Usually, when considering how to increase the sales of a product or service, people do a good job of accentuating what it is that the product/service can do for the customer. For example, if you were selling a vacuum cleaner you might highlight the fact that it is ‘cordless’, ‘bagless’ or ‘easily manoeuvrable’. The same is true for a service, for example in banking you might promote your interest rates, the Return on Investment or your cyber security. People are generally very good at calling attention to all the features a product or service can offer a customer – and this makes sense. This is what you are trying to promote. However, there is another angle we should consider. What if you were to approach it from the customer’s point of view?
This is a little more difficult. It would mean developing an understanding of the ways in which customers buy, rather than solely the best ‘features’ you can sell. So, if you were to dig a little deeper, what is it that your customers are looking for when they are choosing to buy? The simple answer is that they are looking for a solution to a problem/challenge they are currently facing. Unless you have a monopoly on the market, it is likely that your goods/services are similar to those of your competitors. Of course, it seems natural to promote the ways you are different from other organisations who offer something similar. However, if you approach your market offers from the customer’s point of view you have an opportunity to produce something really great, something your competition is missing – an offer that is almost unrefusable. To do that you must understand your customer’s current reality. What is it they experience when they engage with suppliers such as yourself? And what problems does that create for them?
If you supply products (especially when you are dealing with commodity products) it is important to consider the way you encourage your customers to buy. For example, do you promote minimum order quantities? Do you allow order quantities of just one unit? Or do you encourage customers to buy one, two, three, even six-months’ worth of stock – because it is easier for your organisation to make, pack, transport and dispatch. Do you offer price breaks to encourage that sort of behaviour from your customers?
These offers may be desirable to your customers as well – they get a discount and you get to make an easy batch. On the flip side, however, if you are forcing your customers to take three/six months’ worth of inventory, they have to store it… they have to warehouse it… the product might age… not to mention they will be sacrificing cash availability. There are a number of considerations which mean that, while on the surface they are good promotions, there are implications for the way the customer must manage it. We could list many other examples where things people do to promote products/services look like a good idea on the surface but may have negative ramifications for the customer.
Another point worth noting is that your customer isn’t just one person. For example, your offer on price discounts may be attractive to a buyer but it isn’t the buyer who has to manage the warehouse, or the availability of raw materials for the workshop… Understanding an organisation’s way of working and way of buying is crucial to understanding the problems they face and how you as a supplier can alleviate those problems in your products/services and most importantly, in your offers.
The key to developing an offer which doesn’t depend on luck to determine whether it succeeds, is to reverse engineer your customer’s environment. Understand what they do from procurement, through to transport, through to storage, through to production, through to dispatch – making note of the difficulties they have at these points. Organisation, synchronisation, cash, space, stock-outs… these are all challenges you could potentially help them with. If you can map their environment, and their issues, you can engineer a solution which removes two or three key problems. It might be almost nothing to do with the product you are delivering! Do this and you will suddenly be offering something very different from your competition and will stand out head and shoulders above other organisations promoting the same/similar goods or services. It’ll be a no-brainer for your customer to choose you over everybody else because you know what they need!
Goldratt UK works with many organisations who will have customers like yours, if you would like help in reverse engineering your client’s environment or would like to hear the typical problems they face, simply get in contact.
By Phil Snelgrove, Lauren Wiles