January 29, 2010
The second step in the BE DiFFERENT strategy creation process is to decide on the customers you intend to serve. Can they generate the growth you are expecting? You may have the competencies they require but if they don’t have the latent potential to meet your HOW BIG objectives, should you be chasing them? You can, and it may feel good, but unfortunately you might fall short of your financial goals..
HOW BIG should determine WHO to SERVE.
There’s no such thing as a bad customer; its just that some are better than others. Examine the customer groups that you currently do business with. Given the current economic realities, can they deliver to your new financial expectations? Are their market characteristics appropriate to give you the growth you want? Apart from demand factors, what about the competitive environment - is it intense or are there opportunities to enhance your market position?
Carefully evaluate your options and choose the customer segments that can deliver you BOTH the growth you need as well as leverage the competencies of your organization.
Here are some factors to consider in evaluating which customers to dedicate your efforts to:
- customer groups in which your customer share position is low. If you currently have a small peercentae of their total business you have a good growt potential.
- look at markets that are currently growing in the double digits and where you have an advantage over others.
- geographicly defined segments which have easy access at relatively low cost
- high lifetime value customer clusters where investments will provide healthy returns over the long term.
What do you do with customer groups you currently serve but can’t serve your growth and financial needs? Be prepared to walk away from them. You have to let them go in favor of focusing on the few choice segments that will provide the return on investment that you need.
HOW BIG do you want to be?