Challenges Business Owners Will Be Facing in 2019 Series: Revenue Growth – Talking to Your Customers
At Viking Mergers & Acquisitions, we are always striving to be proactive and help business owners achieve their goals. For us to succeed as a firm, we are continuously asking our clients and followers about our services and what areas we need to improve on. As part of this effort, Charley McNealy, Senior Advisor at the Viking M&A Charlotte office, conducted a survey to identify the challenges business owners will be facing in 2019. The first challenge we will be covering is revenue growth. Below you will see an interview conducted by Charley McNealy with Dario Priolo on how important “talking to your customers” is to revenue.
McNealy: Dario Priolo is the CEO and founder of CEO of Execugram Inc., LLC, an executive level marketing promotions company and the CEO and founder of JK Research LLC, a marketing consultancy focused exclusively on companies that offer sales performance improvement solutions. Dario has done extensive research on the value of talking to your customers. I believe this is the first step in developing a marketing and sales strategy to grow revenues. Dario, can you tell us about your background and your research on the benefits of talking to customers?
Priolo: I was a Chief Marketing Officer for 15 years and the last five years I’ve had my own marketing consultancy. What I’ve seen, especially over the last 10 years, is that digital marketing and content marketing have become very popular ways to market your business. The thinking is that if you have all sorts of content on your website about your business and if customers are really starting their buying process on the web, you want to make sure you’ve got all the content and with the right keywords that are optimized for Google searches. What I’ve seen is marketing has for many companies transformed from being a discipline focused on the customer to now being one that’s very focused on technology. A lot of people in marketing don’t talk to the customer, and yet they’re the people who you’re expecting to execute your marketing strategy. Because, in the mind of a lot of people, marketing has become very digital and very specialized. I think that that’s where I see a lot of companies going off on the wrong path.
McNealy: Talk to us about the benefits of talking to the customers and what information companies can gain from this.
Priolo: I think there are several benefits. First and foremost, it’s showing your customer that you care when the owner of a business or someone hired by the company calls a customer. Customers really appreciate being asked, and from my experience, a lot of them will welcome the opportunity to have that conversation. I hear some CEO’s that say, “If you talk to my customers or if I have an outside person to do that it could harm the relationship with my customers.” Well, it kind of goes both ways. It depends on what your objective is. I think there’s a benefit in having an outside party interview your customers when you’re trying to get objective insight into the health of the relationship. So, for example, you may see trends in your customer base where one year you’ve got a customer that’s been a great customer for maybe several years and then all of a sudden, they stopped buying from you or they’ve really slowed down their buying. It’s important to get to the truth of what’s going on. What is causing that trend to happen? So, I think there’s a benefit in having a professional interview with your clients. I don’t think that’s going to harm the relationship, but I think it’s also really important for any kind of conversation with a customer. There needs to be some substance behind the conversation. For example, if you’re a CEO or business owner and if you’re just having a conversation with the customer for the sake of having a conversation, I think you’re maybe risking wasting people’s time. If you position it that you need their input in order to make business decisions and shape the future strategy and direction of the business to benefit the customer, then they see what’s in it for them. I think that they are very open at that point to share their insights with you.
McNealy: Do you find that customers are willing to participate in this kind of exercise?
Priolo: Absolutely. Especially if you position it around shaping the future of the business and wanting to serve them better. I think if they get a sense that maybe you’re trying to sell me something that could become an issue, but you wouldn’t frame it that way. From my experience, customers (especially your best customers) are very willing to share their experience with you. Good, bad, ugly, or indifferent.
McNealy: I know you have a lot of experience doing this and you’ve seen this being attempted by CEO’s, marketing or salespeople of companies. Based on your experience, do you think is best done by a third party?
Priolo: Again, it gets back to your objectives. I think there are plenty of situations where it’s great to have conversations with your customers, whether they are informal or formal. But there are also situations where it’s very helpful to bring in an experienced outside researcher in order to get to the heart of certain issues that you’re seeing in the business. So again, if you’re noticing maybe a drop-off in certain segments of business and you don’t have a good explanation for why that’s happening, then it’s probably useful to engage a consultant who has some experience in diagnosing those types of challenges.
