Tag Archives: Customer

What New Business Options Should You Pursue? Five Guidelines

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Situation: The CEO of a company observes that the business climate has been uncertain, but she hopes that it will improve soon. This will open up new options for her company. As these start to develop how do you decide what to do and what not to do? What new business options should you pursue?
Advice from the CEOs:
• Talk to your customers. What do they value about your current product or service and what is less valuable? Build on opportunities that customers value. What options are most consistent with the company’s strength and focus?
• Consider a customer survey – either online like Survey Monkey or by telephone. If there isn’t in-house expertise to design and administer a survey, look for knowledgeable outside resources. Assure that the survey questions will drive understanding of the company’s focus and potential.
• Get an expert to review the survey and administration plan. Before launching the survey to your full customer base, test it with a select group of customers. This will tell you whether it will produce usable information. If it doesn’t, revise the survey.
• Which opportunities will build sustainable recurring revenue vs. opportunistic or one-time revenue? Recurring revenue can be lower margin if the income stream is sustainable. Balance efficiency and utilization. For example, fixed fee service contracts that renew consistently.
• Judge opportunities against your “Hedgehog” as defined by Jim Collins in his book Good to Great: What you are passionate about? What you can be best at in your marketplace? What you can measure by a single economic ratio?

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How Do You Purchase a Company as a Non-Owner President? Four Points

Situation: The President of a company has a long-standing relationship with the Chairman and Founder, who is also the principal owner of the company. The President joined the company at a time that the Chairman/Owner thought that he was terminally ill and needed an individual who could take over operations as well as leadership. Since then the owner has fully recovered and wants to retake control. The President would like to buy out the owner. How do you purchase a company as a non-owner President?
Advice from the CEOs:
• What role has the President played so far? The President has advised the Chairman on how to grow the company and is leading this growth through developing key customer relationships.
• What is the owner currently doing? The owner has fully stepped back into his prior role, and is micromanaging all aspects of the business, effectively shutting out the President.
• The best way to avoid a situation like this is to negotiate the full deal, including transition of authority and terms of transition of ownership, up front before the signing of an employment contract. Not having not done this, the President currently has no leverage.
• The best option at this point is to have a conversation with the owner and to see whether the owner is open to a transition of either power or ownership. If the owner is not interested, the President may want to consider other opportunities.

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How Do You Expand Your Market? Five Suggestions

Situation: A CEO’s company has historically been organized around a single company’s products and technologies, though their customer base uses multiple platforms. The company wants to expand from a single-technology emphasis to a broader technology base which will more accurately reflect its customer base. What can assist the company in building both its technology and customer base? How do you expand your market?
Advice from the CEOs:
• Conduct surveys among users and employees of the existing customer base. Use what is learned to design new approaches to expand both the company’s technology base and customer base.
• Expand into additional industries, products, and a more diverse company customer base.
• Determine to there is a genuine need for the company’s technology and services. If not, adjust both the technology and offering to better meet customer needs.
• Build a marketing campaign around differentiating factors that others do not provide. For example, in the cooperative banking industry market accounts that allow no-fee ATM access through other coop networks’ and banks’ ATM machines to expand customer convenience and appeal.
• Target niches. For example, small businesses or home businesses where the company’s lower fees make a difference and personal service is appreciated by the owner or someone who works closely with the owner.

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How Do You Optimize Your Product Offering? Four Points of Focus

Situation: A CEO wants to take better advantage of his company’s product offering. There are many opportunities available, but the company needs more focus on optimizing these opportunities. How do you optimize your product offering?

Advice from the CEOs:

  • Brand – Where has the company been? Where is it going? The world is constantly changing – what’s the company’s new brand? The brand identifies the company and both your customers’ and business partners’ identification of the company and its products and/or services. In a changing world with increased competition and “noise,” having a strong handle on the brand and brand message is critical to remaining at the top of customers’ and partners’ awareness.
  • Education/Customer Advocacy – An underutilized source of marketing strength includes both customer education and customer advocacy. Customer education allows the company to better position its product and/or service to the customer and helps the customer better meet unrecognized needs. Customer advocacy positions the company along with its customers in an area of mutual interest and strengthens both bonds and loyalty.
  • Diversification & Channels – In a changing and rapidly diversifying world, being open to new opportunities and channels through which to reach the company’s stakeholders is a source of sustainable advantage.
  • Partnerships to Take Advantage of Diversification & Channel Opportunities – Partnerships are an underutilized resource to creatively diversify and open new channels to stakeholders. They require less investment than doing everything on your own and can form the basis for key alliances and strengths going forward.

