By Dave Kahle

Knowing Your Customers

Again, this week I encountered what has become a common event.  I was called in to consult with a client.  Sales were flat for too long, and the client knew that something had to be done.

One of my first questions was this: “What do you know about your customers?”  Once again, the answer was a glazed look and some mumbling about information in the credit department.

Trying to refine a sales system without adequately knowing your customers is like playing pin the tail on the donkey — you’ll stumble around blindly unless you’re lucky enough to stick something by chance.

On the other hand, if you become good at this critical portion of your sales and marketing efforts, you’ll be able to focus your sales and marketing efforts in the sharpest, most effective areas.

I know you’ve heard it before.  The expression “know your customers ” has been proclaimed from the pages of marketing books and the lips of marketing gurus so often that it has become a cliché.  However, it’s been my experience that, while everyone gives lip service to the concept, very few businesses really practice it.

As a result, too many businesses scatter their sales and marketing efforts in a helter-skelter attempt to build the business.  They squander their marketing resources and struggle to focus their resources where they will bring the best results.  Sales remain flat, and confusion and frustration grow.

Let’s begin by defining the terms.  “Knowing your customer” means developing several complimentary processes for acquiring and using important information about your customers, and then regularly and routinely implementing those processes.

Knowing your customers is one of those principles that has value at almost every level of your system.  Sales people can use knowledge of their customers to manage their time more effectively and to refine and deliver attractive proposals and presentations.  Sales managers can use it to direct sales people to the highest-potential customers.  Sales executives can use it to make effective decisions about products, pricing, and sales processes.  Knowledge of your customers is the most powerful of all a company’s accumulated information.

Your ability to know your customers begins when you develop a computer database in which you routinely collect useful information about your customers.  If you have a CRM or ERP system, you probably have the mechanism necessary to manage this.  If not, then you must create an account profile form, and see to it that it is used regularly.

How to Create an Account Profile Form

An account profile form is a document full of questions, or more precisely, spaces for the answers to questions.  The questions are designed to reveal details about each of your accounts.  The form is the document on which you store that useful information.  It can exist in a couple of different forms – paper or electronic.  If you are using CRM software, then the account profile form can be several screens for each account.  If you’re not computerized, then it needs to be created on paper.  Regardless of the media, the principles and processes are the same.

In addition to the information about the business to whom you are trying to sell, you need another version of the form for each of the key individuals within those accounts.  That’s called a personal profile, and it is the mechanism you use to collect personal information about the key decision makers.  You apply the same concepts and principles to the task of collecting personal information about the key decision makers within your accounts.  You may end up with one document for the company and five to ten personal profiles for all the key people within that account.

Here’s how to create this important systems tool.

1. Identify each of the markets to which you sell.

You may sell to a number of different kinds of customers.  Each different type of business should have its own version of the form.  For example, I sold to hospitals, large outpatient clinics, and independent laboratories.  The differences between these institutions were enormous, and each had a different business structure, set of needs, and decision-making apparatus.  So each warranted a unique account profile form.

2. Create a list.

Begin the form by listing all the things you’d like to know about your account.  For example, you might find it useful to know the number of employees, the SIC code, which competitors are currently involved in the account, who your customer’s customers are, what products they manufacture or what services they offer, and so on.  The key is to determine the information that is useful to you.

Then, create the personal profile.  This is the form on which you store information about the individuals within each account.  List all the things that you’d like to know about the important individuals within that account.  This is generally personal information such as where they went to school, their interests and hobbies, who you may know in common, the organizations to which they belong, and other similar information.  Take several days to develop an exhaustive list, writing down ideas as they come to you.

3. Edit.

Now, edit your list of ideas down to those pieces of information you consider most useful.  You probably can’t collect everything, so focus on the information that is most useful to you.  Start with the basics — name, title, and so on, and add the important business information — like how much of each of your product categories that account purchases each year, what kind of business it is, and what the reporting relationships and decision-making processes are.

4. Design the form.

Now, create the form with spaces for each of the answers to the questions you listed above.  Don’t get too involved in creating the perfect looking document.  No matter how thorough a job you’ve done, you’ll probably revise the form in a few weeks after you have some experience working with it.  So, design something that is workable for now, and let your day-to-day use direct the fine-tuning adjustments that you’ll make along the way.

