Sleeping Partner Number 2 :
Giving the Customers what they want
This would appear to be a pretty basic element of successful marketing. But as with so many seemingly simple ideas, there are hidden areas which are overlooked at your peril. And whenever technology comes in to the picture, things always seem to gain a nice extra layer of complexity. In this episode I’ll try illustrate just a few of the angles from which you should examine your relationship with your customer. Try them and see if you are confident you understand the whole 360° picture.
Anyone who has spent any time rubbing against marketing people knows that one of their favourite toys for showing off their knowledge is a square. Not just any square, but a square divided by two lines in to 4 smaller equal squares. And then, because “little boxes”, or “small squares” doesn’t sound expensive enough, they call it a “matrix”. The most famous of these is one called the Boston Matrix which compares market growth along one axis of the matrix with market penetration along the other. But you can actually use this type of thinking to understand other pairs of related issues. In this example let’s look at the idea of ‘knowing what the customer wants’ along one axis and ‘supplying what the customer wants’ along the other. So we could have a matrix like –
|Supply||Caring supplier||Now, where did they go?|
|Don’t Supply||Do we actually want them as a customer?||Are we still in business?|
Ideally, everyone would say they both know what their customers want, and that they supply that – in other words you would be a top-left ‘caring supplier’, attentive to the needs and concerns of the people who pay your bills.
In this article, let concentrate on the “Where did they go?” quadrant (see how infectious this marketing-speak is – anyone else would still be calling it a ‘square’) Sometimes, – especially if you are a technology-driven company, it is oh-so-easy to stray towards the top-right area of the matrix. You have a product or service which sells to an existing customer base, without really knowing what it is about that product that attracts the users. The danger here is that if you change (in your eyes, improve) the product, the customers start to drift away because you’ve actually removed the one element they really valued. And no one can understand why. After all, the Mk.II is miles better than the Mk.I ever was. Isn’t it?
I nearly encountered an example of this was when I was involved in the semiconductor industry. A division of the company I then worked for supplied sockets for integrated circuits (ICs) to printed circuit board (PCB) assemblers. These were quite cheap items (about 3p each) but a big customer could use around 20 million annually, so their business was hotly pursued. My company, and its competitors, obviously knew what our IC sockets were used for, and focused strongly on trying to demonstrate why our technology was superior. We all tried to show how our metal-plating process was superior, and our corrosion resistance was greater, and our sockets’ retention forces were proof against wilder and wilder vibrations – you know the kind of thing. And we took it seriously. We employed metallurgy specialists, and did lots of basic engineering design on springs and all manner of shapes of metal structures within the sockets.
During one particular boom in the production of PCs in the UK several years ago, we suddenly started to win more and more sales. We were getting a share of the business in companies where previously we couldn’t even find the front door. And of course, everyone in the division patted themselves on the back and said what fine products we had, and what a fine sales force we had, and how all our hard work was paying off at last – you can imagine it all! However, it was only a casual remark from the Quality Manager at probably our biggest customer that suddenly alerted us to what a precarious tightrope we were walking.
During a regular review meeting he made some comment about how we had obviously studied the design of the Acme YTK-27 assembly machine very closely before designing our sockets. This was news to us. We didn’t even know what the YTK-27 was! But we kept silent, nodded sagely and complimented him on his attention to detail. As soon as the meeting was over, we all hit the trade directories and internet sites to find out what was going on. It turned out that a few month previously, Acme (real name hidden to protect my blushes) had introduced a new automatic PCB assembly machine on to the market. It was fast – much faster than any of their competitors – and had taken their market by storm. Customers like ours were installing them in their factories to stay ahead of their competitors. Sockets such as the ones we made were supplied in long tubes which were plugged in to these assembly machines. The machine then extracted the sockets and fed them through an intricate internal railway to the point where they were inserted in to the PCB – at the rate of several components per second (which is pretty slow by today’s standards!).
Now this internal path was so intricate that sometimes components got jammed and had to be freed by the operators, causing lost production, re-work etc. The reference by the QA Manager was to the fact that our sockets apparently flew through the machines and never jammed! They appeared to be a perfect match for the internal geometry of the YTK-27 – hence our sales had risen. Not because our sockets’ technology was any better, but simply because Acme had better technology than their competitors, and we had benefited parasitically.
The really galling thing was, the part on our sockets which made the difference turned out to be 4 little plastic studs on the underside of the body. They weren’t even part of the design, but an unavoidable residue from the plastic moulding process we used. We would have removed them if we could have!
This was a clear case of us supplying our customers’ needs, but without knowing why. If it hadn’t been for that chance remark we would never have known. We might have ‘enhanced’ our sockets, or the YTK-28 might have been launched, and all our sales would have drained away.
And nobody would have known why.