Introduction

Declining prices and margins. Decaying sales. Unprofitable customers. Lackluster market performance. Does your company suffer from these maladies? The solution to these may not be spending more money on advertising, replacing the VP of sales and the rest of the sales force, or further cutting costs. No, the answer may lie somewhere else entirely—and if recognized and addressed, may resolve all of these symptoms.

The problem may actually lie in the way that your products and services are designed, developed, delivered, and refined. Who drives these activities? Is it Engineering? Management? Support? Sales? If the customer is not in the driver's seat, your revenues, profits, and even your company may be at risk.

The problem may well lie in the fact that companies don't understand their customers—what they need, want, and most especially, what they are willing to pay for. Without this understanding, companies do not know what products/services to offer, or how to market and sell to prospects.

The only way to guarantee increased revenues, stronger, longer, and more profitable customer relationships is to center strategic decision'making on actionable customer insight.

1.1 Symptoms

Some of the symptoms that companies face that are operating without sufficient customer insight include:

* Declining margins and prices—Price and margin are excellent measures of a company's ability to make its value proposition successful in the market. Too many companies do not recognize when the market no longer values its offerings and resort to price cuts or other margin-cutting promotions

* Decaying Sales—A company out of synch with changed customer needs will suffer as sales decay. When customers are harder to find and sales are more difficult the reason is often than a company has not driven customer knowledge far enough into the company processes. Adapting everything a company does from product development to core metrics of business health to customer value is a key strategy to reinvigorate a company's economic engine.

* Unprofitable Customers—Often companies, particular those that have been successful, do not know what a good customer looks like. Many companies grew in different economic times by taking the business 'came in the door' but have not yet invested in insight about what kind of customers are good ones.

* Lackluster product/service performance—Lack of market adoption clearly means the product or service missed the mark and does not adequately solve customer pain. Customer knowledge needs to pervade a company's management of its innovation in product, markets, and business extension. Every company has to be alert to opportunity in these areas because growth is a broad based challenge—simply doing one thing very well is no longer enough.

* Most companies have only two communications channels with customers: sales and complaints. Both of these are important—companies need to sell and customers need ways to seek redress—but neither tells a company what the customer needs to make them successful. To ensure success, you must continuously deliver what you know your customers and prospects need, want, and are willing to pay for.

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