Reading Your Customers

Mar 23, 2010

In today’s economy, face-to-face meetings with customers can be rare, so it’s important to make sure your marketing efforts are assessing and addressing your clients’ needs.

We operate in a competitive world that is niche, articulate and breeds intensity. As competition in all its forms intensifies, customer management holds the key to increasing revenues in a way that also drives profitability.

The importance of customer focus and management is without parallel, whether you are cross-selling or up-selling additional products to customers, retaining existing customers, attracting new ones, using customers to help develop new products or simply providing the same products more efficiently and at less cost.

At a time when the number of sales channels is increasing significantly and many other factors are impacting on traditional sales and marketing issues, the need for customer service that is 24/7 and manages the customer is as challenging as ever.

There’s no ideal way of managing customers, as marketers have been brought up on consumer-goods branding, retail marketing and sales-force management. Along comes customer-relationship marketing with the claim to replace or substantially supplement these tried and tested ways of doing business.

However, there are many ways of managing customers. In practice, many companies combine several of the models I’ll refer to as constants in building a network of sustainability in reading the customer and improving the bottom line with steps in developing the customer relationship.

The following methods are simple to implement, maintain a sense of communication and allow for customer takeaways that are positive and realistic for you and your business.

Management Models

Here are some models for managing the customer, whether your business is at the jobber or supplier level:

•  One-To-One Management.

Here, most aspects of the marketing mix are actively attuned to the individual, based on information given by the individual before or during your contact, and may be supplemented by other information such as that attained through a call-in or visit to your booth at a recent car show or trade show event. The follow-up is the critical element in reading this person. Timing isn’t always on your side, and thus the measure of caring is imposed. I recommend a simple preprinted professional-appearing note pad for each respondent. Clearly the person will be more inclined to provide personal contact information and to be receptive to follow-up with this professional approach. Uncommon is the fact that most people are not greeted in this fashion or are asked to fill out the form without tactile caring by the booth person or phone person. Do not assume this is a single person, but a person who is greeting you at your front door to likely do business with and improve your bottom line.

•  Transparent Marketing.

Many customers would like to manage their relationship with companies, rather than the other way around. They try to do this by soliciting information from the company and customizing the offer made to them, but they’re not usually allowed to do so. When it is possible, for example, via advanced calls or the Web, some customers are very responsive. However most companies do not offer this to their customers, and even waste large amounts of money trying to guess what customers want based on inadequate information.

•  Customer-Relationship Marketing (CRM).

This is an ideal if the market mix is total. Relationships are critical in the aftermarket as face-to-face interaction is often infrequent. You may use a mix of print advertising, event promotions and now the Web as tools to market to your customers. Attempting to tie the mix together is often scattered, costly and unfounded, as the lack of expertise in these markets unfolds from those likely to not have such training. The aspiration of most companies is to make CRM work. Although most companies make slower progress than they would like, many get solid gains by prioritizing those areas of the relationship in which the offer for target customers is most at variance with the need. Thus the relationship is the true connecting point, starting with communicating the message in a short, articulate and frequent manner.

Hunger for Information

Reading the customer allows you to pursue an effective marketing plan.

An additional attribute is the likely service and supply of both company and product information. As the Internet business model carves its way throughout our marketing system, the hunger for information is a leading phase to the sale.

Without additional selling tools such as combining what’s in a company name as a component of the product selling mix, and making it easy to find such information, the customer is likely to seek out this valued niche information in a variety of sources.

The key is to reduce the homework for the customer.

The cost of offering such additional information is on the north side of expensive, but place yourself in the shoes of the new customer who is coming into the market as an owner of a prized project.

The territory and demographic is changing, as the graying of hot rodding is readjusting to its demographic. Younger project owners are, in some cases, unfamiliar with certain company names and thus are seeking additional information about a company, its distribution and the ongoing services it provides.

Thus, it is the manufacturer and jobber who need to explore all options of affordable and targeted information delivery, to not only capture but sustain the customer.

In the real world, we look to customers for their needs and sometimes miss the target. In a way it is a speeding ticket waiting to happen, and for all the wrong reasons.

The aftermarket component may be spot-on, the need assumed, the price point within reason, the marketing to the nth-degree, but you still miss the sale. Perhaps it is because in the marketing campaign the communication became disconnected. There are lessons to be learned from good practice in the world of marketing as you read your customer and then respond appropriately.

