Know your customer's risk level
Getting to know your customer can pay off in the selling process
By John F Monoky -- Industrial Distribution, 2/1/1998
In today's rapidly changing sales environment, salespeople need to know more about their customers than ever before. We have touched on this topic in several previous articles. The focus in this article is on the soft data -- soft in the sense that it really doesn't deal with the specifics of their product and application needs, but more in terms of what customers do and how they do it. That question is the starting point in this customer analysis.What do they do and how do they actually do it? This question deals with the mission and values of your customer, who are driven by products, technology, customers, distribution channels, sales forces, and much more. For example, what is their tolerance for risk when it comes to trying out new products and applications? Are they willing to take the big step in order to improve efficiencies? How do they reward their employees?
A second question -- "Why do they do it that way?" -- is even more critical. Is it because of tradition, lack of options, lack of knowledge, lack of capital, or just because it works? Answering this and the following questions can provide valuable insight to possible selling barriers and/or opportunities.
Who do they do it with and why? The customer's suppliers, customers, channel partners and equity owners may give you insight to their processes and behaviors.
What does it cost them to do it? The nature and source of their cost of doing business is critical if you as a seller are to be of assistance.
What do they make? An understanding of your customer's product portfolio in terms of features and benefits increases the customer's perception of your expertise. It also enables you to offer solutions that enhance the market perceptions of their offering.
What are their fondest dreams and most feared nightmares? This is a very insightful question and obviously one that is very difficult to answer. The answers, however, such as the procurement manager who longs to be the big boss, are very powerful and can be of assistance in the selling process.
What are their long and short term goals, problems and opportunities? To understand this question is to understand your role as a strategic seller. It will also enable you to move your contact point to a higher organizational level within your customer.
What are their business objectives? Growth, market share, return on investment, cash flow, profits? This is the quantitative side of the previous question. It also lends insight to your customer's decision-making practices. For example, ROI-driven managers are reluctant to make decisions that only focus on the future and do not provide any short-term impact.
What is the customer's strategic position in their industry? Dominant, strong, tenable, weak? Once again, this answer provides an understanding of their purchasing behavior. Assistance in improving their position is valued.
Although these questions may seem to be rather subjective in nature, attempting to obtain answers will provide the seller with a unique advantage over sellers who don't know the people in the buying circle as well.
Making sure your sales force is proactive and in-the-know will enable your sellers to better assist in changing processes or in responding in appropriate language and or benefits to create sales opportunities.
John F. Monoky is president of Monoky & Associates. He can be reached at (419) 536-7637.
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