As you no doubt remember by now, once a month I join some other branding experts to tackle a marketing/branding problem ala the BrandingWire collaboration.
This month's BrandingWire takes a slightly different twist. A Canadian IT company has asked for our help. So we wade into the B-to-B world.
Here's a quick peek at them:
Offerings (according to them):
They'll do just about anything from proactive maintenance to 24/7 trouble shooting to setting up new users, buying equipment or helping you with software decisions. They are also getting into Green IT – from managing energy costs to eliminating packaging waste.
They are (my words, not theirs) like an IT department who happens to office outside of your workspace.
The money part:
You can engage them in one of two ways. You can buy a maintenance contract or buy their hours ala carte. The contract gets you a discount on services rendered.
As you would guess, businesses who use IT but are too small to have their own internal department.
Conundrum (again, their words):
It's difficult to convince small businesses that our services are worth the amount we are charging – however, to draft a legal document, they're more than willing to a pay a top notch lawyer $500/hour. Customers view IT issues as a pain (i.e. my email is down again) instead of as a critical part of their business (ie. without IT, we can't function as a company).
Customers just don't always understand the value of IT services.
Ahhh, there's the rub. We don't get to decide what our customers should value. It's annoying, but true. We have to figure out what they need/want. Once we serve up that…we provide value. We can provide it but we can't define it.
But there's a flip side to this truth as well. Our clients should provide value to us as well. For it to be a long-term relationship of value, both sides need to benefit and feel good about the value they both give and receive.
But let's look at the client's side of things first.
One of the most significant keys to smart branding is knowing the heart and mind of your customers. Once you really understand where they're coming from…you can talk to them from that place.
Without talking to them (which is dangerous at best) here's what I suspect the IT customers feel.
- They're scared of IT. They know they can be crippled by a virus or something else they don't understand.
- They hate being so dependent on someone outside of their walls.
- They're embarrassed that they don't know more than they do.
- They hate the down time when they do have a problem.
- They don't understand it, so paying for it scares them. (Am I getting taken?)
- They don't want to pay for something they don't need. That's why the contract scares them. Are they just spending money they shouldn't?
- They're petrified that something catastrophic is going to happen and it's going to cost them an arm and a leg.
- They've been taught that extended warranties and maintenance contracts are fool's gold and benefit the seller much more than the buyer.
So that's where they're at in terms of IT in general. But how are they feeling about the IT company?
One of the IT company's stated goals is (in their words) "help our clients understand why our services are worth the price tag."
That's a little worrisome to me. Again, we're doing this in an artificial vacuum. My guess is that they have a mixed clientele. Some who should be clients and some who should not. And it's the who should not's that are causing them trouble.
But, if we were sitting in the room with the client, I'd ask them to describe the clients who don't object to the price structure. I'm guessing they have some. Then, we'd profile those clients based on industry, size, type of work the IT company does for them, scope of the projects, clients that can make a fair and reasonable profit from, etc.
When we were done, we'd have built a profile of the types of businesses that are a good fit. Good from the IT company's perspective in terms of retention and fair profit. Good from the client's side…trusted advisor, a value, and someone who relieves their worries.
Then, we'd go through their client list and score each client against the profile. Anyone who got a C or worse should be weeded out. They're not a good fit.
Anyone who receives a B- or better should be cultivated and nurtured.
We'd do the same thing with their prospect list. There's no reason to waste time and money talking to prospects that are not a good fit.
Once you know who to talk to and how they're thinking and feeling, deciding what to say to them comes much easier.
I will leave those details to my BrandingWire compadres. Check out their posts and welcome our three guest bloggers as well!
This plays to your experience and wisdom, I can see that 😉 Focus is one of my recommendations as well, in the form of questions back to the IT services provider.
Drew, Very wise words there! I like how you’re reminding the company that they need to select their customers as well, instead of just taking all comers and trying to change the viewpoints of the reluctant buyers.
There are always some customers who constantly want lower prices, or need substantial proof that a service is worth what the company says it is… those customers are also the ones who take a lot more time to sell to, and then have a lower return on investment.
You’re right that the company should focus on finding its ideal customer, and then concentrate on marketing to that demographic. Perhaps they could use your tips from “Write for Real People”?!
You and I share the view that one of the most often overlooked elements of marketing is the customers point of view. It’s as though people truly believe they can get anyone to buy anything.
Where do you think that misperception came from?
One of the consistent themes in your posts is the idea of going narrow but deep. I believe in that so wholeheartedly.
So, I’m not at all surprised that you tried to help steer the IT company to understand that they can’t be everything to everyone.
It seems to me that many companies completely miss the “know your best customer” lesson. Do you see that as well?
Do you suppose that comes from our mass media mindset?
I like the way you simplified the process of helping companies find their ideal client. Most business owners I work with truly believe that they “leave money on the table” when they focus on a target market. It takes work to convince them of the value of doing so. But those who do focus realize very quickly the value of that exercise. As Katie pointed out, those outside of the target usually are the hardest to please and take the most energy and resources to satisfy.
Good or bad…one of my gifts is that I’m simple. ;-}
I like (and need) to take the complex and shrink it down so it’s manageable.
And the business owners you work with are right. They are leaving money on the table when they turn their back on potential clients. But the part they don’t see is that money is tainted with the drain that comes from being the wrong fit.
The wrong customers cost us time, money and employee satisfaction. Sure…cash in your pocket today. But as you know and I am sure teach — that’s dangerous short term thinking.
Drew: I’m in complete agreement with your strategy to identify your best customers and then look for more of the same. Then I’d make sure I knew exactly why your good customers like YOU. That’s what I’d promote to prospects. But since those favorable attributes are probably what almost all your competitors are claiming they do, I’d have to find a unique way to state and package your claims. Perhaps the filtering process of selecting market segments will also change your skill mixture, application expertise and/or approach to market penetration. Anyway, you’re right on by starting with customer profiling. Martin
I agree with Debra when she agreed with me… I think companies do not want to focus tightly on a specific target market because then they might miss out on all the potential customers that are outside their target market.
It has happened to me. A couple years ago, I went after a client who did not fit my target market. This client ended up sapping more of my time than any other client I have ever had. A quick and harsh lesson.
Drew – Always good stuff.
“We don’t get to decide what our customers should value.”
AMEN! This realization is always more AH-HAH than it should be. I also find people reticent to differntiate and take a position if it means they will be turning their back on a specific client.
Your analysis of why you should do this is very helpful.
Do you find that clients can articulate why they like a service provider?
Would you recommend that a third party secure these insights or can a company gather this themselves?
I think you and Debra are dead on. People are petrified of leaving money on the table.
But as your own experience has taught you…the price paid for that lesson is a very painful one. in the end, it costs us fair more than we get paid.
I wonder if that is one of those life lessons that has to be experienced to be believed?
Have you discovered a way to help clients avoid the painful and expensive lesson of taking a client who is a bad fit?
Or is it, as I asked Katie, one of those lessons people have to learn the hard way?
Well, I didn’t believe it when someone told me. But, I was lucky enough that I experienced this early in life–rather than later when there is more money involved.
Sadly, I think this is a lesson that many people have to learn the hard way more than once! So if you learned it with one dose, consider yourself both smart and fortunate!