Are you indispensable to your customers?
Monday, January 19, 2015
As you look at your customer base, are there any customers who really can't do without you? If not, you could be in big trouble.
Our economy is fragile, and it is no longer sheltered from the unpredictable upheavals overseas. Anything that happens anywhere in the world can cause an economic downturn in North America, resulting in difficult financial challenges for your customers.
The easiest way to deal with these challenges is to simply stop paying suppliers. Sometimes that means altogether, and other times, it means delaying payments until cash flow improves. Either way, it means trouble for you.
The good news is that you don't need to be indispensable to all of your customers. It is a well-proven pattern that 80 percent of your profitability comes from 20 percent of your customers. It is these customers, and customers like them, that you must become indispensable to.
What does indispensable mean? Quite simply, it means in order to achieve its strategic objectives, the organization must have your company providing critical inputs. By definition, you must be aware of how your company's products and services help your customer create value and achieve their strategic outcomes.
The first step then is transparency on both sides. Take the time now to build meaningful relationships with the executives who are responsible for the organization's strategy. Be sure you understand exactly what they are trying to achieve and you have built up high degrees of trust.
You must then understand how external pressures from the environment they operate in create risk and how you might help them mitigate these risks. You must also understand the internal obstacles that interfere with the achievement of these goals and how you might help them overcome these obstacles.
As you work to help customers mitigate risks and overcome obstacles, you must find ways to create unique solutions that your client can only get from you.
Your solutions must be real and not simply a convenient bundling of goods and services. You must start with real problems that your client is facing and finish with an integrated combination of goods and services from your firm as well as any partners that can only be configured by you.
Finally, you must blow your own horn. As you create value for your customer, if you are not careful to document and validate this value, it will be forgotten. Be sure your salespeople are recording the value that's been created and investigating the economic impact it is having on your clients.
On a quarterly basis, they should sit down with their clients and share an economic impact statement and get confirmation that the client agrees. Over time, the client will have a file of the economic impact your organization has had on theirs and will realize the critical role you play in the health of their business.
When economic uncertainty strikes, which is inevitable, customers will pull indispensable suppliers closer and push everyone else away. Following these steps with your carefully selected customers will ensure you're not left out in the cold.
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