As your company kicks off 2020, one critical factor to get right is to verify if you are targeting not the customers that you have now but the customers that you want for the future. Chances are, at least at some level, you are attracting the wrong customers that are not profitable, not engaged, not being a raving fan, causing some level of pain, or all four. In this article, we look at eight attributes that signify that your business may be attracting the wrong customers.
You Don’t Know Who Your Customers Are
If you don’t have a definition and shared knowledge among your employees of what customers you are targeting, then you likely don’t know what the wrong customers look like. The most important characteristic to understand its intent. Knowing when a customer seeks out your company is critical to understanding the psychographics of your customer. Per the old adage about hardware store customers – “Customers come in wanting a quarter-inch drill bit, but what they really want is a quarter-inch hole.”
Here at Capital Financial Inc, we take it two steps beyond – that customer doesn’t want a quarter-inch hole, they want a lock for their door installed. Beyond that, what they really want is security and safety. If you can understand the need for safety and security, then that opens up a plethora of emotions in which to tap into and drive sales and marketing.
You Are Afraid of Alienating Some Customers
If you stand for something, someone that does not agree with you will likely be upset. If you are not upsetting someone, then likely your marketing, sales, and brand are so vanilla that they are meaningless. It is possible that your marketing and brand are not so much a brand promise but the absence of a brand promise. The goal is to have a clear vision of who your customers are and then speak their language.
You Consistently Compete On Price
If you are the lowest cost producer in your market, then, by all means, go ahead and compete on price. You will win that game every time. However, if you don’t have the lowest cost structure and you compete on price, you will lose that game a majority of the time. Marketing the cheapest price attracts a particular type of customer. There is nothing wrong with these clients, but it is clear that they put a premium on price, not service or value. Get enough of these customers in the door and not only will you find that those customers hurt your profitability and brand, but the biggest thing they do is hurt your culture. Once your employees know that it is OK to compete on price, that now becomes your culture.
While it is possible that you have the wrong employees, the more likely root cause is that either you have the wrong sales leadership or, and this is more likely, you have not developed your brand or product enough to create tangible value. Your employees will compete on price if you have given them nothing else to compete on.
Not Doing Enough Discovery
Before you do anything with a customer or prospect, you need to understand their motivation and issues. If your customer service or salespeople are not doing enough homework or don’t have the right tools to understand the pain points and motivations of your clients, then it will be hard to deliver a value-driven solution to attract customers that care about your brand.
Have A Disorganized Brand and Sales Process
If your company doesn’t continue to put energy into your brand and your sales process, then it will deteriorate over time. A disorganized brand and sales process will likely attract disorganized clients. Have a brand promise and sales process that says you value your customer’s loyalty, feelings, and time, and you will likely attract clients that will do the same for you.
Don’t Have Ongoing Sales Training:
Tell a salesperson that you want them to attend sales training, and likely the first thing out of their mouth is something along the lines of “Sure, I went to sales training three years ago, so I am good.” That sentiment is crazy if you think about it. Selling is complicated and takes consistent training on your products, industries, process, competition, psychology, social media, marketing, technology, networking and more.
Professional athletes train every day, why not professionals at your company? With a strong economy, it is easy just to answer phones and live off your referral and existing customer network. The problem is, you may not be getting the most profitable customers in this manner. If your company does not provide formal training, identify and constellate a host of perishable skills that are applicable to your business line and then figure out how to keep up to date, then likely your salespeople and management are not optimized in their effort to attract the highest quality customers possible.
Putting Marketing Above Culture and Capabilities
While brand and culture are tied together, often a company’s marketing is not aligned with the culture or capabilities. To have alignment, you either need to challenge your company to fulfill your brand promise or have a brand promise that fits your capabilities. If your capabilities are not in alignment, then marketing something else is the surest way to attract customers that will come on expecting one thing and then cost you money trying to be something that you are not.
Think of Yourself and Not Your Customer
There is not a day goes by that we don’t struggle with some department trying to make things easy on themselves instead of easy on their customer. Examine every tradition, policy, status quo process, risk requirement, interpretation of regulation, and technology constraint that gets in the way of pleasing your customer and figure out if there is a better way to satisfy all parties.
Putting This Into Action
Don’t be happy with just having customers. Not all customers are equal, and just because someone can be a customer doesn’t mean that they should be a customer. Getting the tools and training you need to be more discerning and then proactively to go after the customers you want is the best way to build a sustainable company culture and above-average profitability.
Strive to have the right customers that appreciate your value and that are profitable. All of the eight points above take effort, but it is a whole lot less effort than having a company filled with customers that don’t support your value proposition.
The articles presented contain summaries, personal opinions, viewpoints and analyses of the author of the article and not those of Capital Financial Inc. The articles are intended to provide general information on finance, current events, strategy, leadership, risk management, and other related topics and are not intended to be complete or to provide any specific recommendations or advice. Readers should consult their own legal or financial professionals for specific advice on any particular topic.
