Understanding your client’s business
One of the best ways to make a strong impression with a new prospect or customer, is to demonstrate that you’ve done all the homework on them that you reasonably can.
Above all, they want to know that you understand their business, and you have good reason to believe you can help them… before the initial approach.
I’ve found a good place to start is to understand their competitive landscape. There’s a simple but very effective model you can use as a checklist to be sure you’re covering all the bases.
I’m referring to what is known as the “Five Forces Model”. It was described by Michael Porter in his 1980 book, Competitive Strategy. It’s a staple for business school strategy courses.
The Model and Starter Questions
Here’s the model and some starter questions for you to research for the company and executive you’ll be meeting with:
Which companies compete for the same customers your prospect cares about?
Large companies operate in multiple segments. Be sure you’re researching competitors in the same segment your prospect works in.
How much market share does your prospect business enjoy?
Are they gaining ground or losing ground? Their strategy will be different if they’re a leader, or a new entrant.
Threat of New Entry
What other companies are positioning themselves to compete in this space?
At one time, IBM was the runaway leader in computers. But along came DEC, HP, and a host of others.
What is your prospect doing to create “barriers to entry” to make it hard for others to enter?
Unique technology, strong reputation, global support capability, other ways?
Threat of Substitution
What could be a substitute in the market that winds up competing for the same users?
The first portable radio was a substitute for a record player. The record player was a substitute for live concerts… You get it! What competitors are finding a new way to serve the same market need?
How are their biggest customers influencing their product and service strategies?
When I worked for HP, we spent a lot of time and energy visiting with our largest accounts to understand their emerging needs. That yielded a better understanding of the market trends of that customer category, which allowed us to get out ahead or our competitors in designing solutions to meet those emerging needs.
Who supplies critical technology, raw materials, and human resources to your prospect’s firm?
Oil producing companies and countries wield considerable power over companies such as refineries, distributors, and automobile companies.
Understanding your prospect and asking well informed questions gives you a leg up on your competitors who rely on lame “what keeps you up at night?” questions.
Customers reward the consultants who invest in understanding them. You don’t have to be an industry expert to ask a better question. You just have to do some basic research and personalize it to the person you will be sitting across from and the industry segment they serve.