In a recent MSNBC.com article, James McQuivey, principal analyst for Forrester Research, says, “I don’t believe for a second that we’re ‘meh’ on new technology. Instead, we’re very sophisticated in what is going to get our attention. A fancy new device that doesn’t improve on the devices we already have, or a promised service that we can’t go out and buy yet, won’t be able to get our attention.”
[ipad, google buzz, 3D-TV: 'meh'? (Feb. 12th, 2010) by Suzanne Choney]
I couldn’t agree more. In fact, McQuivey is saying that new things entering a market have to be truly new – and not just new, but very useful – and not just very useful, but exciting.
Of course, that’s another way of describing an “I3 value proposition”. I3 means not just clever words spinning a tale, but meaningful words describing a true-truth about your product or service. In increasingly crowded, hyper competitive, and fast-moving markets, you have to think in terms of how your target customer will process your offering in a sea of similar (or similar enough) offerings. Your consumer is probably not as much a student of your market as you are (or should be).
They may see the nuances that excite you as relatively minor feature changes. 
Wow! 10% more efficient! – let’s have a parade! >>> your engineers. Ho hum – whatever >>> your customers.
Are there other ways to compete? Certainly there are! Being the low cost provider and having a radically different approach to a problem are competitive levers that companies must consider as they go to the market.
But, the bottom line is, if these distinctions are buried in minutia and are things that mean your customer has to study, or get a new degree, in order to understand the significance of it all – then you’re missing the real opportunity. And that opportunity is to think of something that is not being addressed in some way or something that is not being addressed in the mind, the eye, or the heart of your target customer.
This is true, whether that target customer is a housewife in Peoria, a college student in New York or a corporate executive at the top of the Sears Tower in Chicago.
Find the sweet-spot of frustration – address it – and gain fans, not just customers.
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Knowing who is your ideal target customer focuses all your energies on higher probability prospects and also has the added benefit of optimizing your messaging to that audience.
The alternative has the false attraction of a bigger (and therefore, more bountiful) market.
This, however, is “fool’s gold” for all but the largest companies.
Most organizations simply cannot develop the capabilities to meet the expectations of many markets. Consider the cost of spreading yourself too thin over too many demands and requirements.
The Bottom Line: Really Know Thy Customer… because you are making major investments of time, staff and money to reach them.
Know Thy Customer
- Know Thy Market
- Don’t Inside-Out Your Assumptions
- Know Thy Customers Are… People
- Know Thy Customers’ Internal Motivations
- Know Thy Customer’s Requirements
- Know When to Switch Gears
- Know Thy Real and Best Customer
- Know Thy Strengths
- Sharply Define Your Customer “Starting Block” for Your Go-to-Market Race
Sharply defining your customer is a “starting block” for your go-to-market race.
- How many of them are there?
- What size?
- What is the published market research?
- Are there demographic and market research reports written on your target market?
In today’s sophisticated marketing world, you can’t go after a market without being armed with data – fortunately there’s lots of it.
At this stage of the game, you’re not necessarily looking at the way the market works, but simply defining the kind of company that your product or service most fits. Ultimately, it’s about knowing your customer. In every market segment, there are cultures, commonalities, unspoken rules of the game that exist in enclaves of the high tech, business and manufacturing worlds.
You need to know what these are. If you don’t have a feel for the people you’re selling to, you’re already at risk of falling further behind your competition.
While with a consulting firm focused on smaller business services firms, we worked with a small regional web design company with heavy specialization in user experience and interface design. As is typical for companies this size, they defined their customers primarily by geography – any business in their area needing help with larger web projects. Over a two-year period we helped them refocus on one particular market segment they had past success with – large, socially focused non-for-profit organizations.
While this was a positioning move, it was much deeper than just looking a certain way to a particular market – or choosing which mailing list to use. By focusing on the specific non-for-profit sector, they were able to start understanding the target customer’s culture, eventually adopting the language, pace and unspoken “feel” of the non-for-profit world.
They’re back on track, growing revenues and profits with a dedicated core of clients who view them as their specialist firm for web design and deployment in the non-for-profit field. In the same way, your understanding of your target customer will influence your marketing and the direct sales communication you have with them and the way you interact and serve them.
Adapted from the forthcoming eBook, “Know Thy Customer” by Jose Palomino
What level decision maker can you access?
If you want to sell to a specific type of company, you need to have access to call, talk and meet with the appropriate level of decision maker at that customer – whatever it takes to sell your product to them. Maybe you need to have access to CFOs of financial services organizations to sell your compliance solution.
While you may have many years and dollars worth of experience selling to financial services firms, you might find that you have no way to get your foot in the door of the C-suite, if your company never worked at that level before. That’s not to say that this marketing and sales capability cannot be acquired or developed – just that you need to know where you’re starting from and identify the gap as quickly as possible.
The “access” issue can go the other way, too. In the product development process, larger software developers often end up creating simpler versions that they try to sell “down market” to smaller customers. Yet, they don’t know the smaller customers (SMB) – the way they function, and what’s important to them. They often do not really know how to access this smaller customer (as in the Cisco example above).
It isn’t primarily a product issue – it is simply that a company that has been selling to Fortune 500 companies will face the same challenge connecting with decision makers in a $50 million dollar manufacturing company that a SMB focused company would have calling on GE. Movement – both up or down market – is possible and many companies manage to do it successfully. However, many more have failed or have had to make many learning runs till they got it right (e.g., Microsoft moving up-market in corporate IT with server software).
Access challenges run both ways: smaller companies face challenges selling to bigger ones, but oftentimes, bigger players can’t get small enough to sell to smaller companies or individual buyers.
Adapted from the forthcoming eBook, “Know Thy Customer” by Jose Palomino