If you’re working with a computer and a contact-manager program, you may still want to start with a paper form.  When you believe that you have all the right pieces of information, you can then incorporate it into the contact manager.

5. Implement.

See to it that the form is used to collect information on every sales call.  This doesn’t mean that you, or your sales people, sit down with pen in hand and interrogate every customer, although a little of that is appropriate.  You can generally collect the information on the account portion in a formal session.  When you do, your customers will generally be favorably impressed with your professionalism and thoroughness.

That formal approach will not work for the personal portion.  With this piece, you’ll need to review the form before each sales call, solidifying in your mind the information you already have and determining that which is missing.  Then, in the course of the conversation, attempt to listen specifically for those pieces of information that you’re still lacking.  Completing the personal profile form may take months of sales calls.

6. Refine.

Review your master form from time to time and revise it as you get experience with it.  You’ll soon determine what information is impossible to collect, and what really isn’t useful.  If you’re using a computer, now is the time to load the revised form into your contact manager.

7. Refer to it

Store the information in a database within your organization.  It is not enough to have your sales people keep the information on their laptops.  Remember, this information is an asset of the company, and needs to be maintained in the company’s computers.

From time to time, review the information you have collected on your customers.  If you’ve done a good job of this, not only is this information helpful for your sales reps, you’ll find that it will bring you good, grass roots information about your customers.  You can then use that information to help you make good marketing decisions, to continually refine your offerings to your customers, and to more precisely target your sales efforts.

Some variations

An account profile form is not the only way to collect information about your customers.  Here are some other options:

Hire a telemarketer to survey your customers.

         If you don’t have an outside sales force capable of collecting this information, use a telemarketer.  Follow exactly the same process as outlined above.

We conducted a program with an office park developer who was building a new building.  Before he began to promote the new building, he wanted to understand what his current tenants thought about the site, and how they felt about their relationship with him as landlord.  He wasn’t able to see them all.  So, we developed some survey forms, hired a telemarketer, called and encouraged them to talk over the phone.

As a result, the developer modified the message he was making to his prospects.  He’s been exceptionally successful.  Today, in an overbuilt market, he continues to hover around 100% occupancy for his buildings when there are vacancies in office parks all around his buildings.

This is a relatively simple task.  Develop the questions that you’d like to ask your customers and create a survey form, similar to that discussed above.

Then hire a part-time, temporary telemarketer to call each of your customers.  Depending on the number of customers you have, this can be an annual process.  The script should be very polite and to the point.  “Hi, this is so-and-so from X company.  We’re doing a short survey of our customers.  Will you help me?  I just want to take a minute of your time.”

Make a simple, straightforward, polite request for help — it’s probably the strongest persuasive tool that you have.  You’ll be amazed at the results.

You’ll invariably experience a positive response to that.  You’ll learn all kinds of things by the simple procedure of hiring a telemarketer and asking your customers.

Send them a survey.

We used this technique with a large retail store.  The store had a mailing list of over 35,000 customers but knew very little about them.  We randomly selected 500 and sent them a survey.  After we studied the results, we made some changes in the advertising program in order to appeal to the customers in the way in which they indicated they wanted to be dealt.  My client did not spend any more money, rather, he just spent it differently.

In the first three months following these changes, he had a record quarter.  The next quarter was another record and so was the entire year.  He had record sales years — almost totally because he changed his advertising based on what his customers told him.

The procedure to develop a written survey is very similar to that discussed above.  Develop all the questions, have someone edit and comment on it, test it on a small group of customers, then finalize it.  There are lots of survey websites that can help you.

Write a short, polite email explaining why you’re doing this and ask for your customer’s help.  If you can, offer some incentive for helping.  In the example above, we offered a $5.00 gift certificate.

Then send it out to a representative sample of your customers (or all of them) and compile the responses.

Again, it will be helpful to have a professional help with the language and choice of questions.

These processes, when executed well and repeated with discipline will bring you a continuous stream of useful information about your customers.  That information is the first step in building a successful sales and marketing approach.