Continuing to do things the way you have always done them guarantees getting the same results you got in the past. Most of us believe improvement is a good thing. We would like to improve our bottom line, our customer loyalty or our effectiveness on the job. This is true for all motivated people regardless of whether they are company owners or employees. Unfortunately, most of us never break through to higher performance levels — not because we don't want to, but because we don't have a road map that will guide our efforts and focus us on high payoff activities with the right customers.

One of my goals in writing these columns is to discuss a road map and a way of thinking about customers that has worked well for my own business. You need to think about customers and your business differently than you might have in the past and be willing to change the behaviors that produce your current results.

I have discussed two elements of this road map in past columns: the Moments of Truth (MOT), and the Customer Report Card (see the December and January issues or AgKnowlogy's Web site at www.agknowlogy.com). When you understand “why” your customer results are what they are, you can begin to change them. With this road map you have a much better chance of hitting your business goals.

This concept argues the share of a customer's business we have is the business we have earned. It drives a stake in the ground to show where you are with each customer for each category you sell. Unfortunately, some retailers are very creative in justifying why they only have 30% of someone's fertilizer business and 50% of some other category. For the most part, this rationalization is a waste of time and produces no understanding of how to get different results with the customer in question.

The MOT concept helps you understand why you have the results you have with each customer. When a customer comes into contact with your company, it is a Moment of Truth. Customers experience many MOT, such as your product knowledge and understanding of their business goals, during the course of attempting to get their needs met. Each Moment of Truth is part of a Cycle of Service of doing business with you. A customer's experience at each MOT along this cycle is a key factor in his evaluation of how successfully you meet his needs.

While it is reasonable to believe some MOT are more important than others to most customers, it is critical to realize each customer places his own importance on each MOT. For each customer, you are judged on two factors at each Moment of Truth: 1) How important is it? and 2) How effectively do you perform it? Each customer rates you on the Cycle of Service according to his perception of the importance of each contact, and how effectively you perform at that Moment of Truth.

I want to fold the Customer Report Card and Moments of Truth concepts into a customer purchasing model that will help you increase sales, loyalty and profits. As the model shows, each customer's Moments of Truth influence his perception of your ability to meet his needs. This directly influences the Share of Inputs (SOI) he provides to you. The SOI you have with a customer in each category you sell points to the strategy you should take with this customer. Customers with over 75% SOI in a category are usually Retention targets. Customers with a low SOI (that is, less than 25%) have issues to be resolved before they give you a greater share of their business. These customers require a Problem Solving strategy.

To change the Share of Inputs you have with a customer in a planned, goal-focused approach, you need to identify which Moments of Truth are most critical to this customer on the Cycle of Service, and then find out how he rates your performance on these drivers of the purchase decision. A good, nonthreatening question to ask a customer is, “How can I earn more of your business?” With this knowledge in hand, you can develop a focused strategy for each of your key customers that delivers on what each customer agrees is important to his business. It might be hard work, but the payoff is worth it. Remember, hope is not a strategy, and working hard is not a business plan. If you need any help getting started, I would be happy to lend an ear or a hand.

Bill Keogh is the owner of AgKnowlogy Inc., a company that helps retailers use customer information to improve their business results. If you have a success story to share or an idea for a future column, e-mail him at info@agknowlogy.com, call 905/868-9953, or visit www.agknowlogy.com.

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