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Your customers hold the keys to profit squeeze

Use customer insight to grow your business

Revisit your “grow the business this year list,” if you don’t find “Talk To Our Customers” on that list, add it now—and make it number one. Done right, it will 1) improve efficiencies 2) keep you relevant and 3) help make your business more competitive. Do it straight up because it could affect key decisions you make now that will help lighten the squeeze on profits later.

If you’re a small manufacturing or industrial business making products or offering services, your customers are business people just like you. But they are also consumers just like you. And more and more the “consumer” in us spills over into our work life affecting our preferences, decisions and what we’re willing to tolerate. It’s a time of high expectations, which is why some of our customers are so damned demanding.

We have been told for years to listen to our customers. Now might be the best time to act on that wisdom. The process can be revealing and, if you do it right, your customers will both understand and admire what you’re trying to do, just as you would of them.

1) Improve efficiencies. It is actually somewhat fun and rewarding. You might find things that you’re doing that they really haven’t noticed and therefore doesn’t matter. So could you move those resources elsewhere and gain some efficiencies? You might discover unmet needs: things customer’s want but aren’t finding elsewhere. Bingo, as the rule goes, when you create the category you also get to set the price. And, by exceeding customer expectation we gain word of mouth, so add “efficient marketing” to your gains as well.

2) Keep your business relevant. If you gain nothing else, talking to your customers will help you avoid becoming irrelevant, or making something that has become irrelevant. Like colored plastic princess phones. The faster the world moves the faster things will become irrelevant. You want to know ahead of time, before you decide to lease that 720-ton injection molder. And competitively, if you can imagine a new category, from this new customer insight, you have a big opportunity to render some pesky, perhaps, Chinese competition irrelevant. Secure your future and save the country, in one action.

3) Help create competitive advantage. All of these ideas and steps roll up to creating competitive advantage. Leaders are those who constantly maintain their relevance to a targeted, relatively narrow, set of customers. The knowledge and wisdom you glean from customers will ensure ownership of clear points of difference compared with the competition.

I will discuss some of the most effective ways to gather customer insight in a future post. If you want it sooner than later just let me know.

One thought on “Your customers hold the keys to profit squeeze

  1. It’s amazing how listening to the customer is such an old, entrenched principle in the game of business. What is more amazing is how many people – sales, managers, owners, etc – are not good at listening. In these days of increased competition, decreased market (customers), and just in time orders, finding even the slightest bit of advantage by listening to the customer can pay dividends. I enjoyed this post.

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