Finding new customers is a pain. Sure, servicing existing customers to the best of your ability, to meet or exceed their expectations, is vitally important. But there’s only so much growth any business can achieve without generating sales leads from new customers.
Here’s something to think about: Unless your business has more than 50% market share, the majority of your potential customers buy from the competition.
If I mention this obvious fact to the stereotypical ego-driven business owner, their reaction is a scrunched-up facial expression. “That’s because customers don’t know how we’re better than the competition”, they’ll say. “If we could get the word out – better marketing, sales, etc. – we’d be top dog.”
On the second point, they’re right. Better marketing and lead generation will increase market share. But a reality many business owners can’t bring themselves to admit is that, sometimes, customers are content to buy from someone other than you.
Today’s reality is, no matter the industry, most businesses do a pretty good job of serving their customers. Yes, some do it better than others. But if there was some kind of “customer satisfaction threshold” for your competitors, most of them would pass the minimum level.
Every business is upping their game – they have no other choice. Ignoring the occasional outlier, businesses have had to improve the presentation of what and how they sell, in order to stay in business. That may manifest itself in creating an improved product, delivering more effective marketing, providing a better buying experience, or all of the above. No matter what it is, that threshold level continues to move upward.
Every Business Looking To Deliver A Better Customer Experience
The internet has had two major influences on this position. Firstly, it’s brought customers and brands closer together. You’re not obliged to buy a widget from the store downtown when you can buy it from pretty much anywhere in the world. In order to remain relevant, organizations have had to reconsider the value they’re providing over and above the supply of the product concerned.
The second effect has been in terms of what I call a ‘social proof quality buffer’. In the old days you’d buy a widget, find out it wasn’t that good, and resign yourself never to buy from that supplier again. Today word of mouse – social media, online reviews, etc. – means poor quality has fewer places to hide.
Today it doesn’t matter what you say about your product. It matters what Google says about your product. Not just in terms of SEO, but it terms of the network effect of user reviews.
A combination of increasing customer expectations with better service from the competition means the quality threshold bar is always being raised. This makes the challenge of finding new customers to increase sales and grow business revenue that much harder.
Customers Buy Elsewhere Because Of The Way You’re Treating Them
Do you know what the biggest source of lost revenue is for your business? It’s not your product, your pricing, or your distribution. It’s not your branding, marketing, location, or even your competition.
The biggest lost source of revenue for your business is the customer you didn’t know existed..
- The customer who left your website after 10 seconds because it’s slow, or they couldn’t quickly find the information they were looking for.
- The customer who drove right past your store because it looked shabby from the outside, or there wasn’t convenient parking.
- The customer who hung up after calling you, because they got lost in your automated system – “press 1 for sales, 2 for support…”
- The customer who got so fed up receiving yet another irrelevant impersonal email that they unsubscribed from your list.
Ignorance isn’t bliss. It’s lost revenue.
Clearly it’s important to “stand in your own queue” from time to time. To take a step back and pragmatically evaluate the buying journey from the customer’s point of view.
Many marketers or business owners will say they’re doing that already. But the issue is the rating system they’re using as measurement is skewed. You can bring in all the management consultants, secret shoppers, or customer evaluation providers you want. The problem is they’re giving ratings based on your rule book instead of your customers’.
Finding Meaningful Competitive Advantage (Hint: It’s Not “Quality”)
I speak with business owners pretty much every day. When I ask what they see as being their main competitive advantage, most will use the word ‘quality’ as part of their answer. They’ll say something like “We produce a higher-quality product”, or “All of our people have a commitment to quality.”
Sorry to say this, but what a load of bovine excrement.
If you really believe quality is your organization’s main competitive advantage, I have a bridge I’d like to sell to you.
I’m not saying the quality of your product isn’t important as part of a wider customer acquisition and lead generation process. What I’m saying is your competitors see delivering quality as being just as important. As far as the customer is concerned, the quality of whatever you’re selling – as well as whatever your competition is selling – is a given.
Basing competitive advantage or USP around quality is like saying your taxi is better because it has four wheels. The ‘fit for purpose’ part of the transaction is implied. Quality is useless as a describer of competitive advantage.
The Competition’s Product Is Often As Good As Yours
So should you focus around what you do better than the competition? You can certainly try, but in the real world it’s very difficult. Why? Because if we’re honest with ourselves, it’s probably not true. Unless your widget is better than anything else at any price, customers will keep buying elsewhere for reasons that make total sense to them. Today it’s extremely difficult to compete by positioning yourself as being ‘better’.
Don’t for one second think of diminishing the quality of what your competitors are producing. Customers are buying from them and are happy with what they’ve bought. Perhaps you say your widget is more expensive because you believe it’s ‘better’ than what the competition sells. That may be true, but did you consider the possibility that, just maybe, customers don’t value ‘better’ in their decision-making process? Perhaps they’re happy with good enough and paying less. What’s your answer to that one, Sherlock?
Your meaningful competitive advantage isn’t about what you do well. It’s about what you do different to everyone else.
The real opportunity is having a greater understanding of your customers compared to the competition. Then, to design meaningful and relevant customer marketing experiences based on insights from such customer data. Delivering whatever you do ‘better’ in terms of providing greater value. Delivering it faster, easier, more conveniently, or whatever.
Customer retention is probably already a key component of your marketing and sales strategy. We know it’s easier to sell to an existing customer than to a new one. Yet in many industries a high customer churn rate are seen as the norm. Retaining loyalty is hard, and getting harder. Finding new customers every year just to offset what’s considered a ‘natural’ churn is not only a pain in the proverbial. It restricts ultimate growth.
Knowing Your Customers Better Than Your Competitors Do
But what if customer attrition was more to do with legacy assumptions and processes, rather than some kind of business de facto behavior? Rather than putting it down to “that’s just the reality of our industry”, businesses could look at better serving an increasingly demanding customer base.
For example, supposing you implemented a retention program to treat existing customers better? We’ve all seen businesses offer giveaways or incentives as a marketing tactic to engage with new clients. “Sign-up for 12 months and get your first 2 months for free”. “Take our credit card and enjoy a lower rate of interest for the first 12 months”. But where’s the love shown for existing customers? The customers who remain loyal, continue to buy, and maybe even recommend your business to their friends?
What if you treated existing customers the way you treated new ones? What if – heaven forbid – you treated them even better?
Such customer retention strategies, properly implemented across sales, marketing, and support departments, could feasibly reduce customer turnover by a significant amount. Imagine if you could reduce customer churn from say 20% to 10%? What commercial effect on customer value would that have on your business?
What you Say & Do Is Not Always What They Understand
Not matter what you’re selling, there are people thinking about ways to disrupt how customers buy within your industry. Maybe those ideas are coming from competitors you know about, but perhaps they’re not. Think about how it took outsiders to disrupt industries like music distribution (Apple, then Spotify) or transportation (Uber) or accommodation (Airbnb).
The way you organize, design, and position your business may well be with the best intentions. But it doesn’t follow that customers will perceive the process and value exchange in the ways you expect. If your marketing strategy is just doing what (you think) you’re supposed to do, you’re missing opportunities.
Take a step back to evaluate who exactly each customer interaction touchpoint is designed to benefit – you or your customer. Compare it to how your competitors’ buyer journey is perceived – then adjust accordingly.