It gets pretty interesting when I work on a Business Plan with my clients, whether they are entrepreneurs or mature businesses. We get to the part where I ask them who are their customers, what industry segments do they work in, and what are the customer needs within each segment.
You know, Voice of the Customer kinds of questions.
I haven’t met anyone yet who could rattle off succinct answers. It’s not easy and a lot of us take longevity in the marketplace as a sign of “success.” Well, we’ve survived, but that’s hardly a rationale for not knowing your Customers.
And again, engineers, IT professionals and technical folks, I am talking to you. Just because the guy or gal you are talking to also is an engineer, like you, doesn’t mean they think the same way that you do. You might be incredibly far from being on the same page and never know it. Never make that assumption.
I don’t need to tell you that the business development process is changing. Solutions selling without adequate knowledge of the offline factors influencing the decision making process at your prospect’s company will not shorten your sales cycle. So why would you ignore understanding what makes customers “tick” in the industrial spaces in which your company plays?
Think of it as taking your clients’ pulse every year. I do. Right after the start of the new year. And that includes a) current clients, b) former clients, and c) non-clients.
Why speak with all three types of clients and not just your current client base? Well, for one, only speaking with your current clients is like wearing blinders and looking at yourself from the inside-out. You are preaching to the choir. Did it ever occur to you that your current client base may not reflect the Voice of the Industry Segment you are trying to capture and possibly own? You may just tend to attract a certain type of client for a particular reason. You need to determine what attracts your current client base to you and be prepared for answers that potentially are not what you want to hear. Or are not where you really want your business to be.
While it really seems daunting to approach former clients, I find these usually are the most insightful conversations. You may feel that you are going to get blasted with criticism. Most of the time my former clients have apologized for not being able to continue their contracts with me due to the economy. They perceive their inability to manage their business to include this line item investment as their fault. I don’t need to tell you how this type of conversation has led to renewed business. Especially when I am talking to them about industry trending and reinforcing my role to their business as a thought leader, rather than crawling to them, hat in hand, mea culpa.
Then there are those customers who, well, never became customers in the first place. There’s a reason and they certainly don’t expect you to want to discuss the matter with them. While you are not exactly calling them out about it, these discussions can be amazingly fruitful in determining the offline factors that impacted your non-customers’ reasons for not making the decision to do business with you. And yes, be prepared for some rejection. Again, however, they really may not have been the decision maker in the first place or they have been acquired, etc. You need to determine why you or your company does not appeal to the non-customer. There are a number of reasons and these factors are important for you to understand when acquiring future business.
The ultimate result of talking to your customers is to generate a list of Customer Needs for each type of customer: current, former and non. What are the areas of overlap across all three customer segments? What are critical areas of juncture between them? Can you or your company be all things to all customer types or is the barrier to entry not worth the time to acquire certain types of customers?
Finally, look at your Top 10 Customers. Determine what criteria make them your Top 10 Customers. These criteria should include consideration of a) total gross revenue generated, b) total profitability, c) total number of projects/year, d) number of years they have done business with your company, e) risk factors associated with this client (Do they make your life miserable during each project? Are they on shaky financial ground? Are they a pleasure to work with and extremely collaborative? Etc.). How do the needs of your Top 10 Customers compare with the Voices of the three customer types you have been researching?
Taking a two-week time period to have these types of data-gathering exercises can contribute to a solid Business Plan that is based on knowledge rather than conjecture and assumption.
Wouldn’t you like to point yourself and your staff in the right direction from the git-go each year?
Think about it.