Getting More from the Core

Posted by: Dan in Untagged  on Print PDF

 

In an economy where the rules are dramatically changing and survival is the topic of the day - precision, clarity of vision, customer intimacy and value creation is everything.  Winning organizations understand that their customers deserve and require heightened levels of insulation and innovation.

 

Setting a clear line of demarcation between who your customers are and who they are not may be one of the most significant decisions businesses make.  Most companies have an urge or an unconscious reflex to respond to each of their customers with the same level of zest, passion and commitment. The problem with that philosophy is that not all customers are created equally, nor does each of them serve the same strategic or financial role within a business.

 

Research shows that the bottoms 20% of most companies' customers are unprofitable and will remain unprofitable.   Underperforming resources hinder vision and company performance.  The key is create a culture that expects "more" performance out of their top customers. 

 

The following five key business attributes helps an organization evaluate and assign a role to each of their major customers - allowing for stronger development of their top - highest potential strategic customers.

 

Sustainability - the strength of a customer's financial position, which is demonstrated by a strong sustainable financial position and a history of not leaving small companies "high and dry" at the arrival of the next big idea.

 

Scale and Profitability - the actual gross sales being delivered by a retailer or the assumed sales potential that could be harvested if managed appropriately.

 

Consumer Alignment - the demographic and/or psychographic (lifestyle) match between the product or service and the consumer (or the retailer's consumer). 

 

Societal Influence - when a customer synergistically serves as a business development advocate for one's brand or service and has the potential to influence the societal impression of the brand.  Customers with strong societal influence are known for providing leadership in their segment and serve as positive societal trendsetters. 

 

Corporate Advocacy - the potential of a customer to serve as a leading advocate in the development and creation of new businesses, including retailers that historically take active roles in building public awareness with new ventures.

 

 

By weighting the value of your customers according to these metrics one quickly comes to the realization that each customer is not the same and will never deliver the same value to your organization.  In fact, if you overextend your organization and collaborate with too many customers, you could gain a financial advantage in the short-term, but may never have the opportunity to establish competitive immunity with your top customers. 

 

Today's winning strategy is to expect more and create more with your core.  This means radically narrowing your focus and redirecting critical resources to your top customers.