Competition for customers is forcing businesses to think and act differently as the development and productivity of customer relationships is shifting the balance of business planning from cost to income.
A combination of changes brought about through increased competition, globalisation, digitalisation and new, disruptive business models has resulted in a big shift in buyers attitudes and behaviours. They know they have the power to choose now and if firms do not match up to their needs or expectations they will move on to the next one very swiftly and won’t look back!
These changes are making businesses adjust their focus and put customer acquisition and development at the centre of their planning, if they are to remain attractive to more demanding and discerning buyers, with more choice. They can no longer take customers choosing them and staying with them for granted. If you are not sure about where your focus is, ask yourself this simple question: “When was the last time customers were discussed meaningfully in a Board, or Partners Meeting?”
To remain competitive work has to be delivered in the way that is most convenient for buyers. Which is proving somewhat inconvenient for some businesses, used to building structures and systems that suit them and their needs ahead of their customers.
In many established industries, where business models have remained largely unchanged for many decades, let along years, like law firms and other professional services firms, the market is seeing a very varied speed of adaptation to these market changes. Whilst some adopt new approaches, new methods of communication and new product offerings to remain attractive to their customers, others are lagging well behind. They are clinging on to the belief that being good at what you do will still be enough for people to select them.
What they fail to recognise is that from the outside, from a buyers perspective, all firms look pretty much the same. In this ‘sea of sameness’ firms need to look at how they distinguish themselves beyond their technical competence, as this is assumed not added value.
It is essential for firms to have a clear offering, based on what is important to buyers, to build effective customer relationships, and an implementation structure to maximise the productivity and value of each one. For those that do, the rewards are higher volumes of work and higher fees as an increasing number of buyers increasingly buy on value rather than cost. In almost every sector there is no need to respond to greater competition by reducing prices but by understanding how to increase value. People consistently demonstrate their willingness to pay more if they feel it is worth more. It is time some businesses started thinking about making what sells rather than continue to try selling what they make.