“If I had asked people what they wanted, they would have said faster horses.”Henry Ford
Tuesday, 21 January 2014
Billy’s Fourteenth Law: Know Thy Customer
Good businesses understand what customers' want and how customers' want to buy. Great businesses know what customers will want and provide it exactly when they want it. This requires a combination of insight, foresight, empathy and trend spotting. It involves knowing not only what customer’s buy, but anticipating what they need and how you can best provide it to them. In short, it means truly knowing your customer!
It is not unusual for business owners to understand their customers from a consumption point of view. For example, a clothing retailer understands customers' clothing needs or a bookkeeper understands her clients from a financial perspective. This level of customer knowledge is just the beginning to truly understanding your customer.
In the book The Discipline of Market Leaders, Michael Treacy and Fred Wiersema define three value disciplines in large corporations. They are operational excellence, product leadership and customer intimacy. They argue that although you practise each discipline, one emerges as the dominant discipline in the most successful corporations. They emphasize the nature and importance of this discipline this way.
Companies and organizations whose discipline is customer intimacy really know their customers; not simply from a customer perspective but from a personal perspective. Good B to B firms understand their client's industries and business challenges. Don’t make the mistake of simply understanding your customers’ needs…understand your customer.
One author and researcher who really ‘gets it’ is Paco Underhill. He has several books, including Why We Buy: The Science of Shopping, however; the book that best illustrates this point is What Women Want: The Global Market Turns Female Friendly. Time and again, Underhill provides examples of how firms understanding of women led to understanding a need and subsequently creating a business opportunity.
To desire to understand you must truly love your customers. I am lucky. I work with entrepreneurs and business owners. I understand business and I understand business owners. I hope this comes from truly caring about both the enterprise and the entrepreneur. I was working as part of an entrepreneurial training team in the nineties. The project coordinator told me that I cared more about the participants business plans than they did. He was probably right!
When it comes to customer intimacy, you really have to care about the whole customer and not simply their commercial needs. This value must permeate throughout your firm and be evident in everything you do. Caring leads to understanding and the understanding in turn leads to opportunity.
Again…your comments are welcome.