Thomas Nies developed an understanding of Cincom’s customers Featured

8:00pm EDT October 26, 2010
Thomas Nies developed an understanding of Cincom’s customers

Thomas M. Nies understands everything has a life cycle. So the longest actively serving CEO in the computer industry built his business on the notion of reinvention.

“Creating a long-term sustainable business is obviously something that is not done just once,” says Nies, founder of Cincom Systems Inc. “But it’s something that must be continuously done over time. The competitive advantage of one’s offerings has a limited time span — three years, five years, seven years — and the more high-technology-related the endeavor, the shorter the typical life span.”

Nies grew Cincom from its Cincinnati roots into an international software player. And he did it by staying in front of and adapting to changing industry and client needs.

“Creating a long-term sustainable business requires some type of entrepreneurial orientation to the business that is constantly reinventing itself,” he says. “New products, new technologies, new services, new offerings that continue to respond forward so as the initial products or services die off, the company doesn’t die off with them.”

To gauge the life span of your products or services or perhaps the need for new offerings, you must understand the marketplace and, as a result, your clients.

“One has to be constantly in touch with the marketplace to understand, ‘What is the opening we’re trying to take advantage of? What product or service are we trying to provide that customers really want? What unique value propositions can we offer them?’” Nies says. “If we don’t have unique value propositions that are pretty certain to gain some preference, the effort is probably going to fail.”

To understand those questions, Nies created a company culture and a method of inquiry that gives his 800 employees a role in understanding what the customer wants.

Involve everyone

At Cincom, understanding the client isn’t just left to the sales team. Nies says it’s important that every layer of the organization, from him to the front desk, is involved in inquiring how the company can better serve the customer.

“We try to involve everyone in the company, in every way possible with inquiring of the marketplace every day and every interaction,” Nies says.

The importance of involving multiple levels of employees is the ability to then go back, discuss the feedback and piece together the larger picture of what the customers’ needs are and what their business will look like in the future.

“I would most certainly recommend that all companies do it no matter what you’re selling or providing,” Nies says. “Typically, senior executives don’t want to talk to lower levels of the provider’s organization, they typically want to interact with their peers. You’re not going to get good insight from senior-level people unless your own senior-level people are willing to do the work necessary to interact with them.

“Similarly, the technicians don’t want to talk to the senior-level executives of a provider, because their interest is in the technical aspect of the product: How does it function? What does it do? What are its features and capabilities? You have to match people on both sides of the organization, the provider and the consumer. Then they have to constantly review and digest that within their own company to make sure that insight is being gained and all aspects of those insights are considered.”

If you want employees at multiple levels within your organization to participate in the customer discussion, you need to explain to them what their role is and teach them how to interact with the customer.

Understand the customer

Nies firmly believes that successful selling is not about promoting and telling customers what they need. Value-based selling or value-based providing, as he calls it, is about understanding the clients’ wants and how you can best serve those. Nies created an internal university called Understanding U to get that message across to his employees.

“That training or learning environment focuses totally on the need to understand what we’re trying to do and what customers want,” he says. “How do you help them buy what they want rather than try to sell them what we have? We try to stretch this understanding and inquiry mode of operation as broadly throughout the company as we can at every level. Because I believe we need a collective leadership at our business rather than leadership from the top or any particular group or person.”

There are two overriding requirements to successfully practice value-based providing in complex environments. You need to gain credibility with the client and understand their needs.

“One of these is the need to gain the credibility and the trust of the other, which builds their confidence that the values that are suggested or offered will be successfully gained without inordinate risk or cost and that they can be quickly gained,” Nies says. “The second theme is that understanding the other person’s wants and needs is essential. The explicit values they desire can be identified and established.

“An effective selling strategy is not about grand design or clever tricks or flashy presentations or good closing tactics. Rather, it’s about thoroughly understanding the customers’ perspective, their motives, their fears, their uncertainties, their wants, their needs and dissatisfactions, and how they may differently react at various stages of their choosing cycle. Then [you have] to understand how best to respond to each concern and to understand how to help resolve every issue and worry in ways (that) consistently build an increased trust in confidence.”

