By Iain Lovatt, IDM, Executive Chairman, BlueSheep
You may have read ‘Who Moved My Cheese’ by Spencer Johnson. It tackles the concept of change using an allegory to convey the need to embrace this unsettling occurrence – it’s brilliant but has been used in some dubious ways I believe! For many businesses, change is not a welcome guest – in fact, in some instances, it can threaten the very being of existence. ‘Where’ and ‘next’ are not found in the same sentence for fear of upsetting the status quo.
In a way it’s understandable that people feel threatened by change – when the safety net is removed or when confidence in one’s own decisions is challenged. Let’s face it, it’s easier to repeat what you have always done and only make some adjustments to your path when you absolutely have to. The good news is you can be in complete control of your future business success by facing change head-on and using change as your differentiating vehicle – turning change into strategic brilliance.
At the centre of this capability is customer knowledge and its power to deliver proportionate relationships. What I mean by this is developing an understanding of your customers that provides you with so much insight that you will learn to understand them as well as they understand themselves. And, there’s not a single crystal ball to be seen. Let me share with you some nuggets of customer relationships that can make change as exciting as business itself.
Sportsmen and women typify the need to embrace change. They adopt a heads-up approach to training and performance – always looking forward – always looking for ways to improve, how to become better than the competition – ways to challenge personal targets. It’s all about improvement and pushing boundaries, not about staying in a stagnant comfort zone waiting for nature to deliver lady lucky.
Business is no different in needing to compete on a daily basis. The challenge is what exercise will give you the edge? Apologies for the sporting analogy! Well, just as sportspeople know their own bodies and limits, businesses need to understand who they are selling to and servicing to understand the limits of opportunity.
This leads us to Money Mapping. As the title suggests, the thrust of this service is based on where your money is earned and spent across the sector landscape you occupy. If I were a Buddhist, I could compare this journey of understanding to the plight of business enlightenment – but I’m not – so I’ll restrain myself and just say that customer insight is a wonderful gift. This isn’t to say you must wait for a special occasion to receive it. In traditional businesses the sales and marketing dichotomy serve to worry about their own affairs. Marketing concerns itself with the future and sales tend to focus more on the here and now. What bliss if the two were joined in a common mission to evoke change to address both the present and the future.
Money Mapping focuses on delivering information that binds sales and marketing activities in a logical and pin-point focused way. It does this by making certain assumptions which challenge traditional thinking. For example, not all customers are the same. How can they be? Some customers spend a lot, are vital to your business’ very existence and others don’t and aren’t. The challenge is recognising this, quantifying this statement and acting on it. Secondly, you don’t always need every customer you have. This might strike a chord with you. You ‘put up’ with certain customers, not because they are valuable to you but because of an obligation or because they are just demanding. Either way, the result is they cost you cash. They consume disproportionate service or resource and well – quite often just end up frustrating you and your colleagues. Yet despite this you soldier on, adopting the same old approach and life goes on.
Sounds familiar? We label them Avoid accounts. Apt? We think so because, all things considered, it signifies and quantifies their real worth to you. And in the current relationship – this might equate to a negative return. There are the bad but by the same token there are the good and it is these customers – and their like – to where we also need to turn our attention. We call these customers that reside at the opposite end of the customer value spectrum Treasure accounts. And that’s exactly what you should be doing with them.
Arriving at this insight is not a chance occurrence. It takes analysis of your customer data drawn together to create a holistic view of relationships. When this has been achieved the nitty gritty of categorisation can take place and the work of moulding your respective service structures around each and every customer. This doesn’t mean that customer service or sales focus is relegated to an unacceptable level but it might mean that the rules of engagement may change – and for the better.
The end goal is to establish a real understanding of all your customers, where they sit in terms of priority and as a result how they engage with your business. Some tough decisions may need to be taken in the light of greater insight including how best to turn Avoid customers into profitable relationships – if at all possible. And if not, what options can you offer, or ultimately, is it time to point these loss-makers to your competition – if they’ll have them! Change is everything. It’s unstoppable and just needs to be reigned in and used to best effect. And there’s no better place to start than finding out real customer value and how you manage this dynamic.
Accreditation: Article supplied by The Institute of Direct Marketing (IDM), Europe’s leading body for the professional development of direct and digital marketers. The IDM offers a wide range of up-to-the-minute training courses, bespoke training solutions and internationally recognised qualifications, all devised and delivered by expert, real-world marketers. Visit the site to experience their range of online digital qualifications and the brand new Award in Data Management http://www.theidm.com