Consumers today are more sophisticated, well-informed and knowledgeable than at any other time in history.
They are better educated about the products and services they desire, more affluent than generations before them and have a greater ability to purchase what they want, when they want and on their own terms.
Knowing that your customers know what they want doesn't guarantee you'll be able to sell to them, however. With the wealth of selection in the global marketplace, it's easy for your product or service to get lost.
Globalization and the internet have redefined the way products and services are bought and sold for entire industries, adding a level of choice for consumers and competition for producers never before imagined.
How to stand out
How then can you stand out from the competition? Certainly being the biggest or the best in the industry has its advantages but what if you're neither?
The good news is that in a global economy with so many consumers, it isn't necessary to be a behemoth to gain a significant market share. You just need to understand your customers - what it is they really want from you - and understand them better than anyone else in the industry.
To gain understanding, research is key. Whether it's finding studies of the demographic most likely to use your product or service or reading trade magazines and other industry publications, you'll need to do your homework. Keep abreast of trends - in your industry and in the overall economy - in order to understand what your customers are buying - and what they're not buying - and what economic factors effect those decisions.
"The power of individual choice has never been greater and the reasons and patterns for those choices never harder to understand and analyze," said Mark J. Penn, author of "Microtrends: The Small Forces Behind Tomorrow's Big Changes."
"The skill of microtargeting - identifying small, intense subgroups and communicating with them about their individual needs and wants -- has never been more critical. The one-size-fits-all approach to the world is dead," he says.
With the analysis of Microtrends comes a new way of thinking: Bigger isn't necessarily better. One of the major trends of the last five years is the phenomenon of customers gravitating away from the "big box" stores to smaller, more specialized outfits. Nowhere is this principle better illustrated than in the recent slip in the influence of retail giant Wal-Mart.
"Rival retailers lured Americans away from Wal-Mart's low-price promise by offering greater convenience, more selection, higher quality, or better service," says Gary McWilliams in his Wall Street Journal article "Wal-Mart Era Wanes Amid Big Shifts in Retail". "(With) the country's growing affluence, Wal-Mart has struggled to overhaul its down-market, politically incorrect image while other discounters pitched themselves as more upscale and more palatable alternatives. The Internet has changed shoppers' preferences and eroded the commanding influence Wal-Mart had over its suppliers."
If customers aren't moved by low prices, then what does move them? We are now seeing a shift in consumers who are more interested in quality - in the products they buy and in the shopping experience as a whole. While many customers will always look for the lowest price, there are just as many today who place quality far higher on their list of priorities - and who are willing to pay for it.
Lowering your price just to try to make the sale, per the old model, not only devalues your product or service, it simply does not make sense anymore. In today's marketplace, don't underestimate the affluence of your customers. Many customers don't trust "cheap" prices. Understanding this mindset will help reframe how you relate to these kinds of clients.
Organic's rise in popularity
An example is the meteoric rise in the popularity of organic products. Once only available at small, local grocers and community markets, shopping organic has become a multi-billion dollar industry. What was once a cottage industry of a few individuals seeking a back-to-the-farm respite from chemically treated food now stands to revolutionize the way millions of average Americans eat and the way food is produced and marketed in the United States.
As a 2007 IBM study of 6,000 U.S. grocery consumers reveals, a staggering number of customers - 73 percent - feel antagonistic toward or have no loyalty to their local supermarket. Despite stiff competition among grocery chains to offer low prices and special deals with customer loyalty cards, consumers are unhappy. Meanwhile, organic markets, and sales of organic items within grocery chains, flourish.
"Specialty stores fine-tune their operations to the specific needs of the community, offer local assortments and are better equipped to develop truly personal relationships," says Fred Balboni, IBM Global Retail Industry Leader, IBM Global Business Services.
Learn about customers
Grocers, just like any other retailer or service provider, need to learn more about who their customers are and what they want so that they can understand how best to serve them. Consumers who patronize the specialty stores are looking for one-on-one interaction and personalized attention.
They want to be asked what they want and given an opportunity to provide feedback. They want advertising and promotions that appeal to them personally and above all, they want the shopping experience to be part of a relationship, not just a business transaction. If the large chains can replicate this experience, they can reclaim their lost clientele.
Companies that focus on building those relationships with customers will reap the benefits. In a marketplace where even the giants can fall, we see a greater opportunity for those with the right product or service, the right attitude toward customer service and the right frame of mind to succeed in ways that were never before possible. You don't have to be the biggest to be the best, you just have to understand your customers, build relationships with them and strive in every way to give them the quality they desire.
"Building differentiation with today's savvy and vocal consumer requires a whole new approach for businesses (and) business operations," says Balboni. "Applying them in a personalized and tailored way will build strong advocates and loyal customers."
Roy Chitwood is an author, trainer and consultant in sales and sales management and is president of Max Sacks International, Seattle.