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New Ways To Win Customers
Harvy Simkovits, CMC - Published in Mass High Tech 10/5/98

Over the last 15 years, much has been said and done about improving a company's customer service ability in order to gain competitive advantage. Efforts have largely focused on tactical maneuvers, like "sugar-coating" a company's approach (playing "nice-nice") with customers, and building a "rah-rah" service spirit among employees who serve customers.

I believe it’s time for business owners need to be more strategic in their approach to customers by focusing their company's efforts at the right customers for their business. I call this "playing the outside and inside business games to win."

Critical Questions About Your Customer Gameplan

To give you a hard-hitting sense of what I mean, answer the following questions about your company's customer-service aspirations with either "fully," "somewhat," "not at all."

Is your company working to:

  • pursue all its potential customers?
  • treat every customer to the same quality product(s), and with the same outstanding service(s)?
  • bend over backwards to keep all its customers satisfied?
  • provide its full array of products and services to all your customers?
  • increase its level of service to save a dissatisfied customer, or one motioning to leave?

If your answers to most of these questions lean toward "fully," then I wonder if your business is making significant profit by doing this. You may be pleasing and keeping most of your customers (and I commend you for that), yet you may be losing significant profits in the process.

As Adrian Slywotzky and David Morrison have so aptly put it in their 1997 book, The Profit Zone, the conventional business approach over the last number of years has been, "Gain market share and then company profit will follow." However, they demonstrate that a new approach is more profitable: "Understand what's most important to the customer and where your company can make a profit with them; then work to gain market share in that finite arena."

Winning the ‘Outside Game’

Decide on which customers to focus on initially, then subsequently. Consider these customer types:

  1. Suspect Customers - all plausible customers
  2. Prospective Customers - high profit-potential customers you decide to pursue
  3. New Customers - recently converted prospects
  4. Existing Customers - repeat users of your products and services (who can be segregated into low, medium and high users, as well as fully- and not-fully-saturated users)
  5. Discouraged or Lost Customers - those who have gone elsewhere

Then consider these tips for handling these various categories:

  • Decide which market segments of suspect customers provide the most profitable business; then design your strategy for those chosen segments (note: don't bite off more market segments than your organization can chew, for it will spread your organizational resources too thin and you will more-likely fail).
  • Design separate marketing literature for prospective, existing and discouraged/lost customers.
  • Categorize customers in an "A", "B", and "C" system based on volume and profitability; then work to build your business with the "A" and "B" customers.
  • Prune all "C" customers that have little potential to become "A" or "B" customers within the next year. (Pruning unprofitable customers allows you to focus scarce organizational resources on more deserving clientele.)
  • Forge close ties with those customers most critical to your business success and work to design or tailor your products and services to their specific needs.
  • Continually work on reducing your cost to do business with existing customers, and pass on cost savings to them. Thus, you reward loyal customers.
  • Work to rejuvenate only those lost/discouraged customers that offer you profitable business.

Winning the "Inside Game"

There are six critical supports your company can build inside the business in order to acquire and maintain your targeted customers. Your customer sees the first two at every contact with your company:

  1. Capable, Committed, Involved Employees — who are helpful and effective, working with their heads and their hearts.
  2. User Friendly Policies, Procedures and Systems - that facilitate the customer’s ability to get its needs satisfied.

The other four supports reinforcement the first two, and together they act as a safety net, which catches and carries the company’s customers. They include:

  1. Sound Management Practices
  2. Functional Supplier Links & Business Alliances
  3. Proactive Service Philosophy and Strategy
  4. Competent, Credible Leadership

After thinking about your safety net, focus about those supports that need strengthening. That is where you will get the greatest return in generating additional customer retention, greater margins, or lower costs of doing business.

Committed leadership will keep efforts focused and moving despite inevitable challenge and possible adversity, especially in a highly competitive business. Outside customer capturing and inside organizational Improvement efforts must be targeted, starting small and building momentum. Employees and suppliers need to be involved in analyses and actions in order to generate uniform commitment and ensure that changes/improvements stick. Also, employee competence and confidence needs to be built to sustain your company's advantage over the long haul.

Performing all these outside and inside efforts both proactively and intelligently will generate and ensure long-term success for your business.

Harvy Simkovits, CMC, President of Business Wisdom, works with owner managed companies to help them grow, prosper and continue on by offering innovative approaches to business development, company management, organization leadership and learning, and management education. He can be reached at 781-862-3983 or .

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