Customers
Are you selling what your customers are truly buying?
31/03/10 13:21
Are you selling yourself short? Do you know and understand what your customers are truly buying from you?
Let me give a bit of background information...one of our current customers is a very specialized service provider who has been around for 20 years solely focused on servicing a very specific industry. Although they do not produce any intellectual property (software), they have been the sales and support partners for industry specific financial systems for many years. As the sales and support company, they not only resell the software, they also provide all of the implementation support, training, technical support, etc.
As part of the Ideas2Revenue process, we spent some time with this client to better understand their offering, current customers, implementation processes, etc. However, the main thing that we try to pull out in this initiation meeting is to have our client articulate the value that they believe that they are providing to their customers. So, this client told us everything about the software solution that they were selling. They told us about how modern the solution is compared to the competition, how the software package is user friendly, etc. However, not once did they talk about the value that they as an organization provided to their clients. In many ways, they were often reducing the price of their own services and implementation support in order to help drive the software licensing deals.
Now, again as part of the Ideas2Revenue service, our next step was to identify, engage, and interview a few of their current customers. When we started to conduct the customer interviews, and we started to use our questioning process to uncover a number of key measurable value metrics, can you guess what we found out? Simply put, is that many of these customers purchased that particular software package because our client was the one selling it. Each and every one of our clients customers stated that the decision to move forward with a new financial solution was based first on the level of support and service that they would receive from our client. The functionality and capabilities of the software package itself were important, however were secondary to the support that they knew they would receive from our client. Each one of these clients used words like trust, reliable, and dependable to describe our client.
So, the point is that you need to make sure that you truly understand what your customers are truly buying when they buy from you. In this example, our client thought that their customers were buying the capabilities of the software that they were reselling, however the reality is that their customers bought the level of support and comfort that they were going to receive from our client and their support organization. In this particular situation, our client was giving away or not charging enough for the services that they provide in order to implement the software solution...in yet what they were not charging enough for was exactly what the customers were buying when making their purchasing decision. So, obviously moving forward the pricing for the services being provided will now have a different price point as this is the value that the customers want and are willing to pay for.
Are you selling yourself short? Do you truly understand what your customers are buying when they purchase from you? There is really only one way to know for sure, and that is to get out of the building, talk to your customers, and ask the right questions in order to reveal the right information. You may be surprised as to what you can learn from this exercise which in itself, if done right can help you to begin making more profitable revenues by selling what your customers are actually buying.
Let me give a bit of background information...one of our current customers is a very specialized service provider who has been around for 20 years solely focused on servicing a very specific industry. Although they do not produce any intellectual property (software), they have been the sales and support partners for industry specific financial systems for many years. As the sales and support company, they not only resell the software, they also provide all of the implementation support, training, technical support, etc.
As part of the Ideas2Revenue process, we spent some time with this client to better understand their offering, current customers, implementation processes, etc. However, the main thing that we try to pull out in this initiation meeting is to have our client articulate the value that they believe that they are providing to their customers. So, this client told us everything about the software solution that they were selling. They told us about how modern the solution is compared to the competition, how the software package is user friendly, etc. However, not once did they talk about the value that they as an organization provided to their clients. In many ways, they were often reducing the price of their own services and implementation support in order to help drive the software licensing deals.
Now, again as part of the Ideas2Revenue service, our next step was to identify, engage, and interview a few of their current customers. When we started to conduct the customer interviews, and we started to use our questioning process to uncover a number of key measurable value metrics, can you guess what we found out? Simply put, is that many of these customers purchased that particular software package because our client was the one selling it. Each and every one of our clients customers stated that the decision to move forward with a new financial solution was based first on the level of support and service that they would receive from our client. The functionality and capabilities of the software package itself were important, however were secondary to the support that they knew they would receive from our client. Each one of these clients used words like trust, reliable, and dependable to describe our client.
