Matching Product And Services To Customer Needs
Customer needs is the buzzword of the corporate world in todays competitive world, a firm is better known by the quality of products and services it provides rather than its market share or profit-earning capacity. While providing good and efficient products and service is a pre-requisite for any entity, it poses several obstacles in practical terms. Thus, to be very efficient and to overcome the hurdles, smooth deliverance of the activities involved during the sales cycle is highly essential. It involves integrating information gathered from all the distribution channels and analyzing the data in order to understand the customer behavior. The continuous analysis and improvements over a long period of time would result in enhancing the customer’s lifetime value with the firm.
The process of sales cycle begins from identifying a potential customer to implementing measures in retaining this potential customer. There are a large number of activities involved within the sales cycle in matching products/services to customer needs. The major activities involved in sales process are as follows:
— 1) Lead Qualification: The primary and utmost important activity in the sales cycle is to generate the leads and see if they are qualified. It’s a process whereby the information about an individual is gathered through different sources to understand if he/she qualifies as a potential consumer or if he/she is disqualified to be of use to the firm in current or future scenario. It is essential to check for the qualification on these terms even before investing time and budget to gain new sales. Failure to effectively implement this activity would result in a serious wastage of resources, or in some cases fully incomplete sales process. Thus, it being the initiation process of sales cycle, it is highly essential for it to be implemented in the most effective manner.
a. Identifying the most potential customers: A step by step strategic approach would help the sales or the firm in identifying the most potential customers. Identifying customer would include:
” Customer Profitability Analysis: Besides acquiring new customers, it is vital for the firm to retain and increase the profitability of the existing ones. Identifying the most profitable customers is the first step in the direction. To arrive at the overall profitability of a customer, firm must quantify firstly the costs involved in serving the customer over a period and secondly the revenues realized from the customer during that period. The results of customer profitability analysis can point towards the reasons behind why some customers are not as profitable as others are. For example, a customer might be unprofitable because the products used by him or her do not match their risk profile. Customer profitability analysis can significantly help in developing new products and customizing existing products for a customer or customer segment.
.b) Customer Lifetime Value: Customer profitability is not the sole measure of a customer’s value to the firm. A customer may have the potential of buying profitable products in the future; he may also serve as an excellent reference for more profitable customers. Customer Lifetime Value is hence, a more insightful measure. Often data mining tools are used to model customer lifetime value, taking into account all the factors that have a bearing on the customer’s value over the entire course of his or her relationship with any specific firm or organization”.
.c) Customer Value Propositions: Firms must create better customer value propositions through better value packages, finance options and going close to customers. They should reach a new level of service by offering their customers the information and services they want before they even know what they want. They should provide the customer more choices and fewer reasons to turn to competitors.
—2) Presentation/Marketing: Once the potential customer is identified, the next activity would be the initial sales pitch whereby the customer is made aware of the detailed review of the product or service which is being offered for sale. A thorough processing of this stage is highly essential to hold a grip over the capturing of the new customer. Even before letting the consumer know about the benefits of the products or services being offered, it is required that the firm understands what the customer needs and fulfill their requirements. In order to produce campaigns that are relevant and compelling, to the right audiences, marketing needs access to complete information. Typically, there are disparate systems and methods for lead tracking, each of which provides only an incomplete perspective into success. The time required to bring multiple sources of data together for analysis is prohibitive. Without a precise understanding of the business the firm deals in, it’s difficult to know which is the ideal product to sell to which target segment. And with a lack of visibility into how many times a plan was quoted or sold and by whom, marketing cannot view or understand the win-loss ratio against a specific competitor’s product line.
.a) Understanding customer’s needs and buying patterns: Another important stage of the sales cycle is to identify the needs and buying patterns of the customers. This would help the firm in attracting new customers and also to a certain extent retaining the existing customers. The three different factors that cater to understanding the customer’s needs and buying patterns are as follows:
”b)Customer Segmentation: It segregates customers who exhibit common characteristics in different segments. These segments can be treated as distinct entities and the future interaction with them can be tailored accordingly. Customer segmentation can save a lot of marketing effort, which would otherwise go waste. Often data mining tools are used for customer segmentation. These tools use ‘clustering’ algorithms for segmenting the entire customer base into clusters, identified on the basis of various demographic and psychographic factors.
.c) Attrition Analysis: It involves analysis of data captured during individual customer
contacts at the various touch points. Acquiring new customers is much more costly than retaining the existing ones. It costs much less to keep a current customer than it does to attract a new one. Typically, buying a non-perishable product is along-term decision for a customer; and if he/she decides to switch, it is very likely that he/she in all possibility will not come back.
