Chances are, you’ve noticed more competition in your industry than ever before. Maybe it’s more international companies entering your market, larger companies playing in smaller
markets or companies diversifying into new markets. You’ve probably also noticed that your customers have become more savvy about your business and industry – after all, they can access information about your company, and a million others, with just a few clicks of a mouse.
Research has shown that with more choices and more information available to them, customers aren’t as loyal to one vendor, supplier, service provider or consultant as they once were. This makes it increasingly important for success- and growth-minded businesses to look at innovative methods for strengthening relationships with and enhancing their value to key customers.
Competing for new customers and retaining existing ones are challenges that every company faces, and there’s more than one right way to go about it.
Re-selling current customers
More than eight out of 10 respondents in Grant Thornton’s latest Survey of U.S. Business Leaders, an in-depth look at how 300 executives in Wisconsin and across the nation are managing the "squeeze" caused by rising costs and greater customer expectations, said they continue to re-sell and re-impress current customers as if they were still trying to win them over.
"It is imperative to strengthen customer relationships by building a value proposition that goes beyond low cost," says Tripp Ahern, president and chief executive officer of J.F. Ahern Co., a Fond du Lac-based mechanical and fire protection contractor, and member of the Grant Thornton Business Leaders Council. "The only way to do this is to strive for a complete understanding of the customer’s needs and how you can help them achieve their goals. This definition goes beyond cost and, hopefully, illustrates all of the returns they can expect on their investment in your product or service, both financial and non-financial."
Grant Thornton’s survey found that today’s companies are more focused on solidifying customer bonds with creative new strategies to redefine and reinvigorate customer relationships. Specifically, they’re more tightly weaving the relationship in with specific products and services, involving customers more directly in research and development, and becoming more involved with their customers’ customers to strengthen the relationship chain.
While general information about your company – and your competitors – is readily available online and through other resources, customers in this day and age expect still more transparency from the companies with which they work. Customers want to know how you will be able to save them money, while also delivering value.
To meet this need to know, companies might consider sharing as much information about the business as possible, without putting themselves at a disadvantage or disclosing proprietary or confidential information. For example, if your company makes a decision to outsource one aspect of operations, explain to customers how this approach drives down your company’s costs, ultimately driving down theirs.
Engaging your customers – and theirs
The old school of thought is that the customer is always right. Taking this theory a step beyond customer service and applying it at the research and development level can open the door to new ideas. If you’re trying to develop a new widget, ask your customer to come in and explain what features they would like to see that widget include. Fifty-eight percent of survey respondents said they do just that, and another 16 percent said they plan to do so in the next year.
Some companies – including 51 percent of survey respondents – are taking the feedback process a step further. They’re getting ideas not only from their customers, but also from their customers’ customers. Let’s say your company manufactures a piece of equipment that you sell to a printer that produces brochures, annual reports, newsletters and other publications for an end user. In addition to soliciting feedback from the printer, there’s value in inviting the end user to provide additional thoughts on enhancements, as well as new ideas that your company might want to incorporate.
Soliciting customers’ advice, ideas and feedback can help your company develop products and services that not only meet your needs, but also meet theirs. In return, that can provide a significant boost to your bottom line.
Today’s companies have a number of options for strengthening customer relationships with an eye toward future success and growth. But no matter which approach or approaches your company chooses, it must be woven seamlessly into the company culture to truly be successful. From corporate communications to customer service to delivery of the product or service, customers should feel they are receiving the same high level of attention they were promised during the proposal process. If a company doesn’t deliver on this promise, its customer is likely to find another one that will.
Mike Altschaefl is managing partner in the Milwaukee office of Grant Thornton LLP, which is the U.S. member firm of Grant Thornton International. For additional information, visit www.GrantThornton.com or contact Mike.Altschaefl@gt.com.