Attract New Customers
Business-to-business owners can use a process to increase sales and profitability by attracting Must-Have Customers. These are customers who are purchasing products or services similar to the ones you sell, but they’re buying them from your competition. Your job is to identify your Must-Haves and turn them into loyal Core Customers.
Core Customers are the approximately 20 percent of your customer base that provides 80 percent or more of your profits. Must-Have Customers are potential customers who are buying products or services similar to what you sell but they’re buying them from your competition.
One of my clients used this process to identify a handful of Must-Haves who could become profitable, loyal Core Customers. Three of the Must-Haves have already started doing business with the company and one in particular has the very real potential to become one its biggest customers.
To begin the process, you need an in-depth understanding of why your Core Customers are loyal. So you have to ask them. Make sure you talk only with Core Customers since this is the only accurate way to find out what you want to know. It should be easy to pick out the customers who buy the most from you and contribute substantially to your bottom line. There’s no definitive number of people you need to survey; just make sure you talk to enough people to get sufficient data.
My client, Lincoln Industries, is the leader in the finishing industry. They provide product design, engineering, manufacturing, plating, assembling, packaging and logistics management to their customers. The following are a few of the questions Lincoln’s Core Customers were asked to better understand their loyalty. Depending upon your industry you’ll need to tweak the questions a little. What you’re looking for is as much detail as possible about what keeps your Core Customers coming back.
- Why do you buy from us?
- What is it about Lincoln Industries that keeps you from taking your business elsewhere?
- On a scale of 1 to 5, with one being most important to you and five being least important, rate the following attributes
- Quality of finish
- Price
- Turn around time
- Cost of freight
- Information on the status of your order
- Quality of finish
Once the company had a clear picture of their Core Customers and understood what was driving their loyalty to Lincoln Industries, they knew that their Must-Haves would need to look pretty similar and value the same attributes. Through a review of companies who used plating services a list of 200 companies that seemed to fit the criteria was developed. Using the Internet, information was collected about each of the companies. This included the products the company made, what kind of plating they used, its financial health (why spend time trying to develop a weak customer), plant locations, and in many cases their philosophies about doing business.
Sixty companies were selected from the list who seemed to be a good fit with the high-quality services Lincoln Industries could supply them and that had the potential to be great long-term customers. Then an interview was developed that would provide more information about these sixty potential customers. When these sixty companies were called, the interviewer explained that an industry survey was being conducted and offered each prospect a copy of the completed study. Naturally, not everyone found that a particularly compelling offer. Some companies indicated that they’d never switch suppliers, and some gave answers that knocked them out of the Must-Have category. But two-thirds of the prospective Must-Haves opted in.
The questions asked included:
- What types of metal finishes do you use?
- How much do you spend on metal finishing services?
- Who makes the decision on which supplier to use?
- Who do you do business with today?
- Why do you do business with this company?
- What do you like best about this company?
- What would you like to see them do better?
Based on the results of this process three new major customers were identified. Lincoln Industries management felt that the efforts of this process was worthwhile. I can’t promise that going through this process will help you land the biggest account your company has ever had. However, I can assure you that identifying and going after Must-Have Customers will help you build sustained, profitable growth.
I know that some owners of small business-to-business companies don’t think they can afford to hire a research firm to help them with this process. You can do something very similar in-house. After you determine the questions you want to ask your Core Customers, assign someone with strong communications skills to do the interviews. Then analyze the answers and come up with a profile of your Core Customer. Using the Internet, research companies in your industry who fit the profile and have the potential to become customers. Have one of your salespeople contact these companies. With a lot of effort and a little luck, you can turn some of these Must-Haves into loyal, Core Customers who can increase your company’s sales and profits.
Robert Gordman is president of the Gordman Group and author of The Must-Have Customer: 7 Steps to Winning the Customer You Haven't Got.
www.gordmangroup.com
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