Module 4 - Who are your Customers and What do they Need?Shai Vyakarnam and Simon Pratten

Breakout is an Epi-V initiative, delivered by Transitions.

Totally Totally newnew

ExistingExisting

ExistingExisting TotallyTotally new conceptnew concept

AA

CC

DD

BB

You have to sell something to someone to make a living!

TechnologiesTechnologies

MA

RK

ET

S a

nd

M

AR

KE

TS

an

d

CU

ST

OM

ER

SC

US

TO

ME

RS

Igor Ansoff, 1957

Segmenting the market

Benefits being sought

Technology solution

Service levelsPricingCommercials

Database of target clients

Typical sales curve – 80/20 rule

1 2 3 4 5 6 7 8

Pile of invoices for top five clients

CustomerCustomerAA

CustomerCustomerBB

CustomerCustomerCC

CustomerCustomerDD

CustomerCustomerEE

The Seller, the Buyer and the DMU

Is it a competitive price?Is it a competitive price?Can this supplier beCan this supplier be

trusted?trusted?

BUYERBUYERSELLERSELLER

D M UD M U

How about maintenanceHow about maintenanceand spares?and spares?

Will my customers like it?Will my customers like it?

Can it be Can it be upgradedupgradedtechnically?technically?

Will unskilled Will unskilled peoplepeoplebe able to use be able to use it?it?

The networking concept

ColleagueColleaguess

SupplierSupplierss

FriendsFriends

FamilyFamily

TradeTradecontactscontacts CustomerCustomer

ss

The Seller, the Buyer and the DMU

No. of Employees Average no. in DMU

Average no. of contacts made

0 – 200 3.42 1.72

201 – 400 4.85 1.75

401 – 1000 5.81 1.90

1000 + 6.50 1.85

The Seller, the Buyer and the DMU

Members of DMU (insert names in boxes).

Most important in box 1, thereafter in declining order of importance

DMU Member1 2 3 4 5

Statement1. Is aware of me and the company2. Is aware of our product/service3. Understands how products/services will

help4. Believes in the product/service5. Supports us 100%6. Has a specialist need7. It has been demonstrated how specialist

needs can be met8. General relationship is good

The Johari Window

OPEN

AREA

BLIND

SPOT

FAÇADE UNKNOWN

SUPPLIER

Knows Doesn’t knowKnows Doesn’t know

KnowsKnows

Doesn’t knowDoesn’t know

BUYER

Example spidergram of relationships

Customer GCustomer GOK at presentOK at presentpossible growthpossible growth

Customer FCustomer FInfrequent but profitableInfrequent but profitable

Customer ECustomer ENot so profitable, but you play Not so profitable, but you play

golfgolf

Customer DCustomer DLarge potentialLarge potential

but very bureaucraticbut very bureaucratic

Customer CCustomer CNew personNew person

has replaced your contracthas replaced your contract

Customer BCustomer BHighly Highly

profitableprofitable

Customer ACustomer ALarge volumeLarge volume

Customer HCustomer HLarge potential customerLarge potential customer 1010

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As it is nowAs it is now As it should beAs it should be

From core science/product to solving problems for clients

Science

Technology

Applications

Markets – commercial advantage

Customers – viable applications

May need infrastructureLike electricity, construction industryManufacturing, trained labour force

Distribution channels

Unmet needsPush

Pull

The product/service as a total package

GuaranteesGuarantees

PackagingPackaging

DesignDesign

ReliabilityReliability

After-sales serviceAfter-sales service

Administrative issuesAdministrative issues

Repurchasing procedureRepurchasing procedure

Image/ReputationImage/Reputation

PricePrice

QualityQuality

Customer ServiceCustomer Service

etcetc

e.g.e.g.

CORECORE

The actual productThe actual product

or serviceor service

and its functionaland its functional

performanceperformance

Customer Service Analysis

Importance to Retailer

Low Medium High

ElementsPerformance

Poor Satisfactory Good

Delivery

On-time delivery

Information

on order status

Stockouts

Flexibility

Order completeness

Damage rate

Key CompetitorKey Competitor CompanyCompany

Marketing mix

Summarising a marketing strategy

Product

Place

Price

Promotion

Processes

People

Physical Evidence

FeatureFeature BenefitBenefit BenefitBenefit

PhysicalPhysicalcharacteristiccharacteristicof the productof the productor serviceor service

‘‘whichwhichmeansmeansthat’that’

What it doesWhat it doesfor thefor thecustomercustomer

‘‘whichwhichmeansmeansthat’that’

If requiredIf required

Changing a feature to a benefit

Benefit analysis for window cleaner

Call regularly

Fully insured

Long established

Keen prices

Your house appearance is always top class

You have no risk should accidental damage occur

Can be trusted to do a good job

Value for money

Obvious

Show certificate

Quote neighbours’ comments

Quote alternative cleaners’ prices

FeatureFeature BenefitBenefit ProofProof

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But what are the unmet needs of your customers?

• Identify new products and services in terms of the benefits to your customers

• Who are the most likely to be receptive to your new products? Why?

When markets are changing

Positioning

High

Low Pr

ice

rela

tive

to c

ompe

titi

on

Value for money relativeto competitor

High

Low

Caused by EDLP

Looking for new marketswith current technologies

New markets

• You have to define what these are

• What is the scope and scale of them – in other words what is the value chain in the market?

• How do they “behave” – characteristics

• Leads to segmentation

• Gain an understanding of channels

• Is the market in pain? Can you provide an aspirin?

BUYER BEHAVIOURRule of thumb

Innovators Early Early Late Laggards Adopters Majority Arrivals

2.5% 13.5% 34+% 34% 16%

Reducing risk through social capital

Ed Crawley (MIT)

Soren Lund - Lego

Family owns Lego

Prof at Florida

QinetiQ – senior management

Rolls Royce BAe

MohanVCs

Legal

Sen Govt in UK

Senior EU

JRA Tech

AlanCandace

Shai