Understand your customer well before you INVEST on them !!

That is what we have been taught in corporate from the day one we joined the organization. But today with growing competition and reducing loyalty, 'some' customers are exploiting companies and below is one example : 

A year back after rolling out a major program, the sales team started meeting customers one by one.  One Afternoon, sales guy called me up fully excited. He wanted to break the news to me that he had made a big break through 

“Yes, I am at a big prospect right now and he is good potential. We presented the complete program and is willing to buy our products. But, to gain confidence he is asking for this XXX part number on Free of Cost”. Trying out product before buying was a common practice and therefore I wasn’t surprised. But I knew he was exploiting us because to taste Coke / Pepsi you can taste it with a 200ml cup too, you don’t need to buy 10 bottles of 2.5Ltr bottle for tasting.  You get what am trying to say.

To taste Coke / Pepsi you can taste it with a 200ml cup too, you don’t need to buy 10 bottles of 2.5Ltr bottle for tasting. 

So I asked the sales guy, if it is for him to get an understanding of product and service, let them take few qtys of product which would give good feel of the product. The qty was decent enough to install and get a feel of it. The sales guy went on to say a competitors had earlier offered XXX part no (similar to 20 bottles of  2.5Ltr bottles) to get a taste and therefore the customer was requesting the same from us if we wanted business.

I said if tomorrow another customer offers 21 bottles of 2.5Ltrs to this customer, he will move and therefore isn’t a reliable customer. Our investment on this customer isn’t going to be fruitful. A Customer who doesn’t value services, quality and only keeps jumping around companies exploiting them.  We did lose this business to another competition.

Ultimately, today I understand the competitor (to whom we had lost) has also lost this business to another competitor within a year time.  

Customer is KING ? 

It is important to understand customer and his interest in moving from competitors.  Therefore, understand your customer well before you Invest into them !! 

To understand the different type of customers and the different styles the organization needs to adopt, you can read blog "Are we spending our time and resources on RIGHT customers ?"