revenue.

2011 will be a daunting challenge for CEO’s – a year highlighted by the continuation of global uncertainties, domestic political conflicts, and high velocity changes in technology.

Yet, the changes in technology will drive changes in customer buying behavior and this is where growth-oriented CEO’s will find new sources of profitable revenue.

This was true in 2010 when: Amazon’s e-books raced ahead of sales of hardcover books; Apple sold more than 3 million iPads in less than four months; Proctor & Gamble announced an initiative to market direct to customers on the internet, bypassing retailers; and Italy’s Fiat took control of Chrysler to create a company with global scale.

And, this will be true in 2011 for those CEO’s in every category of commerce who are determined, courageous, and imaginative enough to “look around the corner” for changes in customer purchasing patterns – not just straight ahead where too-few growth opportunities exist.

Challenge #5: Develop an ambitious, but achievable growth strategy.

Finding growth opportunities is a severe challenge for CEO’s, but it’s just the first challenge. Finding a way to fund growth in lean years, such as 2011, is an even bigger challenge.

There is a solution if CEO’s will change how they approach strategic planning for 2011 and beyond. Here again, determination, imagination, and courage trumps the time-tested sequence of planning which demands that financial planning is the first order of business.

This fixation on an obsolete planning process that was configured before high velocity changes in technology introduced high velocity changes in the business world guarantees that funding will be unavailable for innovation. However, making innovation the first order of business will assure that ideation will produce potential sources of profitable new growth.

When this occurs, management can evaluate the risk/reward ratio of the various growth opportunities as well as the funding required to test the reality for success. All that remains is to examine how to eliminate or reduce expenses in less urgent, less promising categories so as to fund high priority avenues of profitable growth.

Those CEO’s that mandate this contemporary planning methodology have the potential to leap ahead of competition in 2011, perhaps on a smaller scale, but in the same manner as Amazon, Apple, P&G, and Fiat who consistently “look around the corner”.

This program will deliver real-world advice from a panel of business leaders who will face a Bloomberg journalist determined to uncover: “how ventures can take flight; how to give birth to ideas that create a competitive edge; and how to develop strategies to build market share going forward”.

I look forward to being one of the three panelists at this important “Bloomberg Elements of Growth” event with a live audience of entrepreneurs and over 280,000 Bloomberg global subscribers and hope you will join in:

Wednesday, December 1, at 2010, 5:30 PM – 7:30 PM Pacific:  RSVP Now.

If you didn’t catch it, please take a quick look at my October 1st Bloomberg TV interview with Pimm Scott.

So, when my friend and thought leader in the Australian business community, Grant Crossley, contacted me about an initiative to promote “Responsible Leadership”, I welcomed a role.

Here’s what this initiative is about and how you might participate if you share our concern about this issue. First, we’re not seeking funding, now or ever. We are only interested in raising and sustaining the standards of “Responsible Leadership”.

Your first question, of course, is: what’s this thing called “Responsible Leadership”? That’s our starting point and where you can lend a hand with very little effort or time.

Help create the Global Road Map for Responsible Leadership into 2011 and beyond. You can register to participate in their inaugural conference online.

The opening of the new documentary “Waiting For Superman” which explores how the current state of our public education is affecting our children, has had me thinking a lot about the subject lately. Interestingly, many of the issues that educators face have direct parallels to The New Experts thinking.

I’ll start by pointing out a few of the many New Expert qualities exemplified by an average seventh grader. He or she is intensely self-serving, doesn’t care who she buys from, is easily distracted, and has infinite places beyond the classroom to get information she deems relevant.

The relationship between teacher and student is a powerful illustration of the dynamic that goes into converting at both the first and second of the 4 Decisive Moments: The Now or Never Moment and the Make Or Break Moment.  In fact, the teacher-student relationship lives an unending state of these two crucial Decisive Moments every minute of every school day.

And, when it comes to engaging arguably some of the toughest customers there are, education experts are rethinking what makes Customer Preference.

In a recent article in the New York Times Magazine entitled  “Games Theory” writer Sara Corbett asks what if we “reconfigured the foundation upon which a century of learning has been built?” What if, instead of seeing school the way we’ve known it, we saw it for what our children dreamed it might be: a big, delicious video game?”

Wow! What if teachers learned how to communicate with students in a way that they not only connected to and intuitively understood, but put them in a receptive consideration framework. What a great premise for achieving Customer Preference! But it would mean being brave enough to walk away from what is essentially our 100-year old educational model.

