Are you focusing on the right marketing messages?
Let me start with an example. We had a client come asking for market research on what mattered to their customers. Their marketing messages were focused on being global and having two distinct product lines. We identified 22 different criteria that their customers might use to choose a supplier. We then asked their customers to rank these 22 criteria in terms of importance to them. Guess which two criteria came bottom by a long way? You’ve got it; being global and having the two distinct product lines.
To be competitive you have to know what really matters to your customers. Yet how many Sales and Marketing departments really know this? Instead, how many create marketing messages that don’t really resonate with their customers? Because the customer doesn’t care that much about what Marketing thinks is important.
Differentiate with what’s important
It’s the same with differentiation. I know so many salespeople who complain that the customer doesn’t see value in their differentiating features. The salesperson thinks that these features are important. Why wouldn’t a food manufacturer care about hygiene for example? But the problem is that the salesperson sees the situation from their point of view. They don’t see the problem like the customer sees it. And if the customer doesn’t see the problem in the same way then the chances are that they won’t see value in the differentiating feature. So what does the customer focus on then? Well, the price. Because it’s the only differentiator that matters.
This doesn’t mean that the customer only cares about price. Do you drive around in the cheapest car you can find? Or live in the cheapest house? Not necessarily. We will all pay more for something if we can see value in it. We will of course haggle the price on our chosen product once we’ve found it. But that’s about negotiating the deal. I’m talking about selecting a supplier. If you are more expensive and the customer can’t see any value in what makes you different then they won’t want to pay your higher price. Simples.
Marketing might have big data and market analytics but they can still struggle to understand their customers. So they risk producing marketing collateral that doesn’t hit the mark. Surprisingly, they don’t seem to collect customer intelligence from the sales process. For example, very few seem to undertake win/loss analysis. Last year in Huthwaite International we ran a survey on sales and marketing integration. We split the survey responses into two groups. The Group 1 respondents were performing above sales target. Those in Group 2 were performing at or below sales target. We then looked at what Group 1 were doing differently. Win/loss analysis stood out. Group 1 were doing it. Group 2 were not.
Win/loss analysis identifies the reasons behind actual buying decisions. You interview the customers who bought from you (your winners) AND the ones that didn’t (your losers). Your winners will tell you why they chose you. Your losers will tell you why they chose someone else. This can be painful. You might find out things that you didn’t want to know.
Salespeople in particular can feel very vulnerable. That’s why the best interviewers have not been involved in the sales process. You also have the challenge of getting the customer to agree to the interview. It helps if you promise anonymity. That way the customer is more likely to give you candid and authentic feedback.
Win/loss analysis has most value when you get feedback from several customers, and can start to see themes emerging. My research collaborators at Sheffield Hallam University further explore this concept of customer themes in their book Value-ology.
Segmenting on need
Customers have different reasons for buying a product. That’s why Professor Malcolm McDonald advocates segmenting customers by needs, rather than on sociodemographic data or other criteria. For example, a recent customer was marketing a relatively new technology product to universities. One university was an early adopter, because they saw the technology as supporting their brand image of being innovative and technologically-savvy. But other universities wanted to see other benefits of the product before they would commit.
So similar organisations in the same sector may have completely different reasons for buying a product. That means you need to tempt them with different marketing messages.
Just think about it on the personal level for a moment. How many of your friends and family share the same buying preferences as you? My sister and I, for example, fall into the same sociodemographic group but drive completely different cars. I wouldn’t be seen dead in her Ford Fiesta and she wouldn’t be seen dead in my Audi A3. We don’t choose our cars by price either. There are other more important factors at play.
Understand the drivers
Both sales and marketing need to understand these drivers. Huthwaite International’s sales research found that successful sellers really understand what is driving the buying decision. They simply ask the question “why?” And they move the conversation beyond discussing product features. So many sellers still just talk features, no matter what they tell you.
People buy from people. And relationships are extremely important. The customers of our market research client cared most about the relationship factors. Understanding the customers’ drivers will help you build relationships that will win you sales. The more you understand what makes a buyer want to get up and come to work in the morning, and what is going to make them feel really good at the end of the day, then the more likely they are to buy from you.