Sooner or later the markets will be coming back and capital investments towards technology will begin to increase. So the question is … “when is the last time you surveyed your customers and segmented them?”
I am sure you can slice and dice your current customer base a variety of ways, but recently I came across three basic costumer segments identified by By Professor Gary L. Lilien, Penn State Co‐founder and Research Director, The Institute for the Study of Business Markets.
Gary outlines three typical customer segments that are quite apparent during this current financial period.
Value Buyers:
They are those customers of yours who need and value both your core offering and the service, support and expertise you wrap around that core offering.
They may grumble about your price (which customers don’t, especially in tough times?), but, eventually they understand the value you provide them (versus what your competitors provide) and, most importantly, they are willing to pay for it because you helped them understand that value.
Price Buyers:
These are often your most sophisticated customers who know what they need, how to use your core offering, want it delivered to them when and where they need it with minimum hassle.
They don’t want to waste time with your salesforce or service reps since they have all the expertise they need in house (or at least they think they do). And they sure don’t want to pay a price premium for the services you are “throwing in.”
Finally there are the … Pigs:
Pigs are your customers (come on, you know you have them) who occupy your sales and tech service people with all sorts of support requests and demands, probably pay invoices late, and then
demand to pay no more than the base, for your offering.
In other words they want Value Buyer offerings and service at the price the Price Buyers are willing to pay.
If not managed properly (especially in this economy) Pigs can ruin you. If you give in to them, they will provide a reference or example for your loyal, Value Buyers, who, rightfully say “Why should I be a fool and pay more than Porky over there?”
If you do have Pigs, then you have three choices:
- Turn the Pigs into Price Buyers (deny them the service they demand and explain why)
- Turn them in to Value Buyers (by demonstrating and documenting the value they are receiving relative to what they would get from your competitors for your offering, including the service and other support you provide)
- Fire them. Now how do you fire a customer? (The euphemism is “customer divestment”).
Repeat after me…you provide: variable offers at fixed prices. Variable offers at fixed prices. There‐‐notice I did not say do not serve them‐‐I said, only offer them either the value alternative with associated services or the commodity alternative with no option for associated services.
That’s it‐‐‐
