How Vulnerable Are Your Customers? (Part Five) by:Curtis Bingham
In Part Four of this article series, I described the current situation with how customers
are feeling vulnerable during these tough economic times: Now more than ever, your customers are being bombarded by competitive offers and even some of your most loyal customers are actually listening to your competitors.
Your customers are vulnerable. What can you do about it?
The fourth critical step you need to do is to find prospects trading downwards--into your market. If you are like most companies, you have prospects that have told you that "you were not big enough to support their needs." They may have sneered at your lack of credentials, capabilities, etc. and ended up going up-market to your larger competitor. Given the current climate, those prospects you thought were lost are now your best chance for profitable new customers.
It is clear that customers in both the B2B and B2C world are trading downwards. In November 2008, the Wall Street Journal reported that luxury emporiums and high-end retailers posted as much as a 17% decline for the month of October. The only retailer that grew? Wal-Mart by 2.4%! Consumers are fleeing the high-priced stores for the discountsnot for the challenge but for the necessity.
Your prospects might be disillusioned with the lack of service they are receiving from your larger competitors who have slashed staff. They have decided that perhaps they don't need the most glamorous PR agency--and the decidedly unglamorous fees. Or perhaps they've decided that the biggest, bestest, and fastest computer hardware isn't actually as necessary as they thought. They are considering trading downwards, and your goal needs to be to present them with the perfect value for their newly defined equation.
There is huge opportunity out there, waiting for you to take advantage of it. Where do you find them? You start with all of the lost opportunities in your CRM system where they had budgets but you lost out to a competitor. You start scanning your competitor's websites and their public relations announcements to find their customer lists. And you call to find out if they are interested in receiving greater value and much greater personal attention than they are receiving now.
You need to identify these prospective customers and learn more about them. What functionality or service do they now deem "optional"? What attributes of your products and services might they value the most? By understanding customer's needs in this new segment, you may be able to bring these new customers into your franchise. These customers may be the most valuable of all, as they're used to paying a premium to your upper-tier competitors. If you can capture and satisfy them, you're very likely to keep them through the rebound. The result? A much more profitable customer base as well as a springboard into a higher tier yourself.
In the final installment of this article series, we'll conclude with the last of five things you need to consider as you adjust your Customer Strategy: Consider letting go of your most unprofitable customers.
Copyright (c) 2009 Curtis Bingham
About the author
Curtis N. Bingham, President of The Predictive Consulting Group, helps organizations dramatically increase customer acquisition, retention, & profitability. For more information about Customer Strategy or Chief Customer Officers, visit his website at
http://www.predictiveconsulting.com or his blogs at
http://www.curtisbingham.com or
http://www.chiefcustomerofficer.com.
http://www.articlecity.com/articles/business_and_finance/article_10363.shtml
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