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How Do You Use Metrics to Focus Your Team? Three Points

Situation: A CEO wants to improve company performance and is interested in how others use metrics to focus their teams. How do you use metrics to focus your team?

Advice from the CEOs:

  • Engage your employees in the development of metrics.
    • The team members are close to the customer and the company’s key vendors. What makes sense to measure? What metrics are tied both to performance and a healthy or supportive but competitive environment? What would create adverse conflicts within the business or with either customers or vendors?
  • Metrics need to be meaningful and applicable.
    • They have to directly pertain to day-to-day, week-to-week and month-to-month objectives and performance.
  • Factor in personal issues.
    • Everyone doesn’t need to have the same metrics – instead formulate metrics that are pertinent to the different roles and individuals within the company.

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How Do You Quantify Niche Market Potential? Five Suggestions

Situation: A CEO’s company focuses on a specialized niche market. One of his challenges is that there is little public or chamber of commerce information available on the size and characteristics of their market. How do you quantify niche market potential?

Advice from the CEOs:

  • Define the product / service very specifically. To narrow and refine estimates of market size look for the low hanging fruit.
    • What are the high growth segments of the target market?
    • What are the high growth industries of the target market?
  • To determine whether the market opportunity is $100M or $500M:
    • Define the company’s market more clearly – particularly the initial beachhead market where there is the potential to gain the most traction.
    • Recognize that there may be two markets: a high end market – relatively low gross sales dollars but high margins, and a low end mass market – relatively high gross sales but low margins.
  • Contact the originators of available market data to get their assumptions, comparative data and any other findings that may not be published but are beneficial.
  • Work closely with customers to build category / industry revenue estimates.
    • Segment the most active customers and increase the company’s share of their purchases.
    • Develop web site transaction capabilities to offer the company’s line as an adjunct to customers’ web sales.
    • Establish a Customer Council or Round Table to better understand the market dynamics and to differentiate the company within the market.
  • Sell the product and services’ features and benefits to the C-level, not just to engineers.
    • Sell to the CEO / CFO focusing on increasing shareholder wealth.
    • Determine a return rate for conversion to the company’s technology.
    • Reach out to professional segments that will naturally see value in the company’s process.
    • Seek an exclusive relationship with an industry leader to quickly launch new products.

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How Well Do You Know Your Target Audience? Five Points

Situation: A CEO and her team manage a growing and profitable company. She is interested in what others have done to expand their market presence and penetration. In discussion, other CEOs have been curious about her company’s marketing capabilities, and how well her team knows their customer base. The essential question that they ask is “How well do you know your target audience?”

Advice from the CEOs:

  • Become a thought leader:
    • This is Inexpensive because the company is already a leader in its field.
    • Marketing through thought leadership allows the company to get its message out with fewer resources than push marketing efforts.
    • Thought leadership adds credibility and educates the customer.
  • Qualify the need and/or the perception of the need. If there is no need, there is no sale.
    • It’s perfectly acceptable to ask clients about their challenges and needs.
    • Ask them to measure the need on a 1-10 scale.
    • Ask the client to play out the scenario without an adequate solution.
    • Ask the prospect how they have worked with others offering similar services to your company’s and how did that go?
  • Ask your customers to help.
    • Develop a Customer Advisory Board to test a new product or concept – a “Blue Ribbon Panel”.
    • Write a paper together with them to highlight the findings.
  • Use common sense, but:
    • Set measurable goals and listen to enough people to get more directed feedback.
  • The company’s internal staff is also a target audience.
    • Integrate departmental cultures to assure that they don’t clash.
    • Conduct collaborative off-sites to encourage cooperation and support.
    • Create processes for all departments and staff.

