Minding My Own Business

Desperately seeking relevance

May 13, 2008

I was doing some customer research for a sales and marketing plan recently when I came upon a worthwhile piece of advice to those with purchasing power in business. "Salespeople," the purchaser is advised, "always sell what they have in inventory whether you need it or not. Your job is to buy only what you need which are those things that add value." And for emphasis, the purchaser is warned "Don't confuse personalization with relevance!"

This reminded me of the definitive quote on business technology from Bill Gates, who said, "The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency." In other words, relevance is good; irrelevance is worse than nothing at all.

This advice resonates with me on several fronts. Obviously, it makes sense from the purchasing side of the table. Many of us are all too frequently wowed by technology, desperate to keep up with the Joneses, or won over by the charms and appeals of a salesperson whom we trust despite the marginal benefits of the purchase to our business. But just because someone has taken the time and done a great job of it, perhaps to customize his or her presentation to our business does not ensure that the actual utility of the offering is worth its cost.

This advice offers important and useful insight into the machinations of the seller, by addressing the fundamental barrier to success: Relevance to your customers, from their perspective.

In this age of extraordinary competitiveness and perceived commoditization reducing margins faster than revenues, the need to differentiate your company by developing practical, useful, beneficial, and cost-effective products and services to your customers is more important than ever. "Well, of course we do that!" is the knee jerk reaction of most owners and executives. But from whose point of view does that assessment come?

"What are you doing to reinvent yourself in order to make yourself relevant from your customer's perspective?" asks Michele Miller, a partner in the Austin, TX, USA based Wizard of Ads marketing firm. Every business should regularly conduct relevance audits, analyzing the factors that determine their relevance to the marketplace, determining their current measure of relevance, and doing their best to predict their likelihood of relevance in the future.

A relevance audit is difficult, and usually requires input from those who do not normally participate in product development and marketing. Where do you begin? Are you asking yourself the right and sometimes difficult questions? Do you even know what questions to ask?

Since getting started is consistently the most difficult aspect of the entire process, I suggest utilizing the 4 C's method developed by Bob Lauterborn, the one-time creative director of General Electric's in-house marketing and advertising agency, and the former worldwide director of marketing communications and corporate advertising for International Paper.

Lauterborn's 4 C's are:
1. Customer Needs and Wants
2. Cost to Customer
3. Communication
4. Convenience

These are fundamental to understanding your business's positioning within just about any market. It requires understanding your customers really understanding them to a level that many find uncomfortable when the answers don't jive with the in-house Kool-Aid.

Begin by defining your customers and target markets:
- Who are they?
- What do they need? What do they want?
- What do you offer? What do your competitors offer?
- Does your product really fit a need?
- How does it compare, from your customer's perspective, to competitive products?

Communication is critical and I'm not just talking about getting your message out into the marketplace. An important question to ask yourself and those participating in this exercise: Do you actually know what your customers are thinking? Or are you projecting based on your own understanding and analysis? If you don't know, how can you learn?

Peter Drucker stressed that "the single most important thing to remember about any enterprise is that there are no results inside its walls. The result of a business is a satisfied customer." I would suggest that if we spent as much effort learning about our customers as we do teaching them about ourselves, we would save ourselves a great deal of time, money, effort, and angst.

Lauterborn recommends encouraging customer feedback through a variety of methods, such as customer forums, company-moderated chat rooms, comment forms for your online customers, or speaking to them face to face, by telephone, mail survey or through competition entry forms. One of his thought-provoking conclusions is that if developing this two-way customer communication is managed correctly, your customers can become, in effect, as important contributing members to your business development efforts as any of your company's employees.

Cost and Convenience are always critical factors when customers gauge the relevance of potential vendors. To some businesses, cost and convenience are a yin and yang, where the cost of a convenience determines its relevance. Others consider certain conveniences to be essential, regardless of cost, which explains stretch limousines, $300 haircuts, and half a million dollar luxury suites at sports arenas. On the other hand, there are even certain companies for whom there are few, if any, conveniences that cannot be sacrificed at the altar of cost reduction (which, you are probably thinking, explains your customers).

Once you have your information, the next step is to ask yourself some pretty difficult questions. If the data and information indicate the need, can you redefine your market? Could your company reinvent itself, even if it meant making drastic strategic changes, such as reducing the size of your target market in order to remain (or become) relevant?

Think of your company from your customer's perspective much as the way you might think of a vendor's website. A business website that appears stale, dull, and outdated often reflects the same of the company it represents. When consumers believe a website is not current, it loses its relevance and they stop visiting it. The same is true for any business. Maintaining relevance, and the perception of relevance in the marketplace, is perhaps the most challenging competitive pressure today.

Always remember that your customer's responsibility is to buy only what he or she needs which are those things that add value. Ensuring the relevance of your offering is the only way to ensure your consistent delivery of value. And the only way to ensure the relevance of your offering is to continually focus on your product and service development not based on your capabilities, experience, financial strength, or any other internal factors but from the perspective of the only opinion that counts: that of your customer.

Elisha Tropper is president and CEO of T3 Associates, a New York based strategic consulting firm, and the former president of Prestige Label, a North Carolina converter. He can be reached at et@t3associates.net.
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