Business Tip 2: Follow The Money
Business Tip 2: Follow The Money
We’re fascinated when we hear business people say they are customer focused or customer driven, yet their profit models are focused on their needs rather than creating genuine wealth for their customers and sharing that wealth. Even their business structure tends towards an “inner” view. Thirty years ago the customer didn’t really matter. I know this sounds weird, but it’s true. Customer demand was higher than capacity and the seller was in the driver’s seat. They set their business goals based on their targeted profit margins. Today our capacity to produce is greater than demand and, unless you have a distinctly innovative product or service, the customer has a confusing amount of choice. Rarely can we set our own prices due to increased, hungry competitors. Protecting margins involves much more than increasing prices and tinkering with administrative costs.
In reality, the customer is now at the centre of our business universe.
Dale Carnegie said: “Try honestly to see things from the other person’s point of view.”
It’s time to scrutinize whether we actually live this principle or just pay lip service to it.
Unfortunately, traditional market research is of little help since it uses what we call a “rearview mirror” approach. Usually customers are given a series of multiple choice questions. Even when augmented by interviews, the questions often do not get at clients’ genuine future issues.
Why is thinking from the customer’s point of view so hard? Mostly it’s because we’ve been trained to continually focus on improving our products or services. An all too common model is designing a product (service) that we think serves a need and aggressively taking it to market with traditional techniques. Invariably the market responds with apathy, or strong resistance. [Do you remember Crystal Pepsi?]
As an organization grows, the natural, organic flow is away from customers. A recent survey indicates that senior managers spend seventy percent of their time dealing with internal issues, and a high percentage of the remaining thirty percent involves dealing with non-customer issues.
Believe it or not, the best customers or prospects with whom to invest time are the ones most demanding, difficult, or dissatisfied. Over 20 years ago, a successful retailer taught me to actively pursue complaining customers. “Dave,” he said, “a complaining customer is doing you a favor. They are telling you they want to do business with you, but they’re frustrated or irritated at something. They represent at least fifty other customers who, for whatever reason, are reluctant to bring their complaints to your attention. The best ideas to dramatically improve my business came from complaining customers.” He taught us the direct, inexpensive customer focus process we still use for both ourselves and our clients.
Asking the right questions is critical. It is important to uncover our most demanding client’s needs, aspirations, and future business focus. Just asking them how they like our service is vague and weak. Asking them about their “needs” is not enough. Prospective customers usually don’t know their future needs. They operate in the same dynamic business climate as the rest of us.
Ineffective, order-taking salespeople, for example, contend that they think from the customer’s viewpoint. They tell us, “All our customers care about is price. The customers don’t want what we sell; there is no demand for it.”
History gives us many examples of the flaw in this mindset. Years ago, vacuum cleaners were unknown and, when approached, retailers claimed there was no demand for them. However, once a few early-adopters began using the contraptions they purchased from a direct salesperson, demand increased. Now, almost every major retailer carries vacuums. This tells us is that “demand” is after-the-fact and often ineffective in capturing future opportunities.
Suggestion: Seek out forward-looking customers. Listen carefully to their viewpoints and visualize the picture they communicate. No one can predict the future, but these rare visionaries see what others do not see until it’s a commodity. Find out what books they are reading and read them yourself. Look for industry shaping publications, not “faddish,” rearview mirror-type books. Once a topic becomes trendy, bookstores are flooded with a wave of rehash publications that are of little value in uncovering potential future profits.
For the full article, including Key Questions To Ask, email: info@carnegie.ca – ask for the full article: Business Tip #2: Follow The Money.
Business Tip 2 Follow The Money - To learn more about this author, visit Dave Mather's Website.
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When asked, virtually all executives we interview complain that their margins are shrinking. This is a concern since our market is a global, hyper competitive commodity and price driven, margin battering place. How you made money last year may not make you money this year.
