If You Don’t Know Your Client’s Customers, Then You Don’t Know Your Client

If You Don’t Know Your Client’s Customers, Then You Don’t Know Your Client Featured Image

When Jan Carlzon took over SAS Group in 1981, the company was losing $17 million per year and had a reputation for being the least punctual airline in Europe. By 1982, SAS Group was making a profit of $52 million and had become the most punctual airline in Europe thanks to Carlzon’s “Putting People First” campaign. “If you’re not serving the customer,” Carlzon famously said, “your job is to be serving someone who is.”

If you’re primarily a B2B company, you may not serve consumers directly, but you do serve a company that is serving consumers. Even though your client’s customers are a step removed from you, they are the force behind every decision that your client makes. Therefore, to truly know what your client needs, you need to know what your client’s customers need and want. By conducting comprehensive customer reviews for both current and prospective clients, you’ll get to know your clients even better than they know themselves.

Know What They Buy

In some cases, a client perceives a business or industry in a certain way even when customer behavior tells another story. In the 1990s, Polaroid still envisioned itself as an instant photography company when customers were ditching instant film in favor of digital photography. Instead of accepting what customers’ behavior said about its core product, Polaroid kept selling instant film and failed to capitalize on digital. In 2001, Polaroid filed for Chapter 11 bankruptcy, a sad ending for a company that had become an American institution.

Your job is to understand what customers buy from both your client and competitors. Ask yourself some questions about your client, your client’s competitors, and your client’s industry. Most importantly, evaluate what customer behavior says about your client:

  • Company history. How did your client’s company and its competitors get started? What customer need did the company fulfill when it offered its initial product or service portfolio? How has it adapted to customer needs over time?
  • Industry and company trends. What does current customer purchasing behavior say about industry trends? Is your client hanging onto instant film when customers want digital cameras, or does your client have a forward-looking business plan?
  • Core products. What products do customers purchase the most? Does the company place priority on a certain product or on certain promotions? Have sales ratios been changing because customers’ purchasing behaviors have changed?
  • Cycles. Do the client’s company and the industry share a predictable seasonal sales cycle? Are sales of certain products or services driven by events or recurring situations?
  • Revenue. How does the company make its money? Are competitors innovating in a way that is eroding the customer base?

Get Answers

  • Read articles about the company and its competitors. Draw from both traditional sources, like business magazines, and newer sources, like top influencer blogs.
  • Set up Google Alerts to monitor the company’s present actions and its dynamic reputation.
  • Review annual reports. Companies say a lot about where they’re headed and where they’ve been in these reports.
  • Ask the company to provide analytics. Ask for any relevant data that your client can offer.

Know How They Buy

Blockbuster Video did just fine when customers switched from VHS to DVD because it adapted to changes in what customers were buying. However, when customers changed how they purchased movies, the company failed to adapt its outdated sales process.

Customers stopped getting movies by going to retail stores because they wanted to get movies without leaving their homes. They enjoyed the convenience of Netflix, which sent DVDs through the mail, or they ordered video on demand from their cable companies. Blockbuster actually had a chance to buy Netflix in the early 2000s, but executives considered Netflix’s movie delivery model to be a non-competitive niche. In 2010, Blockbuster filed for bankruptcy after reporting a $1.1 billion loss, and Blockbuster shuttered its last stores in late 2013.

Your job is to keep your client from becoming a Blockbuster by making sure it understands how its customers like to buy its products. Research the following information about your client:

  • Sales process. How does your client sell its products or services? What does its sales funnel look like?
  • Buyer behavior. How do your client’s customers like to get their products? Is your client making it easy for customers to get products the way they want to buy them? Does your client have competitors that are executing the “how” that your client is missing?
  • Customer acquisition. How much is your client spending to gain new customers? Does your client get a lot of website visitors but not a lot of purchases? Is it a problem with the product or a problem with the purchasing process?

