Art
Siegel

What Makes Customers Buy?

You created your company's products and services to address specific customer needs. But that doesn't mean your marketing strategy involves just telling your story. Before you begin selling, you need to find out: What Makes Customers Buy? 

When we first met the management of Fiber Services (not the company's real name), their primary business was installing fiber optic cabling in office buildings and medical centers. As the need for data communications grew, cabling spaces in many buildings filled to the point where there was no more room for expansion. Fiber optic cables, with their smaller size and much higher capacity than conventional cables, offered the solution.

For most customers, Fiber Services did the complete job, from design through running the cables, installing the connectors on the ends and plugging everything together. As they discovered the hard way, the task of installing fiber optic connectors on cables is very demanding, much more so than for electrical cable. With fiber, the slightest spec of dirt, misalignment or failure to polish the cable end perfectly can result in substantial data loss.

As a sideline, Fiber Services also made up "cable assemblies." These are lengths of fiber optic cable with the connectors installed which are sold off the shelf rather than being custom made on-site. The management of Fiber Services decided to expand their sale of cable assemblies nationwide.

Fiber Services had two advantages in entering this market. First, the experience they had gained installing fiber optic components in often challenging on-site conditions made it easy for their people to build top-quality cable assemblies in a clean laboratory. Secondly, the company already consumed enough raw cable and connectors to give it a very low cost for supplies.

Despite their experience and technical know-how, the management team realized their experience was in selling large contract jobs, not off-the-shelf finished pieces. They asked us to help them establish a selling strategy. Problem was, we didn't know anything about selling fiber optic cable assemblies either, so we agreed to turn to the people who knew the most -- customers.

We built the following questionnaire and then went out to interview some Fiber Services' current cable assembly customers.

Fiber Services' Questionnaire

What criteria did you establish before looking for a fiber cable assembly supplier?

_______________________________________________

_______________________________________________

What magazines or other sources did you turn to identify potential vendors?

_______________________________________________

_______________________________________________

What approach did you use to contact these vendors?

_______________________________________________

_______________________________________________

After you contacted them, what factors determined which
ones you would give the greatest consideration to as
your supplier?

_______________________________________________

_______________________________________________

Which companies were included in your final evaluation?

_______________________________________________

_______________________________________________

For each of the competitors to Fiber Services, what did you
feel were their relative strengths and weaknesses?

_______________________________________________

_______________________________________________

Why did you ultimately select Fiber Services as your supplier?

_______________________________________________

_______________________________________________

With every person we interviewed, we started by explaining that we were hired to help Fiber Services sell its services more effectively. We asked each of the questions on our form. But before going on to the next question, we asked follow-up questions such as: "Why did you do that?" or "Then what happened?"

At the beginning of each interview, we started a cassette recorder and placed it in front of the customer with the brief explanation: "This help us take good notes." Afterwards, we transcribed the tapes verbatim in order to capture the exact words which had been spoken by the customers.

The Results Of Our Questioning

As always happens with this approach, the results included confirmation of a few things we believed to be true, a few total surprises, plus a great deal of data we could use to strengthen the company's marketing programs.

Among the surprises that came out of the research were:

• The competitor we feared most was not well-perceived by the buyers. Fiber optic components represent a critical link in a company's information systems. Even minor defects can have catastrophic consequences. The giant competitor had perhaps grown too quickly, and what now having difficulty delivering 100% perfect product.
• Although most of our buyers subscribed to the monthly magazine in which we had planed to run most of the company's advertising, it was not the place where they tended to look for vendors. When shopping, most of them turned to a particular semi-monthly tabloid-sized publication which emphasized product news.
• The major criterion for vendor selection was the vendor's expertise with certain difficult-to-apply fiber connectors.

Based upon the customer interviews, we designed an advertising campaign that emphasized Fiber Service's skills with the more difficult cable connections, and placed the ads exclusively in the tabloid. The result? $60,000 in media expenditures over the first year translated into $1,500,000 in new cable assembly business, plus a comparable amount of custom work from new cable assembly customers.

Applying What We Learned To Your Company

Those of us who specialize in a particular product or market have good reason to believe we know a great deal about what our customers want from us. Unfortunately, being too close to a subject can also lead one to miss some of the most important clues.

That is why it is always a good idea to conduct a survey like the one described here from time to time to validate your typical customers' actual buying processes, the information sources they rely on most in making their decisions, and the criteria which make the greatest contribution to their decisions.

Note: Below you will find a more comprehensive version of the preceding questionnaire. Feel free to save this article to your PC, so you can edit the form for your own customer-based market research.

Purchase Processes

Steps in their vendor selection process:

_______________________________________________

Individuals/positions involved in the decision:

_______________________________________________

Criteria they set before buying:

_______________________________________________

Perceived Competitive Product Advantages

Competitive products considered before buying from them:

_______________________________________________

Competitive/alternative products and services they currently use (other than primary one selected):

_______________________________________________

Perceptions of relative advantages and disadvantages of competitive/alternative products they did not buy:

_______________________________________________

Perceived Competitive Company Advantages

Why they buy/bought from the previous supplier:

_______________________________________________

Perceived benefits resulting from their current product's use:

_______________________________________________

Dollar value of these benefits:

_______________________________________________

What features of that company or its products they consider important:

_______________________________________________

What they would be willing to pay for various features:

_______________________________________________

Their perceptions of the competitor's strengths and weaknesses:

_______________________________________________

Perceptions Of Our Company

Their perceptions of our strengths and weaknesses:

_______________________________________________

Why they selected us:

_______________________________________________

Information Sources

Consultants who influence their decisions:

_______________________________________________

Publications they currently read for information about products or services of the types we offer:

_______________________________________________

Kinds of direct mail they receive:

_______________________________________________

Trade shows they attend:

_______________________________________________

Advertising they recall seeing or hearing:

_______________________________________________

Other sources they turn to for information on this type of product:

_______________________________________________

SeaBird Associates Inc
3011 NE 7th Drive
Boca Raton, FL 33431
Phone: 561-750-9233
E-mail: Art Siegel

About Art Siegel