To ensure employees understand the complexity of reading customers, Nies developed a training program that includes reading materials, role playing and team collaboration. For example, after a topic is discussed, each team presents its idea of what that topic meant, how it should be applied and ways to better handle the situation.

Nies started with his direct reports and then oversaw the process as they facilitated the course for the next level of employees. Courses not only focus on sales but also on management, technical support and engineering. The hope is for between 30 and 40 percent of employees to partake in Understanding U by the end of this year and for participation to be continuous.

“We say that we learn forward, but we only understand backward,” Nies says. “We have to have certain knowledge before we can begin to understand. Understanding U is a means to connect the learning, connect the knowledge that we have and show how everything fits together and to do that on the basis of discovery rather than lectures.”

Ask the right questions

So you’ve made it a priority for your employees to interact with customers and understand their needs. Now you have to actually execute.

“Superficial attempts to gain information get superficial responses,” Nies says. “Human beings are conservative. By that I mean we want to try to do the least amount necessary to get a result. That’s good if it produces a result, but it seldom works.”

Simply, you can’t skimp on your communication with customers and the amount of feedback you acquire. You need to have direct, frequent and continuous conversations that will allow you to properly identify the customers’ needs and then provide solutions to meet those needs.

“Our emphasis is on inquiry, questioning, listening and curiosity and then trying to come up with innovative and progressive responses to what they want,” Nies says. “Rather than sitting around our own offices trying to dream up better ways to sell them what we’ve got or what we want to build or produce.

“You can’t fall in love with your own opinions. You have to confirm those. You have to interact directly with the customers and prospects and ask them. Listen to what they have to say in a very empathetic way.”

Nies and his employees use three essential questions when it comes to understanding customers and their needs: What do you want? Why do you want it? How can we help you get it? The “you” is stressed in each of those questions.

“The key point here is the emphasis has to move away from the provider and promoting himself (and move) to the customer and what they want, why do they want it and how do they want you to satisfy their needs,” he says. “That is a major quantum shift in the orientation of modern business. Modern business, up until these times, has been able to pretty much sell everything it can produce, because the world economy has been growing over the last 50 years, since the second World War.”

As the CEO, you need to lead by example. Spend time with your customers and ask the important questions. Nies does exactly that, either meeting with the CEO or the highest member in the company to gain a better understanding of the broader goals of the customer’s business.

“If I were meeting with a senior executive, I would personally not meet with him and tell him what he should be doing,” Nies says. “Sit down with him and say, ‘What are your plans to improve the competitive position of your business? Are you satisfied with your current rates of revenue growth? Are you satisfied with your current market share and its changes positive or negative? If you’re satisfied and believe this is working, what can we help you do to do more of it? If you’re not satisfied, what would you like someone like us or some other provider to do to help you reverse your situation?’

“My discussions with them would be almost totally inquiry-oriented. They know their business very, very well. They’re experts; they’re sophisticated thinkers. For me to be a provider to them or a helper, I need to know what they want and how do they want me to help them.”

Asking the right questions is an essential first step in being able to serve a customer. Without a total grasp on where his or her company is headed and what he or she is looking for in a product or service, you won’t be able to properly analyze how your company can meet that customer’s needs.

Nies’ method of understanding the customer is partially proven in the results the company sees on quarterly customer service surveys. Routinely, between 97 and 98 percent of those who have used Cincom’s customer service report they would recommend others to buy the company’s products.

“The key idea here is that one cannot serve customers that one cannot create,” he says. “The entrepreneur has to understand what those customers want and why they want it so they can satisfy them and provide answers for their wants and needs. If they can’t do that, then they have no reason for being in business.”

How to reach: Cincom Systems Inc., (800) 224-6266 or