GALA 2013 - Client Education, Your Weapon Against Commoditization - Christopher Carter
MIAMI BEACH, USATHE LANGUAGE OFTHE BUSINESS OF LANGUAGE 17-20 MARCH 2013Client EducationYour Weapon Against Commoditization@gala_global#galaconf ChrisCarter
WHY?Why should we educate the market?First, we caused the problem. So we can fix it.The market doesn’t understand the intricacies of what we do, so we all tried to outdo each other in ourmarketing. Now the market has what behavioral scientists call “knowledge by description”. Buyers onlyknow what they learned from all of our collective marketing. But that knowledge contradicts itself and isconfusing to buyers.
Gain TrustWhy else? So our existing clients will trust us more.In 2006, the Judge Business School at Cambridge University conducted a survey of over 1200corporations and found that companies who feel like they understand their B2B vendor more and canbetter determine the quality of the process or deliverable are more likely to have a sense of control and aremore likely trust that vendor.
Gain Clients“clients, who trust inthe service provider,are prepared to allocatemore resources andare more likely torecommend thisprovider to others”̶ ̶ ̶ Bruce WeatherhillAnother reason, to win more clients!A study by Joseph Alba and Wesley Hutchinson,and a separate study by Akshay Rao and KentMonroe, both showed that the amount of priorexperience and therefore prior knowledge that aclient has about an industry directly affects theirchoice of a vendor in that industry. In other words,they may want you to be an expert, but they want oknow enough about your industry to feel confidentabout choosing you.
De-CommoditizationGeorge Akerlof, an economicsprofessor, won the Nobel Prizein 2001 for his work oninformation asymmetry. Heshows that when an industryproduces varying degrees ofquality, where the providerknows how to determine thedifference before a sale, but thebuyer doesn’t, all buyers willcautiously assume an ‘average’quality, regardless of what theyget. This encourages low-qualityproviders, which leads to loweraverage quality, which leads tolower average prices. It isknown as the “race to thebottom”. In both price andquality. And it is caused by thatinformation asymmetry. Thatimbalance.Okay. All of that is great, but we are really here tosee how educating clients will de-commoditize ourindustry. That’s the real reason.
Last year when I spoke I mentioned that client education would one day cause de-commoditization in ourindustry.I said that when translation started, clients thought it was all the same thing. Demand grew duringglobalization, so prices went up. Then the industry became successful, so competition grew. Thisstarted commoditization. But now there are many different clients, with many different needs. We are allstill experimenting with the idea of translation as “fit for purpose”. And one day buyers will betterunderstand the different purposes and the different levels of quality, which will allow for different pricesagain.
High Stakes (better quality)Low Stakes (lower quality)Direct marketingUser interfaceTechnical documentationOther direct documentationWritten product supportReal-time support / Call centerCommunity supportSocial communicationSomehumanTRAfullyautomatedAnd there are many types of source content that will be translated.The higher the stakes of that content, the more that the client will pay attention to quality. And there willbe a much larger volume of content for translation that is considered low-quality. But those types ofcontent will be translated mostly by automated processes – no humans. But these services up here,human translation, will also be the more expensive types of translation.
High Stakes (better quality)Low Stakes (lower quality)Direct marketingUser interfaceTechnical documentationOther direct documentationWritten product supportReal-time support / Call centerCommunity supportSocial communicationSomehumanTRAfullyautomatedIf we teach the market thatthere actually are variations inquality and how to recognizethem before they buy, that willreduce the informationasymmetry and let themassign different money valueto different types oftranslation.And how many LSC, do youthink, use quality as adifferentiator? All of them.That makes it the opposite ofa differentiator.You can’t make othercompanies be honest abouttheir quality output (they maynot even really know), but youcan show variation within yourown company. If clients seetranslation at different levelsof quality, each with differentprices, it implies that not alltranslation is the same. Andsome will cost less and somewill cost more.
High Stakes (better quality)Low Stakes (lower quality)Direct marketingUser interfaceTechnical documentationOther direct documentationWritten product supportReal-time support / Call centerCommunity supportSocial communicationSomehumanTRAfullyautomatedWhen you compete only on price, you will always lose. Because even if you win the contract, industrywill just race to the bottom. And the next contract you win will need to be lower.Make your clients loyal to you, not your price.
WHO?Who should we be educating?Do not try to educate everyone. You cannoteducate the entire world. Your time is valuable,so you need to prioritize.
