What Your Customers REALLY Want
Identifying What Customers Value
What do your customers want? It’s a simple one-word answer: value. Volumes have been written about the topic and what it is that customers really want, but it does not need to be as mysterious as the lost city of Atlantis.
No matter what type of business you have, be it a chain of boutiques, a family run restaurant, or a large multinational corporation, customers are customers. In order for you and your business to best serve customers in your market, you need to understand them. Understanding your customers requires you listen to their needs and respond accordingly, targeting their specific pain point. We often assume customers are won based on price, but there are plenty examples where the true value from the customer’s perspective was something other than price.
Here are four basic examples from our experience:
1. Industry: Oil and Gas
The oil and gas industry is very much working to the clock – every second drilling companies are not extracting oil, they are not making money. For this reason, they need to maintain their equipment and keep the drills working, with cost less of a concern. A large oil and gas company I recently talked with was interested in a new supplier for some of their replacement parts. Their present supplier is a legacy aerospace company (aerospace is a very slow industry). The oil and gas company’s exact words were “our supplier is good, but they move at aerospace speed and that doesn’t work for us.”
Customer Value: Production and Replacement Speed
2. Industry: Household Appliances
A western appliance manufacturer wanted to expand into Japan, however customers in Japan were not receptive to their dishwashers. Their product, geared towards western customers, was intended to clean dishes quickly. As they did more research on the Japanese market, the appliance manufacturer realized their dishwashers were not helpful because the traditional food in Japan could not be cleaned. It turns out that Japanese customers had no issue with the amount of time it took to clean the dishes; they just wanted them to be cleaned. The company redesigned their products to include an extra-long soak cycle that effectively cleaned dishes in Japanese households. The change dramatically improved their success in a new market.
Customer Value: Cleaning Effectiveness
3. Industry: Refueling Stations
Adjacent to every major motorway in the world, there are refueling stations located every few kilometers. These refueling stations are all alike, offering fuel, restrooms and snacks for drivers on the road. Despite this, these stations always charge higher prices than others located further away from the motorway. The reason they can do this is the convenience of their location. Drivers do not wish to stray far from their main route to get a drink or refill the tank, and are therefore willing to pay more.
Customer Value: Proximity to Route
4. Industry: Industrial Products
A large industrial product manufacturer struggled to gain new business over its smaller competitors. Customers went to the smaller firms because they were less expensive. What the large industrial manufacturer failed to realize was the products were similar to their smaller competitors, but were significantly more expensive. What the larger firm did have, though, was technical knowledge and engineering capabilities that their smaller competitors lacked. More business was won when the large firm pitched their engineering and technical services along with their products. These services, it turns out, freed up the customers’ resources for other things. Further, the package deal allowed customers to justify the higher prices in exchange for freeing up their resources.
Customer Value: Engineering Services
The point here is very simple. What customers want may not be as obvious as a low price or a better product. Understanding what your customers want requires having open and honest discussion about various options and business scenarios you can offer your customer. By identifying your customers’ areas of pain and concern, you can uncover a value proposition that they will be willing to pay for.
For further reading, take a look at our SWOT analysis discussion which can help you identify special skills and abilities you have that may present value to your customers.