Who Is Your Primary Customer?
Searching for the right customer implies that there is more than one kind of customer. So who is the right one and where do you find her? The word ‘customer’ holds a different meaning for different people.
A customer is a person receiving value from another person, even if that value is delivered through a fully automated process Adam StJohn Lawrence
Adam’s definition doesn’t require that a customer bring in revenue. This may sound crazy. However, in his Harvard Business Review article ‘Choosing the Right Customer’, March 2014 issue, Robert Simon illustrated that a company can indeed focus on customers who do not supply revenue and thrive anyway. It’s not some obscure company he was writing about, it’s the pharma giant Merck. The most important customers for this pharmaceutical giant are not the patients nor the physicians who prescribe drugs to them. It’s the research scientist in universities and labs around the world who are Merck’s ‘primary customer’. They have one goal with this narrowly defined customer: discovering new, spearheading drugs that can then be commercialized by Merck.
The primary customer is not the one who generates the most revenue but the one who unlocks the most value in a business. Value is the keyword here, just as it is in our definition of a customer. And just as it is in the definition of customer-centricity. In his book ‘Customer-centricity: Focus on the Right Customers for Strategic Advantage’ (Wharton Executive Essentials), the author Peter Faber defines customer-centricity as ‘a strategy that aligns a company’s development and delivery of its products and services with the current and future needs of a select set of customers in order to maximize their long-term financial value to the firm’.
Customer-centricity requires a commitment to identify the customers who matter most and a willingness to allocate a disproportionate amount of resources to understand what the right customers want and to deliver it. Referring back to the case of Merck, that’s exactly what they do: its centralized R&D unit receives the bulk of organizational resources. Just like Amazon dedicates maximum resources to pleasing consumers, their primary customers.
Any organization choosing and searching for the right customer must be willing and able to transform its organizational design and align it with the right customer’s journey. For many, this requires a radical change. Yet the most important question remains: who is your primary customer? The one exclusive set of customers that unlocks the most value in your business.
Balance & immersion
Earlier we addressed the willingness to allocate a disproportionate amount of resources to understand what the primary customer wants and to deliver it. You have to go all the way, and the extra mile. The identification of the right customer starts with a company’s own perspective.
Your own perspective must be reflected in the choice of the right customer. If not, people will simply be unable to gain momentum and to get inspired and creative in service to the right customer. This perspective is intangible, it refers to the mission, the DNA, the history -if there is one- of a company. It embodies what makes you, you.
When a company sees its own perspective reflected in the choice of the right customer, the first step is taken. Next, a company needs to recognize the value potential of the primary customer. From this point forward you dive into the realm of the primary customer.
The second challenge is to figure out if your company possesses or has secure access to the full set of competencies that the primary customer needs. A CMO looks for a different set than a CRM Manager does. A CIO values another set of competencies than an end-consumer does.
Make the effort to fully understand your right customer’s job. A customer job is anything that somebody is trying to achieve in her or his life and work. Dig in, dive deep, immerse yourself in the ‘other’. Identify the job context, the required and expected gains, and the pains that come along with it. And then, determine if and how you can uniquely contribute to the achievement of your right customer’s goal. This is what will differentiate you.
But let’s not forget the Lifetime Contribution Potential of your primary customer. What is the long-term value that your right customer could bring to your organization and vice versa? If perspective, unique contribution to customer job achievement, and lifetime value potential are in balance, then go! Keep on balancing and immersing in your right customer throughout the entire customer journey. And keep walking the extra mile for your right customer.