So, the point is that you need to make sure that you truly understand what your customers are truly buying when they buy from you. In this example, our client thought that their customers were buying the capabilities of the software that they were reselling, however the reality is that their customers bought the level of support and comfort that they were going to receive from our client and their support organization. In this particular situation, our client was giving away or not charging enough for the services that they provide in order to implement the software solution...in yet what they were not charging enough for was exactly what the customers were buying when making their purchasing decision. So, obviously moving forward the pricing for the services being provided will now have a different price point as this is the value that the customers want and are willing to pay for.
Are you selling yourself short? Do you truly understand what your customers are buying when they purchase from you? There is really only one way to know for sure, and that is to get out of the building, talk to your customers, and ask the right questions in order to reveal the right information. You may be surprised as to what you can learn from this exercise which in itself, if done right can help you to begin making more profitable revenues by selling what your customers are actually buying.
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The truth is...well...the truth!
10/11/09 12:53
If you watch the video, towards the end of the commercial the "underdog" cable guy asks "I was curious why we were listening to customers...seems dumb". This is a powerful message. It clearly takes a shot at the cable companies portraying that they do not listen to their customers. However, it actually goes a little bit deeper than that. If you think about it just a bit more, you can probably anticipate that the cable guy did not like what was being said about why FIOS is better than their cable solution. He did not like hearing the truth from the customers as to why the FIOS service was better than cable. For this reason, he made an unsuccessful attempt to question the whole process by stating that asking customers was "dumb".
We all know that this is a commercial and not "real-life", however unfortunately the reality is that there is a bit more truth to this than people would like to admit. Although I have never heard any person or company state in such blatant terms that it is "dumb" talking to customers, many have demonstrated this belief through their other words and their actions. At the most extreme case I have heard senior executives of companies and even VC's state that "customers do not know what they want/need". The more subtle way of communicating this has been by not engaging with customers at all. No matter which way it is communicated, in many ways these companies are like the cable guy in this commercial in that they do not like...or do not want to hear the truth from their customers and prospects.
So, what's the point of all of this? Well, the bottom line is that it did not matter what the cable guy said or did in this commercial as the truth being shared by the customers was the truth from their perspective. Ignoring it does not change it, and ignoring it does nothing to help to get more customers or to change the customers minds. Had the cable guy sat back, actively listened to the feedback from the clients he could have potentially implemented some change which would win back the customers, and potentially to even gain some competitive advantage. However, he chose just to ignore everything the customers said, and as a result will have to live with the consequences. So, the real questions become, do you want to be like the cable guy, or the FIOS rep? Are you avoiding "the truth"? Have you stuck your head in the sand to avoid the truth? Just remember that the truth remains the truth no matter if you choose to accept it or not.
Are you truly listening?
13/07/09 10:40
Are you truly listening?
There was a post on the Forbes.com - Entrepreneurs section titled Learning the Art of Listening. It was written by Dr. Steven Berglas, and it covers the topic of knowing how to truly listen. Where this comes into play is that our business is about not only uncovering the truth of your product or service from your customers and target markets perspective, it is about knowing how to truly listen to them to uncover the opportunities that exist. Until you know how to actively listen, you may be missing out on some great opportunities to grow your business.
There was a post on the Forbes.com - Entrepreneurs section titled Learning the Art of Listening. It was written by Dr. Steven Berglas, and it covers the topic of knowing how to truly listen. Where this comes into play is that our business is about not only uncovering the truth of your product or service from your customers and target markets perspective, it is about knowing how to truly listen to them to uncover the opportunities that exist. Until you know how to actively listen, you may be missing out on some great opportunities to grow your business.
Just get engaged!
08/07/09 09:31
The one thing that we all have to understand is that from the clients perspective, business does not stop. They have some of the same challenges that you do, and have to find ways to not only save some money but ideally find ways to make even more money (sales). So, if you look at it from this perspective, then both you and your clients share the same goals. Take this opportunity of having common challenges and goals to create revenue generating opportunities for you both. The following are just some ideas to help get the creative juices flowing on ways that you may be able to get engaged with clients today in order to ensure you are building a good revenue stream for tomorrow...
