Six Hour Strategy, Step 2: Analyzing your Customers and Competitors

I’m sharing this length newsletter today because it’s an excerpt from my upcoming new book, The Four Roads to Business Wealth, and I wanted you to have access right away.

The key point is this: Don’t sell to your customers, help them.

Today, we are going to continue our discussion of the Six Hour Strategy® to grow your business by focusing on the second step of analyzing your customers and competitors. We’ll discuss these from the framework of strategic position and future goals. It’s really about helping your customers.

But first, a word from one of the greatest management thinkers of all times, Peter Drucker.

Drucker’s excellent book, “The Five Most Important Questions You Will Ever Ask About Your Organization,” should be on every leader’s bookshelf. In this book, Drucker asks:

  • Who is our customer?
  • What does the customer value?

When analyzing your customers and competitors, it’s critical to keep these questions in mind.

Ideal Customer

First, who is your ideal customer?

This may be very different from your current customer.

Remember, your customer isn’t a company. It’s a real person, a human being, that makes a decision using part logic and part emotion, to hire you. When they hire you or buy your stuff, they are putting their reputation on the line. Therefore, your ideal customer is a human being, first and foremost.

Think about:

  1. Who is your ideal customer?
  2. How do you strengthen your relationships with customers?
  3. What if most of the transaction is digital and doesn’t involved direct human interactions?
  4. How do you personalize business-to-business (B2B) transactions?

What does the customer value?

Next, let’s look at what your customers value. This aligns perfectly with the results you help your customers to create, which is the foundation of strategy.

Customers, being human beings, value many things. Which of these do your customers value?

  • The emotional comfort they receive from confidently dealing with a reputable company that quickly fixes problems and stands behind their product or service.
  • Low price.
  • On time and on spec delivery.
  • Low price.
  • Products and services that are aligned with the customers’ business model and brand, so it can acquire and retain more customers.
  • Low price.
  • Relationship, convenience, quality, safety, delivery, repair, maintenance, timeliness, time to think, certification, validation, expertise, proactive advice, choice, customization, collaboration, flexibility, insights, sharing risks, and sharing rewards.
  • Low price.
  • Trust.
  • They may say “Low price” but if the other factors are clear and powerful, the price issue becomes less relevant.

For example, Katz’s Deli in New York isn’t famous for low price. It’s famous for its pastrami sandwiches and for scaring customers to hold on to their tickets so they can exit after paying. It’s also famous for the “I’ll have what she’s having!” line from the movie “When Harry Met Sally.”

Photo © Phil Symchych

Next, we’ll discuss the formal analysis points for understanding both our customers and our competitors. The points are: strategic position and future goals.

You’ll see that the Strategic Positions and Future Goals are likely similar or identical for both your customers and your competitors. It’s up to you—or your competitors—to help your customers strengthen their strategic positions and achieve their future goals. Game on!

Strategic Position

If you’re competing on low price, and many companies are, then you may be in the commodity business. Your strategic position needs to move away from being labeled a commodity. You need to do everything in your power to add more value to the customer relationship and interaction, so they don’t see you solely as a commodity. This can help you create a sustainable differentiated advantage from other low-price providers.

For anyone, it’s very difficult to compete with larger companies on price because they have deeper pockets. It’s much easier to match or come close on price and then use your speed, responsiveness, anticipation, proactivity, and skill to expand the criteria beyond price. In other words, use strategy to trump price.

The best position is to be a strategic partner with your customers where you show up and provide proactive advice that helps them achieve their goals while increasing your sales. Strategy = Be helpful.

Future Goals

Now, let’s look at your customers’ and competitors’ future goals. This isn’t complicated. Just about everyone I’ve dealt with that wasn’t in a succession or transition situation was focused on growth.

If your customers want to grow, then they will need to acquire more of your products and services. If your competitors want to grow, then they will want to sell more of their products and services to, you guessed it, your customers!

The important part is knowing what to do and how to do it to help your customers to grow, improve service, reduce costs, attract more customers, retain their best customers and employees, etc.

By knowing who your customers are and what they value, you can help them grow and prevent them from buying from your competitors. It may be that simple but we all know it isn’t that easy. Helping your customers is much easier than selling.

So now what?

Now, think and act like a consultant for your customers. Show up with ideas to help them, share what’s worked and what hasn’t with others, take risks, let them try stuff for free, give away some value, educate them, tweak and adjust things, fail and learn quickly and often, until you get it just right. Strengthen the relationship. Be useful. Help them be successful, and you’ll be rewarded.

Understanding who your customers are and what they value will help you to deliver products and services they want while competing more effectively in the market. The best strategies are invisible in that they are not obvious to either your customers or competitors. But your customers can feel it when you’re treating them like valued long-term partners by looking out for their best interests.

It’s worth repeating: Helping your customers is much easier than selling.

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