McNealy: Every business owner is focused on growth but in order to grow a business, you must have a stable base. And if you don’t know what your customers are thinking, you don’t know why they’re buying from you, then you may risk a chance of losing that customer and it’s going to be very difficult to replace long-term customers. So based on your information, how do you synthesize and how do you share the information gained from these conversations with the rest of the management team and employees?
Priolo: I have a standard set of questions that I start with and then based on the client and the client’s needs; I’ll tailor a certain number of those questions so that we can be sure to specifically get to the heart of what their most serious issues are. What I like to do is to record the interview. I ask permission in advance. You must ask permission, but when you record these interviews, you get the benefit of unfiltered language, right? So, the way that a client or a customer will describe a problem is often very different than how your marketing or salespeople will describe the problem. A customer will describe a problem in a way that you could never describe it unless you felt that same pain yourself. So there’s a lot of benefits there. But there also is a conviction in their voice, right? You can get a sense of just how serious an issue is or isn’t by the way that the customer is responding. So, you’re looking for trends and kind of commonality. If you see those trends, then those are things that you want to make sure to bring to the forefront. Communicate these matters to the team and work on an action plan to either leverage the strength or weakness.
McNealy: Well, one of the things that is a risk here is that if the CEO, the sales team, or the marketing team prepares a list of customers, they may be inclined only to give those customers that are really happy with of the service that they’re providing. They will never really get to the insights of some of the customers that aren’t so happy. So how do you deal with that?
Priolo: It gets back to why you are doing this in the first place. I think that in terms of the selection process, you don’t want to just interview the top customers. I think you need probably a couple of other criteria. Because when a customer goes through a buying process, they’re doing a lot of market research themselves and it’s very useful to understand why they chose you or not. It will give you a good read on the market and several different things. I’m a big fan of looking at trends.
McNealy: Most of us get a lot of surveys in our personal life and our business life. You don’t recommend a written survey. You’re talking about an actual telephone call with the customer. How receptive are they to talking to someone over the telephone?
Priolo: I’ve found customers are very receptive. They want to be heard and usually the higher up the better. They don’t necessarily want to be sold, but they definitely want to be heard, especially if there’s a problem. So, in offering them the opportunity, to have a line of communication open. I think they want to know the truth about your business. The unfiltered truth. Then you as a business owner or a CEO can decide and use that to help prioritize whatever other things that you want to do to improve the business.
McNealy: You recommend 10 calls to customers. Is that a good number to think about?
Priolo: It really depends on the size of your business but if each quarter I think it’d be great if the CEO or an owner is committed to doing one to two calls a week. That’s about 15 over the course of a quarter. This should be enough to keep your finger on the pulse of the business, the market, and your customers. But again, it’s not so overwhelming that you can’t do it. So, I think that that’s a reasonable number. I think it’s a commitment to the process of doing this as opposed to a onetime event. I just think there’s so much value in what you’re going to learn in talking to the customer.
McNealy: Tell us what to do with the results of these calls. The CEO, business owner, or some other person at a high level in the organization has made these calls.
Priolo: First, we want to identify any major red flags. If there is a big issue with a client that surfaces in one of these calls, then you immediately want to bring it to the attention of the CEO or a business owner. As a team, decide what you want to do to fix the problem. If there is a matter that needs attention, take action. Otherwise, I think if it’s part of a process and you should be doing this on a regular basis. Maybe what you do is every month or every quarter you have a formal report capturing the lessons learned and then you have a discussion with the management team around on how this might impact the business going forward. It may impact, for example, your product strategy or service delivery. On a monthly or quarterly basis, you’re reviewing it and you’re figuring out what you need to or change in your business in order to be more successful.
McNealy: Dario, I would like to thank you for your insights into this very important topic – revenue growth.
If you would like more information on Dario and how he could help your business with a revenue growth strategy, visit his website at www.jkresearch.com. His email address is firstname.lastname@example.org. If you go to his website, you can fill out a contact form or get his phone number off the site and talk to him about any specific questions or needs that you have.
Stay tuned for our second blog of the series which will be covering Revenue Growth – Talking to Your Employees.