1. Can your product or service help your client to sell theirs? We have been talking with one client who is offering a solution that brings together teams of people and provides a common set of communication tools for these teams to communicate. Anyway, one of the biggest challenges that they have is that their customers are cautious about spending money on this solution as they do no know if their users will use the new system. Well, one of the biggest issues that causes people to not use a system is that it does not truly meet their needs. So, we have been working with our client to put together a plan where we engage with the end users to truly understand their needs and do an assessment on their requirements for this system. By doing this the users have some input into what they need and as a result of some customization services will get what they need from the system. The users win in this situation, the company purchasing the system wins as they have more captive audience that they can market and easily communicate with. Our client wins as they now can sell their system and also make some additional services revenues. And finally, we win as we are doing the services engagement to help gather and qualify the users needs. You see...in this situation everyone wins by all of us understanding each other challenges and working together to form a solution. Can you find a way to do this with some of your current prospects?
2. If you believe you can do it....can you make a little less today in order to make more tomorrow? For another one of our clients, they have a solution that has a very small footprint within one of their strategic accounts. We have helped them to understand the players within this account and the true stakeholders. As part of the group of stakeholders, there is a very large Systems Integrator. We have approached this Systems Integrator and are now discussing a specific project where we can work together to take an initiative to the organization for approval. Without getting into all the details the point here is that in this example the model is that we work together to build the system based upon taking some of the profits or residuals that the company makes from it. In this situation, the company wins as they get a new system to help generate revenue without a massive outlay of money. The Systems Integrator wins by getting the opportunity to take new a fresh ideas to the client and they get a big portion of the services work that come from this project. Our client wins as they too get services revenues and also their technology is now being used widely throughout the company to help them make money. So, again can you find ways to make a little less money today (NOT FREE), but make even more in the future?
3. Is your price point a barrier to entry? If your focus is on trying to get new customers, and just on trying to sell more to your current customers, then you have most likely run into this challenge. Think about it, in today’s world you too have to be concerned about mitigating risk and want to know that you will see a return from every dollar that you spend. If you feel this way, then chances are your customers are feeling the same way. So, if you were approached by a company who may have a great product or service but to get started required a significant investment, and you were approached by another company with a great product or service which could provide the same benefits, but they had a package that would allow you to get started for less than half of the price of the first company....which one would you choose? My guess is that you would go with the second company as it is a bit less risk for you. Now dont’ get me wrong I am not suggesting that you lower your price, but rather I am suggesting you find ways to package your product or service in order to lower the cost of entry for your clients. A perfect example is can you find ways to provide your product on a subscription basis? If your solution is software, can you find ways to offer it as a hosted Software as a Service solution? Can you put together a packaged service focused on providing an assessment rather than a full engagement? There are many creative ways that you can actually make more money over the long run by packaging it a bit different today....
These are just 3 in depth examples of ways that you have to be in touch and communicating with your clients today. There are many more like this. The bottom line is that if you are not engaged with clients and are “waiting for it to get better” then you do not have the opportunity to truly understand their needs, and ultimately you will not have an opportunity to find creative ways to work together in order to find a win-win solution for you both to make money. So, pick up the phone and find ways to get engaged with your clients today!
Knowing your market is not just for business
24/06/09 06:54
Why is this the case? Did America and its academic standards and practices just become “stupid” or obsolete overnight?
