Customer-focused innovators make the best customers

If you are a packaging machinery company prospecting for customers, my recommendation is to look for those who are leaders in customer-focused innovation. They make the best customers.

Customer-focused innovators will be growing their businesses by satisfying unique customer demands. Packaging will be viewed by them as an essential part of satisfying the customer need, not simply as a cost that they must bear. They will understand that their attention is best focused upon product innovation around their particular core competencies and they aren't likely to meddle in how you do your job as a packaging machinery supplier. With time-to-market being critical to innovators, they won't bog you down in a long project cycle or make you take on additional development time to meet their customized specifications. They need your machinery to work and are likely to share both responsibility and risk. From the perspective of a growing market, they see profits for both themselves and for you and will seek out win-win ventures.

This sounds like a great customer! Most companies start out this way as entrepreneur-driven customer-focused innovators, but many fail to maintain that focus and evolve into a different sort of packaging machinery customer.

Businesses seem to naturally evolve from customer-focused innovation to process-focused innovation. This shift is intended to drive productivity, sometimes motivated merely by the need to meet increased demand. The creative minds go to work on developing more productive maintenance strategies, more automated systems, and more detailed training plans. Eventually this focus on productivity begins to get in the way of product innovation. As more resources are devoted to process innovation, machinery specs begin to take on a life of their own. The customer is convinced that only they know best how to specify components, source materials, and write training manuals. This customer, who was once fun to do business with, becomes more of a burden on you as you try to adapt to his every wish.

As companies continue to evolve, chasing productivity becomes an end to itself. Where at one time everyone in the company may have been focused on the customer, now many are focused only on the budget. Innovation becomes a hazy memory as the company tries to save its way to prosperity. Cost becomes the driving factor for packaging machinery decisions. Relationships become more adversarial as the company sees life as a zero-sum game where if you win, they loose. It's not impossible to have a successful business relationship, but it is difficult.

One can make the argument that innovators are seeking customer intimacy with their packaging machine suppliers; the productivity zealots are seeking quality from their suppliers; and the cost-cutters are seeking favorable price from their suppliers. Price, quality and customer intimacy are all valid propositions from which to compete. As a supplier, you must compete on the basis of at least one of these three and you may be able to compete on the basis of two of the three, but probably not more.

By matching your competitive strengths with the needs of your customers, you will be more successful. For me, I would want my competitive profile to align with the needs of innovators.

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Comments Some good points here. So many customers will spurn good suppliers because the accountants have taken charge. Posted by: Joan Round on January 29, 2008 Stating the obvious is an easy way to write a column. Posted by: Anonymous on February 14, 2008 Post a comment (If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.) Name: Email Address: URL: Remember personal info? Comments: (you may use HTML tags for style)