In the article, Corbett profiles Quest To Learn, a non-charter public school in New York City, and the brainchild of a professional game designer named Katie Salen. Salen is a professor of design and technology Parsons the New School for Design and directs a research-based organization called Institute of Play, which focuses on the connections between games an learning.

Heavily funded and two years in the making, Quest To Learn was approved by the New York City’s school chancellor as one of a handful of demonstration sites for innovative technology-based instructional methods.

Quest to Learn’s educational model focuses on the “largely unexplained force field” between children and video games. The belief is that since digital games are central to the lives of today’s children, they are potentially extremely powerful tools for learning. So, instead of fighting the way children consume media, harness it.

This thinking, which is gaining in influence, is built around the conceptual framework that learning can and should be more like playing a game. And by this, educators like Salen mean more relevant, more participatory, more immersive, and a lot more fun.

It’s not surprising then, that Quest To Learn’s curriculum is developed from a gamer’s discipline. Once a lesson is reconfigured by game designers, it doesn’t look much like a lesson anymore. Instead, Corbett writes, “it is now a quest. And while students are put through the usual rigors of studying pre-algebra, basic physics, ancient civilization, and writing, they do it inside interdisciplinary classes with names like Codeworlds – a hybrid of math and English class – where quests blend skills from different subject areas.”  For instance, students might be challenged to balance the budget and brainstorm new business ideas for an imaginary community called Creepytown.

Further, students don’t receive grades. Like in the gaming world, they achieve expertise levels of ‘pre-novice” “novice” “apprentice” “senior” and “master”.

That’s more than just fun. It’s a learning environment a kid can engage in. While I do not have the experience to judge the efficacy of this new thinking in the abstract, I will say that, if the material itself is smart, the form will give the learning a fighting chance.

Why? Because students will be immersed in the learning rather than resisting the process of learning. It’s the difference between feeling like you’re being sold to (usually when you’re feeling most vulnerable) and feeling like someone is doing their best to understand your needs.

When educators Get Out Of The Seller mindset and into the minds of their customers, they have the opportunity to convert instead of meeting resistance. They gain Customer Preference simply because the learning, aside from being fun, is delivered in a context students see as immediately relatable, and valuable.

If that can happen, everyone wins. And that’s as good a definition of smart business as any I know.

Prior to this moment in our world, “looking ahead” was the time-tested protocol, perhaps essential and potentially valuable when the world told time in seconds, not nanoseconds. Today, it is almost useless, because when you “look ahead,” you will see and learn little or nothing.

Prove it for yourself—grab your most powerful binoculars and if the weather permits, you may see the horizon. What did you learn? Eratosthenes, the Greek mathematician who first calculated the circumference of the earth, saw the same horizon. The horizon has not changed since c.276 BC.

From the perspective of my corner office and experience in boardrooms, I observed that we business leaders planned our future by using previous years’ financial results as our base line. In the limited time remaining, we “looked ahead” at the very predictable changes that would influence our company, industry, economy, and nation and discussed their implications for the financial projections that we had already set in concrete.

Little time, if any, was spent on “looking ahead” to discover the few changes that might influence our customers’ purchasing behavior because, at that time, we business leaders were transfixed on our company’s “numbers,” not our customers. Moreover, customer purchase behavior did not change year-to-year, so it never occurred to us that we might want to focus on customers’ very predictable wants, needs, aspirations or concerns, apprehensions, fears. Moreover, little time was spent on the vital challenging issues of today, such as globalization, environment, and social responsibility. They were not on Eratosthenes’ horizon, nor on any business leaders’ horizon.

When the time allocated for this annual exercise evaporated, there were silent sighs of relief all around and our rigorous activity concluded with high-fives. This seemingly spontaneous, enthusiastic, and artificially synchronized response gave those of us in the corner office absolute confidence that internal consensus had been achieved. Soon after, we would produce a weighty document and lofty “mission statement.” Then, everyone but the top gun surreptitiously locked the weighty document in a drawer and snickered at the mission statement, a superfluous requisite of that period, posted in the reception area to prove that our firm had “looked ahead.”

This fixation on an obsolete planning process guarantees that firms that use it will not keep pace with the rapid, substantive changes in our business world.