.d) Affinity Analysis: It is often referred to as market-basket analysis. Certain products show an affinity towards each other, and are likely to be bought together. For instance, a man in his early thirty who buys a life insurance policy might also be interested in a certain type of annuity. Similarly, a woman interested in a hair-cut at a beauty parlor would be interested in various other services”
—) Interaction with Customers: Interaction with the customers so as to meet their expectations is another important activity in the sales cycle process. This involves:
.a) ”Target Marketing: Marketing to a specific customer group is a natural outcome of customer segmentation. Once distinct customer segments are identified, business intelligence tools are used by firms to study the products likely to be bought by that specific segment. Often data mining is also used to develop predictive models to establish the buying propensity of a segment towards various existing or new products. Armed with this knowledge marketing manager can design specific campaigns targeted at individual customers,
b) Campaign Analysis: It is necessary to analyze the effectiveness of a marketing or promotion campaign. The effects of a particular campaign on sales of the promoted product could be tracked using various tools. Often the surge in sales of the promoted product can result in decrease in sales of the other related products.
.c) Cross-selling: It is a major source of revenue for most of the companies. For effective cross selling the firm can leverage the data – housed in the data warehouse – to quickly zero down on the new product that would be required by its existing customers”.
.d) Customer Response Analysis: It helps them in gaining a better understanding of their customer needs so as to recognize customer preferences and buying patterns that allow them to build individual customer solutions across all of their business channels and divisions, as well as to cross-sell and up-sell.
Once the sales understand the customer’s needs and requirements, he or she must evaluate if the product or services being offered by their firm matches the customers’ needs. After evaluating and taking the decision the sales person in the most effective fashion proceeds further in detailing the customer the products and services offered, the competitive edge of the firms product over others in the market, the benefits
of buying these products or services from their firm and the long term benefits to be enjoyed by the customer. This stage in sales cycle emphasizes on the activity of a sales person to convince the customer in most positive note and ensure that the qualified lead results to be a potential profitable asset to the firm in long run.
—4) Closing the Sale: Once the presentation is completed, it gets mandatory for the sales person to gain the knowledge of what is in the customers mind. Thus, he/ she should ask the customer about the next steps. If the consumer is positive on proceeding i.e., if the consumer agrees to buy the product or service than the sales person needs to proceed on closing the sales. Closing the sale is a sensitive activity as this is the time when the sales rep would get a clear picture if his efforts had been fruitful or no. Thus, high level of proactivity, accuracy and negotiation skills should be used as great weapons by the sales person. Negotiation is an important element while closing the sales. It is the process whereby the sales rep and the consumer discuss on concessions before finalizing the deal. It’s a good practice for the sales to be flexible enough and a bit negotiable. However, high negotiability might not result in profitable business. Thus a clever understanding of the business and the costs impact is required to be known while proceeding and closing the sales.
— 5) Following Up: There are a large number of instances when the sales people terminate the sales activity as soon as the sale is closed. However, this is not a good practice if the firm is aiming at retaining the customers. In order to bring in efficiency in the closure of the sales deal, it is important for the sales person to follow up and ensure if the products had been delivered on time or the services are rendered effectively. Furthermore, it gets better when the sales people keeps in touch with the customer and get a feedback on the product and service and understand the customer satisfaction level. It is to be considered that highly efficient customer service can be enhanced through formal training and that the best customer service training is based on customer feedback itself. Best-practice organizations develop training programs based on information gathered from customer satisfaction survey. For example, the pharmaceutical giant Glaxo SmithKline conducted a survey and did gap analysis to identify areas where it could improve its service. As a result of the survey, the customer service department was able to set service standards and identify training and developments needs of the organization. Thus, it proves the fact that post closing the sales, the firm must ensure they follow up with their customers through different means in order to understand their customer satisfaction levels and also to understand the customer mind set. This would help a firm not only in boosting their sales but also in retaining the existing customers in the market.
In today’s dynamic world, the importance of the importance of good customer service is becoming more and more apparent. Customer has always been the primary and utmost concern for any business outfit, worth its salt. Every organization has always been obsessed with the concept of customer satisfaction. However, several
organizations have failed to know what the customer really wants and several others, after knowing, could not really translate these requirements into deliverance.
constraints have been many, like redesigning the organizational structure, revamping the product or products, maintaining the gusto with the tides of change. In few cases, it would have involved a new R&D process altogether, leading to huge costs. This has resulted in some organizations being unresponsive or inadequately responsive to customer needs. In areas where the customer could shift his/her loyalties to another product or service-provider, he/she has come out to be the winner, making the organization ponder deeply over its inability to adapt to the changing needs. However, in cases where a shift was either impossible or very difficult to achieve, the customer has remained a mute victim to the goings on.
Some of the time-tested and popular strategies adopted by the firms towards relationship building and management efforts range from sending out a greetings message on special occasions, data mining and cross-selling to sponsoring mega events. Experience has shown that each interaction at an event may not result in a sale; nevertheless the aim should be to make each interaction a potentially profitable opportunity to offer additional value to the customer.
Customer satisfaction can be easily gauged in case of product-generating organizations. The process is much more complicated in case of service-providing entities, as feedback may take a longer gestation period and may not altogether give a realistic point of view. Within few service organizations, these problems are much more intricate because of the innate nature and in some cases because of the long term nature of contracts.
Consequently it is essential that any type of service opportunity provided to the firm should be responded efficiently to gain customer-confidence. Furthermore activities in sales cycle should be processed in a manner which ensures that the products/services match the customer needs. An effective sales cycle process thus would enable a firm not only to attract new customer but also to retain the existing customers.
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