If your company is in commercial or industrial sales, you are familiar with changes in market forces. Sometimes your company is at the forefront and experiences rapid growth. Sometimes you just step on the water: you don’t lose ground, but you don’t make any measurable gains either.
Revenue is a barometer that reports on how the market measures the effectiveness of your sales, marketing, offerings, policies and business operations. And customers are the heart of revenue. Customer feedback is a tool that assesses where you stand, why it’s right, and where customers want you to make a change. Letting your customers tell you what they expect from you will yield a wealth of information and help your company manage its footprint in the marketplace. Three important business areas of feedback to help shape are:
- Customer retention.
- Revenue growth.
Competitiveness, customer retention and growth are constantly being challenged by market forces. But the change in market forces that is easy to predict but difficult to plan is the retirement of the Boomer generation.
What it took to successfully compete, sustain, and grow in the past will be obsolete once the generational “switch of guards” reaches its tipping point in your market. It will feel like the business version of Body Snatching Invasion.
Changing generations of guards. When they first enter the workforce, Generation X members are characterized as spoiled children who want everything to be left to them. Millennials are candid about putting their personal life above their day job. They were each easily dismissed when the oldest of their generation got into entry-level jobs. Now you have made your own observations of how each group is changing the workplace. Today, Gen X-ers have matured and filled key roles, and Millennials are rising through the ranks. Maybe you are alone.
The oldest Baby Boomers started leaving the workforce almost ten years ago. Owners of boomer generation companies are starting to leave in droves with every hiccup in the economy either through closing their companies, selling out to competitors (or private equity groups), or handing over the reins to Gen X-ers who are groomed for the role and waiting for wings.
Competitiveness. Any change of leadership in the company you compete with and subtly sell it lets your company know that status quo business practices may no longer create status quo selling. This is a valid concern for leaders of all generations. But since Boomers are used to making other people flexible to accommodate them, the main message is this:
If you’re a Boomer who isn’t quite ready to sell or retire yet, then stay agile and be aware of the changes that are coming. wash you.
- Your competitors and customers will be increasingly owned by Gen X leaders.
- Generation X makes decisions differently than your competitors and Boomer customers do.
- Individual competitors may change overnight from familiar adversaries to strangers following a change in leadership (or ownership).
Change also puts new demands on what it takes to retain existing customers. New leaders in your customer’s company may have different expectations from their vendors. Like new owners, they tend to evaluate their inherited vendors with an unsympathetic look. Without reaching out regularly and following why key customers buy from you, there may be a shift in expectations that recategorizes your status quo business practices from “good” to “inadequate.” And that shift might happen without warning.
The message here is:
Reach out and periodically ask openly – where key customers see room for improvement. You don’t want to lose touch because of a recent incident when you didn’t know your company was a source of repeated distractions. Instead of making assumptions about why customers are loyal, ask key customers why they are loyal, ask what would harm the relationship, and ask what changes they would like to see. (You’re not obligated to follow through on all of their suggestions, but it’s better to know than not to know what customers think and want.)
Instead of making assumptions about why customers are loyal, ask key customers why they are loyal, ask what would harm the relationship, and ask what changes they would like to see. (You’re not obligated to follow through on all of their suggestions, but it’s better to know than not to know what customers think and want.)
Without learning why your company is winning new sales and retaining existing customers, you undermine your ability to create a growth plan based on the factors you can influence. Without clear insight into how customers think, your company runs the risk of becoming an underwater economic plug that rises and falls as the economy as a whole goes. The spike masks how well the company is run as some customers are forced to lower their standards and buy from whatever supplier is available. Conversely, a decline indicates weakness; fewer decisions are made, competition is heating up, and customer standards are rising. Moving in line with the economy is not your only option. If you have competitors who are dealing with economic downturns better than you, they may not just be worse off than you. Instead, they may be more diligent in assessing and adapting to changes in the way customers make decisions.
At the center of every selection decision is the decision maker. Regardless of which generation the decision makers and influencers represent at your customer’s company, you need to stay in active communication with the people who know you best. One step you can take before the next downturn occurs is to listen to how they selected vendors during the last drop.
For a company that sells through dealers, how does your dealer drive sales during periods of slow demand? What could your company do differently to get better dealer support?
For companies competing for projects, how are competitors evaluated (time & material costs, project prices, full service offerings, other approaches)? What innovations do customers see that they recommend all competitors offer?
For companies with long-term relationships, are your customers courting your competitors with attractive offers? What changes should you make to keep your relationship resistant to poachers?
The message is here: Learn how your customers make decisions in difficult times. This will help you take better control of your company’s growth in good times and bad. No one is surprised to hear customers ask for lower prices. Even if it’s not a driving factor, the pressure to keep prices down still increases the urgency to lower costs by optimizing your technology, operational strategy and dealings with your own suppliers.
And remember, any downturn will result in a push to resign until the Boomers all retire or sell their companies. Look forward to noticing changes in leadership at the company’s competitors and customers over the next ten years.
By actively monitoring what your most important customers think and want, you’ll always know how to:
- make yourself easy to do business with,
- gain ongoing customer loyalty,
- and chosen in difficult times.
Boomers have been a force to be reckoned with for decades. For better or for worse, business would not be the same without them. The challenge is surviving the transition.
Ann Amati, Principal, Intentional Strategy Consulting, helps companies use guidance from their current and past customers to increase future sales. He has a 20-year track record of using in-depth interviews to create positive turning points in his client relationships with their customers.
In her national practice, Ann has clients who sell millions to companies that make billions and sole practitioners / LLCs with simpler practices. He is the author of “What Your Customers Don’t Tell You What You Need to Know,” a collection of case studies, tips, and tools for companies in commercial and industrial sales.