Strategic Planning and the Customer
When I work with a company to develop a strategic plan I find a common perspective. The discussion always begins with what a dialog concerning the capability of the company to do what they feel they do well.
- How good the products are.
- How advanced the technology is.
- Or, how effective the service is.
These are all good points but what is missing . . . the customer. Rarely do I find the discussion starting with what customer problem the company’s products or services solve.
Why is the customer problem important?
In B2B selling it is critical for the customer to recognize what is you sell is of value to them and that the return on investment by buying your products or using your services is competitive against the competition. Good sales people can make up for shortcomings in the product message or positioning so that the customer sees a solution to a problem. Shrewd and prudent buyers however will hold the proposed offering to a higher level to make sure it solves real problems cost effectively.
Businesses that try and get by promoting features, technology and capability leave it to the customer to realize the strategic fit and whether a real solution to an important problem exists. Customers that sell value to their customers are the first to examine suppliers to see the "strategic" fit of not only the current products and services but also to the direction the supplier is setting for itself (strategic plan or story) and does that direction offer a competitive advantage (leverage) in retaining and winning a larger number of customers for their product. Such a supplier would qualify as a strategic partner.
Value of a Strategic Partner
As a serious B2B player you want to be viewed as a strategic partner. A strategic partner has an inside track to opportunities. They may find themselves at the "planning" table where they can make contributions to the direction and definition of the customer’s products, which gives them the "specification" advantage to tailor requirements that favor existing products and technology strategy. This strategic partner role results in a competitive advantage where the selection decision is based not only on a reasonably competitive price but also on the overall value that the business makes to the customers strategic value in their markets. This barrier can be significant for the competition to overcome in a competitive situation.
Sharpen Your Strategy
Converting a capability message to a customer value message is similar to putting on a new pair of shoes. You were comfortable in the old ones and the new ones hurt a little in the beginning. To ease this transition you need to employ some strategy basics or using a football analogy "get down to how you are blocking and tackling."
The SWOT process is the best method for identifying your opportunities. However, you need to put on the hat of the customer and using your knowledge of his business develop the SWOT characteristics as they relate to the market you operate in. Again, the objective is to identify what problems they are dealing with and ultimately what your SWOT characteristics are that respond to that problem set.
The following example describes a customer that is strong in their field but has a serious weakness that the supplier can take advantage of. The supplier’s current practice positions their products as off-the-shelf components that can be easily integrated. The customer wanted to expand the feature set of the widget but was struggling internally with limited engineering resources.
The customer problem opportunity is for the supplier to move from an off-the-shelf offering to including integration services that would speed up the addition of features to the widget, overcome the resource bottleneck in engineering and increase the integration experience in the product line. The customer will have significantly increased their value position with its customers and the supplier would be on the inside working on current deliveries as well as looking toward new product introductions as a value partner with more attractive margins.
Is your current business strategy focused on solving your customer's problem? If not, step back and reassess your position. Take advantage of your strengths, address your weaknesses and take the initiative to establish a strategic partner relationship with your customer. As a strategic partner you can look forward to a long-term business relationship, influence product decisions, be in the driver seat on new opportunities and enjoy higher margins. Bring the customer into your strategic planning process.