Business Insight Zone

Forrester’s Josh Bernoff gives typically good advice in this post:

Wrong customer, or, the perils of dog food marketing

He talks about the college textbook market as a textbook (wince) example where one class of customers (i.e. professors) makes decisions about purchases used by another class of customers (i.e. students). He extends the lesson to other examples in both B-to-B and B-to-C settings. Then he drops the hammer:

Dog food marketers: beware. The more time you spend on the needs of the non-user customer, the less you are focusing on the user of your products, and the more vulnerable you become. If you empower that other customer to persuade you to make decisions not in the best interests of the the people who use your products, you are striding down the path to ruin.

His focus on user-customers is especially apt. Yes, in the short run, the non-user making initial purchase decisions seems more important, but in the long run the users will determine the fate of your product, your company, and, maybe, your entire industry. (See: recorded music.)

But the antidote is straightforward — even though it implies loads of hard work:

It doesn’t matter if you sell insurance, shoes, or web searches. If you always worry first about the one who uses your products, she will lead you into new business models, new features, and loyalty. Social technology means you can form a relationship with that customer, even if you send your invoices to someone else.

If you worry too much about that “other” customer, he’ll go into competition with you, insist on more discounts, drag you down as he goes out of business, or distract you, opening up room for competitors. User customers may have loyalty. Those other customers rarely do.

The ramifications are serious — maybe especially if you’re providing a B-to-B offering like a CRM system or (ahem) an information service.

Read it, ponder it, take it to heart.

Category: Innovation & Entrepreneurship,Marketing & Sales