The Software-Buying Customer Isn't Always Right!
|Published:||Nov 18, 2010|
For years, so-called business experts have been telling us that the customer is always right.
The customer isn't always right. So says Jeffrey J. Fox, the author of "How to Become a Marketing Superstar - Unexpected Rules that Ring the Cash Register."
Fox urges us to understand the segments of the marketplace that we're targeting with our products and services. For each target segment, we need to try to learn the size of the market, the growth rate, the demographics, the customers' needs, your competitors' offerings, and the fundamental buying attitudes of your prospects.
For each of these target market niches, Fox tells us to define four categories of customers, based on sophisticated/unsophisticated and okay/not-okay.
- Sophisticated/okay customers know what they want, and they might know your competitors' products better than you do. Sales are high. Margins are low.
- Unsophisticated/okay customers look to you for advice and guidance. Fox says that they expect to pay for support - I'm not so sure that this is true in the software industry. Margins can be high, but orders won't be as high.
- Sophisticated/not-okay customers are to be avoided. Be prepared for long dialogs, both before and after the sale.
- Unsophisticated/not-okay sales are to be avoided. Fox cites problems such as lack of appreciation for your products, lack of respect for your company, and lack of loyalty.
It should be fairly easy to figure out which marketing techniques are generating good customers versus less good ones. For example, most software developers should spend more time going after larger (multi- user and site license) customers. Prices should reflect the sophistication of the customer, and the amount of hand-holding needed.
Fox reminds us that we get to define which customers we will deal with. Beginning companies tend to put up with all sorts of abuse, in the hope that they can generate some sales. Established companies learn to fire customers who aren't okay. These clients can be a monetary and emotional drain, even on a one-person software development company.
You can put up with a lot of problems. Fox tells us that "good customers can be tough, exacting, impatient, challenging, finicky, exasperating, demanding, needy, insistent, and a million other things."
Bad customers, on the other hand, drain too much time, energy, and emotional capital. Don't deal with them. You don't have to.
Since 1984, Al Harberg has been president of DP Directory, Inc., a public relations firm that helps software developers use press releases to get publicity and sales.