Every business needs to discern which customers are their target customers—the ones that best fit their business model. Those customers are the ones that your company makes money on, can best serve based on your unique capabilities and strengths, and are going to grow over time. The first two may be obvious. The third criteria may not. Lisa Hays, guest blogger, suggests how we might find our future best customers.
By Lisa Hays, guest blogger
By re-evaluating your customer base today, you can better position your firm as a desirable supplier (and potential partner) by tomorrow’s highly-valued customers. One option is to seek as customers firms smaller than those you currently serve if they demonstrate significant growth potential and operate substantially like your core target group.
Every industry has small players. Industries undergoing tremendous change and growth have more small – often young – firms. Some companies simply aren’t going to make it. Some will reach a sustainable level, but not be positioned for additional growth. Then there are companies with viable business models and strategies, poised for particularly strong and sustained growth.
Value of These Companies as Customers Today?
Small – often young – companies primed to excel within their industries may not meet target customer criteria today. However, they can be excellent customers someday so capturing them now makes sense. Their future customer potential along with 1) the ability to learn about future characteristics of beneficial supplier and partner relationships, and 2) how these companies approach business, their employees, and obtain and serve their customers combine to provide excellent insight – making them worthwhile customers today. The key is to be sure their basic business values coincide with your target customers.
What’s critical is identifying high-growth, long-term successful companies. While it may not be blatantly obvious, several distinctive differences set these companies apart.
What Distinguishes These Companies?
There are multiple observable actions that distinguish these firms from other small companies.
Differentiating Behaviors:
- Visionary leaders that articulate the strategic plan, target customers and value the company offers now and in the future.
- Key employees are highly talented, bring some experience, and an entrepreneurial mindset.
- Employees are valued. A strong culture, competitive pay and multiple opportunities for training and personal development attract, motivate and retain the top talent they require.
- They invest in advanced technologies that enable them to offer more customized products and services to their customers, today and in the future. They are agile and adapt more quickly to change than their peers.
- They are customer centric; obvious in how they conduct business.
- They are well-funded for their current status and next stage of growth.
These differentiating behaviors can be easily observed through discussions with company leadership, review of their website and other promotional materials, press releases, etc. Depending on type of company, perhaps your business can become a customer. Chambers of Commerce and other community-based business groups may count these business leaders among their membership. Conversations with customers, other suppliers and contacts within the financial community can also provide valuable insight.
Understanding the differentiating factors that make these businesses desirable customers takes effort. Most worthwhile endeavors do.
Your top customers today may well be replaced in the future by companies that are disruptive change-drivers in their industries. Developing strong relationships with and learning from these businesses early is a smart business move.
Call to Action:
- Discuss the potential value of identifying and developing customer relationships with small businesses with a strong growth trajectory. Identify key criteria, and appoint someone from the leadership team with the task of overseeing this effort. Ensure there is no duplication of efforts with those charged with customer development.
- Identify the changes your business needs to make to continue to meet and exceed customer expectations. Which businesses are most able to help you to accelerate desired change within your company? What is the most appropriate way to approach those businesses?
- Is “customer centric” a term people internally use to describe your company? Externally? If not, there’s considerable work to be done.
- How would company employees describe your company culture? The extent to which they feel valued? How well are you meeting objectives for top talent? Are your turnover rates stable or declining? Your answers will identify where additional emphasis is needed. Assign leaders to remedy these issues and re-address quarterly.
Sources:
Kapoor, Namit, Manohar, Lavanya, “Small Customer Today, Revenue Giant Tomorrow”, strategy+business, May 3, 2016
Mask, Clate, “The 7 Deadly Sins of Growth Companies”, Entrepreneur, June 3, 2016
Lisa Hays provides business leaders with content, such as blogs, article, white papers, and web content, that helps position them as experts and thought leaders within their industries.