Your ClientsYOURTIMESIZE OFAUDIENCEhelps themMost of your focus should be on teaching your own clients. There are less of them, and they are moreimportant to you. This education will also have more of a direct effect on your own company. For yourown clients, you decide what they need to know. Do not decide what information will help you. Buildrelationships. Teach them information that will help them. Share information that is relevant to them. Youcan even customize information for a single client.
Your ClientsPotentialClientsYOURTIMESIZE OFAUDIENCEhelps themhelps agroupBut you should also try to spend some time educating potential clients or markets. Consider who you donot work with, but would like to. Other customers in the industries that you support. Other industries thatyou want to get into. This is almost as important because it could help bring in new clients. You can showyour expertise, but also help set up realistic expectations when they start asking you for quotes orprojects. This information should not be targeted to a specific client, but rather to that industry overall.This will show that you truly know that industry.
Your ClientsPotentialClientsPublicYOURTIMESIZE OFAUDIENCEhelps themhelps agrouphelps GILTAnd if you still have time – some of you actually will – you can help educate the market overall. Or eventhe general public. Now when you try to teach or create educational content for the general public,however, you can’t address all of their needs. This is where you do talk about your own needs. Or morespecifically, about the needs of the language services industry. Create information that fights broader,more general myths or misunderstandings about language services. Such information would work best inpublic relations, being published in professional journals or papers, or maybe even advertising. Showyour expertise about our industry.That’s a lot of people. How do you narrow that down? Within those groups, who do you try to educate?Anyone that is willing to listen. Technical or production professionals are better. There is no need tospend a lot of time educating procurement or contracting professionals. They don’t know what they arebuying, and they probably don’t care. If you can convince the people in their organization that use theservices, those people will advocate for you to contracting.
YourselfIf you don’t know your clients, your markets, how can you educate them? Study your clients. Study theirindustries. Study your own industry. Earn credibility by already knowing about them. Validity goes bothdirections. Ask your clients outright, they may have questions and not know it. Or maybe they just don’task the questions. Don’t just ask “Do you have any questions?” Get specific and explore what they doand don’t know. But you can’t inform your clients if you are not well-informed first.And who is the MOST important person to educate?
WHAT?What should you be educating? What should you be teaching these people?Well that isn’t for me to say. I am not here to tell you what are the facts and truths about thisindustry. I am not here to tell you what your clients should know. Those things should bedecided by everyone. By each of you. By other companies. By our organizations. Everystakeholder deserves to have input.But a few guidelines on the type of information we should teach.
ExpectationsTurns,Crossings,Construction,Police,TollsFirst, obviously you should beclear on what you do. Successin business is based onexpectations. Make sureeveryone has the properexpectations. That meanspreventing misunderstandingsor assumptions. In our industry,problems often arise overdifferent definitions of whatediting or proofreading means.Or even translation. Is it oneround, two rounds? Is DTPincluded? Many LSPs have perword rates. But we all includedifferent services in that“translation rate”. Of courseclients get confused.And we can help each other ifwe just take these problemsseriously.
GILT ProblemsThink about problems that the language services industry faces. Don’ttry to solve your own problems. Usually, if you have a problem, butthe industry doesn’t, that is your own fault. Not the industry’s. Andcertainly not the client’s. That’s when you need to fix yourself, andstop trying to fix others. If other companies legitimately have a betterproduct or service. You can’t stop that with education. So work onproblems we all share.
Coordinated MessagesPart of the problem is that clients are receivingmixed messages. If marketing is about repetition,then we should organize and coordinate our keymessages. Hearing the same thing over and overfrom different sources reinforces that messageeven more. That doesn’t mean you can’t usemarketing to show your own unique sellingpropositions or your differentiators. But don’tredefine the basics. Show how you compare basedon standardized measurements. That will improvethe average quality from our industry and how torecognize it. And that will stop the “race to thebottom”.
PositivityBut finally, be positive. Don’t be negative. Don’t whine. Don’t complain. People are naturally attractedto positivity.There are so many changes happening in our industry. Don’t let your clients think that that you’re justbitter or angry about innovation or some disruptor. No, you’re just realistic about it. Sure, innovation isgreat and you are dedicated to staying up-to-date with as much of it as you can. But your job is to helpyour clients see through the marketing so that they will know the good and the bad, and then they canmake an informed decision. Because of you. You’re not teaching your clients, you’re empowering them.
HOW?How can we teach them these things?How should we be teaching them?
Be PreparedFirst. Be prepared.Think about the questions from clients that youanswer more than once. Or the informationyou have to keep telling them. Have a list, andeach time it happens, you or your staff canadd to that list. Write down answers to thosecommon questions and make them availablefor the entire staff. You can also learn whichtopics your own clients need the mostinformation about. This lets you prioritize. Youcan create content for your staff. Or contentthat you can distribute: white papers, shortvideos, charts and infographics, statistics,facts, personal stories and anecdotes, or evena glossary of industry terminology. It is mucheasier to spontaneously teach, when you havea library of content already prepared.
