AFTER $14 MILLION dollars and four years, our customers
don't want to buy what we have? What a depressing statement
from a VP of Sales. How many times can you afford to have a
new product fail in the marketplace? How many customers can
you afford to lose because you don't meet their needs?
Shortest time to market no longer cuts it, nor does lowest
cost. And excellent customer service is now expected. As
the old rules for achieving competitive advantage fade
away, what can you do to secure customers and vanquish
competitors?
The only true, sustainable competitive advantage is an
intimate understanding of customer needs. You can develop
such "clear customer insight" in many ways and use it to
win profits and the loyalty of "savvy" customers.
Learn About Your Customers
Often, we attempt to understand our customers by employing
approximations of customer needs and wants, such as
third-party market research, anecdotal evidence from sales
or service organizations, competitive activities, website
tracking, and, worse, our own opinions. We need to go
directly to the source, gathering real, direct customer
insight that's accurate, current, and meaningful, and upon
which we can bet our businesses.
Not every customer has something to offer. The 80/20 rule
applies here: select the most valuable 20 percent of your
customers according to an accepted metric such as strategic
fit, gross revenue, gross margin, cost to support, or
frequency of purchase, and cultivate long-term, two-way
relationships with them. Ask them to share with you their
candid opinions. Go visit them and observe the use of your
product or service in actual environments.
While customers are critical to learn from, prospects may
be even more valuable. In many cases, customers keep doing
what they've always done, and are poor predictors of new
technologies or other marketplace shifts. But prospects are
not already infatuated with you or your current products,
and will communicate more realistic views of the changing
marketplace. So listen to prospects as well as customers.
Information to Gather
What information needs to be gathered to obtain clear
customer insight?
*Working environment* Ask, "What is the environment that
our customers are working in?" "Who is using the product
vs. who is the buyer?" Understanding the environment may
provide clues as to how your products are used and how
their use could be improved, there by increasing the value
to customers. You need to know how customers are or would
be using your product or service.
Ideally, you should go directly to your customer site and
watch the product or service being used. In this way, you
can gather information that may not be evident as someone
describes their environment and can't be uncovered using
surveys or other impersonal means.
*New opportunities* The greatest value in gathering
firsthand customer insight may be the ability to uncover
new opportunities, either for new applications of existing
products or for new products. During direct customer
interviews, you can uncover latent needs that customers may
not even know they have. Frequently, your company will be
uniquely capable of addressing these needs.
Acting on the Results
Without this step, nothing else even matters. Here are a
few ideas:
1. Draw a poster-sized picture of your stereotypical
customer and post it in the most prominent spot you can.
Give this stereotypical customer a name. Record on the
picture all of the details about the customer that you
know, including the environment they are in, their worries
and concerns, and their most painful needs.
2. Laminate smaller versions of the poster and hand them
out at meetings. Before making decisions, ask yourselves if
your customers (by name) will even care about the decision
you are making. If they do, will your decision alleviate
their pain?
3. Examine your current products and services for problems
you are causing your customers. Are you destroying your
relationships despite yourself? Make a list of everything
that you can do to improve. Rank each improvement according
to the value to the customer and the difficulty to
implement. Select the most critical and the easiest to
implement and fix it this week.
4. Explore new areas you can profitably address. What areas
of significant pain (or latent needs) did you uncover? How
can you provide added services or products to address these
needs? Flesh these out and review them with customers and
prospects.
5. Have customers rank your forthcoming new features or
product and service offerings. Describe the changes to
existing or new products and services you are considering
based on your newfound insight. Have your customers and
prospects rank your changes. You might have them spread
$100 over each change to signify both order of importance
and relative value, or rank them from 1 to 10 to signify
order of importance. Determine how much they might pay by
either asking for a figure or using comparative methods.
6. Create an implementation plan that balances real
customer insight with business reality. Create a resource
allocation plan that heavily weights the customer value and
more lightly weighs the strategic fit of the change with
the corporate direction, as well as the difficulty/cost of
implementation.
7. Execute. Armed with real customer insight, you are
prepared to keep your most valuable customers as your gre a
test allies in thwarting competitors.
The only sustainable competitive advantage is clear
customer insight. By leveraging your customer knowledge,
you can make strategic and tactical business decisions that
your customers and prospects will appreciate. Even better,
they will pay for them, increasing your revenue, profits
and overall success.
----------------------------------------------------
Curtis N. Bingham, President of The Predictive Consulting
Group, helps organizations dramatically increase customer
acquisition, retention, & profitability. For more
information about his new Customer Experience Audit,
Customer Strategy, or Chief Customer Officers, visit his
website at http://www.predictiveconsulting.com or his blog
at http://www.curtisbingham.com .
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