How well do you understand your customers?

High growth is the “Holy Grail” for every SME, but most don’t achieve it. This article explains why and the key thing you can do to achieve serious growth

How well do you understand your customers?

How well do you understand your customers? 2560 1999 Visible Pathway
Author: Chris Rodowicz  |  Reading Time: 6-7 minutes

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“Little has been written to help entrepreneurs understand how to transform their brilliant ideas into products and services that companies want to buy. What is missing is an understanding from the buyer’s perspective on what they go through when they make decisions about buying” – Guy Kawasaki – entrepreneur, speaker, author, investor

For those select band of people who start, run, manage and grow their own business this statement will bring a wry smile. Many will recognise the symptoms of not understanding how their customers buy; typically, early and quick success followed by a period when growth stalls. What worked before doesn’t work now, and the increasing sense of fear and panic that they are either missing something or doing something badly wrong. Others will sail along quite happily with steady growth but carrying the nagging doubt that they really should be doing better as they glance enviously at others whose revenues seem to be taking off like an Elon Musk rocket.

Seeing the symptoms is one thing; making the correct diagnosis and treating the cause is a whole different kettle of fish. Many will be in “Donald Rumsfeld State One” which is they don’t know what they don’t know. They don’t know (yet) that they need to take account of how their customers buy because they are completely focused on creating a great product. They might even be engaged in hiring salespeople to go out and sell it believing that the obvious quality and brilliance of what they have built will be sufficient to have buyers throwing orders at them. And that’s when the wheels start to wobble.

do you understand your customers

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Lean harder on Sales

In more mature companies the normal response to stalling sales is to lean harder on the sales team. Drive them to make more calls, more meetings, create a bigger pipeline and push the customers they do have to close deals with not so subtle tactics and price incentives. But anyone who has worked in such an environment knows this is inevitably counter-productive. Therefore, to avoid this happening to a smaller company with a B2B offering, you need to do something counter-intuitive.

You have to start with the customer, understand how and why they make decisions to spend money (i.e. invest in their business) and how your approach to them must align with how THEY work, not reflect how YOU work. Unravelling these underlying reasons boils down to understanding “How B2B Customers Buy”. It’s fundamental to your success and to your growth; it’s more relevant the smaller you are but it applies regardless of size. That’s because if you don’t get it right early on, your chances of failure are much higher. So yes, the stakes are high. But so is the reward.

Here’s how it works

Unlike most consumers, businesses make decisions for rational and logical reasons and they execute those decisions in a predictable and measurable way. They have to in order to satisfy multiple stakeholders in the business and the various external regulators under whose jurisdiction they operate. As another business wishing to sell to them, you can really leverage that to your advantage – once you know what is going on.

To help you dig beneath the surface of this, we have described the typical investment decision-making process as having six steps, characterised by the acronym “IMPACT”. You can find more detail about it here but for now, the key thing to know is that the I stands for “idea” and the T for “transaction”. In other words, it tracks the progress of an idea through the company until it becomes an external B2B transaction.

The next step is both simple to state, immensely powerful and also quite hard to answer. Before you start to engage any particular customer or prospect, ask yourself this question …

Does the customer understand the problem or opportunity?

In this context, the problem is the one you believe your product or service solves and the opportunity is the one they can create for themselves by adopting it. It is couched in binary terms so either they understand, or they don’t. Let’s examine the implications of the two possible answers.

  1. YES, they do. This means that they will have some idea about the potential solution. If they are very sure, then they will buy a product or service based on very simple criteria, usually price, availability and fitness for purpose. It is likely they have bought similar products before and have established suppliers. Products in this category tend to be mature, commodity items such as laptops, office furniture, janitorial supplies and the like.

On the other hand, if they are still a “yes” but not so sure about the solution or even the problem, they may have an outline specification and have conducted some research into potential suppliers. They have a business case approved so they now go to the market for input. This can often take the form of an RFI or RFP. The vendors participate in demos, trials, presentations etc. and eventually a winner emerges.

  1. NO, they don’t. In this situation, YOU now have to educate them. You don’t sell them a product (yet) because the problem you solve isn’t apparent to them. You have to deal with a very different group of people and convince them that there IS a problem that needs to be fixed (or an opportunity they can explore) not on the basis of your wonderful product, but on the basis that it makes a sound business For them.

What emerges from these brief descriptions now forms the basis of how you can engage. And it is this. Each of those situations describes how the customer recognises the VALUE you bring to his organisation. And value in this context is not related to the cost of your product, it is derived from the outcome the customer achieves by implementing it. Typically, that will be measured as either an increase in revenue (for them) or a reduction in operating cost. It can also be cost avoidance, or time to market, or increased market share and so on, but ultimately it feeds either the revenue or cost line.

Customer Buying Styles

Each of these three distinct ways of making decisions and reaching a transaction point is called a “Buying Style”. You can read more about Buying Styles here.

It should now also be clear that the point at which you as a vendor engage with the customer, and how you relate to their perception of the value you bring, will vary in each of the three scenarios. This is called your “Selling Style”. And there are three of those as well.

And so we arrive at the crucial point. If your selling style does not align with the customer’s buying style, you will really struggle to achieve repeatable success and therefore growth. For example, if you provide simple, basic commodity products that are essential for your customer to keep the lights on and which they buy regularly, this is not a proposition you will take to the CEO. You will immediately be re-directed to procurement. CEOs do not decide which paper they put in the printers.

On the other hand, if you have a game-changing but visionary product or service that is not yet widely known about and you start by talking to the nice folks in procurement, they will just give you blank stares. They have no mandate to buy something of that kind. They won’t even know where to direct you, except perhaps back to the car park.

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Align to understand your customers

Understanding Buying Styles and Selling Styles, getting them aligned and then building your sales approach, and indeed your entire company, around that alignment is what happens when you solve this mystery. You can then start to see why perhaps some people have bought and others, apparently similar, have not. You can also see why your growth has been held back because you have not engaged the customer early enough and keep losing out to competitors who do.

Consistently high growth is the “Holy Grail” for just about every SMB no matter where they are on their journey. But the reality is that many simply do not have the breadth and depth of skills readily available in their team to help them get on the right trajectory. The conventional solution to this problem for large enterprises of engaging external consultants doesn’t always deliver the outcomes required and can be way out of what an SMB can afford.

We believe in a very different approach: the idea of your own team up-skilling themselves at their pace using original consulting content but without having to directly engage expensive consultants. If you want to find out how then check out the What We Do page on our website.

If you want to dive deeper into the concepts around your customers’ buying styles and how your business benefits by aligning its sales style to them? Then please check out our digital project “How B2B Customers Buy”. You can try it free and with no obligation to continue. It explains these concepts and much more in detail and gives you step by step instructions to apply them to your business to reduce friction in your sales process, closing more sales that are more profitable.

For further information please visit