Two Prerequisites for Successful Business Growth Success VisionEdge Marketing
There are two customer-centric prerequisites to improve your customer acquisition rate and drive successful business growth. And that’s the focus of this episode of What’s Your Edge? Remember when you were picking courses in school and some courses listed prerequisites? For example, Computer Science 2 required Computer Science 1; Chemistry 2 required Chemistry 1; Finance required Statistics, and so on. Even in life there are requirements. Life as we know it requires a source of energy, liquid water, and a suitable, reasonably stable environment. In business, growth depends on understanding the customer buying journey to acquire, retain, and grow the value of customers. While there are many prerequisites to customer acquisition, assuming you have completed all the upstream work and have a relevant and compelling offer, two prerequisites are critical to success: discoverability and engagement.
The value of prerequisites can be debated. Are they merely a gate-keeping mechanism or do they ensure a minimum threshold necessary for success? Academic research demonstrated that when students take the recommended prerequisite(s), they outperform peers who skip the prerequisite(s). I propose the same is true in business. Companies that complete these two customer-centric prerequisites achieve more success when it comes to customer acquisition which impacts your company’s product adoption rate, market share, and category ownership.
Why Discoverability and Customer Engagement are Two Critical Paths to Success
It doesn’t matter if you’re a big company or a smaller firm. For business success, you need to invest your energy into discoverability and customer engagement. Why? Because today we operate in an environment of the empowered customer. What does this mean? It means the customer has the knowledge, confidence, means, and/or ability to do things or make decisions for themselves. It means they are in control of their customer buying journey and their buying process. Let’s explore each.
When prospective customers embark on their buying journey to solve a problem or address an opportunity, they typically begin in one of two ways, if they do not already have a solution for the problem/opportunity in mind. They ask someone they trust and/or they head off to do an online search.
According to GE Capital Bank, 81% of retail shoppers conduct online research before they buy. And according to a B2B Procurement study from the Acquity Group, 94% of business buyers do some form of online research and 77% conduct this search via Google. I suspect people conducting online searches prior to purchase has only increased as we’ve all spent more time in front of our computers in the past few years. This means your company needs to surface during their search, it must be discoverable, that is easily found.
Where your company lands in the rankings is critical. According to a 2014 study from Advanced Web Rankings, more than 67% of all clicks on SERPs go to the top five listings.” Not only must your company be discoverable, but it must also come up fairly early in the listings or search engine rankings. Hence the value of both organic and paid search engine optimization (SEO) in order to improve discoverability. There are hundreds if not thousands of articles on how to improve SEO and your search engine ranking. The point is that discoverability is a necessary, above the line, requirement to achieve momentum for customer acquisition.
Back to the customer buying journey. For either a prospect, or even an existing customer considering additional products or services, discoverability impacts your opportunity to acquire a new customer or increase your share of wallet of an existing customer. Transactions in business that occur without any interaction between the buyer and seller, such as buying thumb drives, computer cables, and power surge protectors, or industrial and construction products, such as couplings are very consumer like. There are however important nuances that make B2B (business to business) different from B2C (business to consumer) buying.
From our perspective, business-to-business buying journey entails a consultative sell for a relatively complex product/solution that involves several, if not many, people in the evaluation, selection, and purchase stages of the buying process. A Harvard Business Review article reported that the number of people involved in B2B solution purchases climbed from an average of 5.4 people to 6.8. Gartner found that the typical buying group for a complex B2B solution involves six to 10 decision makers. In the world of B2B, there are quite a few people within a prospect’s organization your company needs to engage with to move the process forward. Hence, the second prerequisite, engagement.
No customer engagement. No growth. Customer engagement is about commitment. We can easily see how this works in our personal lives, when two people become engaged. They are making a commitment to move their relationship forward. In fact, a University of Denver study found that people who were engaged before they married tended to be more positive about their marriage and less prone to divorce (that is higher retention and loyalty rates).
Engagement matters. It matters in both personal and professional relationships. It matters with people within your organization, with people outside your organization, such as suppliers, and most certainly with prospective and existing customers.
What does customer engagement entail? It entails cultivating a relationship. The word relationship implies that there is some kind of connection and level of interaction. Connecting and interacting with prospects and customers is a prerequisite for them to enter into a deal with you and your company. Here’s something to consider. What kind of connections and interactions do you have with your prospects?
Kristian Döscher shared his research findings on proactive vs. reactive interactions and their impact on customer relationships in his book, “Recovery Management in Business-to-Business Markets”. He found that customers are more likely to continue and even expand the relationship as a result of proactive interactions vs. reactive interactions. The better you understand your prospective customers’ buying journey, the more you can initiate interactions, that is be proactive.
Take a moment to conduct an audit of your customer interactions and touch points. Consider where, when and how you interact. Note which interactions are proactive and which are reactive. What is the ratio between reactive and proactive interactions? Ideally you want a ratio of 5:1, 5 proactive interactions for every reactive interaction.
Be Prepared to Deliver What Comes after Discoverability and Engagement
Discoverability and customer engagement alone will not guarantee your organization success. Your offer must competitively solve their problem or enable prospects and customers to take advantage of an opportunity. Your offer and your company must meet their evaluation and selection criteria. Discoverability and engagement, however, are two customer-centric prerequisites to the evaluation, selection, and purchase stages of the customer buying journey. To grow, ensure you successfully address both of these.
We hope you found this episode of What’s Your Edge? helpful. What’s Your Edge? is the creation of VisionEdge Marketing. VisionEdge Marketing, founded in 1999, helps our customers solve the most difficult problems when it comes to using data, analytics, process and measurement to accelerate growth, create customer value, and improve performance. We always welcome hearing from you.
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