A satisfied customer is the best business strategy of all.
A satisfied customer is the best business strategy of all.
Article by Ben Thompson / originally published on Linkedin / 9th November 2019
Every business is born with a single transaction; an exchange between a producer who is selling, and a customer who is buying. Companies come and companies go, and the world changes, but this relationship remains at the heart of corporate life. I believe there is something fundamental about this relationship, and that its quality and sophistication has a great deal to say about the overall health of your business. I would go so far as to say that the long-term success of your enterprise is inextricably linked to how well you build your relationship with your customers.
So much, so obvious.
None of this is earth-shattering. The problem is that over time in many organisations the laser-focus on the customer that once existed gets lost. This happens for many reasons, here are just three.
Firstly, as a business grows and attracts more clients, so the individual importance of each client lessens. When you have one customer who buys 100% of your product – they are everything to you. If in ten years you have a hundred customers, each one is numerically less important to you than the first.
Secondly, if your business becomes successful, a situation may arise where demand for your product or service is greater than your ability to supply it – so you have to make choices betweenyour customers as to who to prioritise. Scarce resources have to be shared out and this puts the business doing the selling in a position of power.
Thirdly, if your product becomes a nationally or globally desired as a “brand”, you will actually find yourself and your colleagues choosing carefully which customers to sell to in the first place.
I highlight the three situations above; the growth in number of clients, demand exceeding supply, and the growth of brands, because all three can lead to a loss of focus on the customer, and a swelling of heads in your business. Success, in other words, can breed contempt – or something near to it. This is in direct contrast to the way you made your first sale.
You see, whether your company’s first sale was direct to a consumer, or to a business customer, the chances are that in order to make the sale, you had to do your homework. You had to work hard on understanding your customer and what they wanted; you had to work hard on your product to perfect it, whether it was a consultancy service, a mobile-app, or a box of biscuits. You approached the customer with humility and respect. I believe there is a tremendous value and significance in this,which people on both sides of the table can lose sight of, and I want to remind people about.
Don’t think I’m being misty-eyed here. I’m not hankering after a bye-gone, gentler age of business that probably never existed. I’m not endorsing great relationships with customers because they’re nice to have. Neither am I saying you should be subservient or weak. I will argue for real, tangible business reasons why you should work hard on developing great customer relationships that are ultimately about ensuring your ongoing success. I will make the case that if you are in a sales team, it is your responsibility, by exposing the business to the needs of real, changeable, finicky customers, to ensure the ongoing success of the organization. Because if your business has lost touch with what got them that first sale, you have opened the door to your competition to take your customers away from you.
Get the best to trade the best.
The fundamental objective of any sales team has to be to understand and meet the needs of your customers better than the competition, thereby ensuring that your own business continue to prosper and grow. You need to get the best from your own company in order to trade the best when you go back to the table with your customer. This is a game, and one where you are constantly putting on and taking off at least two different “hats”.
When you are out meeting your customer, you are wearing the first hat: the hat of the brand champion. When wearing this hat you are obviously selling the features and benefits of what you do, but you are also listening and observing, learning as much as you can about the precise needs of your customer, both stated and un-stated. You are looking for what is behind the words they say as well as their actual statements, and you are deciphering the difference between what they want as people, and what their company needs. There is a difference. In this stage, everything is possible, “no” is a not a good word, and trust has to be established. When you leave that first meeting your customer needs to know firstly that they have been heard, and secondly that as far as it is in your power, you are going to act on their feedback and deliver them what they want.
Take a second here and think of the value to your organisation of the information you are gathering here. Precise insight on what the customer is looking for from the market; how well they are being served by the current offer; how much more they would buy if their needs were better met; what their own business really needs to thrive. Wouldn’t most CEOs want to know this stuff?
Once you’ve figured all this out and you’re back in company HQ, you put on your second hat: the hat of the customer champion. Your job now is to secure the very, very best of what your company has to offer, so you can deliver on the opportunity you have just opened up in the customer meeting. Again, this sounds obvious, but remember that in successful businesses many people view customers and their requirements as basically a pain in the backside. This is particularly so with folks who spend little or no time actually meeting clients themselves! Many an excited account executive has had the wind taken out of their sails within the first half an hour of arriving back at the office by the long list of reasons that get thrown at them notto give the customer what they want. This takes a while to get used to, and can be extremely frustrating. It’s your job in these situations to take your business with you on the journey you need them to go on; show them why this is a great opportunity, listen to their concerns and build in the relevant safe-guards they suggest – as long as they don’t dilute the end product so that it is no longer what the customer wants.
