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Why you can’t be all things to all customers

 

Originally published on October 14, 2014 as a Guest Column in The Globe and Mail: http://www.theglobeandmail.com/report-on-business/small-business/sb-marketing/customer-service/you-cant-be-all-things-to-all-customers/article21016160

When you first start your business, the ideal customer is simple – she’s anyone who walks through the proverbial door with money in their pocket. How do you decide what services to offer her? Usually, you’ll take on anything that sounds even remotely close to what you think that you can do.

This is what I might call the “yes, absolutely we can do that” phase. Of course, once the client is out the door, “yes absolutely” is quickly followed by, “who do we know that actually knows how to do what the customer is asking for?”

Saying yes to customer requests is a very exciting phase of building a business (or a new business division). And, frankly, that excitement should never completely go away.

Customer requests do two things: they identify market needs, and they push entrepreneurs to think about their next product or service offer.

As your company matures, you tend to realize that you can’t be all things to all people.

But that’s okay. As you figure out what it is you do best, there may even be some existing customers that you have to let go – and that’s okay, too. The key to sustained business success is to identify a substantial, pre-qualified group of customers who are willing to purchase your products or services at a profitable price-point.

Identifying your core clients – so that you speak their language, support their interests, and listen to their feedback – is the most important job in business. Here are three steps I like to suggest:

1. Generate a comprehensive list of both your current and the potential target customers that you have in mind.

2. Once you have that universal customer list, identify the target groups that you think have the highest potential. Study the wide range of attributes that you believe are important for a prospect to become a customer of your company. You need a cross-section of criteria that include demographics (characteristics such as business sector, title, age, gender), psychographics (psychological factors such attitudes, values, likes and dislikes) and geographic attributes (proximity to your business or its distribution network). To be clear, you must go deeper than simply describing where your customers live or how old they are. You need to work across all the ranking areas to create a useful customer profile. For example, simply specifying adults aged 18 to 49 who live in Washington D.C. is too broad. Create profiles of your various target groups based on what they like and don’t like, and on what they think, watch, eat, wear, visit, experience, and so on. Essentially, you need to think of your customers not as points on a graph, but as people.

3. Create a ranking system to measure the quality of the leads (potential customers) that you are trying to sell to. At my company, we use a tool we created called the Lead Quality Index™ (LQI). Essentially, it’s a grid. We list potential customers down the left-hand side and our ranking criteria across the top. We use categories such as corporate sector (e.g. retail, consumer goods, services), title (co-ordinator versus CEO), location (Toronto, rest of Ontario, rest of Canada, or beyond) and mindset (forward-thinking, pioneering versus market follower). The LQI is no guarantee of success, but it helps us think through and stay focused on our highest potential opportunities.

We only have so much time in a day. Staying focused on who we are selling to and what we can offer them is all-important in establishing long-term, mutually beneficial relationships.

The voice of the customer needs to be heard throughout your business. Remember, you don’t buy what you make — you create your products and services to sell to other people, so it’s their vote that counts.

I was once on a conference call to plan the relaunch of a national store brand for a leading retail chain. Because many of the client’s products required explanation to shoppers, a member of the chain’s merchandising team asked if they should set up the stores’ ‘help’ section to suit the needs of the company, or the shopping behaviour of the customer. One of the owners piped in to say, “set up the section to the liking of the customer, and I’ll adapt.” He had it right.

As Wal-Mart founder Sam Walton famously said: “There is only one boss; the customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”

Bottom-line: Know your customer. Think like a customer. Delight the customer. In return, they will delight your bottom line. And they’ll point you in the right direction for the future.

A Big Thank You to Molson Coors Canada, Pelmorex Media Inc., Petro-Canada Lubricants and Masque Bar Beauty (England)

We’d like to thank these incredible companies for choosing to join Spyder Works’ growing list of blue chip clients in 2014.  While their shapes, sizes and assignments are different, we are truly grateful for the singular trust that they have shown in our team.

At Spyder Works, we applaud (and love working with) action-oriented organizations.  They focus their abilities on acquiring and serving customers right now.  We open up new possibilities by helping those organizations to think and to act longer term.  Our value is to help them to enjoy better conversations and build more meaningful relationships with their customers and people as springboards for their future success.

Since our inception over 20 years ago, as a leading provider of creative design, we have been through the same transformative process ourselves. Spyder Works has evolved into a comprehensive provider of integrated business and design strategy, brand exploration and communication.

Our firm is grounded in three practices — brand, innovation and performance.

Brand is about building customer relationships. Innovation is about keeping them fresh. Performance is about keeping your team engaged in and delivering on the relationship’s promise. Together, they generate powerful, organization-changing ideas and difference-making implementation.

Launching a new brand? Grappling with a specific, skill-testing question or leading your organization through a fully transformative process?

At Spyder Works, we partner with national and international organizations and visionary entrepreneurs to articulate and to solve the business and brand challenges that keep you up at night.

Spyder Works.  Building Business by Design®.

‘Tis the Season of Falling Leaves and Growing Budgets

It’s that time of year again. With the turning of the leaves it is officially budget season!

Yes, planning for a new budget begins with everyone eagerly compiling their want list. Like kids creating a birthday wish list, there is wide-eyed excitement and hope that this will be “the” year. And, yes again, as the budget process unfolds inevitably there are a few disheartening adjustments to the wish list.

But, as the chorus of “ughs” begin, I offer some advice.

Rather than being the person who laments over what could have been, try this. Focus on leveraging one of the largest resources you have – your people.

Focusing on your people means focusing on your engaging your team with a view to driving your bottom line. Why?

  • Engaged people are more productive.
  • Engaging your people will increase productivity.
  • Engaging the hearts and minds of your people will help your company to recoup some of the $450 billion in lost productivity annually due to disengagement.
  • Engaged employees contribute to customer retention.
  • Engaged employees deliver revenue growth.

We all know it is easier to have existing customers buy more than it is to attract new customers. Research indicates the cost of customer acquisition is on average between four to ten times more expensive than customer retention. Investing in engaging your employees can be beneficial for your customer retention strategy.

The Disney Institute and McKinsey Company recently reported companies whose people consistently offered an exceptional customer experience realized a 2-percentage point advantage over their peers in revenue growth along with an increased employee satisfaction and engagement of 30 percent. Imagine what customer experience could do to your bottom line.

Through increased productivity, customer retention and revenue, you will be creating your own budget increases … freeing up more time to go outside and rake!

Are your people fully engaged? Here are a few tips to get started.

Ten Tips for Increasing Engagement:

  1. Develop inspirational leaders
  2. Hire motivated people
  3. Ask for input
  4. Do change well
  5. Provide learning opportunities
  6. Encourage calculated risk taking
  7. Get to know your people as individuals
  8. Deal with non performers
  9. Be true to your company values
  10. Celebrate success