Historically, we business leaders assembled our management team in a locked-down environment for the dreaded annual strategic planning meeting. Some of us arranged the session offsite so our team could “bond” while constructing our plan forward. Others combined the planning session with a mountain climbing adventure, as a metaphor for “teamwork.” All-too-many hired the “consulting firm of the moment” or the “guru of the day” to provide external perspective and help us “look ahead.”

The sequence of this dated planning process dictated that we spend the first grueling hours going over the minute details of our past financial performance. After this restrictive look backward, we spent even more time developing and manipulating our financial projections.

“Looking around the corner” requires you to inject some innovation into your strategic planning process. You can do that by following a series of logical steps:

Step 1: Define and comprehend the most significant external factors that will influence your business as you look “around the corner”: the world situation; your nation’s situation (no politics); the categories in which you now market and may want to enter; your direct rivals for customers; and most important, the purchasing behavior of your customers and prospects.

Put these factors on flip charts with as few, simple words as possible, place them on a wall for all to see. Then get consensus for a meaningful short list of external factors that will likely have the most impact on your business in the period of your planning cycle.

Step 2: Identify a few business leaders (5-10) who have proven successful at looking “around the corner”, not just those that turned out the best financial results. From their accomplishments in the marketplace, try to figure out what they discovered when they looked “around the corner” and what strategies they employed to capitalize on their findings.

Determine the commonalities in their discoveries and strategies, not their tactics, and place them on the wall. Analyze these discoveries and strategies, get consensus on those that are relevant to your business, and consider adopting, modifying, or enhancing their conceptual value in a manner that will benefit your business in its determined effort to look “around the corner”.

Step 3: Define and comprehend the most significant internal factors that will influence your business: your company’s strengths, weaknesses, and gaps; staffing strengths, weaknesses, and gaps; customer performance strengths and weaknesses; prospect-to-customer conversion and customer retention performance vs. competition; infrastructure and technology issues; growth barriers and opportunities.

Place them on the wall and get consensus for those that need to be changed, enhanced, or discontinued as well as those that will influence your effort to grow. -

Step 4: Break into two groups and task each group with “role-playing” one of your two most challenging competitors. The goal here is to identify the strategies they might employ to assault, damage, or destroy your company and to hypothesize the manner and style in which they might do so.

Reassemble, so each team can describe its strategies to “annihilate your company”. Abbreviate the competitive strategies, avoid duplication, and place them on the wall. Allow them to frighten the hell out of you! Take a deep breath and then determine what changes your company must introduce to prevail over its competitors, especially in your effort to grow by looking “around the corner”.

Step 5: Break into two new groups of different composition. Task each group with reexamining all of the charts on the wall before endeavoring to look “around the corner” to identify the highest potential, and greatest impact developments, trends, and occurrences that will likely affect your company.

Reassemble to review and gain consensus for the combined short list of influences the company must consider as it creates strategies to capitalize on its future vision.

This is the moment to have a brief celebration in honor of your job well done!

Step 6: Keeping all the flip charts, especially your view “around the corner), on the wall for everyone to see, begin to create a sturdy, imaginative, and ambitious “strategic framework” for your firm. At this important juncture in the process, all-too-many businesses make a huge mistake – they begin filling page and page with prose, data, assigned responsibilities, and timelines, rather than create a thoughtful, meaningful, carefully crafted “strategic framework”.

This is the moment for thinking, debating, and imagining and the moment that demands consensus. Your “strategic framework” must describe the solid foundation and innovative spirit of a thriving company that, in this challenging era of “new experts”, will be your customers’ 1st choice.

Step 7: Task a small group of C level executives to develop a first draft of a comprehensive strategic plan that mirrors and magnifies your strategic framework and includes a preliminary estimate of the financial investment required to realize your look “around the corner” strategy.
Simultaneously, task a second group – operating independently of the first – to develop an initial draft of a financial plan for the company that incorporates a range of investments in your look “around the corner” strategy.

Each group must complete its preliminary draft within two weeks of the conclusion of your off-site and both groups working together, must craft a preliminary merged document within another two weeks of the conclusion of the off-site.

Using the preliminary merged draft as a template, the company must create a final integrated plan and gain total internal consensus for it within two additional weeks. This final plan must incorporate the company’s ambitious look “around the corner” within the context of prudent fiscal governance.

Yes – this timetable is aggressive because, without its discipline, the meal you cooked at your offsite will get cold.

Once completed, it is time for another brief celebration to mark the conclusion of your company’s look “around the corner”, although the moment to celebrate big-time is when the company realizes its rewards and benefits.

