Competition is increasing along with pressure on price, which can lead to a race to become the lowest price. However, discounting prices further to keep customers only prevents you from being competitive in the future because you have lower margins to invest.
With companies having fewer but larger customers it means that the top 10-20 customers for a company typically represent 60-80% of revenue and profit. Losing one of these customers can have dramatic impacts on a company - adding still further pressure to discount prices.
To reduce this pressure, you need to provide additional value to your customers, so they don't just focus on price. To provide additional value to your customer, you need to Know what is important to them and how they currently think you are performing. The most effective way to discover this is to interview the customer's executives.
These interviews will be brief as executives are time poor. So, you need to ensure you are well-prepared. You need to research the company and the individual and determine the best three questions to ask during the interview to gain the best insights.
To gain strategic insights from your interviews you need to have trusting relationships with your customers' executives. Even then, they may be hesitant to say anything that could jeopardise your relationship.
Typically, you will have premeditated ideas about what is going on with your customer and will focus on how your products and services can help them achieve their tactical goals or overcome their tactical challenges. As you are expecting certain responses, you may miss clues to strategic issues that you are not currently aware.
For these reasons, it can be more productive to have a third party conduct the interviews. So, who should you turn to for this? Market researchers will focus on products and tactical needs. They are not business people looking for strategic business problems and risks. What you need are independent experts. They are curious and strategic, and will search for trends, opportunities and risks beyond this financial year.
So, don't cross your fingers and hope that despite increasing competition, what you are supplying will satisfy your customers. Be proactive and discover how you can delight your customers and keep them loyal.
For more insights on finding out what your customers really think of you, read our eBook: How well do you know your customers?