Thursday, November 17, 2016

Book Review: The Xiaomi Way: Customer engagement strategies that built one of the largest smartphone companies in the world

What motivates me in work are a lot of things, but currently especially the following aspects are very motivating for me:

  • Using user feedback into digital media (websites/devices), to really get this interaction with users. To find out what is working but also what to improve, and to understand why users do not buy! (and to change that of course).
  • Optimizing the user experience (user engagement, touchpoints, data collection)
  • Constantly innovating to improve the user experience
  • Crossborder e-commerce
  • Startup mentality, doing things together in a great team with the same focus.

I really think that ecommerce (and marketing) has evolved from a functional model (direct selling) to a brand model and is now moving to an experience model. Things might overlap a little bit between these models, but this is the greater picture. 
It is not only me who thinks so of course, more and more is written about this subject recently and it fits perfectly in line with another book I have read.

I bought the book “The Xiaomi Way – Customer engagement strategies that built one of the largest smartphone companies in the world”. So I could learn more about their techniques in terms of user experience and how to deal with user feedback, and of course to learn more from the Chinese (ecommerce) market, which also interests me a lot. 

I will highlight a few things from this book, a book that really made me enthusiastic again, just same so, when I read this book. So many possibilities still, if you just think from the customer's perspective and if you aim for the long term, instead of the short term! 
Besides that it is always nice if you read about people and companies that have the same vision as I have.
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Most of the bullets below, can also be used in a situation where you do not develop products yourself, but  also if you just sell products you can use these idea’s and best practices to offer your customers a better experience. Use this bulletlist to think creatively in how to connect with your customers and how to provide them a better experience.

A few highlights from the book: The Xiaomi Way

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  • The secret of success in Internet thinking is focus. Only if you remain focused on something you can be fast. Only if you are fast you can achieve “├╝ltimate excellence””. Only if you have achieved ultimate excellence you can get a good word of mouth reputation. Only those who live by word of mouth reputation on the internet will survive.
  • The traditional mode of doing things turns the relationship between a user and the product into a naked matter of money. Once the transaction is done, the relationship between company and user is cut off.  Some companies even hope to have nothing further to do with the cusotmer once he or she has bought the product. Afer all, further entanglements might involve all kinds of post purchase demands, disputes, costs, and PR crisis. Instead a company has to make friends with users. Only friends will really help you pass on the word. The transformation in business models, to make friends with customers, is made necessary by the fact that we are living in an age when you cannot simply “sell” a product, what you are selling is a sense of engagement in the product.
  • Word of mouth reputation is king! Yes, and in order to do one can think of many digital toolings that can be made, to make people interact about and with you! This can be done for any webshop!
  • Branding went through an almost insane era, but now with the experience model coming along, many of those nicely “branded” companies have now disappeared.
  • As this book is about smart phones,  it sees three principles of engagement:
    • Open R&D to users.
    • Create an interactive design
    • Promote through word of mouth. 
  • Consumers are also producers, the distinction between professionals and amateurs will fade. 
  • Consumers are playing a larger role in the process of creating value. Therefore companies must establish new organizational structures.”
  • Within Xiaomi itself, we have created a well functioning system that allows us to improve product based on user responses. Xiaomi does not use key performance indicators. What drives performance is purely and simply the user responses. 
  • Between “good looking” and “easy to use””, easy to use should always win.
  • Turn products into activities. In making products you have to use an operational way of thinking, that is, you have to plant things in the design of your product that become functions. Those functions themselves are links in activities.
  • On Hiring: They had to have an extreme devotion to what they were doing. People with such an attitude are able to ignite themselves. They do not require external motivation and you do not need to manage them with a pile of KPI targets and management systems. 
  • Early Days: When the Mi 1 came out many people had doubts about the quality of China made smart phones. They could not believe Chinese manufacturers used the certified materials. When a journalist raised such doubts, Lei Jun would stop everything no matter what was planned. He patiently explain that our parts were supplied by world class suppliers and that we were using the same assembly plant that had previously been used by apple. He would even demo how our smartphone was unbreakable by throwing it at the ground 3 times!
  • Previously companies had a “competitive mentality””whereas now the mentality is more about the product itself.
  • Previously, the idea was to implant our thought into the customers consciousness, whereas now it is to infiltrate the consumers consciousness to obtain their thought!
  • Even today we do our utmost best not to put out ads! That forces us to consider how we can get users to like our products voluntarily, on their own initiative.
  • We never asked a celebrity to represent us. Our products themselves and our users are our stars.
  • On service: We decided that adequate strategic investment had to go into customer service. We were faced with a major challenge, because our sales volume increased so fast. What that meant was that we had to outsource a considerable amount of customer servicing. Now we have 75 percent in house and 25 percent still outsourced. Still we feel that is not enough, I hope that in the future 100 percent of our customer service personnel will be our own employees. Only when people are part of the company will they have a great sens of identification with the job, only then will they feel that they are providing service to their own customers.
  • On service: if service is not done within one hour, xiaomi will pay the user a voucher of 20 RMB, that is to have the user to feel the service is really fast. They made also an on site game of throwing large dices. If users have to wait more then an hour, they can play the game throwing dice, via which they can win small prices.
It really gives me passion again and makes me so enthusiastic, to read a book like this. My next smartphone will probably be a Xiaomi phone! 

Learn to think from the customer's perspective and create possibilities for customers to talk with you and especially about you! 

PS: Too bad the book does not describe more about the way how they work, which tools they use to acquire all this massive customer data, and how they work with this in their data warehouse. Well, next time I am in China, I will sent an email if I can pay a visit tot he Xiaomi headquarters, maybe I am lucky :)

Now I am relaxing and enjoying the rest of my trainride in China which is extremely comfortable in a bullet train to Yangshuo.

Entanglement with it's customers: The Xiaomi Way book review

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