You have now seen what Eratosthenes could not and what many of your competitors will not. In addition to creating a potential competitive advantage, your work will also produce significant internal value. Few people involved in this process will lock the final planning document in a drawer or snicker at it, because it wi

A mid-afternoon meeting had been scheduled for him at a new hotel on the far west side of mid-town Manhattan.

And it is here that a remarkable ‘Get Out of the Seller’ moment happened.

It was a chilly day, so in the lobby they were serving complimentary hot chocolate. My friend went up and poured himself a cup. And because it was so delicious, he went back for a second cup.  This hot chocolate, which they could easily have charged $5.00 for, was free to anyone who entered – guest of the hotel or not. But this was not the remarkable part.

He was a few minutes early, so he sat down on a plush, cozy couch and waited for his 4:00 appointment.

From the restaurant bar in the adjoining room, a waitress came over, welcomed him, and said, ‘May I get you a glass of water while you’re waiting?” This was a seemingly insignificant offering. But it is the very reason he now stays at this hotel and recommends it to anyone who asks.

As he tells it, “she had me at ‘glass of water’.” Why?

While too many companies consistently miss this critical first opportunity to create Customer Preference at what I call the Now-or-Never Moment, this simple first impression converted a prospect into a customer.

And all it took was a glass of water. How?

The waitress did not ask if he’d like to order a drink, which is what most waitresses in most hotel lounges are instructed to do. She asked if he’d like a “free” glass of water. And when he said “yes”, she brought him over a tall glass on a tray, set it down with a napkin, smiled and retreated.

He was so impressed by this, he later asked her why she had not tried to sell him anything. “It’s what we do,” she replied, “It is part of our policy.”

I was so impressed by this story, soon after I dropped by the hotel to speak with the Food and Beverage director. Was it her idea I wanted to know. “Not mine alone,” she told me. It was one of many small decisions that management makes to create friendly unexpected connections with existing and potential customers.

While most hotels are hell-bent on monetizing every inch of the property, and squeezing incremental sales wherever possible, this hotel’s business was modeled around relationship building. A glass of water is a simple thing to offer, she told me. Visitors are smart enough to know that they can order anything at any time. And if they do, it’s on their terms. It reflected the kind of “in-our-living-room experience’” the hotel wanted to promote.

This Now-or-Never Moment for prospects and Keep-or-Lose Moment for existing customers did not cost the hotel anything. It was simply the result of discipline and creativity on management’s part.

It worked. Next time in New York, my associate stayed at this hotel. Everything about the experience (except for its out of the way location) lived up to the positive initial experience. Without even being asked, he now recommends the hotel whenever appropriate.

I am continually surprised at how many companies in the service business aren’t able to put themselves into the heads of their customers who want and appreciate service.

This hotel has a smart business model executed smartly. And it’s all reflected in a simple glass of water.

Ad retargeting is a technology I’ve been watching develop for a while. Essentially, it enables companies to create a “Make-or-Break” moment that just won’t quit. And it’s poised to become a hot button issue.

Let me explain.

Source: Retargeter (http://www.retargeter.com/)

Retargeting works by attaching a tracking beacon, or a 3rd party cookie, to a visitor’s browser when they visit a company’s site. Since the overwhelming majority of people who visit a site do not convert, the technology allows a digital marketer (the 3rd party) to follow the customer once they leave, track them wherever they go across the internet and serve up personalized ads based on their behavior on the site. This effectively extends your decisive “Make-or-Break moment by enabling you to turn prospects into customers even after they’ve left your site.

Zappos.com is a particularly well-known user of the technology. If a visitor puts two pair of pants into their cart, but leaves before purchasing, Zappos will follow the customer and serve up an ad with the two unpurchased pants aimed at getting them to return and complete their transaction.

The major problem right now with all-to-many online retailers is one of discipline. And here is where disciplined companies determined to Get Out Of The Seller can win where others lose. As of today, this technology (which has only begun to reach its potential with marketers’ ability to aggregate media networks) still feels surprisingly Wild West, primarily because no rules around customer engagement have been established.

There are complaints of people being followed by Zappos ads, repeatedly being served message after message about the shoes they didn’t buy. Mark Burk at BigVoice Unlimited calls this kind of non-buyer-centric thinking “ad stalking”. Without an understanding and a strategy around what the customer will accept, he explains, a retailer risks crossing the line between being perceived as smart and helpful, and creepy and intrusive.

