Six Hour Strategy Step 2: Customers & Competitors
I’m sharing this length newsletter today because it’s an excerpt from my upcoming new book, The Four Roads to Business Wealth, and I wanted you to have access right away.
The key point is this: Don’t sell to your customers, help them.
Today, we are going to continue our discussion of the Six Hour Strategy® to grow your business by focusing on the second step of analyzing your customers and competitors. We’ll discuss these from the framework of strategic position and future goals. It’s really about helping your customers.
But first, a word from one of the greatest management thinkers of all times, Peter Drucker.
Drucker’s excellent book, “The Five Most Important Questions You Will Ever Ask About Your Organization,” should be on every leader’s bookshelf. In this book, Drucker asks:
Who is our customer?
What does the customer value?
When analyzing your customers and competitors, it’s critical to keep these questions in mind.
Ideal Customer
First, who is your ideal customer?
This may be very different from your current customer.
Remember, your customer isn’t a company. It’s a real person, a human being, that makes a decision using part logic and part emotion, to hire you. When they hire your or buy your stuff, they are putting their reputation on the line. Therefore, your ideal customer is a human being, first and foremost.
Think about:
Who is your ideal customer?
How do you strengthen your relationships with customers?
What if most of the transaction is digital and doesn’t involve direct human interactions?
How do you personalize business-to-business (B2B) transactions?
What does the customer value?
Next, let’s look at what your customers value. This aligns perfectly with the results you help your customers to create, which is the foundation of strategy.
Customers, being human beings, value many things. Which of these do your customers value?
The emotional comfort they receive from confidently dealing with a reputable company that quickly fixes problems and stands behind their product or service.
Low price.
On time and on spec delivery.
Low price.
Products and services that are aligned with the customers’ business model and brand, so it can acquire and retain more customers.
Low price.
Relationship, convenience, quality, safety, delivery, repair, maintenance, timeliness, time to think, certification, validation, expertise, proactive advice, choice, customization, collaboration, flexibility, insights, sharing risks, and sharing rewards.
Low price.
Trust.
They may say “Low price” but if the other factors are clear and powerful, the price issue becomes less relevant.
For example, Katz’s Deli in New York isn’t famous for low prices. It’s famous for its pastrami sandwiches and for scaring customers to hold on to their tickets so they can exit after paying. It’s also famous for the “I’ll have what she’s having!” line from the movie “When Harry Met Sally.”
Photo © Phil Symchych
Next, we’ll discuss the formal analysis points for understanding both our customers and our competitors. The points are: strategic position and future goals.
Hmmm….
You’ll see that the Strategic Positions and Future Goals are likely similar or identical for both your customers and your competitors. It’s up to you - or your competitors - to help your customers strengthen their strategic positions and achieve their future goals. Game on!
Strategic Position
If you’re competing on low price, and many companies are, then you may be in the commodity business. Your strategic position needs to move away from being labeled a commodity. You need to do everything in your power to add more value to the customer relationship and interaction, so they don’t see you solely as a commodity. This can help you create a sustainable differentiated advantage from other low-price providers.
For anyone, it’s very difficult to compete with larger companies on price because they have deeper pockets. It’s much easier to match or come close on price and then use your speed, responsiveness, anticipation, proactivity, and skill to expand the criteria beyond price. In other words, use strategy to trump price.
The best position is to be a strategic partner with your customers where you show up and provide proactive advice that helps them achieve their goals while increasing your sales. Strategy = Be helpful.
Future Goals
Now, let’s look at your customers’ and competitors’ future goals. This isn’t complicated. Just about everyone I’ve dealt with that wasn’t in a succession or transition situation was focused on growth.
If your customers want to grow, then they will need to acquire more of your products and services. If your competitors want to grow, then they will want to sell more of their products and services to, you guessed it, your customers!
The important part is knowing what to do and how to do it to help your customers to grow, improve service, reduce costs, attract more customers, retain their best customers and employees, etc.
By knowing who your customers are and what they value, you can help them grow and prevent them from buying from your competitors. It may be that simple but we all know it isn’t that easy. Helping your customers is much easier than selling.
So now what?
Now, think and act like a consultant for your customers. Show up with ideas to help them, share what’s worked and what hasn’t with others, take risks, let them try stuff for free, give away some value, educate them, tweak and adjust things, fail and learn quickly and often, until you get it just right. Strengthen the relationship. Be useful. Help them be successful, and you’ll be rewarded.
From the Vault
Understanding who your customers are and what they value will help you to deliver products and services they want while competing more effectively in the market. The best strategies are invisible in that they are not obvious to either your customers or competitors. But your customers can feel it when you’re treating them like valued long-term partners by looking out for their best interests.
It’s worth repeating: Helping your customers is much easier than selling.
What’s New includes two parts
Announcing the inaugural “Small/Medium Enterprise SME Advisor Conference”
We’re going to the mountains!
Photo © Phil Symchych
Did you know that SYMCO & CO. helps high growth companies in numerous ways, including:
Acquisition – Position your business to acquire or be acquired at any time so you can take advantage of market changes and accelerate growth.
Annual Reports – The key for mid-market company success is to think and act like a much larger company. Preparing an annual report, even if it’s only for your internal management team’s use, will help you to learn so you can repeat success in the future. It will capture major goals and initiatives, highlights, successes, and learnings that occurred in the prior year. It also helps clarify your thinking and goals for the future.
Attract Financing – with a stronger balance sheet and a clear growth strategy, you can attract strategic financing partners to provide financing that can create fuel for even more growth.
Board of Directors – Set up an advisory or fiduciary board of directors with people that have already been where you’re headed so you can prevent mistakes, identify and capture opportunities, and grow more quickly and safely.
Consulting CFO – We can provide ongoing financial management and advice to high growth companies that do not need a full-time CFO but do need high level financial advice to accelerate profitable growth.
Financial Performance – Improve financial performance in ways that strengthen your balance sheet, increase your valuation and improve cash flows.
Growth Strategies – Developing and implementing high growth strategies that dramatically increase your revenue, profit, and valuation.
President’s Advisor – Leadership can be a lonely existence. One of my most popular services is a confidential sounding board with the leader to discuss goals, strategies, growing their people, managing risks, riding the trends, and developing and implementing plans. The best entrepreneurs don’t bet the farm by rolling the dice, they think things through - quickly - and take action.
Succession and Transition Plans – Design and implement a succession and transition plan that protects your wealth while transferring responsibility and accountability to the next generation of leaders and owners.
If you’ve stuck with me and read this far, congratulations!! I’m offering a 15-minute free phone consultation on any business topic to the first five people who contact me.
