We’ve been taught we have to create value with our customers. There are a lot of definitions to this, including:
- Proving our product is the best choice of all the alternatives.
- Tying the capabilities of our solutions to the needs our customers have prioritized.
- Assuring we help the customers solve their problems.
- Articulating the value the customer should realize from the implementation of our solutions.
- Developing a business justification for the implementation of the solution.
- Creating value through the customer buying process, helping them make sense of and have confidence in our solutions.
But what about the reciprocal, what value do our customers create for us?
Usually, we think of that in terms of the revenue the opportunity will generate for us. Sometimes we think of retention/renewal revenues, LTV, expansion revenues. For key and strategic accounts, we think of the total revenue we can generate across the account. And sometimes, in addition to revenue, we may look at gross margins generated by the customer.
But we need to look at value creation–and the value we receive from our customers as more than revenue or gross margin.
What other value should we expect our customers to create in our relationships with them? Some things we must constantly look for are:
- What are they teaching us about the issues/problems/challenges they face and how we might look for the same things in other accounts?
- What are they teaching us about their markets and the changes they and their peers face in the markets?
- What are we learning about each key role/persona we work with and how we might leverage this learning in other situations?
- What feedback are they giving us about our solutions, our engagement strategies, our company reputation, and how we work with them?
- What are they providing us to help improve our current solutions, capabilities we might add, and new products we might develop?
- What direct referrals and introductions might they give us?
- What indirect influence do they provide that enables us to expand our business. For example, if they are innovators, early adopters, or market leaders, others in their markets pay attention to them–and the solutions/vendors they they work with?
- How can they help us innovate our own growth strategies?
Customers can be so much more important than the revenue they give us. They can help us gain huge leverage and create multiplier effects, driving our growth. They recognize how important this value is, reserving it for their most important/trusted partners. They reserve this for those few partners that have earned it. While they may give us revenue for our products, we have to continue to do more with them, before they will create value across these dimensions.
But when we tap into those capabilities, the return we get can be staggering. Some examples:
- One customer “strongly suggested” their supply chain partners seriously consider a specific solutions. There was a lot of incremental value they, collectively, could realize if they were all doing similar things.
- One client tapped into an “Innovator” in their industry. As others recognized what this innovator was doing, they started actively pursuing my client–creating 10’s of millions in new opportunities.
- One client and a key customer developed enhancements to a product that, when brought to market, created millions in net new revenue.
Customers can create much more than revenue. We have to understand those that can do this, then we have to earn it from the value we create with them. But it’s such a great opportunity, we’d be crazy not to pursue it.
Before, I wind up on this, I should mention there is the opposite case. There are some customers whose revenue we would be wise to forego. They don’t create value, rather suck us dry. And usually, it’s not because of them, it’s just we’ve chosen the wrong customer because we think it is only about revenue dollars.