Q: How can you determine exactly what it is your customers want?
A: This sounds like a no-brainer, right? Wrong. You'd be surprised to learn how many entrepreneurs lurch around, oblivious to their customers' deepest desires. How is this possible? Easy. The entrepreneurs forget to ask. Or they ask the wrong questions. Or they rely on their sales force to enlighten them, and the sales force asks the wrong questions. That's where Jaynie L. Smith comes in.
Smith is co-author of Relevant Selling and CEO of Smart Advantage, a Fort Lauderdale, Fla.-based marketing consultant to clients such as Kraft Foods and Zurich Insurance Group. Her company works with a research firm to conduct double-blind surveys to figure out what companies think their customers want vs. what those customers really want. (Double-blind? Customers don't know who's asking the questions, and companies don't know who's providing the answers.) You could fit a canyon into the space between perception and reality.
According to Smith, more than 90 percent of companies get it wrong. Yes, the majority don't know which of their products and services are most valued by the very folks who pay for them. No wonder Smith calls this degree of customer scrutiny a "lost discipline" among today's entrepreneurs. "Too few companies are doing this," she says, "and they're leaving profits on the table every day."
Take the case of a Pennsylvania steel company (that shall remain nameless). Smart Advantage asked employees at the company which services they felt customers cherished most. The top answer? The breadth of the inventory. Sorry, no.
In fact, Smith says, in the customer survey, the company's inventory ranked eighth among the top 20 services. "Not one person on the sales and marketing or executive staff guessed the No. 1 thing customers valued, which was the accuracy and completeness of documentation," Smith says. "They were doing things right, but they didn't know what was most valued by the customer."
So what's a hapless entrepreneur to do? First, stop considering those customer-satisfaction surveys as gospel. They might tell you how your company is doing, but they don't tell you the value of what your company is doing. "What does the preponderance of your customer base value most? Lead with that in your marketing and sales," Smith advises.
It's also important to note that what customers want often differs from what prospective customers want. "If somebody has never had any experience with you, and you're trying to convince them to be your customer, they need a different sales pitch," she says.
Further, customer needs invariably change, so it's critical for entrepreneurs to conduct regular surveys. Because when you're trying to figure out what a customer wants, turns out the customer really is always right.
This story appears in the December 2012 issue of Entrepreneur. Subscribe »
