The “product” component of offerings, especially B2B offerings, no longer dominates the purchase decision in most cases. With offshore manufacturing and rapid software development leveling the playing field, customers are looking for the “whole product” as never before.
These changes in the business landscape create obstacles to traditional sales and marketing. Marketing can no longer broadcast messaging or even control it, and customers look to their sales rep more as a configurator than an advisor. Customers still need advice, but they want to control the process. Organizations need to adopt a new approach.
“Sales and marketing alignment” – getting sales and marketing to work more closely and share responsibility for outcomes – is but one piece of the solution. The silos separating sales and marketing must come down.
Companies, especially CMOs, need to embrace customers as a powerful force to align the entire organization.
The goal should be to build a better business able to thrive in a more competitive and service-oriented market.
Time and again in working with clients, I find customers represent a treasure trove of information and insights not just for tactical decisions, but for making executive-level policy decisions.
Using insights from customers, a client of mine selling software into vocational education gained incremental penetration, higher revenues and happier customers. Like all levels of education, the customers were under budget pressure. My client’s software was a large budget line item, and, as such, sales reps got an earful about limited budgets and the high price of their software. Sales reps began to balk at demands to generate higher revenue.
Deep-dive interviews underscored how the software was critical to the customer institutions’ own position in attracting students and faculty; they would be uncompetitive if they used anything less than the latest versions. Budget pressure or not, if the related course offerings were to remain viable, there was no question that the licenses would be renewed – and maybe even expanded. My client was in the highly enviable position of being first in the budget line. Despite the outcry, they could have actually raised prices.
The interviews also revealed that that their users – the instructors teaching courses leveraging their software – were deeply loyal and genuine fans who took pride in using and promoting the software. Raising prices in this situation would eventually threaten this loyalty.
What customers wanted was access to even more of the client’s applications. Many of them were working internally to drive adoption of all of the client’s software, including applications their institution had not standardized on.
We ended up recommending – with a lot of help from customer insights – a change to licensing that tied push products (those demanded by customers) and pull products (those the company has to actively sell). By adopting the entire set of applications, institutions paid a bit more but got greater perceived value. A true win-win solution. The client soon formalized this approach by offering an application suite.
Below are five ways customers can help you build a better business. The catch is that each benefit is the by-product of a transformed culture viewing the customer-company relationship in terms of multiple overlapping interactions rather than a linear series of transactions focused on making a sale.
- Long-term loyalty. Purchased customer loyalty is volatile. Loyalty you earn is enduring. Strong alignment with your customers – and acting on what you learn – is a massive loyalty generator. Do this really well and customers feel they have a stake in your success. Having customers committed to your success is a game-changer in how you view each other.
- Controlling costs. Some people still think being customer-centric costs you money. Not true. Whatever additional investments are needed is nearly always more than paid back by learning about activities that can be trimmed because they aren’t creating value.
- Product / service development. You need to go further than soliciting customer input during the design process; you want to develop and nurture a sense of co-creation that taps deeply into your customers’ needs and creativity. Do that and they will go beyond answering questions and submitting lists of desired features to helping you actually design your complete offering.
- Positioning and messaging. The best positioning and messaging not only communicates what you want to say, but does so in ways that reinforce audience perceptions of your company. You need to focus on what to say, but your customers can make major contributions in where and how you say it for greatest impact
- Selling effectiveness. Having an inside advocate increases your odds of winning a specific sale. The same is true for the overall selling process. As with the marketing benefits in #4, connecting with customers so they identify with your company’s success creates a source of insights into the selling process and how you can increase your value. Great relationships and services are the new purchase drivers, supplanting product features and functionality to a large extent.
Those companies that master the new environment will flourish, while those that don’t will encounter increasingly challenging obstacles to success.
By aligning your interests with those of your customers, your company will adopt a more service-oriented perspective that will drive you to the next level of success.
Bruce La Fetra develops strategic marketing plans for software, technology and services clients. After more than 20 years as a consultant and practitioner, he launched LaFetra Consulting to help clients elevate marketing to a more strategic role using a service-oriented approach that builds stronger ties between companies, customers and partners. He previously served as Business Strategist with Rubicon Consulting, Director of Industry Marketing for Docent (now SumTotal) and Director of Strategic Marketing & Business Development for Internet Commerce at First Data. Contact him at bruce@lafetraconsulting.com.