No...the reality is that this was not something that has taken place overnight but rather has taken place over the last number of years. In my opinion, the issue is that the academic system has grown more and more out of touch with their target market and the “customers” of their solution. Think about this....the purpose of the academic system is to train and educated people so that they may be marketable, and can go off into the world in order to make a positive impact on society and the world as a whole. However, the world has been changing over the last number of years, and it seems that many of these academic institutions have not been paying attention this change and have not adapted in order to meet their “customers” needs. The academic institutions have not taken the time to work with the “customers” who will be buying (hiring) the students who are leaving the school. They have not taken the time to spend time with the companies in the industry to better understand their changing requirements, their needs, and where they feel their needs are going to be in the future. As a result of all of this, they have produced graduates which companies feel are “unemployable” for various reasons.
Now, not all academic institutions fall into this category. Take Carleton University and the Talent First Network here in Ottawa Canada. Under the leadership of Dr. Tony Bailetti, they have released a program called the Lead To Win. Although this does not fit with the typical scenario of recruiting students from secondary schools, this program is an example of knowing your market and what it truly needs. The Lead To Win program knows that entrepreneurs and new companies are vital to the community around them. They understand that by creating new companies in a region, not only does it attract more money which helps the overall economy, it also creates new jobs, new investment money, etc. The Lead To Win program is open to anyone in the community who would like to start a new business. The people and companies selected for this program are put through some intense training by not only the academic institution, but also by leaders within the industry who have “done it in the past”. As part of the program, they also put in place a system to help the graduating companies to get their first set of paying customers and also assist with introductions and preparations for gaining investment money, etc. The result of this program on the last go around in 2002 was the creation of over 300 new jobs and over $90 Million in investment money.
The Lead To Win program is a perfect example of the benefits of being in touch with your target audience and customers. It demonstrates that knowing your target markets needs, their issues, their future requirements is what separates a successful academic or training program from an unsuccessful one. This is a fundamental truth for everyone and every organization and is just as important to the educational market as it is to the business market.
It is not too late for change. So, if you are someone that is involved in the world of education, then the best thing you can do today is to take the time to better understand your target market, and get out and talk with them. If you are a charity, then get out there and talk to your target market to understand their needs....If you are an individual who is looking for a job.....again get out and talk to some people within the market where your skills are required. And finally, if you are a company or business get out and to speak with your customers and potential customers today to ensure you and your solutions do not become obsolete and “unemployable” tomorrow.
Bridging the gap...
17/06/09 20:12
A few hours later I started to think about this statement a bit more. There were a few things that started to jump out at me regarding the statement. In regards to market analysis, there are many organizations and people that can help a company to do this important and necessary exercise. Anyone can easily analyze the market, strategies, pricing models, competitors....anything. On the flip side of this coin, commercialization is just as important to any business as the reality is that you do not have a business until you release your product or service to the market for people to purchase.
Now the interesting part of this is that the “bridging” is the key to success. You can do analysis on many different aspects of your business, but it is not until you cross the bridge to commercialization does any of that matter. Also, you can take any idea to market if you have enough persistence, time, and money, however it is not until you cross the bridge to connecting it with your market analysis (a true understanding of your target market, and their needs) do you truly begin to make profitable, repeatable, and predictable sales results.
So, take some time to think about this analogy and determine if you have built a good bridge for this gap within your company. If you are not sure if you have a bridge or even if you need to update or fix your bridge, the only true indicator is in your sales results. If sales are on track and you are making money....chances are you have built a good bridge. If however you are not seeing the results that you desire, then the first thing you need to do is see if your product or services (commercialization) is cut off and isolated from your target market, their requirements, and their needs (market analysis). If your not quite sure where to go or how to do this....then give us a call as we have already built a number of these bridges for our clients already.
It is all about the experience
05/06/09 08:53
Just to set the stage for you....my contact has phoned in to inquire about potentially signing on for this companies service. He tells me of the painful process of even getting signed up in the beginning as they had to do a credit check, they had to verify his home network setup, etc. When he was done this initial call he felt that everything was now in order and all he had to do was to wait for the software required for the ability to run the VOIP service on his laptop to show up.
