How Vulnerable are Your Customers? (part 3)

In my previous blog post I described the current situation:  Now more than ever, your customers are being bombarded by competitive offers and even some of your most loyal customers are actually listening to your competitors.

Your customers are vulnerable.  What can you do about it?

The second question you need to ensure you can answer is, “Why do your customers buy?  What are their core value drivers?”

If you know the exact answer to this, you are ahead of many executives in businesses small and large. So many times we suppose we know the answer and are surprised when we find the real answer. In a previous blog post entitled, “Why Don’t You Understand Your Customers?”, I described a Fortune 20 company in the midst of a worsening downward spiral of customer defections and plummeting margins, all because they were marketing services their customers didn’t understand and didn’t value.

Customers buy for one or more of the following basic reasons:

  1. Increase revenue
  2. Decrease costs
  3. Mitigate risks
  4. Assuage emotions

The more of these Customer Value Drivers you can address at the same time, the more compelling your value to your customers.

To confirm that you know why your customers buy, you need to ask them. Pick a large handful of your best customers and go talk to them. Ask them the following simple questions:

  1. Why they buy from you vs. from a competitor
  2. What they value the most (or, if everything else were stripped away, what are the key things that would keep them from leaving)
  3. How your products and services help them satisfy the aforementioned value drivers?

By asking these questions, you will learn the real reasons why your customers buy.  Most importantly, you’ll learn the critical aspects of your products and services that you cannot afford to cut lest you jeopardize the relationship beyond repair.

In the next post we’ll continue with the third of five things you need to consider as you adjust your Customer Strategy.

In the meantime, if you would like help in identifying and keeping your best customers, as well as revitalizing sales in a challenging economy, you might benefit from our new Customer Snapshot program.