How Well Do You Understand Your Customer’s Business?

We know our products, our competition, our companies well.  But this isn’t what counts for our customers–sure they want sales people who understand the products they sell, but what they really want is sales people that understand them–their companies and businesses.

Yet I’m constantly amazed how little too many sales people know about their customers.  They know them at a surface level, but they don’t really understand them and their businesses.  This keeps us at a distance and makes it difficult to really connect and engage our customers.

It doesn’t take a lot of time to understand our customers’ businesses, but you have to know what to look for.  Here’s a 50,000 foot view of how to do this quickly

1. Do you understand the structure, key issues, KPI’s and language of the industry you customer is part of?
2. Do you understand the top issues faced by your customer’s customers?
3. Do you understand the structure, strategies, and priorities of your customer’s company?
4. Do you understand how each individual you deal with in the customer is measured or how their performance is evaluated?
5. Can you link items 1, 2, 3 to how they impact 4?
6. Can you articulate a unique value proposition in the context of items 4 and 5?  Then can you work it backwards to connect it to items 1, 2, and 3?

Let’s look at these further:

1.  Do you understand the structure, key issues, KPI’s and language of the industry you customer is part of?  You need to understand a few key things about the industry your customer operates in?  How big is it–both from a total dollar size, but also the number of competitors.  Is it dominated by a few large competitors or is it highly fragmented?  Is it growing rapidly, both in revenue and number of participants?  Is it shrinking or consolidating?  What are the top 5 issues that seem to be most critical to the industry  right now? 

What are the top measures of success in the industry–for example, if you are selling to retailers, you better understand “same store sales.”  If you are in the semiconductor industry, you need to understand “book to bill” and “yield.”  Do you know what these KPI’s mean?  Every industry has it’s jargon or special language, do you understand theirs?  If you sell to a certain functional group within an industry, for example manufacturing, do you understand the top industry issues in that function?

2.  Do you understand the top issues faced by your customer’s customers?  Your customers may sell outside their industry.  If they do, for their top customer segments, you may want to look at some of the issues I’ve outlined in (1). 

3. Do you understand the structure, strategies, and priorities of your customer’s company?  How is your customer’s company positioned within their industry? Are they a leader? Are they in trouble?  How does their performance in the industry;s KPI’s compare with the industry and their key competitors?  How effectively do they compete?  What are the strategies and priorities outlined by top management within your customer?  What goals have they established for themselves?  How are they performing against those goals?  What are the KPI’s for top management and for the organization as a whole?  Do you understand what these KPI’s mean?

4.  Do you understand how each individual you deal with in the customer is measured or how their performance is evaluated?  Everyone in an organization has performance objectives or goals of some sort.  Do you understand how they are measured and evaluated?  Do you understand the key priorities of their function or department? 

5.  Can you link items 1,2, 3 to how they impact 4?  This is what I call “connecting the dots.”  Unless your customer is the top management team within the customer, it may not be obvious.  However, this is the most important step.  Being able to translate what’s happening in the industry, markets, and company to the function or department your customer is in is critical.  Your customer may not even understand how they fit in, but if you can do this, you can help them on issues most important to their managers—all the way up the food chain.

6.  Can you articulate a unique value proposition in the context of items 4 and 5? Then can you work it backwards to connect it to items 1, 2, and 3?  This is the real secret to success.  Being able to discuss your value proposition, not only in terms of its direct impact on the customer but how it connects with the strategies and priorities of the company and what they are trying to do within the industry and their customers.  Ever had a customer make a decision for you, only to have top management not approve it?  If you can make this connection, you will reduce the chance this happens.

It sounds like an exhausting list, but it’s really not that tough.  It takes a little time and research, but if you can identify the top 5 issues and the to 5KPI’s in each area I’ve defined, you’ve made a great start.  The longer you work with a specific set of customers, the more you will know.

How well do you understand your customer’s business?