A couple of days later, the door bell rings and sure enough there is the new VOIP system. He went and started to install the system onto his laptop and that is when the problems began. To make a long story short, after several calls to the support organization they then decided to tell him that their VOIP software would not work on his machine because of the version of the operating system he was using. Now well beyond frustrated he then got passed back to the original customer service department he had dealt with in the beginning and they confirmed that the operating system he was using was not supported. Rightfully so, he then asked to speak with the manager due to the fact that they should have asked him in the beginning what operating system he was using which would have saved a great deal of frustration and valuable time. When the manager came on the line, my contact explained to him the sequence of events along with the frustration he was feeling....and the response from the manager of the customer service team was - “Yes, that OS is not supported, so what would you like me to do about it?”
So, here are some of the things that I would like you to think about regarding this story:
1. Do you think that this company spoke with many real life customers before they made a decision to build a solution that does not support one of the most used operating systems in the world?
2. Do you think that this company ever spoke to a real-life customer to better understand how they would like to have the solution delivered to them? (Lets face it...it is software which could be downloadable and does not require a physical shipment which requires the customer to wait days in order to receive)
3. Do you think that this company was concerned about creating a positive experience with their customers or do you think that they are more focused on getting their money?
4. Do you think that this company has ever done an audit or “mystery shopper” type of activity to truly put themselves in their customers shoes in order to experience the buying process their customers go through when buying their solution?
5. Do you think that the company really wants to have a customer support organization that states “....what would you like me to do about it?”
6. Do you think that either myself or any of the other people that my contact has told about this experience will ever voluntarily buy from this company again?
7. Would you buy from this company?
Finally....when was the last time you did an “audit” to truly understand the experience your customers are getting from you, your company, and the process they have to go through to either buy your solution or to get support when they run into issues? You only have one chance to make a positive impression....and there are big consequences for not providing the right experience for your customers.
24H of Innovation - 1/2 Time Pep Talk for 2009
15/05/09 09:55
2009 has been a very interesting year, to say the least. However I firmly believe we are on the verge of something great as it relates to Innovation and how business is done. I believe that although there are many technical innovations that will take place in 2009, my excitement is for the innovation and movement that is taking place regarding customers and how we interact with them.
I believe that one of the fundamental issues many companies have historically had is that customer acquisition and retention was viewed as “steps in the process”. Often the interactions with prospects and customers only started to come into play once a product or service had been developed and delivered. Once initial sales of the product or service were delivered, then the only interactions with the customers were for technical support cases or in rare cases a company would choose a “select few” to participate in formal events like customer advisory boards, etc.
I have seen the world change in 2009 as it relates to this, and I see the second half changing more as people begin to truly understand the importance of involving customers and potential customers into all aspects of their business. By taking a collaborative approach to working with customers it can have a positive impact on all parts of your business:
- Concept Validation: If you have an idea for a new product or service. Get out and talk to your target market. There is no greater risk then spending months or years developing a solution that people do not need, and not willing to pay for. Here is a great video from Eric Ries at Lessons Learned. Eric is a supporter and promoter for the Lean Startup methodology.
- Development: Look up some information on Steve Blank who is not only a successful entrepreneur but also taught the Entrepreneurship courses at UC Berkley. He wrote a book The Four Steps to Epiphany which is a must read for anyone looking to start a technology company. He talks about the importance of customer development in parallel with product or service development.
- Marketing: How can you repeat something that you do not understand. The best way to replicate your success is to get out and talk with customers to find out why they bought from you in the first place. Take this information and repeat it to put more opportunities into your sales funnel.
- Sales: The world of sales has changed. No longer do companies and people rely upon the salesperson to be their main source of information. Google, Yahoo, and the internet as a whole mean that customers do their homework and make many of their decisions well before even making contact with you. So find ways to engage with customers early and to build the relationships with them.
- Post-Sales: Stay close to your customers. If your strategy is to only contact them when you have a new product/service or when it is time for them to upgrade....then you may find your sales falling. Customers have limited budgets and they are going to spend it on companies that they know and trust. If you do not have that relationship and trust with them....you have missed a huge opportunity.
