Strategic Customer Analysis

It is common practice to determine your target customer when developing a business. However, this tunnel vision buyer group mentality leaves money on the table for businesses. To truly optimize profit and revenue a company’s leadership must be well aware of the many buyer groups (purchasers, actual users, and influencers) that can offer opportunity to enter into a new market space with high profit potential.

For example, say you are leather shoe manufacturer who usually focuses on retailers as its main buyer group. Through analysis of your current, similar and alternative products coupled with identifying the pain points of using your product you can realize a low-cost profitable opportunity to reel in your end users; essentially entering into a new market space.

A more effective strategic customer analysis would require you to understand the following:

  • Why buyers choose to buy your product; aka purchase criteria
  • What are the factors that cause customers to become angry with your product or company
  • What are the factors that keep potential customers at bay (you must understand their priorities and create solutions to meet their needs)
  • The preferences of your customers
  • The decision making process of your customers
  • Customer behavior
  • Why they choose to buy at a certain time (holidays, birthday, graduation, et cetera)
  • Time, travel, hassle and money the customer is willing to pay for buying and using your product or service
  • What functional needs need to be met
  • purchasing power

Businesses must also understand what factors motivate buyers to purchase based on price or quality. However, it is imperative that you just focus on the buyer group that has the highest profit potential at a lower cost and your company’s capabilities are able to meet their priorities.

Advertisements
Featured post

Lean Wednesday Tip: Why you are in business

“Effective leaders are motivated by why they started their business instead of the financial rewards. They strive to solve real industry and consumer problems coupled with the integration of  employee and customer-centric philosophies in their culture. They are not me-too leaders, they are innovators.”

E.O.W(End of the Week) Notable Tip: Reduce RFP Lead Times

Happy Friday!

I hope you’ve had a great week.

Today, I will discuss how you can optimize your CRM management process for reducing RFP (request for proposal) lead times while increasing profitability. By developing a client quality plan it becomes easier to vet prospects which makes RFP analysis much easier. RFP lead times (time taken to secure RFP) can be reduced by filtering high quality requests based on your quality plan filters which have lower proposal cycle times, higher profit/margin potential and higher probability of attainability.

Lower proposal cycle times can be attained by collaborating with team members and creating proposal templates that require minimal updates based on average or common project requests. Proposal templates, quality plans, historical and competitive analysis will allow you to budget resources for the purpose of optimizing profits and customer satisfaction. Read our article on Strategic Customer Analysis.

I hope you’ve enjoyed this E.O.W!

As always, “Success is continuous improvement!”

Lean Wednesday Tip: Fulfilling Buyer Needs

“An over-designed product causes waste and increases overhead. It is best that you gather insightful insights from customers to ensure you truly comprehend what they really want in a product instead of over-designing a product that no one wants to buy or understands how to use.”

E.O.W (End of the Week) Notable Tip: R&D Spending

Happy Friday!

I hope you’ve had a great week.

Today, I would like to touch upon R&D spend. Research has shown that highly successful innovative businesses have a lower R&D spend to sales ratio compared to their competitors. For example, Microsoft has one of the highest R&D spend to sales ratio but poor innovative value-creation; however, Apple with one of the lowest R&D spend to sales ratio has continuously acquired market space with iPods, iPads and iPhones. Another great example is 3M’s post its, which were developed with resources that were already available at the company.

Spending less on R&D is not the only factor to consider when you are looking to create innovative products. You must also understand all your potential customers, their pain points and preferences. This information will help you identify and solve a problem that your competitors are not targeting.

I hope you’ve enjoyed this E.O.W!

As always, “Success is continuous improvement!”

 

Lean Wednesday Tip: Customer-centric digitalization

“Companies that stay abreast of consumer behavior changes and priorities coupled with a dedication to a customer-centric philosophy will always yield a greater market share. Effective leaders integrate new technologies wisely based on the company’s capabilities and it’s ability to optimize client satisfaction and profitability.”

E.O.W (End of the Week) Notable Tip: Being Grateful

“Being grateful for your business, employees, clients, vendors and suppliers should not be a one time thing. You should continuously thank them and praise them because without your employees or clients you would not have a business. Always respect them and treat them well because they are more than just numbers.”

Lean Wednesday Tip: Loss Prevention Critical KPI Metrics

“Measuring and reporting the most valuable metrics is critical to identifying areas for improvement because they can be compared to industry and competitors for the purpose of lowering costs, enhancing productivity and safeguarding assets. Some critical Loss Prevention/Fraud KPI metrics you should be measuring are process cycle time, average days to resolve a fraud incident, cost per fraud incident, and process cost).

E.O.W (End of the week) Notable Tip: Client-centric Accounts Receivable

Happy Friday!

I hope you’ve had a great week.

Today’s E.O.W is about encouraging your accounting team to embody a more client-centric approach to accounts receivable by asking smart questions that glean insights into what clients value most and what their priorities are. To truly understand that customer everyone must be part of the customer service spectrum because anybody in the company can affect how the client sees the company. This also provides the opportunity to realize areas for improvement, for example, reduction of receivable days and optimized value creation.

I hope you’ve enjoyed this E.O.W!

As always, “Success is continuous improvement!”

Create a free website or blog at WordPress.com.

Up ↑