Be ViralBe viral. Make content easy to forward to other people, to systems, to social media, to anything, and toeverything. And allow people to respond, comment, or even rate your content. And make sure that whenyou need to, you reply back. Viral educational content is really content marketing.But why speak to just one person. Weusually educate one-to-one. But we shouldalso be educating one-to-many.
Be RelatableBe relatable. Choose words andterminology appropriate for the audience.Avoid complex terminology unless that iswhat you are explaining. Use analogiesthat they can relate to. When you’re talkingto an industry, explain something in thecontext of that industry. When talking toone person, ask them questions to findwhat analogies will be effective for them.Or tell a story. Humans are naturallyemotional. Most people engage with andremember stories and emotions betterthan just facts. Also, people arestatistically more likely to believe in orbecome emotionally involved in a story if itis told from their point of view, or the pointof view of someone like them, a relatablecharacter.
Be BelievableBe believable. First of all,the best way to do that is totell the truth. If you’re addingto the misinformation in themarket, you are adding to thedistrust and the confusion.You are helping the race tothe bottom. You are helpingcommoditization. Build areputation for beingtrustworthy. Admit when youare wrong. Don’t exaggerate.Be specific and use metricsand facts. And when you can,use supporting evidence orreferences.These days, people areskeptical of “facts”. Peopledecide in the first few secondsif they will continue looking atcontent. But if their own ideasare validated, they keepreading.
Be BelievableThe company Less Accounting knew this and theyused it on their web site.Neuro-marketing research shows that if the readeragrees with the problem or the pain, they are muchmore likely to agree with a suggested solution.
Be Simple“Ain’t nobodygot time for that.”Sweet Brown̶ ̶ ̶Be simple. People can only learn small amounts of information at one time. And no one wants to read largeamounts of data. Pictures are shared on social media much more frequently than articles. We preferheadlines. Infographics are also appealing.Small packets of information though. A theory called Cascading Flow of Information says that people want toreceive new information, repeatedly and continuously. But only if that information is relevant at that time tothem, and if it arrives in small amounts. It’s also easier to remember what you just read. Today, we all spendso much time in social media, where micro-published content is coming at us so quickly in such largevolumes; we have trained ourselves to filter. And anything too complicated or too large will usually beignored. We just don’t have time for it.
Be FunAnd lastly, be fun. When possible, make it interesting. No one likes education to feel like education. Havecontests or competitions that actually educate. Make websites or infographics that are interactive. Usegames or puzzles or trivia. You can even tell jokes or funny stories.
WHERE?Where should we be doing this education?Everywhere! A variety of studies were conducted by Ann McFayden, Albert Cennalla, Janine Nahapiet, andSumantra Ghoshal, and all of these studies came to the same conclusion. The more contact two partieshave with each other, the more information sharing happens. And that increases the knowledge that both ofthese two parties have about each other. And that creates a subconscious emotional connection, and theyboth develop similar goals. In other words, you don’t simply know more about each other – both of you aremore likely to want to collaborate to solve problems.
Your Web SiteBut more specifically, where? Your web site, obviously. Web sitesshould already include education. FAQ pages are nice.Knowledge Centers, or Resource Centers are better.Make your Knowledge Center free. Make yourinformation free. Don’t require people to sign up or fillout a form in order to access your information. No onewants to be added to another mailing list or be afraid ofa sales call just because they want to look up someinformation. What is the point of creating all of thatcontent if most people never see it? Make it free sothat a lot more people will see it. And make somecontent easily downloadable. But, put your branding allover it.But people only go to Resource Centers if they arealready looking for information. You can also sprinkleeducation throughout your site. They don’t have to besearching for education and they’ll get it anyway. Talkabout standardizations and certifications on pagesabout your quality. Don’t just say you have quality, saywhat the industry has or is working on, then tie that toyourself. Don’t just say what languages you do. Set upexpectations about working with specific languages.Issues with bi-directional languages, writing systems,languages with very low literacy or no standard dialect.
All CommunicationsCRMMarketingAdvertisingPRAdd education to your othermarketing materials too. Whosays you can’t teach a little withyour brochures. Or even in youradvertising. Okay, it’s notobvious, or easy, but if you canand it fits, why not. It couldeven be part of the keymessage, the call to action, orthe differentiator.But honestly, it can go into all ofyour communication. In yourblog is an obvious place. Butalso in your newsletters. Pressreleases. Any RSS feeds. Anddefinitely in your social media.Some of you already do thesethings. But we created thisinformation asymmetry becauseour messages all conflict witheach other.