With recent articles in the WSJ and AdAge, as well as Google’s recently publicized vision statement outlining its interest in capitalizing on retargeting’s capabilities, awareness of both the technology and the issues surrounding it are beginning to cross over into the general public discussion. Certainly, the argument can be made that placing tracking code on a person’s hard drive without their consent represents an intrusion. But every site places cookies on visitors’ browsers, so this in itself should not be an issue.

It’ll be up to marketers to understand what their customers find helpful and what they find offensive. How frequently and how long a marketer makes contact with a customer will determine whether the technology is perceived as helpful or invasive; and whether your company is perceived as friendly or “creepy”.

Advertising retargeting is a valuable, inexpensive tool that can enable you to continue an online “Make or Break” moment that would otherwise have been beyond your control to influence.

Companies who get out of their seller’s brain and into their buyer’s, will realize that they must understand what their customers will and will not accept, enabling them to use retargeting as a valuable, persuasive tool, and not as a blunt instrument.

Note: I’ve listed several retargeting companies on the Need To Know page.

At face-value this might sound like a very bad idea for retailers. I mean, effectively the lowest price is instantly known by a prospective buyer who can opt to purchase online or from another retailer with a cheaper price. However, there’s much more to this story.

I had a chance to speak with Alexander Muse of ShopSavvy – one of the leading applications and service providers in the space. Alexander shared some very interesting information with me. In just over 2 years, ShopSavvy has 6.5 million users scanning an average of 9 products every 90 days – or about 50 million scans per month. That’s a lot of product impressions on a monthly basis. On average, those scans are roughly allocated 50% to consumer electronics; 25% to books, video games and DVDs; and 25% to soft goods including grocery & beauty.

ShopSavvy (like other providers in the industry) provides its software and access to its extensive database to users for free. The mobile scanning application is a free download and users can scan as many UPC codes as they like at no charge. ShopSavvy also allows manufacturers and retailers to include their product data, pricing and inventory information in their database for free.

This new technology creates a couple of opportunities for retailers during their “Now Or Never” and “Make Or Break” Moments. Let me explain. If a customer scans a product from within your store and discovers that your price is lower, or within a reasonable dollar/percentage range of the low cost provider, the customer now has confidence in their decision and can feel good about purchasing the product from you. Congratulations; you just converted your “Make or Break” moment without a personal interaction with your customer. And your customer also won by choosing to enter your store to begin with. An easy WIN/WIN.

But things get even more interesting when you look at this application as a targeted advertising platform. I mentioned earlier the UPC/GPS Intent Pair and this presents a potentially highly effective advertising opportunity. Once a user scans a UPC code, the application knows two things: 1) what product the customer is interested in purchasing and; 2) their physical location. So imagine that you purchase advertising that targets any customer within 5 miles of your retail locations (but not in one of your stores) who scans UPC codes for products that you carry or that are competitors of products you carry. Every time scan search results are displayed, you serve an ad offering a guaranteed lowest price (lowest found price if not yours -10%, for example) to purchase from you. Interesting, right? You’ve just created a “Now Or Never” Moment that never would have existed before.

Every new platform brings with it its own disruption. It can start out small, as is currently the case with mobile price comparison, but it can also grow to have major impact, as is the case with Google AdWords. In the same way competitive protocols have been adopted for AdWords (like not buying keywords against a competitor’s name), the rules of engagement will most likely be determined for each new technology opportunity as it is adopted. And this gap is where the opportunity can be found for smart, innovative first mover companies. Advertising against competitive scans may someday be considered verboten. But until then, smart companies can take advantage of the ShopSavvy disruption by using it to pull people away from another retailer’s ‘Make or Break’ Moment. And this can translate into a competitive advantage that can last for a month, a quarter or far longer.

Smart, flexible companies that know how to Get Out Of The Seller, don’t look at the mobile price comparison tool as a threat. They see it as an opportunity to convert customers and build lasting Customer Preference.

In the casual-dining industry, remaining relevant is a non-stop endeavor that – like the fashion industry – moves at a faster pace than many other businesses. Tastes change rapidly; the line between an appealing menu and a tired one is a constant balancing act; and an ever-evolving social experience for the customer.

Houlihan’s, the Irish pub style restaurant chain knew it needed to rethink and redefine what had become a tired customer experience.

