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Part 2
Just as you try to build and strengthen the critical path between you and your customers, your competitors are building their own critical paths…to those same customers. In fact, they want to destroy your critical path and have your customers all to themselves.
So the question becomes how to detect before too many customers defect.
First, you need to keep your attention focused on your best customers—the ones you really want because you can serve them well and profitably over a long period of time. They are your lifeblood.
Over 10,000 fans showed up for the grand opening of Planet Hollywood’s New York restaurant. Stars like Demi Moore, Bruce Willis, Arnold Schwarzenegger, and Whoopi Goldberg had invested in the company, and they showed up regularly to promote the handful of initial restaurants in Chicago, Los Angeles, Washington, D.C., and London.
Hospitals face difficult patient decisions. For example, inner-city emergency rooms are used as a typical doctor’s office where people show up with colds, the flu, or earaches. The patients go there because they don’t have a regular doctor.
So, if you are an aluminum company, you should know the whole industry value chain and the part you play in it. When you view yourself along this chain, you see that your revenue is actually a cost to your customers, the fabricators. If your revenues increase at the fabricator’s expense, then their costs go up. In turn, they either:
From a critical path perspective, you must understand the value you add for your customers. But if your company’s business relies on selling goods and services to other firms and companies, there’s another consideration you must take into account.
As the Swiffer example in the previous Lesson shows, we need to understand the customer experience from their perspective. What steps do they go through to buy and use your company’s product or service? While they are doing so, what are they both doing and feeling?
Occasionally, the problem that the customer is trying to solve is linked to another problem that the customer needs to solve. Recognizing and solving that unstated problem can be a tremendously powerful way of connecting with customers along the critical path.
Some companies fool themselves into believing they know what their customers want by looking at their sales data. After all, it stands to reason that if people buy something, it is a strong signal that they want it.
Understanding the customer’s problem is no easy task. Just as with the critical path as a whole, this understanding begins with the customer, not your product or service.
Customers look at your company the same way that your company looks at you as an employee: are your company (and you) adding value, and is that value worth the price?
We can go a step further than we did in the previous lesson. It’s not only important for executives to know the company’s customers. It’s actually the job of everyone in the company to know the customers—and not just the current ones, but potential customers as well.
The critical path does not start with the company’s product or service. It starts with the customer. The movie Field of Dreams popularized the fantasy that “if you build it, they will come.” But it rarely turns out that way. If you start out at the wrong end of the critical path, you are handicapping your chances of success.
