To stay ahead in business, make it your business to know your customers

We all think we know our customers. Advertising agencies think it is their clients. For soap-makers, depending on their targeted demographic, they can be grown-ups or children. For a business-to-business (B2B) company, it is the firms that buy from it. But, are they really the customers? The success of a business depends on the contribution we make to the entire value chain and it does not end with the primary customer to who you sell your wares.

Typically, a business marketer thinks of primary customers as the only customers. That is natural because salespeople work directly with those customers—engineers succeed by meeting the specifications of these customers and accounting knows who pays the company’s receivables.

What are customers’ customers up to? 

The problem is that primary customers who are out of step with changes in their markets drag their clueless suppliers down with them. Therefore, the suppliers who are a step or more removed from end-users must know what those customers’ customers are up to.

By watching trends, you will not only know how to meet the needs of the primary customers but also better predict their future needs. Research customers’ customers, develop scenarios as a formal part of your marketing planning then position yourself as a contributor to what your customers will need.

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M Muneer

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Stay a step ahead

Anticipate where your primary customers will be weak and show them that you are the answer to their prayers. The advantage will be enormous. For example, your new product development process, which takes a long time, would not come up with obsolete solutions.

Your salespeople will have the information they need for value-added selling. Your planners will be prepared to deploy your marketing and production assets in the future.

The final customers will care about the ingredients in the products they buy. In meeting their competitive quality challenges, they would want to know more than just the price and terms when buying from their supplier, who is your direct customer.

If you know what the customers’ customer needs, you will be way ahead of the competition and tailor your market persona to an ingredient branding strategy (aka Intel Inside).

Your primary customers will recognise your loyalty to their interests when you help them sell more to their customers. Such an analysis requires an intelligence system similar to the methods you should use to monitor your competitors.

You might even want to look at another level beyond the customers’ customers’ and to their customers.

Selling a component to your direct customer, for instance, might hinge on your tech assistance and ability to reduce the customer’s own cost. Once you understand your customers’ customers and the experience they have with the components you provide to the products they buy, you can add a rich segmentation dimension to your direct customer’s marketing programme.

Think long-term, track trends 

Customers’ customer analysis is not rocket science but it calls for discipline. Encourage salespeople to discuss long-term trends with major accounts, particularly their innovative “lead-user” accounts. Do study printed sources and online databases, or hire a consultant who can provide information.

The scenarios you will address will vary from industry to industry but conceptually, you need to know the following:

— What drives your customers’ success with their customers? What factors sustain their competitive advantages?

— How will economic, regulatory, technological and social trends alter the importance of those advantages? What new factors will supplant those advantages?

— Which new markets will your customers pursue or which they can chase? How will that change what they now buy and could buy from you and from your rivals?

—What is likely to be your major accounts’ response to each of the above scenarios, trend-by-trend, key account-by-key account?

Think of the analysis as a matrix, with each trend-account cell prescribing your response. Then pull the cells together to determine how your account mix will change, depending on the strategies you deploy.

Creating brand value that is recognised throughout the value chain is one of those effects, and knowing customers’ customers will be essential to it.