This involves good use and management of customer data. It can raise response and conversion rates and save communication costs. In its most advanced form, data given by the customer at the point of contact is used to create or modify the profile and hence the offer made.

Top-Shelf Customer Management

Manufacturers and jobbers need to explore all options of affordable and targeted information delivery, to not only capture but sustain the customer.

In this method, leadership is gained by offering excellent customer management before, during and after the sale to standards available to everyone in the target market, rather than just a few selected customers.

As seen in some situations, this is combined with other approaches for one or more small segments of highly valuable customers such as larger customers. This approach is characteristic of companies who manage their customers entirely by direct-marketing techniques such as phone follow-up from advertising, direct mailings to clubs and the Internet.

For some or all of the aftermarket products purchased, some customers prefer to get the best deal. By this I mean the best value for the money, not necessarily the lowest price at the time of purchase.

There is a certain product value component that is deemed entry-level and most aspire to exceed the entry-level in markets such as street performance and thus buy key name-brand manufactured products.

Obviously, the mentioned approaches to managing customers overlap, and suppliers may find they need to combine them in different ways to manage different customers and for different products.

However, each has a characteristic and very different marketing patterns. The choices of how to most effectively market to each of your customers are affected by factors illustrated in the following:

•  State and rate of change in product technology, which can lead customers to require uncertainty reduction.
•  Underlying production and distribution techniques-business-to-business and business-to-consumer-have a variance on price. Thus knowledge of the economies of scale and perceived value are critical.
•  Development of market structure fundamentals, such as implementing patterns learned from the success of your competition.
•  The knowledge exchange between the manufacturer, dealer and customer and meeting the different paradigms of delivery of information that customers expect.
•  Customer behavior and psychographics or, more simply, what the customer thinks and feels, how they buy, their need to give or take control, and associated way-of-life issues. Connecting with the personality of car club members is associated with how group behavior as a mass-marketing delivery system can be implemented.
•  Timing issues relating to how quickly customers’ needs to can be identified, and how quickly they can be responded to.
•  Customer expertise IDs-whether customers are good at identifying their own needs, and if so, how long it takes to get to yes.
•  Intermediation and how the connectors of a Web-based approach to information delivery, print advertising and collateral printed promotion connect with the face-to-face and personal tactile approach of selling and reading the customer.
•  Staffing and human capital issues as they relate to current skill levels, possibilities of recruiting new skill sets, training options, etc.
•  And addressing the system culture of the manufacturer, WD, jobber and whether managers are able to cope with the latest systems of Web-based technology while dealing with the demographics of their company chemistry, culture and demographic of their customer.

Making It Happen

The following are key points that become doable approaches to improving your ability to read your customer and improve your bottom line. I suggest you address each point with a written step-by-step approach that works for you and your company.

• Build customer management by combining different approaches in different ways for addressing various customers and your products.
•  Treat one-to-one marketing as an ideal target rather than a practical means of returning more value.
•  Don’t guess what customers want, but build an accurate picture from well-researched data.
•  Recognize that the customer relationship is only one part of the marketing mix, and that other elements may be more critical.
•  If possible, offer excellent customer management, before, during and after the sale, to everyone in the target market, not just a few.
•  Review the success of different approaches in your own and parallel markets as part of your ongoing general business-build strategy review process.

In conclusion, no one paradigm dominates. Keeping the car on course is the key.

My research indicates that companies should consider the variety of models of customer management as you learn not only to read your customer and the market, but identify which might be best for the particular segment of the market be it, for example, engine, suspension, electronics or drive train.

You should then review the extent to which these approaches have really been successful in their own and parallel markets. This review should take place as part of your general business strategy review, for each paradigm requires its own operational structure, processes, systems and policies.

There’s no point choosing a marketing model that sits badly with other function strategies. Thus, the aspect of finding the customer is not the hard part, but mastering the craft of reading the customer is paramount.

Business generation in the aftermarket is applying sustainability tools of communication and utilization of your company attributes including human capital. By incorporating a variety of methods in your mix of reading the customer, you’re likely to sift through what works and what doesn’t by laying claim that you know your customer because you’ve read your customer.