Get Answers

  • Eyeball the website for “how” problems. Check for easy-to-see contact information; intuitive website navigation; obvious calls to action; and simple, functional checkout. Note broken links, shopping cart bugs, or payment difficulties.
  • Use Google Analytics. Get quantitative information like ad click-through rates (CTR), bounce rates (how many customers leave the website without making a purchase), and conversion rates (the number of leads that make a purchase). Also, get qualitative information like top referring domains to understand how current customers make purchases.
  • Calculate value per lead (VPL). To start, calculate how much your client earns from new customer purchases every month. Divide that dollar amount by the number of new customers that your client gains each month, and you’ll know the approximate value of each new customer. Multiply that value by your client’s conversion rate to calculate value per lead. A low VPL indicates that people are visiting the website but deciding not to purchase. Your job is to figure out why.

Know Why They Buy

In 2010, J.C. Penney’s annual revenue had taken substantial hits from both the economic recession and the intrusion of online shopping. The company hired Ron Johnson, the brains behind the Apple Stores who had also revived Target’s brand by creating hipper, more designer-oriented stores. Johnson became CEO and was tasked with re-envisioning the Penney’s brand.

Johnson conceptualized a younger, bolder Penney’s, so he applied the boutique setup that he’d used at Apple and Target. He also eliminated Penney’s sales and coupons in favor of everyday low prices. His strategies may have worked well at other stores, but at Penney’s they only ended up alienating current customers who liked the drama of sale, promotion, and coupon-driven shopping. No coupons or discounts meant no sense of urgency, so current customers had no reason to come to the stores. Even worse, the younger, trendier customers that Johnson assumed would flock to Penney’s never showed up to replace the customers that Johnson drove away.

Ron Johnson implemented a panacea that had worked for him in the past. He lost his job in 2013. Unfortunately, he didn’t appreciate why current customers shopped at J.C. Penney, and he didn’t give new customers a reason to come and fill the void. Your job is to make sure your clients understand why current customers buy from them. Your clients also need to know why new customers might convert to their brand.

  • Persona. What is your client’s typical current customer like? What are the customer’s demographic characteristics? What does the customer do when he or she isn’t purchasing from your client? What motivates your client’s customers to choose your client?
  • “Watering holes.” Where do your client’s customers hang out, both physically and digitally? What do they read or watch? Do they participate in certain groups? Do they frequent some social networks more than others? What do their habits say about why they buy from your client?
  • Mood. Are customers happy with your client? Why or why not? What are they saying about your client’s brand and customer service quality? Are they enthusiastic with your client’s brand or restless for something new?

Get Answers

  • Gather information and sentiment through customer surveys. Online and phone surveys are easy to set up and aggregate.
  • Monitor social networks for customer engagement and communication. Many programs, like Sysomos or SproutSocial, automatically monitor social networks for customer sentiment, but it’s also good to engage with customers on social networks.
  • Leverage CRM programs to mine customer data. These resources can provide invaluable insights into customer persona and habits.

Offering Solutions

Once you know your client’s customers, you’re ready to make actionable suggestions. Talk to your client about goals and about how they measure success. Ask what kind of progress your client wants to make to grow the business, and get familiar with both their short-term and long-term objectives. Then, based on your knowledge of your client’s customer, offer candid advice about strategy. Affirm goals that would work for your client’s customers, and dissuade your client from objectives that aren’t going to make the connection. Bringing in a third-party vendor, like an outside digital marketing firm, invites a fresh perspective and better, more objective insights.

Your client’s customers determine your client’s choices and direction. That’s why a comprehensive customer review is such a powerful tool for understanding your clients. Ultimately, if you’re not serving a client who’s properly serving its customers, then you’re not going to develop a lasting and prosperous client base.

Need help getting to know your customers?

If you’re still unsure how to get to know your customers, Digital Current can help! With over a decade of experience developing integrated online marketing campaigns, we know a thing or two about reaching the right audiences with the right message.

Connect with your customers now!

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