Tuesday, September 15, 2015

Your Business - Customer Identification and Valuation

One fundamental question I ask when I start a training session targets deep into the first principle: customer identification and valuation: Who is your customer and what does your customer value, value defined as any product or service your customer wants and needs that’s delivered on time hassle and defects free. 

That’s one lung full of words that basically point toward two words: Customer and Value.



Before anyone answers, I tell them that the customer can be the consumer and a variety of other individuals. In the oil fields, I get answers like the company they work for, such as Chevron or Aera, or the people that represent those that signs the job tickets.

In one of these sessions, the owner of the company stood up and told them that a customer can virtually be anyone that requires you to perform a function. It could be your immediate supervisor, a co-worker, a safety guy, the accounts receivable specialist who needs clear and precise error-free job tickets.

I interjected that your wife is a prime example of a customer, in which I repeated the definition of value as “any product or service that a customer wants and/or needs delivered on time hassle and defects free.”

As I recite this phrase I get immediate nods and see faces light up processing this information reflecting upon how this directly relates to them, not knowing any of what these people are thinking. Then out of the blue, one of the employees said, “It’s like when I ask my son to take out the garbage. I’m the customer and I value a quick response and get pissed off when he lags.”

More nods.

I then proceed to tell them the story of the NEW RESTAURANT IN TOWN.

From word of mouth, you hear about a new expensive restaurant in town that serves supposedly the best juiciest steaks around.

Everyone’s read about them on the newspaper; heard about them on the radio; saw them on television, a fancy place with hot looking waitresses with happy faces.

So you decide it’s time to check this out for yourself; you’re a steak kind of guy who enjoys this kind of dinner.

You call for reservations, clean up after work, wear your best clothes, as with your beautiful wife.

Reservation is at seven o’clock.

You show up ten minutes early and was asked to take a seat, and was told it would take a few minutes to be seated. Unfortunately, it drags on. You’re finally called to a table around 7:45 p.m., a good 45 minutes late.

You’re pissed because clearly you were lied to; but, you’ve cooled down now that your wife and you get a nice table.

The waitress promptly serves you with clean setting, a smile, ice water with lemon in it, and a plate full of freshly baked bread.

She gives you a couple of menus and tells you the special; first, a nice 20 oz. prime rib with all the fixings and second, wild salmon grilled to perfection. Okay, you like what you hear so you order the specials about $25 a plate.

Wow you think, it’s real expense but you don’t mind. Good food is on its way, so you order a nice tall draft and the wife a nice glass of wine.

Waitress tells them the expected wait is about 20 minutes that extends to about an hour.

You know this because you checked your watch when the waitress mentioned 20 minutes and you wanted to hold her to it. But then, okay; bygones are bygones.

Food’s supposed to be good and what you get are two plates of cold, under cooked meat and fish with over cooked vegetables and watery potatoes.

What a bummer. It turns out to be not only the worse meal you’ve ever had but found out when you were given the meal to be around $150 dollars because your ordered three beers and glasses of wine at $15 each with an additional 20% gratuity already built in with the bill.

Conclusion: Within six months the restaurant shut down due to lack of business.

Value is what drives a customer to buy.

So the restaurant may have garnished the fortunes of initial buyers and even the investors who believed in the idea, but due to poor products and service it could not sustain repeat and even new customers, due to repeated “NOT delivered on time and multiple incidents full of HASSLE and DEFECTS!”

As a business operator, you focus on what you produce in products and services that people are happy to pull out cash, check or credit card to pay.

From where you sit, up to now, you’re either barely surviving, breaking even or making real good money.

Regardless of this position, the question you need to ask yourself is how much time have you spent on thinking about who your customer is and what he or she values?

Are you living off a steady stream of new, repeat, or few to no customers?

Do you know what truly brings them to you?

Are your products or service truly unique or better than competition?

Are you as good as what you think you are or is this a perception on your part that could prevent you from really earning the business you truly deserve?

These are compelling questions, and you need to sit down and find answers for the sake of your company’s immediate and future health.

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