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How Can Customers Provide Competitive Advantage?

Someone recently asked me, “How can customer research provide competitive advantage?” There are far too many ways! Here are a couple:

  1. Let your customers tell you what your competitive advantage really is. When FedEx gathered a group of executives to show them a video of their new planes, the huge capacity they have as described by all the packages on the runway around the plane and the staff in their spiffy uniforms, one executive said, “this is all well and good, but I use you guys when I absolutely, positively have to get it there the next day.” There’s a billion dollar tag-line, free of charge!
  2. Establish pricing: For another company I researched small businesses who purchased credit-card processing services. My client thought their prices were too high, but as I researched their customer base, I found a group of customers that were actually willing to pay 3, 4, and even 5 times their current prices because my client’s solution saved them so much time at the end of the month in reconciliation of their accounts. For this group of customers, they raised prices and generated an extra $16M annually.
  3. Let your customers tell you how they want to be marketed to: In the above example, by focusing on the time savings in their marketing, they were able to justify a premium price and protect themselves from the severe discounting their competitors were engaged in.

The bottom line is that you need to ensure customer research is at the core of your business and decision-making processes to grow your market, grow revenues, and profits.