Using Diligence and the Ownership Change to Leverage What Matters to Customers
Conducting commercial diligence that matters should equip the new owner and the leadership team with insights that can quickly make an impact on market share and pricing opportunities (among other opportunities).
One highly effective commercial strategy is to discover, focus, and communicate that you (as a company) understand what matters to your customers. Customers like to buy from companies that “get them” – and this is especially true for products and services that might otherwise be considered to have commodity attributes. When you demonstrate that you understand what matters, customers will start to believe that your offering uniquely addresses what matters to them – and they will reward you in turn.
What if the diligence exercise could bring this opportunity to the table?
At a mid-point in Home Depot’s life, the company sought to expand the market of DIY customers. After conducting research, it came to understand that there was a segment of homeowners who were skilled enough, but not sufficiently confident, to take on a significant DIY project. The company started to host weekend clinics: how to build a deck, make a garden, install cabinets, etc. The message: “we get you; there are many just like you; we are here to serve.”
Starbucks wanted its customers to buy more coffee, more frequently. The company realized that many consumers were looking for more than a cup of coffee (there were plenty of places to get a cup). Leadership formed the view that people wanted a place to spend time comfortably, in the community, to work, to study, to see neighbors, to get away from the burdens at home, and even listen to music. So, Starbucks offered new in-store features - different seating formats, more electrical outlets, newspapers, refills, etc. - but most impactful, then-CEO Howard Shultz and his leadership team took to all forms of the press to share their insight that people wanted a “third place” and made the case that Starbucks provided the solution.
Apple understood that both business and consumer computer users were tired of the “blame game” and complexity associated with getting computers to work properly. In one motion, Apple expressed that it understood users’ pain: it introduced the now-famous Apple Genius Bar. Its message: “we are built for you.” Yesterday at my gate at the airport, I counted 18 laptops; 15 were Macs.
The costs to getting these messages out – “we will teach you how to build the deck” or “we want to be your comfortable third place” or “we will resolve your pain” -- were relatively cheap and provided an incredible ROI.
The job, in each case, required three things:
- Intelligent insights on what mattered most yet had been neglected
- A simple way to demonstrate with proof points that what matters to you matters to us
- Leadership commitment to make this a primary message and back it up
Having a new owner is a fantastic moment to communicate that leadership understands something unique about the customers and is going to do something great with its understanding (thanks to the support of the new owner). Win them over and create energy and momentum for growth. There are few better times than during commercial diligence to discover these opportunities (early) and gain the attention of leadership. Money is already being spent to uncover market, channel, and customer insights; all that’s missing is setting the expectation to capture these ideas.
The little things (that matter) are easy to overlook and exclude from the diligence agenda and leadership discussions. But they are often just as easy to incorporate into the diligence assignment. If new owners are able to hit the ground running with something meaningful, there is a fantastic opportunity to drive focus that can generate leading brand equity and preference – and to do so in the very earliest stages of ownership.
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