What Questions Should You Ask?

We’ve been talking about the business model the last few weeks.  We’re determined to interject positive, forward momentum into both manufacturers and other businesses at this critical time.  We’re trying not to mention what’s going on in the outside world, which is difficult at times. 

In crisis comes opportunity.  That crisis could be personal or worldwide, so the models that we’re discussing are just great reminders of the building blocks of traditional business. 

Today, we promised to dive into the exploration of your own questions for customer prioritization.  How do you determine what you need to ask in order to see if your customers fit your model?

What? 

Yes, customers need to fit your model as much as you do theirs.  You built your business model and the way that you deliver both your products and services to a certain price point and certain areas of what you do are investment for your customers.  You’ve already made those choices.  For instance, when you deliver to a particular long-time customer, you might be willing to do a little extra work that is specific just to them.  For the rest of your customers, you might have a standard process. 

These choices are not endless and there are limits as to what is possible for you based on your business and your profit margins.  So how do you find the questions you need to ask. 

First, look to your delivery process. What is standard about it and how do you change it (or not) for customers?  How expensive is it?  What customer costs you the most in terms of the ways that they ask you to deliver their goods and services?

How about your billing model?  Do you have a really good sense of how customers pay you?  Remember here that “cash is king” and so when you do the work and when you get paid for it is critical.  Get paid early and you have the investment to put into other jobs.  Which customers pay promptly?  Which ones don’t?  Do you have customers that you have to chase for payment which costs you significant additional dollars in time and money on those collections?  This is significant as well, and often gets lost in the mix.

Do you have metrics on your customer service?  How often do customers call in?  What do they ask for?  Do you have additional costs (that are not covered by the people calling) that you have to incur?  Which customers call the most?  Note that we have always strived to provide the best customer service in the industry and we believe that it’s the only model that will carry a business through, but it is always good to understand where you are spending those dollars and to what effect. 

These three pillars form the base of how you deliver for customers.  Think through special areas or tasks that are unique to your business.  If you are in manufacturing, for instance, do you have large, upfront, sunk costs that are difficult to recover to win new business?  Do you get engineering specifications from customers that are either difficult for you to deliver on (so costly) or, worse, are often wrong and cost you a lot of time and money to correct before moving to production?  We will talk in later blogs about how to get your customers to pay upfront for the work you do and make the investment more of a joint win. 

Until then, look to each of your customers on this delivery process and see how they measure up.  Is there a way or ways that you would siphon out one or more of your customers to the bottom or top of your lists based on the answers to the questions that you developed?  This is just the beginning of the process to determine customer segmentation.

 

In 2020, we are rolling out meaningful tools for manufacturers that are affordable, on-target and competitive.  We are also expanding our educational offerings.      

We believe in the critical importance of manufacturing right here in North America and we work hard to keep you working.  Ask us questions; you will find that we are far more reachable than other software providers you may partner with.  We are here to help you find the right tools and use them, whether it's a Google doc, an Excel sheet or a Production Control system.  To learn more about meeting your targets for 2020 or just getting a question answered, visit us at www.cimx.com.

 

ASK THE EXPERTS 

 

Topics: What is Paperless Manufacturing?, How can software improve manufacturing quality?, How is MES different than ERP and other software?, What is Smart Manufacturing?, How does software motivate process improvements?, How can you implement paperless manufacturing?

Written by Kristin McLane