Business Issues  



Differentiate Customers From Consumers

Plugging leakages in sales, profits and customers is an attractive, relevant and rewarding initiative in the current marketplace.

By Barry Urquhart

Clearly, greater effort is needed for all those in business to reach out, connect with and to engage with existing, prospective and past clients

In the absence of sales and revenue growth, enhancements in profits are being achieved by the realignment of corporate cultures and the focus of all team members. Recognising, respecting and differentiating customers from consumers is fundamental. Sadly, too many business people have been, and are, unaware or insensitive to the differing demands and expectations of the two sub-sets.

This article is a call-to-action, with the promise of profitable rewards.

Sales, profits and customer satisfaction leakage are a fundamental current reality. A key important insight in the cause is that too few business owners, managers and service providers are aware of, sensitive to or see the need to differentiate between their customers and their consumers.

The consequences include sub-optimal sales, disenchanted consumers, fractured relationships, a lack of loyalty and isolated instances of previously scarce recommendations and referrals. Often there is a bewilderment and a sense of alienation on both sides of the relationship.

The apparent disconnect between business, service providers and their consumers is widespread. It explains in part the seeming chasm between the perceived service standards provided by companies and the experiences recalled by both customers
and consumers.

A recent national Australian study revealed that 82% of business owner and manager respondents stated that the service offered by their businesses was either “good”, “very good” or “exceptional”. Customers didn’t agree. Only 8% nominated one of those three categories in their assessment of service standards in Australia.

UNDERSTANDABLE CONTRADICTIONS

The disparity is understandable. Many relationships in business-to-business circumstances are founded on the contacts between the product or service provider and the Purchasing Manager or Purchasing Officers.

Recent detailed analyses of 250 Australian companies of all sizes and across a wide spectrum of professions and industry sectors revealed that 63% of senior managers confessed to not knowing their customers in a full and any meaningful manner.

Isolating and studying the criteria utilised in the selection of companies, products, services and people enable effective and efficient strategies, tactics and campaigns to be formulated, documented and implemented.

With little or no direct contact between suppliers and operations executives, line managers, operatives and “hands-on” utilisers of products and services it seems reasonable that for the latter to believe customer service is poor or completely lacking. They typically conclude that specific suppliers “don’t care” and “don’t understand”. In the absence of personal interactions, it is indeed difficult, if not impossible, to convey a sense of caring and understanding. Emotions often influence, determine and overwhelm perceptions.

Clearly, greater effort is needed for all those in business to reach out, connect with and to engage with existing, prospective and past clients.

MULTIPLE CONTACT POINTS
The mobility of the contemporary workforce contributes to the fracturing, termination and fluidity of relationships.

Personal rapport is with the individual, including those who leave the business. Respect and demand for products, services and brands are therefore vulnerable and exposed to rapid dilution. Dedicated efforts are required to establish, enhance and to sustain multiple, often interactive person−to−person and cross-departmental interactions.

To not to do so can literally see business, revenues, profits and relationships walk out the door as the employees leave positions and the employment with a company.

The loss of momentum and continuity can be, and is, taxing on revenue and necessitates the redeployment of considerable resources (time, money, people and equipment) to address and redress the circumstances.

Business purchase decisions can be, and are often, materially influenced or determined by external consultants. Therefore, ongoing relationships with them are imperative.

Likewise, intimate knowledge of who specifically scripts tender documents accords strategic advantages. Certain, high-profile international IT hardware and software suppliers dedicate some 25% of their workforce to be on secondment to work within client companies, assisting and complementing staff members to outline criteria for major capital and consumerable expenditures. Very smart. Some leaders like to not only know intimately the decision makers but to also be, figuratively, “at the table,” when decisions are being made.

Imagine the inherent power of product and service specifications nominating particular brand names and model serial numbers.

BUSINESS−TO−CONSUMERS
The scenario differs little with relationships involving consumers.

Females, typically the sole or joint heads of the households, fulfil the primary role of customer in up to 70% of instances.

It is she who transacts the purchase. Consumption, enjoyment and satisfaction often lie with other family members. Few direct channels exist to provide direct feedback to suppliers from the latter group. Yet most importantly, they are the very people who evaluate and nominate specific brands, products, services and outlets. Alas, the unseen power behind the throne.

For example, up to 55% of the criteria applied in the selection and purchase of a “family motor vehicle” are determined by the children. Some younger, and discerning consumers simply won’t be seen “dead” in certain brands of motor vehicles.

For the disbelievers, it is well to ask the mothers of three-year old girls about who decided which garment was to be bought – and which colour.

TRANSGENERATIONAL INFLUENCERS
Managing Director of the Grand Cinemas network, Allan Stiles knows well, and closely studies his customers, consumers and spheres of influence.

He is alert to the influence and essential roles played by grandparents and grandchildren. Who have a material impact on the sale of soft drinks, popcorn and chocolate.

Furthermore, the scheduling of screenings take account of these contributors to decisions.

Allan Stiles and his team members are forever vigilant in providing clean, appealing and safe ambiences. Sometimes the core product, the movie, is a secondary consideration or determinant.

NO ONE IS IMMUNE
No entity, private or public, product or service is immune to the ever−changing influences of customers and consumers.

In today’s marketplace many businesses are in earnest battles to win the hearts, minds and money of existing, prospective and past clients.

They might need to take note, to learn and profit from a basic tenet of military strategy:,

“KNOW THE ENEMY”... customer, consumer.




Barry Urquhart, Managing Director of Marketing Focus, Perth, is a former lecturer in Management and Marketing at the Curtin University of Technology in Australia. He is an internationally recognised facilitator of interactive strategic planning workshops and conference keynote speaking.