By Brian Babcock
First published in the Globe and Mail, Jan. 10, 2003
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Focus on what your clients really need - not what you want to sell them

"The customer is king." How often has this mantra resonated in the minds of executives and small-business owners? Cruising under the banner of serving our market, we work overtime to please our loyal customers, and we launch sales campaigns to find new ones. But do we recognize who our customers really are and what they need? Or do we define our customers by our sales plans?

As president of a school bus company, I had to please the local school districts - our paying customers. But I also had "silent" customers: the parents whose children used the service.

Initially, school districts responded to sales calls with disenchantment. They seemed to think of private contractors as nuisances unless their prices were bargin-basement. But our silent customers, the parents, had different priorities. Because the majority of them worked outside the home, they needed dependable pickup and drop-off times that would allow them to go to work free of stress and to organize after-school child care. Parents were also concerned about child molestation and bullies. This meant that drivers had to be extremely dependable and capable of providing a secure environment. Parents also wanted to pay lower taxes - but they saw this as being less important than their need for safe, secure, on-time delivery of their children. Once we spelled out the requirements of these "silent customers," the school authorities' focus on price became malleable. Then, because we had looked to our silent customers' needs, sales turned to marketing with unbelievable ease.

The point was this: By seeing our silent customers' issues and focusing on their lifestyle requirements, rather than on products or services, we gave the needs of our paying customers meaning within the company. In doing that, we convinced the school districts that their priorities were more complex than they thought. In the beginning, they expected rock-bottom prices. But once we demonstrated that top-quality service ensured the safety of their voters' children, they understood that a somewhat higher price tag was worth it.

Sales-oriented groups try to convince customers to want what they have. Any company that looks to the broadest needs of all its customers - both paying and silent, visible and invisible - will leave the treadmill of forcing sales. This creates the opportunity to enter the domain of marketing, where managers develop a comprehensive vision that brings the consumer's needs inside their enterprise.

Of course, good marketing alone doesn't bring success. Executives have to deliver substantial value - that place where price and service intersect. In the school bus case, risk management was supremely important and we had to focus with extreme care on every detail of our operations. If we had failed to do so, we would have betrayed the goal of our more complex needs-oriented approach. I was reminded of of Oscar Wilde's remark about people who know "the price of everything and the value of nothing." We choose, in this case, to create an understanding of value.

As executives, we cannot create win-win situations if we're out of touch with our customers' needs. It's vital to identify a problem that is central to our typical customer and set about to solve it. We may have to follow the example of Steve Jobs, who learned that it's with "hands-on" contact and real listening that a true understanding of the customer's problems can be translated into a product that provides a solution and creates value. The result? In his case, the Apple computer, which was a stunning success story.

Another example is bottled water. The sale of safe, clean water appears to be tremendously successful as an alternative to much less expensive tap water. Perhaps this is because bottled water has become fashionable. More probably it's because consumers fear health risks associated with everyday drinking water. This need was clearly less prevalent in the 1950's, when tap water was thought to be safe. But today, the perceived risks related to consuming household water have served to create a strong market for bottled water.

Have water bottlers been smart with creative promotion, market segmentation, mix concepts and market environmental analysis? Of course they have. But it's only in recent years that it's been worthwhile to invest in developing and executing marketing concepts based on the perceived health risks relating to the consumption of household water.

The lesson: Consumers' needs create markets and markets give life to businesses. But how do you implement that? As U.S. author, humorist and actor James Thurber wrote: "It's better to ask some of the questions than to know all of the answers."

Here are some questions to ask yourself:

  • Do you take the time to distinguish and define different kinds of customers and learn about their central problems as life issues?
  • Do you know the impact these problems have on your market?
  • Do you know the impact a changing market has on your business?
  • Do you know if you'll survive the changes or thrive in the changes once you know the answers to these questions? Should you expand, retain the status quo, or "close down" your operation to preserve assets?
  • Do you create value or are you becoming price-focused and commoditized before your product life cycle compels you to do so?
  • Can you define your business in simple terms? For example, do water bottlers sell water or perceptions of better health?
  • Does your business definition compel you to design new and better-integrated products?

Consider your answers in building the foundation of your market strategy.

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