Some things never change

To create value for investors, you must first create value for customers. Never before, however, has serving customers will been as challenging and critical as it is today. You know it, I know it. As you know too, customers in consumer and business-to-business markets alike have become very sophisticated and demanding. They weight their choices carefully and in many categories swap vendors instantly if they find a better deal. And new deals arrive every day. In today’s world the number of products in the marketplace has long been rising far faster than the number of customers, and this trend shows no sign of reversing. Blessed with this proliferation of choices, today’s active customers are eager for options, convenience, and service, while maintaining a higher degree of control. Winning companies can create value for investors by understanding and delivering what today’s active customers want and are willing to pay for. Doing this well requires an understanding of both the lifetime value to the firm of customer segments-even of individual customers and their evolving needs and priorities. Then the company must develop a winning system to capture this value. Managing the active customer requires that a company consistently:

• Target those customers who promise the greatest profit and lifetime value and define the initiatives which capture that value

• Present a compelling properly priced offer

• Deploy the power of brand to differentiate and communicate

• Deliver an experience that meets or exceeds the customer’s expectations in each and every interaction.

Ask yourself these questions:

1. Do we know who our best customers are? ( I bet you’d be surprised)

2. Do we understand our customers’ current needs and priorities, how they are changing and why they are changing? (Current needs?)

3. Is our customer value proposition compelling, unique, and differentiated from those of competitors? (I’d bet not, just saying)

4. Are we prepared to give customers the choice and decision power they want today and in the future? (Hummmm?)

5. Do we know what levers to pull to improve customer acquisition, development, and retention? (It’s not doing more of what you’ve been doing.)

6. Are we actively managing customers to maximize the value and profit we can get? (So want are you doing… exactly?)

7. Do we know what our brands are worth with customers, employees, and investors and what can increase or dilute this value?

8. Are we fully realizing the potential of our brand? (No you are not)

9. Do we measure and monitor the impact of satisfying customers on business results? (This is your only value, you ought to be measuring.)

10. Are our processes, operations and organizations as customer-centric as they should be? (take another look at your processes there are probably room for vast improvements.)

Managing the active customer requires that a company consistently:

1. Target those customers who promise the greatest profit and lifetime value and define the initiatives, which capture that value. It’s been demonstrate that most sales people call on those companies that do not add the most profit, but spend time on the least profitable.

It’s not all the sales people fault though…sales forces are asked to be strategic, but yet are measured on tactical activity. So, the behavior of management, thinking that sales productivity can be linked to tactical activity is a part of the problem.

2. Present a compelling and properly priced offer.

(VALUE) No company in the history of the United States in the long term has ever stayed in business by being the low cost provider. (WalMart, you say…Wal-Mart competes by being the best distribution company in the world, which allows them to provide what consumers perceive as the lowest prices. Their competitive posture is not based on price.

3. Deploy the power of brand to differentiate and communicate. The key is to differentiate and communicate. Asked yourself this, “What is the one must compelling reason someone would buy your product or service rather than your competitor?” The answer is not quality, price or service. Everyone says that. How can you articulate your advantage in a way that your customer views your solution as an asset, a must have?

4. Deliver an experience that exceeds the customers expectations in each and every interaction. It’s the little things that make a big difference. Make sure your sales people are doing them. You know what they are. Look for other ways and opportunities. Improving in anyone of these will increase revenue generation. Increasing your effectiveness in two or more of these will allow you to increase revenue exponential not geometrical. You build synergy. Here’s your “to do” for the first of the year. Go back to the list of 10 questions. In a group setting from different people within your organization ask yourself two questions for each of the 10 questions.

A. On a scale of 1-10, 10 being the best, how does you company rate? B. How do I rate? Then you can look at where you are strong and where you are weak. Once you do the numbers you have a base line in which you can measure in the future. Now that the numbers have made the activities visible, you can design strategies to fix glaring problems areas.