Regardless of whether it is doing well or not, a company is always exposed to errors that may or may not affect future growth. Often these errors have to do with the quality and accuracy of the information that supports decision-making (at any level) which occur due to one or more of the following:
- Storing and using incorrect information
- Insufficient key information to support decision making
- Absence of time critical information
- Underutilize existing information
Each of these factors can easily be resolved; the most obvious solution is also the most overlooked: ‘90% of the information required for company growth can be found with your customers’.
When one of your customers forms an opinion or has a suggestion regarding your service that could safeguard you from problems in the future, they will not necessarily share this spontaneously unless of course they would substantially benefit; as you can imagine, your customers priority is to assure themselves a competitive position.
Some will, however these are exceptions. Most of the time customers do not use the information about you (especially B2B) to your advantage; if they do, it is to their own or, they will share it with others.
Leaving aside the most obvious cases where feedback is given immediately (e.g. a newly installed machine has a fault, the wrong component is delivered, the economic offer is inadequate), if the customer is unsatisfied or there is a problem, they will rarely let you know straight away. Often, this is down to caution; before complaining, the customer will make sure that there are sufficient facts to support him.
In general, not only is it unlikely that your customers will tell you what they think, but when they do, it may be too late to resolve the problem. Fact remains that the percentage of those who will tell you nothing is very high.
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The errors mentioned previously can undermine the company if they remain invisible and unchecked by management. In order to easily identify them, we have listed the more common errors regarding customer information that can block or slow down business growth:
1. What does your customer expect?
Even if you had ongoing conversations with each of your customers at all levels and across all departments, you would nevertheless continuously discover expectations which you had not yet taken into consideration.
Statistics based on our experience show that even with just four customers, the gap between what we believe to be their expectations and their actual expectations starts to increase significantly. It therefore goes without saying that, when the customer portfolio is made up of tens or hundreds of customers, as often happens when supplying B2B, there will be a difference between your idea of customer expectations and the customers, therefore this gap needs to be constantly measured and reduced so as to avoid missing opportunities and maintain strong client relations. Over time, if this misalignment remains unchecked, it will impact the company’s revenue and growth even if not immediately apparent.
2. Where does your value lie?
In this case, we are looking not at what the customer expects (the expected value), but your understanding of what is important or ‘valuable’ to your customer (value offered). We may have perfectly satisfied customers, nevertheless, be convinced that we are not giving them the value they expect. When we hear phrases such as: “No one has complained, but I am sure that an extension of the warranty will make a difference to our customers and make us more competitive”, we need to invest in research to verify if ‘additional services’ are really the solution.
Making sure that what you offer translates into perceived value is critical to making the most of your resources, reducing costs, and making the best productive and commercial choices; however this information can only be obtained from your customers.
3. Unchecked Customer Relations
A large customer base portfolio needs to be managed, organized and delegated. Today, modern AI-powered CRMs, when combined with an appropriate process, make previously unthinkable information available in real time. We know if the customer has visited your website, how many times and via which channel, if they have replied to an email etc. however nowhere will we find, for example, that one of the customer’s employees was offended because a salesperson made inappropriate comments about the way they are using the new machinery installed by you. We certainly will not know from our CRM that four times the sales account has reassured his contact person about delivery times, however always arriving one if not two weeks late. We also will not know if that contact person is now unsatisfied with our service.
In these circumstances, the company, without knowing it, is putting at risk the relationship with a decision maker who, regardless of how good or value for money the product is, could change its purchasing behaviour even in the short term.
4. How do you compare?
No one better than your customers can tell you how you compare to your competitors. Research carried out by external consultants is often used to understand the competitive position and are valuable tools when it is not possible to get this information from your customers, for example when launching a new product or when you need to know the competitive position of a target company for an acquisition. However, when you require a benchmark of your competitive position compared to your competitors; you need to talk to your customers.
5. Redundant Activities
One of the frequent causes of customer dissatisfaction and frustration is seeing their supplier invest in activities that they do not need, when their more urgent requirements whicha are being overlooked.
It may seem like an operational problem; however, the cause is almost always down to communication. The sales phase ends, the quote is approved, and the order passes into the hands of the technical team. Whether it is installing an antenna or customizing a packaging machine, the customer is given all details including delivery time, the performance that can be expected and the technical specifications. The developing stage begins, the project manager receives dozens of emails and participates in several video calls for validation and confirmation of requirements. Your employees are struggling to meet the strict technical standards that, according to your company guidelines, make a competitive difference by offering the quality for which you were chosen.
The customer however has stated that in this case, what matters most to him, is timing. He told his sales representative, who probably mentioned it to the technical department. However, the job is managed at all stages exactly as always, without any production or process customization. No one has thought to work on speeding up logistics. For the customer, if you had been able to deliver a few days in advance, you would have created more value for him, regardless of the extremely high standards of product quality.
An extensive part of the customer’s perceived value of the new automated robot is speed, or so you think. Therefore, investing in a faster and more efficient version would bring you a competitive advantage, however, the customer may be looking at scalability within their company, and not speed. Increasing production would be recommended direction.
6. Insufficient strategic information
We think we know a lot about our customers plans such as budgets, future developments, management changes, regulatory pressures, internal issues. However, on average this information is acquired no more than once or twice a year. In addition, the information you obtain as a supplier always undergoes ‘adjustments’ by the customer when you ask them directly or when they arise during informal conversations. Also, this information is often always provided to you by the same person; if you could talk to several levels within the company, you would gain more detailed, as well as generic, information of your customers plans for the short and medium term.
By crossing referencing information obtained from multiple sources, you can validate details on future developments and gain a clearer idea of the direction in which your customer’s, and therefore your, budget will go. You may also discover if you are a strategic or transaction supplier and gain a more accurate idea of your replaceability in the short term.
7. Develop a dialogue
As consultants, when talking to our client’s customers across different levels of the organization, we receive input of how they would like our clients to improve their product.
The input we receive is intentional as they are investing in the supplier relationship and would like to be heard and see improvements. When the customer is being listened to, they are proactive to working on the relationship and only occasionally will they use the opportunity to simply complain. Even if this does occur, it nevertheless is an opportunity to adjust and recuperate any damage done. The customer has all the interest to see the supplier receive suggestions and will rarely hold back information that would improve the service they receive from you.
There is a natural ‘conflict of interest’ between the supplier and customer that limits the sharing of essential information for your growth. It is therefore crucial to find a way to communicate in order to let customers help you make choices whether strategic or operational.
