GorMust 06-10-159      


7 Steps to Winning the Customer You Haven’t Got


Robert Gordman

St. Martin’s Press, 2006, 309 pp., ISBN 0-312-35169-0


The author is president of a consulting group that works with senior management of Fortune 500 companies.  His sweet spot is hiring only consultants with proven executive track records so that he never sends a novice to advise a client.


The customers you “must-have” to sustain and grow your business are like your “core customers,” those who are loyal to your business because their needs and desires match what you provide.  Here are seven steps to identify your core customers and what they value, and to find more customers like them.  Most of it entails asking the right questions to the right people and listening and responding.


Few companies are capable of achieving greatness.  Businesses simply want to consistently get a little better.  (1, 2)


“Companies don’t die of natural causes; management kills them. …it happens one customer at a time.” (2)


The customer makes the rules, not the company. (4)


Core customers are your biggest fans.” They will guarantee your success. (11) “Must-have customers are potential customers who look a lot like your core customers.” (16)  (They) “could become core customers, but they currently do business with the competition.” (7)


Success can be predicted by the ratio of core to non-core customers. (14)  Non-core customers are usually price-driven and probably cost you money.  Ignore them. (15) 


It’s all about shared values.  “Your core customers value the attributes that make your product or service different.”  It could be high-quality, fast delivery, easy returns, excellent service, low-fat, or anything else. (18)


“The only accurate means of finding out what you want to know is to do it the old-fashioned way: ask.  People are remarkably candid and articulate if they know that you’re really interested in their answers.” (21)  But you must talk to the right people (your core customers) and ask the right questions!  (21)  Get as much detail as possible about what keeps them coming back.  [Questions on p. 22.]


Get a clear profile of your core customers. Then assemble a list of similar potential customers, those with similar products, size, philosophies, etc.  Call them and ask some basic questions. (23-4) 


Segment customers by the equivalent of lifestyles.  “It’s only when you understand those values and lifestyles that you have any chance of turning your must-have customers into core customers.” (31) 


Do you know where your company is in the market and how you got there?  Customers and prospective customers control your position.  They decide.  Only the opinions of your core customers and must-have customers count.  Other opinions are worthless.  


Don’t listen to whoever makes the most passionate argument about what you should do.  Respond to the customers’ rules. (65-8)  Typically managers ask the wrong people the wrong questions.  “Asking people inside your organization produces a lot of speculation based on internal biases, and very few hard facts.” (71) 


Do the managers agree on where the company is positioned?  Get them all to write down the answer to this question: If our company were a car, what kind of car would we be?  Then allow everyone to explain their answers.  This will tell a lot about whether the managers agree on where you are positioned.  If management vision is unclear, the customers are probably getting mixed messages.  (73-4)


If you’re not talking to your core and must-have customers, you’re wasting your time and money.” (76) [emphasis is the author’s. dlm]


“Your company is where your core and must-have customers have positioned you, and you can go only where they say you can.” (77)


“If you need to make significant changes in your business to make yourself more attractive than the competition, those changes must (a) not alienate your core customers, (b) be relevant to your must-have customers, and (c) provide a measurably superior alternative to what your competitor is offering.” (93)


You must create a “sweet spot,” a customer-relevant position in the marketplace. (102)  “With a sweet spot…you know your strengths and you have a clear vision of where your company can realistically go.” (103)  GEICO targets only very low-risk drivers, thus they can offer lower rates. (105)  “Before Starbucks, coffee was just a low-priced commodity.  Now it’s a lifestyle choice.” (109)


“…management must have a clear vision of where the company can go based on a rational analysis of where its core and must-have customers will permit it to go.” (115)


The author created a sweet spot by employing only former senior executives with a track record of superior results.  “We never send out a new MBA for our clients to train.” (116)


“Whatever the size of your company, your first order of business is to take off your rose-colored glasses and honestly analyze the realities of your market.”  Ask questions to get objective ideas for how to tweak your positioning to create and dominate a profitable sweet spot.  (118)  (See questions on pp. 119 and ff.)