We’re fascinated when we hear business people say they are customer focused or customer driven, yet their profit models are focused on their needs rather than creating genuine wealth for their customers and sharing that wealth. Even their business structure tends towards an “inner” view. Thirty years ago the customer didn’t really matter. I know this sounds weird, but it’s true. Customer demand was higher than capacity and the seller was in the driver’s seat. They set their business goals based on their targeted profit margins. Today our capacity to produce is greater than demand and, unless you have a distinctly innovative product or service, the customer has a confusing amount of choice. Rarely can we set our own prices due to increased, hungry competitors. Protecting margins involves much more than increasing prices and tinkering with administrative costs.
In reality, the customer is now at the centre of our business universe.
Dale Carnegie said: “Try honestly to see things from the other person’s point of view.”
It’s time to scrutinize whether we actually live this principle or just pay lip service to it.
Unfortunately, traditional market research is of little help since it uses what we call a “rearview mirror” approach. Usually customers are given a series of multiple choice questions. Even when augmented by interviews, the questions often do not get at clients’ genuine future issues.
Why is thinking from the customer’s point of view so hard? Mostly it’s because we’ve been trained to continually focus on improving our products or services. An all too common model is designing a product (service) that we think serves a need and aggressively taking it to market with traditional techniques. Invariably the market responds with apathy, or strong resistance. [Do you remember Crystal Pepsi?]
As an organization grows, the natural, organic flow is away from customers. A recent survey indicates that senior managers spend seventy percent of their time dealing with internal issues, and a high percentage of the remaining thirty percent involves dealing with non-customer issues.
Believe it or not, the best customers or prospects with whom to invest time are the ones most demanding, difficult, or dissatisfied. Over 20 years ago, a successful retailer taught me to actively pursue complaining customers. “Dave,” he said, “a complaining customer is doing you a favor. They are telling you they want to do business with you, but they’re frustrated or irritated at something. They represent at least fifty other customers who, for whatever reason, are reluctant to bring their complaints to your attention. The best ideas to dramatically improve my business came from complaining customers.” He taught us the direct, inexpensive customer focus process we still use for both ourselves and our clients.
Asking the right questions is critical. It is important to uncover our most demanding client’s needs, aspirations, and future business focus. Just asking them how they like our service is vague and weak. Asking them about their “needs” is not enough. Prospective customers usually don’t know their future needs. They operate in the same dynamic business climate as the rest of us.
Ineffective, order-taking salespeople, for example, contend that they think from the customer’s viewpoint. They tell us, “All our customers care about is price. The customers don’t want what we sell; there is no demand for it.”
History gives us many examples of the flaw in this mindset. Years ago, vacuum cleaners were unknown and, when approached, retailers claimed there was no demand for them. However, once a few early-adopters began using the contraptions they purchased from a direct salesperson, demand increased. Now, almost every major retailer carries vacuums. This tells us is that “demand” is after-the-fact and often ineffective in capturing future opportunities.
Suggestion: Seek out forward-looking customers. Listen carefully to their viewpoints and visualize the picture they communicate. No one can predict the future, but these rare visionaries see what others do not see until it’s a commodity. Find out what books they are reading and read them yourself. Look for industry shaping publications, not “faddish,” rearview mirror-type books. Once a topic becomes trendy, bookstores are flooded with a wave of rehash publications that are of little value in uncovering potential future profits.
For the full article, including Key Questions To Ask, email: info@carnegie.ca – ask for the full article: Business Tip #2: Follow The Money.
Business Tip 2 Follow The Money - To learn more about this author, visit Dave Mather's Website.
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Joe DagerJoe Dager is President of Business901, a progressive coaching company providing no-nonsense direction in areas such as Lean Six Sigma Marketing and organized referral marketing. What others say: In the past 20 years, Joe and I have collaborated on many difficult issues. Joe’s ability to combine his expertise with “out of the box” thinking is unsurpassed. He has always delivered quickly, cost effectively and with ingenuity. A brilliant mind that is always a pleasure to work with.” - James R. If you want to learn more about Business901, start a conversation with us. We can be found @ Web/Blog: Business901.com Web/Blog: FundingYourNonprofit.com LinkedIn Profile Follow me on Twitter - Visit Joe Dager's Website |
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David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
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