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December, 2010

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.

Mike Brice
Phone: (206)226-1617

Feature Article

10 Ways To Boost Employee Morale

by Jane Applegate, Published by

"Money can’t buy happiness" is not a cliche when it comes to boosting morale around the office. In these uneasy times, when stressed out business owners are pinching every penny, knowing how to reward employees without spending a lot is crucial. Here are 10 ways to pump up the troops.

  1. Give Thanks
  2. Pull them Aside
  3. Value Family Time
  4. Invest in their Future
  5. Surprise 'Em
  6. Hand Out Pet Projects
  7. Reward Specific Achievement
  8. Get Everyone Involved
  9. Take a team Approach
  10. Focus on Fun - Not Cash

Management Resources
Mentoring: It is lonely at the top. Anyone that starts a business feels like a bit of an imposter. There are so many things to do and problems unique to the top position that the CEO has never solved before.  It is easy to think that because no business like yours has ever been done before that your problems are unique.  They are not.  Most of the things that early entrepreneurs do have been done by every startup and there are many that have gone through it many times.

That's where mentoring comes into play.
The Value of Mentors

Problem Solving: Bouncing back from a financial crisis, product default, or natural disaster is difficult but not impossible. Focus on fixing the problem and finding opportunities for growth.
7 Tips for Dealing with a Company Setback

Business Practices: The search engine company famous for creative freedom is realizing there's a place for discipline, too.
Google's Management Style Grows Up

Personal Productivity: Reader opinions differ, but multitasking is counterproductive, inefficient, and a danger to your effectiveness at work. Not only have studies shown that multitasking makes everything take longer than if you just single tasked our way through the day, but last week, Tony Schwartz in the Harvard Business Review suggested that multitasking is reducing your attention span and effectively giving you ADD:
Multitasking Despite the Warnings? 4 Strategies to Sharpen Your Attention Span

Management Development: We all know that bad and difficult managers exist, are they on your team and are you taking action as the leader?
3 Types of Bad Managers (4:07 min)

Management: Last week I learned a small but very important lesson. You know those people who go around saying, “don’t sweat the small stuff?” Well, that’s bull. Life, business, golf — it’s all about the details.
Being Your Own Boss: It’s All About Mastering the Details

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