So my message to you as you read this....get out and talk to customers. Do it often...do it early. Take the time to truly understand their world and what they face as challenges on a daily basis. Develop solutions that solve problems and satisfy needs....not just for the sake of innovation. How can we not succeed when companies and individuals are focused on solving true customer issues and making the lives of their customers better?
"Business is a combination of War and Sport"
11/05/09 09:16
For many years, people have been using analogies and comparing Business and Sales to war and to “doing battle”. I cannot help but believe that this is not the best long term strategy for any company and in many ways these words are doing more harm than good for the people and companies that use them. From your own perspective, lets think about this for a second....if doing business is like going to war...how motivated are you going to be to get out there and do it? For some reason I do not believe that there are many people that wake up in the morning, and jump out of bed excited about going off to war or having to do “battle” with their customers.
Now put yourself into the customers shoes for a second. In fact think about the last time you were a customers and you bought something....how enjoyable would the experience have been if you were dealing with a salesperson who had the mantra “Business is a combination of War and Sport”? First off, do you think that this person would have really cared about your needs? How enjoyable and productive would the interactions have been with this person if they are focused on winning at all costs (and you loosing) rather than trying to find a win-win situation? How likely are you to open up to this person and provide the names of your friends or family who may also benefit from the same type of solution?
I know that many of these sayings come from the time in our history when going to war was “glamorous”. However, the part that concerns me about this is that not only have times changed, but the reality is that when you are focused on situations like “War” and “Sports” where there is always one winner and one loser, it does not foster the type of trust and collaborative relationship you need to have with your clients to build a business that is successful both today as well as for the future.
The first customer....
25/04/09 14:25
If you ask an entrepreneur, many of them will tell you that the first customer is always the hardest. I challenge this saying and that maybe this saying belongs in the same bucket (read: trash can) as “Build it and they will come”, and “Build a better mousetrap and customers will beat a path to your door”.
Now, I do not want to play down the fact that getting your first set of customers involves some work, but I firmly believe that if you have your mind in the right place then it is much easier than what some early stage companies are facing. I believe the challenge is a fundamental one where people are viewing their company, their solution, and their day to day operations as business practices that take place “behind the scenes” and without customer involvement or interaction. Simply put, If you just take an idea and start developing it without client involvement, then you risk building something that does not truly meet their needs, and will take much more work to get into paying clients hands.
Would you like to have a good saying? If so then start with “go find a customer problem, and solve it...and you will have a solid business”. In fact, modify it just a little bit to be “go find a customer problem, build a relationship with these customers and involve them throughout the process of building a solution to solve their problem...and you will have a solid business”. If you involve them throughout the process not only do you build a solution that meets their needs, but you actually begin to build relationships with your first set of customers and reference sites.
So, if you are an entrepreneur looking to build a solution that will change the world....start thinking about your first customers now, and not after your development is complete. If you are not sure how to do this, then we can help. If, however you have already built your solution and are now searching for your first set of customers, then all is not lost. We can still help, however it will still require you to change your mindset to be more inclusive of customers into your business and not exclusive.
Would you like to have a good saying? If so then start with “go find a customer problem, and solve it...and you will have a solid business”. In fact, modify it just a little bit to be “go find a customer problem, build a relationship with these customers and involve them throughout the process of building a solution to solve their problem...and you will have a solid business”. If you involve them throughout the process not only do you build a solution that meets their needs, but you actually begin to build relationships with your first set of customers and reference sites.
So, if you are an entrepreneur looking to build a solution that will change the world....start thinking about your first customers now, and not after your development is complete. If you are not sure how to do this, then we can help. If, however you have already built your solution and are now searching for your first set of customers, then all is not lost. We can still help, however it will still require you to change your mindset to be more inclusive of customers into your business and not exclusive.