If your company is in commercial or industrial sales, you're used to changes in market forces. Sometimes your company gets ahead of the curve and experiences rapid growth. Sometimes you just tread water: you don't lose ground, but you don't make measurable gains, either.
Revenue is the barometer that reports how the marketplace measures the effectiveness of your sales, marketing, offering, policies and operations. And customers are at the heart of revenue. Customer feedback is the tool that assesses where you stand, why that's true, and where customers want you to make changes. Letting your customers tell you what they expect of you yields a wealth of information and helps your company manage its footprint in the marketplace. Three vital business areas feedback helps shape are:
- Customer retention.
- Revenue growth.
Competitiveness, customer retention and growth are always being challenged by market forces. But the market force change that was easy to predict yet hard to plan for is the retirement of the Boomer generation. What it took to successfully compete, retain and grow in the past will be rendered obsolete once the generational "changing of the guard" reaches its tipping point in your marketplace. It will feel like the business version of Invasion of the Body Snatchers.
Generational changing of the guard . When they first entered the work force, members of Generation X were characterized as spoiled brats who wanted everything handed to them. Millennials are candid about placing their personal lives ahead of their day jobs. They were each easy to dismiss when the oldest of their generations broke into entry-level jobs. By now you've made your own observations about how each group changes the workplace. Today Gen X-ers have matured and fill key roles, and Millennials are moving up the ranks. Maybe you're one yourself.
The oldest Baby Boomers began leaving the work force almost ten years ago. Boomer-generation company owners are starting to leave in droves with each hiccup in the economy whether through closing their companies, selling to competitors (or private equity groups), or handing the reins over to Gen X-ers groomed for the role and waiting in the wings.
Competitiveness . Any change in leadership at companies you compete with and sell to subtly puts your company on notice that status quo business practices may no longer create status quo sales. This is a valid concern for leaders of all generations. But because Boomers are used to making everyone else flex to accommodate them, the key message here is this: If you are a Boomer who isn't quite ready to sell or retire, then stay nimble and be aware of the changes that are about to wash over you.
- Your competitors and customers will increasingly be owned by Gen X leaders.
- Gen X-ers make decisions differently than your Boomer competitors and customers did.
- Individual competitors might change over night from familiar adversaries to total strangers following a change in leadership (or ownership).
Retention . Change puts new demands on what it takes to hold onto existing customers, too. New leaders at your customers' companies may have different expectations of their vendors. As with any new owner, they are likely to evaluate the vendors they inherited with an unsympathetic eye. Without reaching out periodically and staying abreast of why key customers buy from you, it's possible to miss a shift in expectations that re-categorize your status quo business practices from "fine" to "inadequate." And the shift may come without warning.
The message here is this: Reach out and periodically ask-in an open-ended way-where key customers see room for improvement. You never want to lose relationships because of a last-straw incident when you had no idea your company was the source of recurring irritants. Rather than make assumptions about why customers are loyal, ask key customers why they're loyal, ask what would put the relationship at risk, and ask what changes they'd like to see. (You're not obligated to follow through on all their suggestions, but it's better to know than to not know what customers think and want.)
Growth . Without learning why your company wins new sales and retains existing customers, you weaken your ability to make growth plans based on factors you can influence. Without clear insights into how customers think, your company risks being an economic cork in the water that surges and dips in step with the overall economy. Surges mask how well companies are run because some customers are forced to lower their standards and buy from any available supplier. By contrast, dips reveal weaknesses; fewer decisions are being made, competition heats up, and customers' standards go up.
Moving in step with the economy isn't your only option. If you have competitors who weather economic downturns better than you do, they're probably not simply luckier than you are. Rather, they may be more diligent in assessing and adapting to changes in how customers make decisions.
At the center of every selection decision is a decision-maker. Regardless of which generations are represented by the decision-makers and influencers at your customers' companies, you need to stay in active communication with the people who know you best. One step you can take before the next downturn hits is to listen to how they chose vendors during the last downturn.
- For companies that sell through dealers, how did your dealers push sell-through during periods of slow demand? What could your company have done differently to get better dealer support?
- For companies that compete for projects, how were competitors evaluated (time & materials costs, project price, full-service offering, another approach)? What innovations did customers see that they'd recommend all competitors offer?
- For companies with long-term relationships, were your customers approached by your competitors with attractive offers? What changes should you make to keep your relationships resistant to poachers?
The message here is this: Learn how your customers made decisions in lean times. This will help you take better command of your company's growth in good times and bad. Nobody is surprised to hear customers ask for lower prices. Even when that's not the driving factor, the pressure to keep prices down raises the urgency to bring costs down by optimizing technology, operational strategies and deal-making with your own suppliers.
And remember, each downturn will create a stampede of resignations until Boomers have all retired or sold their companies. Expect to pay attention to changes in leadership at competing and customer companies for the next ten years. By actively monitoring what your most important customers think and want, you will always know how to:
- make yourself easy to do business with,
- earn on-going customer loyalty, and
- be chosen in lean times.
Boomers have been a force to be reckoned with for decades. For better or worse, business won't be the same without them. The challenge is to survive the transition.