What Customers Value Most
“The only way to succeed in business is to understand what customers are all about.”
So said R. Siisi Adu-Gyamfi, senior vice president of international and marketing for Textron Inc., during his keynote presentation at the recent Frost & Sullivan Sales & Marketing Executive Mind Xchange. “You can’t squeeze someone out of existence,” he said, referring to such tactics as overcharging for services. “There needs to be a balanced give and take; a value exchange. The key to finding that balance is customer knowledge—understanding what the customer values.”
Adu-Gyamfi discussed three steps needed to create a value exchange:
Customer analysis: Build a needs tree
Companies need to uncover the root of their customers’ needs. In B2B this is usually the desire to improve profitability (i.e. increase revenue, reduce costs/investments). In that case, it’s important to understand factors as a customer’s industry, value chain, financial performance, and buying behaviors. Then create a holistic view of the customer’s current operational state.
Internal analysis: Define your offering
How will your product or service create value for the customer? Don’t just say how; show how by quantifying the functional, process, and relational benefits.
Customer discussion: Demonstrate value
Show the total economic value of your offering, as well as both the positive and negative differentiators between you and your main competitors. For example, you may have a higher initial price, but lower maintenance costs, resulting in a better overall return on investment.
Adu-Gyamfi discussed the Eaton IFS product and its use in Wal-Mart stores as an example of a successful value exchange.
Executives examined how they could deliver value to Wal-Mart. They considered such areas as Wal-Mart’s need to maximize selling area and desire to keep the time it takes to build a new store to a minimum. One solution was the Eaton IFS, an end-to-end electronics “closet.” Instead of having to dedicate a large room full of electrical equipment from several vendors that would need to be installed over several days by a master electrician, the Eaton IFS is a prebuilt, space-saving electrical distribution system that requires only a small room and can be installed in about half a day by any electrician. Executives demonstrate to Wal-Mart management the space, time, and cost saving in real dollars, not just with platitudes. The result? Wal-Mart has installed the Eaton IFS in every store it has built since that meeting.