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Customer Service and Customer Satisfaction: What’s the Difference? Two Points

Situation: A CEO and his team have been having a debate about the difference between customer service and customer satisfaction. How do others work with their teams to improve both customer service and customer satisfaction? Is there a difference between the two and, if so, what is it?

Advice from the CEOs:

  • Customer service has to be clearly defined.
    • The objective of customer service is for the customer to have a positive experience.
    • Customer service is addressing the needs and concerns of your customers in a timely fashion to create a competitive advantage and higher perceived value for a company’s products or services.
    • Customer service is a process that can be taught and trained.
  • Customer satisfaction has to be measurable.
    • Customer satisfaction is listening to what the customer has to say, addressing their issues, and providing a resolution that meets their needs and expectations.
    • It is a measure of comfort, confidence and trust.
    • There is a difference between being proactive and being reactive – work with each to assure that the customer is pleased with their experience, product and/or service.
    • To test this, record and analyze responses to the question “How did we serve you?”

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Do-it-Yourself Marketing or CRM – Which is Right for You? Five Points

Situation: A CEO is looking at customer relations management (CRM) systems. To date their marketing and sales has been in-house, but he wants to investigate alternatives. What CRM systems are available and what is the experience of others with these systems? Is do-it-yourself marketing advisable or should he work with a CRM system? Is do-it-yourself marketing or CRM right for you?

Advice from the CEOs:

  • Marketing, whether Do-it-Yourself or working with a CRM system, must always be in line with the company’s brand and customer set.
    • The solution selected and implemented should never confuse or dilute the brand.
  • There are many CRM systems. Check out https://www.top10.com/crm for comparisons.
    • Good systems will track both prospects and sales.
    • Some can also help to create newsletters and other marketing materials.
  • Use your resources wisely.
    • Use clubs, affiliations or organizations to target the company’s market.
  • Before securing a firm or individual to design or refresh your web presence, first know your brand and what you want to communicate. This helps to identify the right resource.
  • Resources for free or low cost marketing:
    • Focus on and work with distributors.
    • Sell through key client audiences and pay them a commission on sales gained.
    • Give key client audiences a reward that will appeal to them.
    • Serve PDFs through your web site to deliver content in your preferred, branded format.

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How Do You Unlock Your True Profitability with Sound Cash-Flow Trade-offs? Six Points

Situation: A CEO has her company on a positive growth track. The company has a solid customer base. Their products and accompanying services are increasingly well-accepted. She is ready to take the company to the next level of growth and profitability. How do you unlock your true profitability with sound cash-flow tradeoffs?

Advice from the CEOs:

  • Profit is different from cash flow. Make this distinction clear and act to boost cash flow.
  • Tracking Cash & Forecasting:
    • Watch the company’s bank balance. Frequently track cash inflows and outflows by period.
    • Carefully assess and project the pattern of customer buying habits and payment performance to develop sound revenue assumptions.
    • Compare the company’s margin dollars and billings with norms for peer group businesses.
  • Issues to consider in forecasting:
    • Hiring means commitment of future cash outlays. Consider contingent work force options.
    • Project and plan for future large payments (equipment, technology, marketing, loans, etc.)
    • Differentiate between investing in ongoing business capacity as opposed to incremental add-ons.
    • Look at cyclical trends and issues. Understand your customers’ purchase habits and patterns.
    • Develop likely “what if” scenarios (good and bad) and develop plans to reduce the impact of surprises.
    • Analyze the company’s business model and determine exactly how cash flows through the company’s operations.
  • Analyze important upcoming decisions: hiring equals investment; outsourcing equals expense. Evaluate needed support for each.
    • Differentiate investment versus outsourcing decisions. Smooth cash flow through selective outsourcing – especially when dealing with sudden or cyclical peaks. Avoid the risk of committing long-term resources by staffing up to address short-term peaks.
  • Focus on the opportunity cost of money. Add this focus to both planning and assessment.
    • Operate with a mix of other peoples’ money and ownership funds. The latter are more expensive than bank interest because the trade-off is what you could earn through alternate investments.
  • Fine-tune the company’s planning tools. Analyze budget and cash implications of alternate plans through detailed budget projections and follow-up by tracking cash expenditures.
    • Use Cash Flow Statements to analyze and project trends in investments, operations and financing and how each of these affects cash balances.

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