"I am always amazed to learn who our customers are and why they choose to buy from us," the CEO of a DAX 30 company told me over an informal glass of wine. An honest admission, and a dangerous one. If you do not know who your customers are, a competitor may well learn to.
Savvy competitors are learning what customers want and filling the gap with products and services at a price the customer accepts and the producer profits from. The emphasis usually falls on consumer markets; in B2B it is where companies win or lose. I have followed American and European B2B suppliers that rocketed to the top of their segments in share and, more importantly, profitability, by delivering what customers would pay for to the segments most attractive for the future. Listed, private-equity owned or family controlled, investors reward the companies that focus on particular segments and serve them at a higher return than competitors.
Three things boards overlook
It is a board matter. Customer insight is not marketing's job or customer service's score. It is what customers will want in the future and how and where they will buy, and the mandate to find out has to come from the board.
Ask the right questions of the right people. Not "are you satisfied" but which criteria decide the purchase, how they rank, who else they considered and why. Ask the people who sign, not only the people who use.
Turn the answers into decisions. Insight that does not change a product-market priority, an investment or an exit was a survey.
Where it goes
Onto the market reality check, tool 3B of the MOVE® system: for each priority cell on the product-market matrix, nine questions answered from outside the company. It always changes the internal read, and that is the point.
Monday
Name your three most profitable customers and write why each buys from you. Then ask them. The distance between your answer and theirs is your exposure.
