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Winning Companies Focus on Winning Customers

By Denise Harrison, Executive Vice President & COO

Strategic Planning Expert

Strategic Planning Expert

Reprinted from Course and Direction March 2007

Is strategic planning dead? Many so-called experts criticize the time spent on evaluating the core businesses and current competition as myopic. They point out that companies often miss emerging markets (mainframe to mini-computer to PC) or are blind-sided by new competition (Wal-Mart entering the retail grocery market). The Simplified Strategic Planning process covers both the evaluation of existing customers and competition and the assessment of future customers and competition. First, you need to know what is going on in the markets your currently serve, not only current and future needs and preferences of customers, but also competition. Next, you must also look at market shifts and make sure your company is positioned to take advantages of changing market conditions.

Industry Scenario/Winner’s Profile

In order to capture possible industry transformations the Simplified Strategic Planning process asks your team to generate a scenario of the industry looking at the broad planning horizon, both market-wise and time-wise. For example, if you were selling storage devices to the mainframe computer industry you would look at the whole computer industry for your industry scenario and at a point in time beyond the period for which you are planning. What are possible industry shifts?

  • Mainframe to mini computer to PC
  • Pagers to cell phones
  • Film to digital imaging

In addition, your team should ask: Who will our future customers be? Who will our future competitors be? Once this scenario is developed, then the team is asked to construct the winner’s profile, the key characteristics of the winning company given the industry scenario. Future importance and current performance is assessed for each characteristic. Gaps are identified and plans are developed so that the team is working on the items most critical to position your company to be the future winner.

Winning Customer Profile

What about customers? Can you identify the profile for winning customers using the same industry scenario? Yes! Simply take the industry scenario and identify the key future attributes for the winning customer. Then rate your customers and prospects against the winning customer profile. How does your customer base stack up?

Recently several companies employed this approach to focus their marketing and sales efforts. The results were outstanding:

  • Customer lists shrank: one list went from 200 customers to 30, with revenue and profit increasing
  • The targeted customers grew faster than the industry average, taking their suppliers along with them
  • Accounts receivable problems diminished — in one case to almost zero
  • Competitors often gained accounts, but gained the companies who were not positioned for changing industry conditions and soon developed financial issues. Accounts receivable and bad debts soared.

In strategic planning your company must position itself to compete effectively in changing market conditions. Developing an industry scenario looking out beyond the current planning scenario will enable your team to anticipate changing industry dynamics, new customers, and new competitors. In addition, this future vision helps your team develop the profile for the winning customer. Use these profiles to guide your priorities for future development and you will find your company on the path to future prosperity.

If you are interested in learning additional ways to invigorate your strategic planning process, please read a complimentary copy of our book: Strategy Tune-up.

Denise Harrison is Executive Vice President and COO of the Center for Simplified Strategic Planning, Inc.  She can be reached at  harrison@cssp.com.

© Copyright 2014 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.