Know your customer to grow sales and trump competitors

Who is a customer? Whenever I ask delegates in my session that question, I almost always get one or both of these responses.

“A customer is the end user of a product or service” or, “A customer is the one who trades his money for the product or service.” Whereas both have elements of truth in them, they are also narrow and misleading.

Understandably, the responses are borne of a mind filled with academic theory of who a customer is.

The business world, however, is a bit more complicated; therefore businesses must be clear who their customer is as this will determine the most effective way of selling to him.

And so to the latter response, I ask, “Do you all have a free e-mail address?” “Of course!” the class responds indignantly. “And do you consider yourselves customers of Yahoo! and Gmail?” I prod. Pin drop silence follows.

I can almost hear the minds creaking for what seems an eternity, but is only a few seconds, before insightful understanding spreads across their faces and a bust of laughter follows. “Yes, we are.”

As for the former response, it’s even more intriguing. If the business model of a company is distributor dependent, for instance, it follows therefore that the distributor becomes a key customer.

Most fast-moving-consumer-goods (FMCG) companies fall in this category. What about the end user then? Well he’s also a customer, only different from the distributor.

And there-in lies a world of difference that will either profitably propel the sales activities of an institution or rapidly repel the institution from the customer – clearly defining who its customer is and consequently, selling to that customer in his language and laying business emphasis and resources in commensurate manner.

In today’s world, many business models are different from the traditional one. In the former example of e-mail addresses, Yahoo! and Google have invested massive resources to get the full attention of (read, sell to) a non-paying customer (you and I), so that they can have a leg to stand on when selling to the paying customer (advertiser).

In similar fashion, this paper you are reading costs much more than the Sh60 you bought it at and most probably Sh60 is the unit cost of printing it; much as you are the target market, what keeps the media house that prints it afloat isn’t your Sh60, but the advertisers who will pay to appear in it, for you to read about them.

In this case, both are paying customers and each serves a different, but complementary purpose.

In the case of the FMCG, the distributor is an intrinsic part of the business model and for this reason many businesses invest heavily in their distributors.

This distributor will, of course, further sell to the retailer and then she to the end user who buys from her local kiosk. That’s the theory-in practice however, having sold to the distributor, the FMCG cannot sit on its laurels. The end user is still a customer it must reach out to (sell to).

This it does via advertising, promotions, and merchandisers (that’s the aisle attendant who attempts to get you to try the new sausage). In fact the merchandiser is a classic example of selling to both customers.

The distributor (supermarket) has already been sold to by the FMCG, but the FMCG has still gone ahead and planted a salesperson in the distributor’s premises to sell to the end user.

Know your customer isn’t a term reserved for the financial world to reduce fraud; every business must know its customer to survive, let alone thrive.

Mr Kageche is the lead facilitator Lend Me Your Ears- A Sales and Speaker Training Firm.