Is your company doing everything it possibly can to be useful and compelling to customers? Nayeem Syed provides seven essential questions to make sure customers come first.
This is a simple but incredibly powerful question which can be used in the product development, marketing and sales function of any organisation that needs to persuade buyers to select it from a range of alternative sellers. It can be used to great effect when teams brainstorm together to consider what they are offering from the perspective of their target buyers, and work out if what they are offering and how, is best addressing a big enough specific consumer problem that will lead to a sufficient number of satisfied purchasers.
Thinking from the customer’s perspective is what great organisations do. The trouble is that organisations routinely produce incredibly innovative things that don’t sell, set prices seeking only a modest profit but which customers consider still too high or devise marketing strategies that fail to excite the market.
Focusing on what will actually encourage customers to willingly part with their cash will clear the fog and help you make the right choices. If leaders help their organisations fully internalise this fundamental question and use it as a formal tool, they will shape the internal culture at the operating system level, and help align all their employees around a grounded consumer marketing mindset: we want you to choose us and keep choosing us.
Companies spend a great deal of time thinking about what they offer for sale; either the same or new things, to either the same or new customers. However, companies would do better to consider why customers should buy and keep buying from them?
The best defence is a good offence. You may currently be a large organisation, or even the biggest company currently in your space, but new technologies and more open platforms mean much lower barriers to entry. These developments necessarily mean shrinking economic moats and a decreasing ability to rely on traditional incumbent status and price stickiness.
Consider Apple which has repeatedly entered entirely new industries, spent heavily and built its way into a leading position. In turn, it too has faced the issue of powerful players piling in and producing de facto facsimiles according to its carefully crafted template. Google is also a highly successful disruptor of industries, developing incredible alternatives to high margin profitable business tools, operating systems and devices often seeking small if any direct profit, seemingly viewing these initiatives as indirectly growing the use of search in which it leads the world. Equally, a small of team of talented technologists with a genius idea can rapidly disrupt even seemingly unassailable product superiority or customer loyalty.
Only a commitment to providing customers with the most compelling service will provide a sustainable defence to disruptive changes and aggressive market entrants.
Ask yourself: are you considered competent or one of the best in your industry? Is your product providing customers with the most useful features? Are you helping them gain the competitive advantage they need to succeed in their own downstream markets?
Even a low cost strategy must still offer compelling value for the price charged. Low cost short haul airlines seemed (to varying degrees) to revel in ignoring traditional industry customer service staples – arguing they had focused on the right lever – price – and not extras or passengers at the margin. However, is this sustainable indefinitely? As they sought to compete outside their traditional tier-two routes, and found they perhaps overreached in the manufacturing of hidden extras, they have tempered their drive to strip back every possible expectation in the travelling experience and have now sought a more business friendly image. Growth expectations will continue to put pressure on them and external forces can, and usually will, erode their competitive advantages.
Amazon secured its “1-Click” patent to free users from not only manually inputting billing and shipping information, but even the need to go through the shopping basket process. The latter arguably saved the user only a few extra clicks but clearly was appreciated by users as evidenced by the amazing resulting spike in registrations for this faster way of buying and industry validation when it licensed it to Apple for the iTunes Store and iPhoto.
When Amazon developed its mobile e-reader device, it led with the slogan which further demonstrates its grasp of this question: Think of book. Start reading it in 60 seconds. The way it then devised the search, ordering and wireless delivery of content furthered the so-called long tail effect, enabling its entire digital book catalogue of content to be accessed even more easily than its desktop e-reader service.
The process through which Amazon found a way to succeed in simplifying online ordering and digital delivery can be applied to any product or service by just collectively exhausting the possible ways to answer this question.
The question has broader application: we should continuously aim to make all parts of the customer purchasing journey easier, finding appropriate ways to enable clients to discover and try out new products and remove obstacles or red tape to spending more with us. We must create frictionless commerce in a broader sense.
What is the average length of time to get a client on board – to complete a tendering process, negotiate and conclude contracts, complete acceptance testing and migrate away from third parties? Each of these steps has scope for reduction and offers an opportunity for each internal group to find structural ways to do this. And, the motivation is simply this: to avoid losing business and to accelerate the initial billing date.
Doing a good job may keep clients but doing a great job will exponentially magnify any marketing effort. The halo affect that some organisations enjoy is intentionally earned and not accidental. These companies consciously want to be loved by their customers. This is a helpful, healthy and vital form of corporate neediness. To achieve this, leaders focus their employees on striving to be as helpful as possible in their particular function to further their organisation’s overall delivery of great value for money. This goodwill also empowers companies to be bold when innovating in new areas and less fearful when mistakes invariably happen.