Two golden rules
In this situation I find two golden rules helpful. The first rule concerns keeping within your company’s commercial boundaries, including the rule of precedent, and the second rule is protecting your company’s strategic interests.
By keeping within your company’s commercial boundaries, I mean keeping at the front of your mind throughout every decision you make that you are the custodian of this business, and it is your job to deliver sustainable, profitable growth. I often imagine myself inheriting the results of decisions my team or I have made, and asking myself whether I would thank myself for signing this particular deal. What would the sales or commercial director say about this deal in 5 years time? What would the CEO say in 10 years time? Would they still think it was a good deal? With regard to precedent, I ask myself, is this a deal I would be willing to repeat in another business, with another customer, in another product category?
It’s tempting you see, when you are managing one big customer or a group of clients to get “tunnel-vision” about the personal success you will achieve through this customer winning above all others. You cantake a “get the best toys for my customer” approach, and this is where the second golden rule of protecting the company’s strategic interests comes in. Put simply, this means that a deal or decision that is great for your customers might in the long run be bad news for your company if it restricts the opportunities for competitors in the market and so puts more power in the hands of one customer than is healthy. It is in your company’s strategic interest to have a balanced group of customers across as wide a field as possible, to give your business stability and balance. The dynamic sales guys powering all the good stuff into one channel may give you overall growth for a while but if it means your customer base cuts in half in a few years it is bad news.
In all this, having the right mind-set is extremely important, particularly as a lot of people you work with live in fear of customers and customer-interaction. It’s a fact of life that a lot of people don’t trust big customers, and develop a basically cynical attitude towards them and the people who do their purchasing. I have seen this a lot, and I think it is a huge mistake. I have even seen it in sales people which worries me enormously, because if as a sales person you go into that room with cynicism and mistrust, it will communicate itself to the person on the other side of the table, and you will never build the rapport with them that you need to make the all important sale. You will be in damage limitation from the start, rather than value-creation. If you have listened well to your customer however, if you have really asked yourself how well you are meeting their needs, and if you have worked hard to secure the very, very best of what your customer has to offer – you are ready, and your attitude should be one of prepared optimism. I have spent most of this article talking about how you prepare. You should be optimistic for at least two reasons; firstly, your customer wants to grow their business, and they need your help to do it, and secondly if you believe there are more opportunities out there, you will be looking for them. If you don’t, you won’t.
The final thing to remember, as I have hinted throughout the article, is that there is always a difference between what your customers want, and what they ask for. The smart manager gives their customer what they actually want and need to be successful, which might be very different from what they state as their needs.
A couple of illustrations on this, starting with the most obvious: price. Most customers say they want the cheapest price you can give them, but they really don’t. What customers actually want is the best possible product, with all the features and details that matter to them, including how the product gets delivered, how long it takes to get there, what the customer service is like if anything goes wrong, and finally how buying it from you makes them feel. They want all that to be right, and then they want the best possible price they can get for it.
This is why the listening stage in customer relationships is so incredibly important, because it is where you pick up all the valuable insight into what makes your client’s day, and what really frustrates and annoys them. So often it is the details, the execution, the delivery of the product that goes wrong and makes them question whether they want to buy from you again. The maker of the computer I am typing this article on knows I will probably only buy a new computer every five or six years. So if they want me to come back and buy another model from them, this computer needs to give me years of enjoyment and satisfaction – then I will gladly come back and purchase a new model at the full price, without even thinking of another brand.
When the Lexus launched into the UK market in 1990, Toyota had spent years preparing for an entrance into the luxury car market, but despite this, in 1990 they had to recall the LS400 for a potential fault with the cruise control. This could have been a disaster for the brand, but the response from Lexus made all the difference. Dealers contacted all new owners of the LS400 personally, picking up the cars from their homes, fixing them and returning them with a valet and a full tank of petrol. The owners remained loyal, and by 1991 Lexus had become the leading luxury car import into the US with over 70,000 cars sold. So always remember it’s never just about the price.
Doing a major deal with your business should take time, it should be arduous – if it isn’t, you are probably not being challenging enough on yourself or your business. In negotiations, customers may make demands, they may insiston better margins, more investment, and instant decisions. But what they actually want is to feel the satisfaction of a hard-won deal where they know they had to work really, really hard to get what they wanted. Satisfaction for the seller comes through knowing that through listening hard to their customer, challenging themselves and their company to deliver, managing the risk, staying optimistic and securing a great deal, they have sharpened the saw of their whole business and so set the company up for more success in the future.
Ben Thompson is the founder and CEO of 9 Degrees West