Of course, you say. We provide an important service. No doubt. But do your customers need YOU? Could they get that service from another company and feel (whether you agree or not) that it is comparable?
It is interesting to me how many companies can’t even define who their target customers are; they are anybody that needs the service, right? Wrong!! If all customers need is a basic product or service and three companies can supply it and your company, at least this time, had a small edge on price on timing, you win. Until next time when someone else has a small edge.
Wouldn’t it be nice if you knew they would choose you consistently? You can ensure customers need YOU. It just requires you to know what they need. Not every customer is created equal.
Here are three ways to do it:
1. What would change the paradigm in your industry? Identify the most common complaint that nobody addresses and figure out how to do it. It is an innovation waiting to happen and eventually someone will invent a better mousetrap. Why shouldn’t it be you? This is a product excellence strategy.
2. Integrate the business with your customer. Once a bank gets you to become an online customer and sign up for online bill pay it is very hard for most of us to walk away. It would be so time consuming to switch. There are distributors that work with customers to establish that same degree of integration–identifying EOQ’s, determining an inventory policy that maximizes profit, managing stock levels and servicing a broader range of needs. That makes it hard to change–why would they need to? That type of partnership is considered a customer focus strategy.
3. While few of my clients pursue this strategy, there are those that excel at it– low price. Be the low price–always. Sound familiar? Wal-Mart makes it work by having superior logistics that allows them to charge less and still make money. So does Southwest Airlines. There are manufacturing operations that successfully increased productivity to allow for a low price model.
Regardless of which path you take, the key is to align your behaviors and operations to maximize it. It is impossible to do all three at the same time without being a Jekyll and Hyde. It will add cost and confusion and challenge consistency. You can hone your business model to the point customers choose YOU!
We have some tools to help you identify your ideal customers, and choose which strategy will maximize your profitability. If interested, get in touch. We would be glad to help! mreynolds@breakthroughmaster.com