Customer satisfaction is not the goal.  Customer loyalty is. Satisfied customers often buy from the competition.  Loyal customers stick with you.  They will forgive your mistakes.  (128-29)


Customers have rules – policies, beliefs, desires, expectations, and needs, i.e. values—that determine what and where they buy.  You must know and play by the rules of your core customers to turn satisfaction into loyalty.  “Not knowing—or not paying attention to the rules—is the fastest way to get bumped….” (130-32)


All customers know exactly what they want.  To find out what they want, ask!  To attract and keep loyal customers do what you have to do to meet their needs. (136)  Three groups to ask: core, former core, and must-have customers. (139)


Listening is even more important than asking!  “Too many companies fall into the trap of thinking they know what customers want.” (141)


Loyalty involves attitude (the collection of thoughts, beliefs, and emotions about your company and product) and behavior (purchasing).  “Having one without the other may produce some short-term gains, but they won’t last.” (151)  “Keeping a loyal customer loyal is a never-ending effort.” (165)


Key question: What is critical to our success?  “What you’re looking for here is a maximum of two or three concrete, long-term initiatives that will focus your entire organization on a process of continuous improvement.” (173)


It is common for strategic planning to totally ignore the perspectives of the client’s core customers!  “Trying to decide in the boardroom what’s critical to a company, without substantial input from core and must-have customers, is just plain dangerous.  A strategic plan that is internally generated is neither strategic, nor a plan.”  “A plan that isn’t customer driven has nothing to do with reality….” (179)


Be careful of consensus building.  It avoids internal disagreements, discourages questioning and encourages rubber-stamping.  Compromises reflect a middle ground that has nothing to do with the customer.  It (188-89)


The things we don’t know, that we don’t know we don’t know, bring executives to their knees. (191)


“Boards of directors are often composed of people with little or no experience in a particular industry.  And they’re expected to leverage that lack of knowledge to guide their companies through the challenges they face.” (202)


Everything so far said about customers can be applied to employees as well.  “For your business to thrive, you’ll need to increase the percentage of core employees and decrease the percentage of opportunistic ones.”  It’s all about shared values.  “If you value quality, customer service, reliability, or whatever, your core employees do too.” (215)


When hiring, values are often more important than experience or education. You want people who have a real passion for your values. (217-18)  “Everyone in your organization has to be absolutely clear on what your values are.” (222)


“You can’t teach a pig to sing.  It frustrates you and annoys the pig.”  (227) “Putting employees in an environment where they can thrive is a question of shared values.” (228)


“There’s a measurable correlation between employee loyalty and customer loyalty.” (233)  “The right people equals the right results.” (235)


“Knowing your employees’ rules—what’s critical to them and exactly what you have to do to meet their needs—is the key to attracting and keeping loyal employees.  If you aren’t 100 percent sure what their rules are, your core employees will be glad to tell you.  But they won’t say anything unless you ask them.” (239)  [Gordman lists the questions published in First, Break All the Rules by Marcus Buckingham and Curt Coffman, BookNotes04/BucFirs.html .]


“Your employees know more than you do.  They’re on the front lines every day….”  “Your employees know better than you do what’s causing the problems that cost you sales, reduce quality and productivity, and lead to employee dissatisfaction, which itself results in poor customer service.  And they’ll tell you if you ask [your core employees].  The right way.” (242)  [See questions from Buckingham, above.]


“Your advertising is essentially an answer to your must-have customer’s question, What’s in it for me?”  You have to give them a reason to buy from you instead of from someone else.” (271)


Internet advertising will get more popular as more people research on-line.  “Amazon.com is a master at this.  If you’ve ever bought anything from them, you’ve probably received an e-mail at some time, saying, ‘Since you recently bought a book on ABC, we thought you might be interested in one on DBF.’  Brilliant.  But more important, relevant.” (275)


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