The US retailer Nordstorm is often held up as an example of exemplary customer service. Its president joked that his company focuses on this because "customers will buy more when they're happy with you”. The challenge he says is that "what has made them happy has changed". Indeed, the shift from fixed stores to e-commerce has presented challenges to Nordstrom’s coveted competitive advantage: its experienced and highly committed in-store sales staff. The challenge Nordstorm Direct, its online store, faced was transferring that powerful human engagement to the online experience. The company seemed to succeed by approaching the task applying its traditional great-customer-service-leads-to-sales ethos to the new platform and new customers segments.
Selling is time consuming and certainly not formulaic. And it’s not solely the responsibility of those whose compensation is directly related to how many units are sold. Each and every interaction that each and every one of your colleagues has with customers is a marketing opportunity. Failure to fully appreciate this can inadvertently lead to broken relationships and worse, the opposite of customers singing your praises.
Often those only sporadically involved in the seller’s tendering process can and do send conflicting messages as to how much the customer is valued. This conflicting message may leave the customer wondering what the firm will be like to deal with once the ink has dried on the sales order.
Just as receptionists and call centre staff are hired and trained to fully appreciate their role as the “initial face” and “ongoing voice” of their organisation, all employees no matter how far removed from constant or regular direct customer interaction must be helped to ensure a healthy respect for their role in “representing well” the company to customers and to actively contribute to their front-line colleagues efforts to support the customer’s needs.
The aim should be a comprehensive alignment toward a single collective mindset: an appreciation of the clear self interest in empathising with the challenges, concerns and needs of customers and an acceptance of each individual’s responsibility in contributing toward the customer experience. Every one must think more and care sincerely about customers.
You should be constantly and actively thinking about your best customers – those customers who already spend a lot with you and those with the potential to spend even more.
Sales teams will think a lot about whether they can we sell more of the same to customers. However, you should also ask if there are things which customers are buying from others, or entirely new things they need that you could usefully offer to sell them. If you have the relationship and a track record of credibly offering customers one solution, you are well positioned to offer a solution to their other requirements, to the extent you usefully and profitably can.
To do this, you need to deeply understand their business structures and spending behaviours in order to anticipate threats to current revenue streams and identify new opportunities.
Research teams will seek out market intelligence but all staff should be comprehensively trained to understand what you sell, why it is useful and how it compares with the alternatives. Further, you should encourage - and expect - staff to learn about their industry and to develop their client and market knowledge through a structured plan agreed with line managers. It is otherwise difficult to expect them to innovate, drive change and ultimately fulfil their potential in providing added value.
Perhaps this is easier in start-ups where many employees literally grow up along with the company but even large sprawling conglomerates can at least offer employees opportunities and incentives to engage. Addressing this may be even more vital in larger, older organisations.
It would be an ideal situation if your customers would tell you- clearly and in an unvarnished way - exactly what they liked about your product, what they would change, what other features they would appreciate and how much more they would be prepared to pay for them and what they thought of your direct competitors on these counts.
You may not be able to ask too much directly and equally and customers may not be prepared to answer you directly. However, there are few better ways to find out which would be useful activities to pursue and what refinements would provide value likely to be appreciated by customers. Therefore, you want to create a trusting relationship that will allow you to work discreetly, but openly, with customers so that you can directly gain actionable insights. They could for example be invited to sessions in your R&D labs and encouraged to step outside of their traditional roles and play with the test use cases and discuss their reactions.
In this context, your best customers are not necessarily the biggest potential spenders. So, initially, you should look to engage with those customers you have strongest relationships with and appear more open to collaboration to lead you to greater mutually beneficial learning.
However, you shouldn’t give up on clients who initially are not enthusiastic to the potential of joint innovation. But, you can keep working on them, sharing details of your plans, some of the results so that they may see the benefits of joining with you.
A business has two goals. First, to generate higher earnings in order to be able do to useful things. Second, to create value for customers that they will pay a premium for. (Hopefully, they will then go on to do useful things too.)
The only sustainable pathway to the first is through achieving the second. Success there will, on average, be in proportion to the entire organisation’s commitment to selling more by delivering that perceived customer value.
What that looks like in each case can be worked out by answering these questions with humility and a determination to demonstrate to customers they should select you and your company over the alternatives.
This article is written in a personal capacity.
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