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Art and Science of Diagnosing the health of companies and organizations. 

            Just like a physican starts with and examination of the patient, so too leaders must evaluate the attractiveness of  their customers. This is what I have found it useful to evaluate since each of these customer characteristics impacts the organizations CASH FLOWS... 

Customer Attractiveness

These are the major factors we use to determine how attractive the customer characteristics are:

Importance of the product or service to the customer. If the products and services you provide are an necessity and the customer must have it, it is more attractive than if it is purely discretionary or even worse, if it is a fad.

  • Speed of Payments. This focuses on how fast customers pay their bills. This impacts cash flows and ultimately the bottom line. Obviously, the faster they pay the better. However, this may change in the future, because of changes in the customer’s situation and so changes must be anticipated.
  • Difficulty to Reach Customer. This focuses on how much time, money and effort must be expended to make a sale. In some markets, customers are easy to reach, in fact, they may come to you to make a purchase without any solicitation. In other situations, it may be difficult to determine who the customer is and what will motivate them to make a purchase. The longer it takes to make the sale the more expensive it is and so it impacts the attractiveness of the market.
  • Number of customers. If there are only a few customers then the probability of getting orders is lower and so the more customers, the more attractive the segment. Obviously, if you are selling consumer commodities, there are thousands of potential customers and users, however if you are selling a complex communications satellite system, there are few potential clients.
  • Customer knowledge and experience. If customers are novices and inexperienced they will require more help in selecting and using the products and are normally willing to pay more. Experts, on the other hand, don’t require help in making the selection or understanding the benefits of the product or service and so will focus more on price. In fact, the expert may even know more about the product or service than the sales force and be more demanding.
  • Decision Makers. It is easier to sell to an individual than it is a group or committee. Individuals can make decisions faster than a committee or a study team.
  • Loyalty. If customers are loyal they are likely to repeat their sales without the need to continue to sell them. If they are shoppers, then it is more costly to sell.
    This is the matrix I use to evaluate the CURRENT and FUTURE attractiveness of the customer.

 

CUSTOMER ATTRACTIVENESS MATRIX

                                                    High                      Medium                              Low

Importance to customer               Vital                    Important                           Discretionary

How quickly they pay?         Pay immediately        In 30 days                            60 days +           

How difficult to reach?                  Easy                   Moderate                           Difficult

Number of customers                   Many                  Moderate                            Few

How knowledgeable                     Novice                 Some                                 Experts

How many decision makers?        One                     Few                                   Committee

How quick make  decisions?     Immediately         1-3 months                      Over 3 months

How Loyal?                                   Very                      Moderate                          Not loyal

OVERALL RATING__________________________________________



DEEP BENCH= Loyal, trained, skilled dedicated EMPLOYEES and

NOT CONTRACT WORKERS!


I believe that one of the most important networks and systems for any SUCCESSFUL organization is their human resource selection and development systems and networks. The successful organizations have always been willing to INVEST in its people. When I graduated from Fordham I was was a RUSSIAN major in college and originally was focused on being a member of the military's intelligence organizations. However I decided to apply for the GE Business Training Course, now called the Financial Management Program. I had no business courses and knew nothing about accounting and finance. GE hired me, trained me in finance. It include in depth courses and personalized assignments. I then moved to its Employee Relations Program and learned all phases of the human resourse are including recruiting, compensation, management development and even had a FOREMAN's assignment in the factory and part of the apprentice tool shop. 
I learned from a combination of courses, great assignments, management mentors and went on to Crotonville Management Institute where I learned from the best accademics and the Corporate Planner. 

In short GE made an investment in me and it was a benefit to the company and me. I retired early and then went on to have over 30 years of a successful and profitable consulting practice.


If you look at today's world most companies DON'T INVEST in their people and so we have "contract workers", not loyal, trained and dedicated employees.



















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