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Home  | How we help clients |  Executive Education  | Learning Centre 
June 27 2019.
Understanding customer's customer is the key to success

We keep a close watch on our customers. But as business marketers, it's just as important to watch your customers' customers. Savvy marketers recognize that their success ultimately depends on their contribution to the entire value chain.

Unfortunately, most of the organizations think of primary customers as the only customers, relying on them for just about all their market feedback. The problem is, primary customers who don't adapt to rapid changes in the markets drag their clueless suppliers down with them. Similarly satisfied big customers can blind us to the major trends that eventually dictate our business. Therefore, the suppliers who are a step or more removed from end-users in the value chain must know what that Customer's-of-Customer is up to.

Knowing Customer's-of-Customer (C-of-C) gives tremendous advantages. For example,

  • Your salespeople, will have the information they need for value-added selling,
  • Your new product will be much less likely to be obsolete the day it is launched.
  • You'll also know which of your customers to prefer over others, because they'll succeed as their markets change
  • Which customers to treat as cash cows.

C-of-C know & worry about the components in the products they buy. In the quest to meet their own competitive quality challenges, they'll want to know more than just the price and terms when buying from their supplier, which is your direct customer. If you, the upstream supplier, know what those C-of-Cs need, you'll be way ahead of your competitors. In addition, your smart Primary customers will recognize your loyalty to their interests, when you help them sell more to their customers.

C-of-C is not a rocket science but requires discipline.
Encourage salespeople to discuss long-term trends with major customers, particularly their innovative "lead-users". Study printed & online resources. Insist that a full C-of-C analysis be included in each marketing plan.

The specific scenarios you'll address will vary by industry, but conceptually, you need to know the following:

reddot
What drives your customers' success with their own customers? What factors sustain their competitive advantages?

reddot
What's likely to be your major customer's response to each of those scenarios, trend-by-trend, key customer-by-key customer?

reddotWhat new markets will your customers explore, or which could they vacate?

reddotHow will that change what they now buy & could buy from you and from your competitors?

reddotHow will economic, regulatory, technological and social trends alter the importance of those competitive advantages?

 

 

 

 


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