April 10, 2006

Jack Covert Selects: Jack Covert Selects -- The Must-Have Customer

By: Jack @ 6:46 PM – Filed under: Management & Workplace Culture

The Must-Have Customer: 7 Steps to Winning the Customer You Haven't Got by Robert Gordman with Armin Brott, Truman Talley Books, 290 Pages, $24.95 Hardcover, April 2006, ISBN 0312351690
Disclaimer time: I picked up this book because I liked the Marcus Buckingham quote and the subject is something I personally have trouble with. Intellectually I understand the concept but putting it into action can be difficult.
The premise of the book is that there are good customers and bad customers. We need to nurture and understand the good customers and get rid of the bad ones. As a merchant for the past four plus decades, this sticks in my head.
The author has great credentials and uses his experiences to illustrate his points. One of the passages that won me over was where he said:
And over the course of all those years, I learned something remarkable: Companies don't die of natural causes; management kills them. And death doesn't come suddenly; it happens one customer at a time.

I have witnessed this time and time again. It's easy to spend tons of money to go after opportunistic, price-driven customers but it's more important to go after our core customers. (Guilty as charged!)
Another point that really rang true for me was:
First, don't bother trying to convert opportunistic customers into core customers. Opportunistic customers are almost exclusively price driven, so unless your only attribute is low price, trying to chase down opportunistic customers is a waste of time and money.

The author uses examples from mega-businesses like JC Penney and Coca-Cola, to smaller businesses. The philosophy is perfectly scalable. Finally, the real takeaway is:
Success in business is not about beating the competition; it's about serving your customers. Over the past decade Wal-Mart has been blamed for the untimely deaths of hundreds of small merchants. I disagree. In my view it's really more a question of suicide than murder. The grim reality is that most of the small retailers tried to compete directly with Wal-Mart on price (which no one can do), and killed themselves in the process. The smart retailers--and there are plenty--however, didn't see Wal-Mart as a competitor at all. Instead, they identified a must-have customer who was more interested in quality, service, reliability, or any factor other than price. They repositioned their business to serve those customers in a unique way, and they thrived. Today, retailers wait in line and pay premium rents to be next to a Wal-Mart. Next time you drive by one, see if you can find an empty store in the same shopping center.

The book is a worth a read. It helped me get over my old-fashioned way of viewing customers and may do the same for you.
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