Instead of keeping the reboot internal and using old world tools like focus groups to get controlled customer feedback, it used social networking resources that were not available even a few years ago.

Houlihan’s reinvention, chronicled by Ben Paynter in ‘Fast Company’ in March, was built around the creation of its own social-networking site HQ, which is an invite-only community of 10,500 ‘Houlifans’ to serve as a virtual feedback loop. This community has been a central component in the company’s transformation from a tired Irish pub style experience into a contemporary suburban lounge-style hangout.

The network was culled from a database of over 600,000 customers who either visited the corporate web site or signed up in-store for email coupons. Each potential fan filled out a questionnaire which tested both their love for the restaurant, as well as how socially active they were. HQ averages about 200-400 fans per restaurant, most of whom bring in friends once a week. Their fans take pride in their restaurants and lay claim to changes and menu items.

The network has enabled the company to try out new ideas, seek immediate feedback, and revamp on the fly. For example, its idea for a small-plates tapas style menu was originally a flop. But using the network’s immediate customer feedback to make changes, it now accounts for a whopping 26% of item sales in the 10 markets where it debuted.

In the Kansas City area, which was the site of the first test, overall profits are up 12% at a time when sales in the $84 billion casual-dining industry is down 1% (NPD Group).

After a recent uprising by HQ members, Houlihan’s brought back chicken fajitas, even though they’re a low margin item. As a result, members identified themselves with the return.

When customers start tweeting photos of their favorite dishes and declare as one woman did, that she “was the woman who saved the chicken fajita”, you know you’ve created a connection that translates into highly valuable Customer Preference.

Houlihan’s may be outspent and outshouted by Appleby’s and Chili’s, but you can’t buy organic “Multiplier Moments” like this – repeat purchase, advocacy, and referral. It’s the result of the Customer Preference that Houlihan’s HQ system is generating every day. And it’s a great example of an important change in a seller’s mindset that produced a powerful and effective outcome.

Thanks again to Fast Company and Ben Paynter for illustrating this great example of a smart company using powerful social networking tools to ‘Get Out Of The Seller’.

• Instant, comprehensive information from the Internet about all products and services sold at retail – online and offline
• Immense choice in every segment of retail – a wide variety of options and prices in every local community and from every corner of the world

• Real-time price comparison at the moment and location of purchase on now-ubiquitous mobile devices

Being aware of these facts will help you confront your customers’ radically changed buying behavior. However, if you’re a CEO trying to figure out how to compete in this new world, you need some technology insights that you can put to work immediately.

Since the technology that empowers  the New Experts is composed of ever-changing products and services, I’m going to start with three trends that you need to be aware of: Social Shopping, Mobile Price Comparison and Mobile Couponing. I’ll cover each of these in more detail in future posts.

The concept of Social Shopping has been around since 2005 and has evolved into a collection of targeted social networks where users share and recommend great buys and interesting products they’ve found both online and off. Social Shopping sites include ThisNext, Kaboodle and StyleHive. These are great places to conduct competitive research, identify what products and categories are hot and, if you’re savvy, to get your products noticed.

Mobile Price Comparison is a relatively new category whose growth has been fueled by GPS-enabled smart phones. Mobile applications like RedLaser and ShopSavvy allow a customer to take a picture of a barcode (SKU) with their smart phone and instantly locate other retailers in the immediate vicinity and online that have the exact same product for a lower price. This trend is likely to have the biggest immediate impact on retailers.

Finally, Mobile Couponing is just like what it sounds. Customers can download coupons to their mobile smart phones and in-store scanners can read them right off the mobile device. Companies like Yowza, mobiQpons and Coupon Sherpa promise to take this offering to the next level by using GPS to deliver coupons redeemable at whatever store the customer is visiting. Mobile Couponing offers national distribution that can be locally targeted to increase sales and consumer loyalty.

Social Shopping, Mobile Price Comparison and Mobile Couponing are three trends that are quickly evolving to further empower customers. These trends will continue to give customers even more control of the buying process.

Caveat venditor (a twist on the centuries-old legal concept “caveat emptor” and my personal warning to CEOs).

Rather than watching while your market share and profit margins erode, you can leverage these very same tools and applications to reach more customers, grow sales, and increase your market share.  In future posts I will share case studies and specific examples of how these tools and applications can be deployed to create the kind of enduring Customer Preference I describe in The New Experts.

This market is changing by the minute and you can’t win if you don’t play to win.

Carpe diem!