Winning over new customers is often a challenge for most business owners. Yet a business would not survive without customers. James Abola expounds on how one can bank on customer value to attract and retain customers
The main purpose of a business; and by extension the main reason why people are employed by a business is to serve customers.
Put another way, a business should strive to improve customer value.
There are internal customers comprising of the employees and owners of the business and then external customers such as people who buy products or services, suppliers and regulators.
There are four things that define customer value and they are summarised by: what customers want, when they want it, where they want it and cost effectively.
Know what your customers want
What customers want is often presented in layers. Take the example of a sweetener; the basic want might be anything that can sweeten a drink such as sugar.
The next layer may have added features such as brown sugar instead of white sugar.
The layer of want can be seen in something else such as transportation where the basic need is the means to move from point “A” to point “B”.
The next layer of consideration might be some form of convenience, for example, some people like to use bodaboda because they can weave through heavy traffic.
Another layer of consideration might be safety and so forth.
Know when they want it
The time customers want a product or service matters. This could refer to the waiting period between placing an order and being served.
Some customers are impatient and want instant service. It could also refer to the period in a year, for example, items that are required at the beginning of a school term or during Christmas period.
Where they want it
Customers have preferences for location and ambience of where they get served. In Kampala, road side markets are mushrooming and thriving because customers find them very convenient. Non-physical location such as the internet has also become an important market for technology savvy buyers and sellers.
For some businesses, the environment in which customers are served matters a lot. In such a scenario the business has to strive to make its premise pleasant and irresistible to customers.
Last but not least is the price at which you sell your product or service. Customers will have ways of telling whether you are cost effective or not. This may be done by comparing your price with that of competitors or how much a burden the price places on the wallet of the customer.
You have to strive to offer your product or service at a competitive price. This may be achieved by putting a small margin in order to profit from high volume sale or cutting down your costs.
Create products, processes and methods that satisfy or even exceed the needs of your customers.
Deliver what the customer wants, at the time the want it, in the place where they want it and at the price they are willing and able to pay.
James Abola is the team leader of Akamai Global, a business and finance consulting firm.