Trade OrganizationsClient education should also come from our own tradeorganizations instead of being the sole responsibility of LSPs.We need guidance. But we also need representatives. Someorganizations have done some work and they offer usresources. But there could be more. And it could be moreorganized. And LSPs should not sit and wait for that tohappen. We are those organizations, so LSPs and othermembers have to contribute time and content too.Committees can make decisions and plans. Information willalso have more legitimacy if it comes from a tradeorganization or a group, and not just from one for-profitcompany.
OutsideOur IndustryAnd we should try to reach a broaderaudience. Proactively go to other industries.Post information in LinkedIn groups relatedto your clients, not yourselves. Look forpeople on social media or blogs who areconfused or who have questions aboutwhat we do, and then respond. Give themuseful information. When you go to tradeshows or events for other industries,prepare yourself to answer typicalquestions. Better yet, offer to speak aboutlanguage service industry to that outsideaudience. If exhibiting, your take-awayinformation can include industry educationalong with information about your company.And don’t forget that any one-on-oneconversation is an opportunity. Prepareyour salespeople and your accountmanagers on how to respond to commonquestions or concerns. Even in theirpersonal time.
WHEN?All of this advice is nice, but the big question isWhen will de-commoditization happen?Next year? The year after that? Five years?
Educating Buyers EnoughYes. And no. Commoditization is just a process. Therefore,de-commoditization is also just a process. There will never be acomplete knowledge equilibrium between providers and buyers.Providers of language services will always know more about thoseservices than the buyers. And the buyers will always know morethan the general public. And because buyers will not knoweverything, they will continue to ask for more, cheaper, faster,better. They will always look to improve themselves and for you tobe more competitive.The goal is not to equalize knowledge. But to educate buyersenough that they can evaluate quality, and therefore buy on value,not on price. So if, today, most buyers evaluate on price, when willmost buyers evaluate on value? Not next year. Maybe in five years.Maybe more. I don’t know. But it will never happen if we don’t dothe work.
notenoughknowledgeenoughknowledgeTodayYesterday TomorrowEducating Buyers EnoughDe-commoditizationCommoditizationAmountofInformationAsymmetryHow much we know100%0%
BenefitsRight AwaySo why bother? Well there are somebenefits you will see in the near future.A more educated client might be lessfrustrating. You won’t have to explainthe same thing over and over as often.Or have to constantly defend standardpractices. And saving all of that time ismore time your people can work onsomething more important. That isadded efficiency. Also, you can use itin your marketing. Show yourexpertise. Sharing this knowledge is avalue-add. Which again is puttingemphasis on total value, and not theper-word price.
HabitBut most importantly,don’t focus on when thiswill happen. There is noend goal. There willnever be a day wheneveryone knowseverything. Think of clienteducation as a new habit.Something you can dowithout even thinkingabout it. You cancontribute every week.Every day. Just a littlebit. Anywhere. It all addsup. The entire industry isaffected by this, so theentire industry can sharein the work. Companies,organizations, evenvendors. We just have tobe a little moreorganized. We needconsistency. We needleadership. But don’tunderestimate the powerof many people eachtaking small actions.
Environmentalism storyJust look atenvironmentalism.People recycling,reusing, reducing. Themost dramaticenvironmental changesare from you. And me.And everyone else thatmakes small changes totheir daily lives.There is a company named OPOWER. And since 2010 they have been working with energycompanies to help those companies educate their customers about their energy usage. They notifythem about how much energy they use, which types, when, and how they compare to their neighbors.They also compare them to other customers based on different demographics. OPOWER teachesthese customers ways to conserve energy. Then they help the customers set up energy use goals. Andthey send them alerts when they are close to going over those limits they set. OPOWER helpscustomers understand and change their behavior in small ways to use less energy.
Environmentalism story Down 15%A study by the National Resource Defense Council of the United States found that modifying existingbehavior to reduce personal consumption of existing energy types through such consumer educationcould potentially reduce national consumption by 2020 by 15%.
“Never doubt that a small group of thoughtful,committed citizens can change the world.Indeed, it is the only thing that ever has.”Margaret Mead̶ ̶ ̶We don’t need to change the whole world. But we can change our industry. As a group.
HOMEWORK1)Talk to industry organizationsa)help to organize / centralize2)Talk to each othera)What are our key messages to buyers3)Start your own library of educational content