So who are my customers and where do they fit into the scheme of things?
We all like to think that we really know who our customers are and why they like to buy from us rather than from our competitors. Yet most small business owners find it difficult to accurately state who their real customer is. Surprisingly, many of them do not have a well-defined description of their customer, nor the market segment their customer is part of. It often ends up in a jumble of words including consumer, end user, customer and client, with very few really knowing or understanding how this puzzle fits together.
All successful and profitable businesses operate as value delivery systems.
When I was the Fashion Direction Manager of the 42 Grace Bros. department stores early in my corporate career, I realised that my customers operated as a chain, which we now call a value delivery system.
My job required me to be the source and direction of all fashion marketing information in the company. Fortunately, I realised early that there were key links in the chain that formed the value delivery system. To achieve my end goal, which was to enable customers to buy in an up-to-date coordinated merchandising environment, I had to work with the series of vital links in my value delivery chain.
My clients (who I rated as those who has bought from me at least four times) were the merchandise buyers. I had to work with them to ensure that the information we collected was suited to their target customer. If they chose to ignore the information we distributed, we faced enormous risks. (How many times have you tried to match men’s or women’s tops with a pair of pants in a major department store and failed?) So my focus was in developing a very thorough understanding of their expectations, needs and wants, as well as in developing a strong relationship with each and every one of them. My customers included Grace Bros.’ advertising, visual merchandising and promotions departments as well as the store and department managers. I needed to develop strong business relationships with these functional managers in order to influence their decisions. The actual end consumers were the men, women and children who bought the merchandise. An end user was the person who actually wore or used the item purchased.
Each vital link in the chain brought its own set of expectations, needs and wants.
The challenge lay in not neglecting any one link in the chain. My job was to know them all intimately, because each of them was instrumental in my ability to be successful.
These same principles apply to every business.
I recently consulted to a small training company and was able to help the Managing Director construct the business’ value chain. Until then, she had assumed that her key focal point was the person who attended her training workshops. After much discussion and debate, she reconstructed her value delivery chain to include the training broker as her client. The broker was then established as the main focus point for all of her business interactions. She did this because it was the broker who forged the vital link and sourced most of the business for her.
The broker needed reliability, credibility, and design and delivery excellence. She established the human resources or training manager as her customer, because they needed a completely different set of expectations, needs and wants. The course participants, who all had different learning needs and wants from the training program, became her consumers.
So take some time to chart your business’ value chain. You can’t imagine the difference it will make to how you do business and the results that can be achieved!