If I showed you a picture of a really tricked-out car with a big spoiler with a lot of fancy (and expensive) equipment on it, would you rave about it or find it annoying? Would you drool over it and want to know more about it and die if you could actually drive it? Or would you think this was over the top gaudy and unnecessary to the point of being repulsed? Both states exist within your customer base…
“Not all money is good money.”
Let me get right to the point, not ALL your customers want the SAME experience, like the same things, or want to be treated the same way. Customers, just like the cars I described above, are very different. If your customers aren’t all the same, they need to have an experience that works for them… or you may be selling to the wrong customers. Wait… what are you saying, isn’t all money good money? No, not all customers are the right customers. While this might sound counterintuitive to what we were taught in business school, this is actually truer today than it has ever been.
If we want customers who love the tricked-out feature rich car, then we need to go after and find as many of those as we can as a business. We also, on the other side, need to “fire” or “eliminate” the customers who have no interest in this type of car… even if they want to pay us money for some of the products or services we sell.
Let me give you a slightly different example that everyone can relate to… dining out. Some people love to go to very fancy restaurants where they take impeccable care of you, have awesome food, treat you like you are a king/queen, and allow you to spend 4 hours dining with them. Another group hates the “over the top” décor, environment, stuffy wait staff, over priced food, and long time to dine. You can’t cater to both or you will upset at least one (if not both) of your audiences and lose more than just customers.
“You need to make a choice… and go all in to be Customer Obsessed.”
The examples above may sound somewhat simple, but I would challenge you to look at your own business and I think you will see many similarities. The majority of time when I challenge a company to look at their customer base, we find these kinds of crazy differences in the customers they serve. Outside of being a bit shocked, leaders usually see a wide discrepancy in their customer base. This needs to be addressed if they are wanting to become “REMARK”able (get their customers telling others about them) and be Customer Obsessed.
Upon further analysis, the other thing that most companies find out is that the revenue is very different for different types of customers. Even if a customer type only contributes 5% or 10% to the revenue base, the company still continues to serve them. When this is the case, two things happen… they are either “over serving” or “under serving” this type of customer based on the experiences they provide.
Back to the restaurant example. If the restaurant allowed people to come in and enjoy all the aspects of their expensive experience but had to offer it at a significant discount to attract them, they are “over serving” this audience. When this occurs, there are some significant ramifications that occur…
- The restaurant generally loses money on each customer because their overhead is designed to deliver an “over the top” experience that is a fixed cost… so lower revenue means lower profitability per customer
- The wrong customer still won’t be happy, regardless of price, because they never liked all the posh atmosphere and surroundings in the first place, it’s just cheaper now so it fits in their budget
- The other customer types (those that love this type of environment) will see that there are different types of customers coming in that may not “fit” in their estimation and so their own personal experience may be compromised
- Since this wrong type of customer doesn’t love this ambiance and experience, there is no way they are going out of their way to tell others how awesome your restaurant is… they don’t believe this to be the case and visit only because it’s at a lower price point right now
- And if they did go out of their way to tell others about your restaurant, what type of prospective customer do you think they will tell… exactly, the same type as themselves (people know people like themselves)… and these are the customers you don’t want more of because they just want cheaper prices, not the ambiance and experience you are designed to provide
While there are several other reasons this is not a good idea, hopefully this gives you some insight into why there are “wrong” customers and there are “right” customers. Take a look at your own business… are you serving some “wrong” customers that maybe you shouldn’t? Are you getting a small percentage of revenue from a group that doesn’t fit the experience you are “built and designed” to deliver? If there are, I would encourage you to rethink this situation (for the reasons above) and possibly eliminate these from your revenue base.
Once you fire the “wrong” customers, you now have the opportunity to “focus on the right” customers.
This is one of the biggest advantages to an organization that truly understands who their “right” customer really is… they can go get more of them. When an organization isn’t distracted by serving the wrong group of customers, they can invest more time in serving the customers they really want and are designed and built to serve. With regard to the restaurant example above, if this restaurant followed this thought process, they could eliminate the low paying, deal seeking customers that don’t care about their ambiance and focus more on attracting the “full price” customers that love their experience.
Don’t change your experience from what makes you the most money… change the customers that are keeping you from earning the most money.
What’s important is to design and build an incredibly awesome customer experience for the “right” customer audience… the ones you want more of. Create this experience so it is over the top awesome and is designed for your ideal customer. Then do more of it… add more value to this audience because they will appreciate it, want more of it, pay for it, and, most importantly, go out of their way to tell others about you and the experience. In a relatively short amount of time, you will have more of the right customers making you more profitable.
What to do next…
Start with doing an inventory of your existing customers, including revenues, products/services, how many there are, and their profitability to your company. This alone will be eye-opening. Then look at your customer experience and see which type of customer it is designed to serve the best. I can almost guarantee you there will be some misalignment here… this is where you start to make changes. If you haven’t already designed an incredibly awesome (and consistent) customer experience for this audience, this is the first place Customer Obsessed companies start.
There is a process to making this happen. If you want to save some time and get to the core of it quickly, let’s grab coffee (or lunch or a phone call) and I can expedite the process and give you the insights into what you need to know to make it a reality in your company. The coffee (or lunch) is on you… the information and education is on me. My goal is to help save you TIME in the process if you are interested in being Customer Obsessed and becoming “REMARK”able in the process… which is my passion and goal for every company on the planet. Big goal… but it starts with one.
The only question that remains is, “Are you ready to be Customer Obsessed and become “REMARK”able?”
To inspire and help leaders create Customer Obsessed organizations so they can become “REMARK”able… allowing their customers to become their Marketing Agents and Advocates and do their marketing for them… every day.
We have found that if you aren’t OBSESSING OVER YOUR CUSTOMERS in today’s new economy, they aren’t obsessing (REMARKing) over you and don’t see you as unique or memorable. And you don’t have to believe us… according to Forrester, Gartner, McKinsey, Adobe, Accenture, IBM, and a host of others, their research is telling us Customer Obsession is a way to escape commoditization and avoid becoming extinction.
THE GOOD NEWS… the ONE THING that you can own and completely control is HOW YOU MAKE YOUR CUSTOMERS FEEL.
This isn’t a commodity… it is your DIFFERENTIATOR. It is what people talk about. It is what people seek out from companies. It is what they will pay more for (89% of the people say they would pay more for an awesome experience) AND it is what creates TRUST. Trust is the “currency” in the Customer Economy. If you have it you will lead… if you don’t you will become irrelevant.
TRUST is vital today. If you have it… YOU GET TALKED ABOUT! Without it… you don’t. We share what we TRUST. There is NO ONE on the planet that will ever become your advocate if they don’t Trust you… period.
This is what we help leaders create and achieve in their organizations. You can see how we approach this by visiting The “REMARK”able Triangle. Are you ready to be Customer Obsessed so you can become “REMARK”able? Visit us at WOM10.com and learn more about how you can become “REMARK”able.