in April 2006
By David McNutt
Learning to align the company with its customers.
It’s a hard
thing to lose a good customer. But it happens all the time.
Sometimes companies don’t even know they’ve
lost a customer because their communication with the customer
is so poor. Customers can switch at the drop of a hat because
the cost of doing so is negligible. What do they have to
lose? Sometimes there is no reason not to switch, and often
there is an incentive to switch because of the renewed attention
the customer receives.
This is important because you can’t
sell enough new business to make up for the revenue loss
from customer attrition. Yet, most organizations don’t
have a handle on who their customers really are, how they
are grouped, the role each group plays or how to optimize
A tool for improving this situation
is called a “market alignment check,” which
consists of a series of questions, interviews and evaluations
that measure how your company is fitting within your various
business arenas. The audit uncovers information that lets
you understand what your market really is and who your real
competitors are. It identifies your best marketing vehicles
and answers how to reach constituents.
Quite often, different customer
groups have different communication and marketing needs,
which is why a marketing approach, message and media selection
may work for one segment, but not for another.
For example, marketing to professional
service organizations, such as architects and attorneys,
can be difficult and requires specialized tailoring. Suppose
you are considering an email newsletter campaign component
targeting professional practitioners. These two groups are
very smart and highly computer literate, so a marketing
campaign that includes an email component likely would have
some penetration. But the similarities between the two groups
may end there.
Attorneys do not like long copy
(they like to write it, not read it). They consume vast
quantities of information, are trained to follow an argument
and can sniff out hype in a nanosecond. They are intrigued
by a sharp, poignant message, preferably in text-only format
that looks great on a BlackBerry.
On the other hand, architects respond
to more descriptive copy and likely are not so impressed
by text-only messages. Because they are more stationary
and near a larger computer screen, a nicely designed, HTML-formatted
message has room to be seen and appreciated. There are 10
more differences between these two professional groups,
but this illustrates the point.
Understanding customer groups and
their differences can mean the difference between a successful
communication program and a flop. It can also mean the difference
between retention and attrition.
A market alignment check doesn’t
just address marketing communications. A well-executed check
also can reveal critical service needs that the company
isn’t providing, or is delivering poorly in customer
groups. The main purpose of the alignment check is to identify
improvements the company can make to better align itself
to its customer groups. A huge, unintended, benefit is the
occasional discovery of an unmet market need.
For example, a company in the outsourcing
industry provides outsourced IT, facilities management and
computing services to mid-tier colleges and universities.
The company engaged in an alignment check to be sure its
outsourced services were on target with its clients and
with the market in general. The result of the engagement
uncovered a significant market need for outsource consulting
services to help its customers decide which services to
outsource, to whom, and to manage the transition. The company
has grown three-fold; 60% of its revenues come from consulting,
and it is in an enviable position to cherry-pick specific
outsourcing opportunities of its own. The nature of the
company changed because it addressed an unmet market need.
Sometimes opportunities aren’t
as evident as the nose on your face. But, if you never study
yourself in the mirror, you’ll never know. A disciplined
market alignment check is essential to the discovery of
how to resonate with your customers.
David McNutt, a member of Sound & Communications’
Technical Council, has been involved in many business sectors
of the systems integration industry. Send comments to him