Why don’t you understand your customers?

The Fortune 20 company I was working with couldn’t understand why a segment of their customers were defecting in droves, and those that stayed were hammering them on price, causing their margins to spiral downwards faster and faster with each quarter’s results.

The company had focused their marketing around three primary themes:

  1. Inventory control
  2. Cost containment
  3. Raising gross margin

While these may seem reasonable at first glance, they were nothing at all like what their customers wanted–and this disconnect ran the risk of driving them out of business.

When I interviewed their customers, I discovered they wanted to do three things:

  1. Spend more time with their customers
  2. Put more money in their pocket at the end of each day
  3. Decrease the intensity of their day-to-day involvement in their business

My client could help them achieve all three of these goals–and could do so much, much, better than any of their competitors. However, because the client’s primary goals were at such odds with their customers’ goals, the customers couldn’t understand why their vendor wasn’t meeting their needs, and my client couldn’t understand why their customers were so unhappy (and ungrateful!).

I spent some time with executives and the marketing department and learned that my client’s original goals were perfect–for customers 100 times larger than the segment they were concerned with. Massive companies are concerned with inventory control, cost containment & margin improvement, but these were not value drivers for the smaller customer segment they were so worried about.

Once my client began to understand the real value drivers that are influencing purchase decisions within this segment, they dramatically revamped their marketing efforts and began communicating on the same page as their customers. Their their price pressure eased and they were able to stem the tide of customer defections.

How can you learn what customers truly value? There is no better way than to ask them! In my experience, so many customers are just waiting to be asked their opinion, wanting–no, begging–to be heard that they’ll easily tell you what you need (but not necessarily what you want!) to hear. Don’t hide behind a survey, a customer feedback form, a sales call report, or some other abstraction, because real customer insight is lost in translation. Pick a large handful of your best customers and go talk to them. Ask them the following simple questions:

  1. Why they buy
  2. What they value the most
  3. How your products and services help them:
    1. Increase revenue
    2. Decrease costs
    3. Mitigate risks
    4. Assuage some emotional need
  4. If they were to tell someone about you, what would they say?

By asking these questions, you just might learn the real reasons why your customers buy–and how you can push all of their “hot buttons” in all of your marketing, sales, and service interactions.

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