The competitor to be feared is one who never bothers about you at all but goes on making his own business better all the time. A great quote from Henry Ford. Yes, your best competitors are making their business better and better all the while. And their growth is all about their marketing strategy. Of course, if you pay attention to competitors, you know this. That is what Google would tell you if they were marketing your company. They would also tell you to pay attention and to be different for each customer.
And pay particular attention to your best and long-term customers.
Michael Schrage writes about a large bank that discovered that 10 percent of their customers were using their online banking service every day, while the remainder were using it about once a month.
If the bank brought in a consultant to evaluate this, his first conclusion would be for the bank to stop spending so much on the service for so few people.
It was, after all, appealing to only the innovators and the early adopters. After a little analysis, however, the consultant would show this small group also accounted for about 70 percent of the bank’s deposits.
The ultimate goal of all the points I list below is this: eliminate the fluff from your marketing strategy and focus only on the things that work.
It is often easy to look at an idea distribution curve and tell that the most profitable place to be is right in the center, where all the customers are.
However, that doesn’t reflect reality most of the time. Often, the valuable sections of customers are located to one side or the other.
What this bank realized is that by focusing on this small slice of innovative customers, the bank may be able to attract even more highly profitable, risk-seeking customers. And leave the much less attractive customers to seek out competitor banks.
Here is another example where simple business processes overwhelm and, often, totally lose customers by creating terrible experiences for them. This is an actual letter sent to a bank by an 86-year old woman. The bank manager thought it amusing enough to have it published in the New York Times. Sound familiar?
Dear Sir:
I am writing to thank you for bouncing my check with which I endeavored to pay my plumber last month.
By my calculations, three nanoseconds must have elapsed between his presenting the check and the arrival in my account of the funds needed to honor it
I refer, of course, to the automatic monthly deposit of my entire pension, an arrangement which, I admit, has been in place for only eight years.
You are to be commended for seizing that brief window of opportunity, and also for debiting my account $30 by way of penalty for the inconvenience caused to your bank.
Related post: An Actionable Approach to Target Market Segmentation
My thankfulness springs from the manner in which this incident has caused me to rethink my errant financial ways.
What would you do, as bank President, after receiving this letter? Would your actions include looking closely at some of your ‘simple’ business processes?
The bottom line
That’s the thing, customers are never all the same. Neither should be your business practice applications to those customers.
Differentiate your customers. Find and know the group that is most profitable for your business. Find out who your long time customers are. They are the ones most likely to be your advocates. Find the group that is most likely to be moving into this most profitable group.
Figure out how to capture the hearts of these groups and focus less on the rest. Review your best practices and see if you could simplify some to make them better and more convenient for these groups.
Don’t let your best practices and/or your marketing cater to the masses. Cater to those customers that will make the difference to the real success of the business.
Remember this above all else. Don’t just keep up with your competitors. Always strive to leapfrog.
Not just best practices but next practices.
