Think about something you buy all of the time. Imagine how
you would change that offering if you had complete control
over what was delivered. The result would look a lot
different, wouldn't it? Your customers feel the same way,
as do their customers, and so on.
Let's expand on the idea of individualizing what you offer.
This is an important subject, and one where you have many
pleasant and unpleasant surprises ahead of you. To begin
with, you probably don't know what choices each potential
customer wants.
Market research results will often tell you which
percentage of the market favors various options. Better
market research may even segment the market, and tell you
preferences by segment.
Be wary though of the answers because both approaches can
be very misleading for identifying the right new benefit
choices to add.
Let's look at the information a different way. Segment your
customers to find those where you should earn a higher
profit margin than any of your competitors in serving the
total account. Then, consider one-by-one how you could add
valuable benefits to each of these customers.
The best way to do this is to spend time observing how they
and their customers (and so forth on to the final user)
engage and respond to your products and services. Then
follow up on your observations by discussing what you
learned with those you observed and asking them about what
else is important to that customer which you have not yet
observed. Your expressed sensitivity to their problems will
help them dredge up deeply buried resentments and problems
that they have repressed because they assume you will do
nothing to help them.
Why start with those where you can earn a higher profit
margin than competitors?
First, because you will be more eager and interested in
finding new benefits for them.
Second, you are more likely to be willing to create
customer-specific solutions for them (which all of your
potential customers may also need).
Third, the potential rewards for your company from adding
these benefits are large. As such, your successful
experiments will add more resources that you may need to
change to a better business model.
After you have done all you can do with this set of
customers, then look at the customers (one-by-one again)
where your total account profit margin will be similar to
the most effective competitor in supplying or helping that
account. Follow the same process, except to discuss and
offer to add improvements that you have identified from
your first experiences.
Having examined these two groups, you then need to begin
thinking about how each of these benefits can be customized
to reflect what individual customers need. Rather than
giving each new benefit to all customers (whether they need
or value the benefit, or not), how can you change your
business model to provide just the right mix of new
benefits that the customer wants and needs? Notice that in
many cases this may include doing less than you do now in
some areas for certain customers.
Consider Dell Computer. Each corporate account can have a
separate on-line profile that tells Dell what
configurations of hardware and software the company wants.
The profile for each customer is different, and is based on
interactions with the customer.
When a person at a customer account orders a piece of
equipment (whether a server or a personal computer), that
equipment will come preloaded with just the capabilities
and software that are needed to work best for that company
without any further activity by the Information Technology
staff. This compatibility across all the equipment allows
all the tasks to run faster and more reliably for their
intended purposes in a given application.
How can your business model go from providing consistent
potential benefits to all customers to tailoring those
benefits specifically to individual customers and sell at
today's prices? The odds are pretty good that you can,
because many people don't want expensive-to-provide aspects
of your current offerings.
At the same time, others would be willing to pay a premium
for the same aspects. The cost of getting and responding to
the right information for what to provide should be a lot
less than the cost of providing the wrong combinations of
aspects for almost every customer. Many contract
manufacturers and outsourced service suppliers have the
skill and experience to help you put processes in place to
fulfill these individual needs, if you find the challenge
insuperable.
Copyright 2008 Donald W. Mitchell, All Rights Reserved
----------------------------------------------------
Donald Mitchell is chairman of Mitchell and Company, a
strategy and financial consulting firm in Weston, MA. He is
coauthor of seven books including Adventures of an
Optimist, The 2,000 Percent Solution, and The Ultimate
Competitive Advantage. You can find free tips for
accomplishing 20 times more by registering at:
====> http://www.2000percentsolution.com .
No comments:
Post a Comment