As a small business advisor, you possess a wealth of knowledge and experience in compliance and financial record-keeping. While companies rely on you to keep them within the legal, financial and regulatory boundaries, it is a rare company that outmaneuvers the competition with more stringent compliance.
Unleashing Your Potential as a CEO Whisperer
“Build an advisory practice” is a common refrain and great advice, but no one provides instructions on the “how” or the “what.” In this four-part series, tailored specifically to “CEO Whisperers” like you, we will guide you on how to elevate your services from rules-based to value-based advisory.
By steering your conversations with business owners towards the universally faced challenges of growth and profitability, you can deliver measurable and impactful business outcomes that truly set you apart in the market.
Businesses do not create and maintain a competitive advantage by merely being “better” at complying with accounting rules and regulations. While these are important, business owners do not lose sleep thinking their policies and procedures manual is outdated or a competitor having a better lease accounting disclosure.
Similarly, businesses do not fail or underperform because they lack a product or service. They fail and underperform because they have not figured out how
to identify, reach and sell to profitable customers. Compliance-based advisory services alone cannot rescue a failing or underperforming business.
As a CEO Whisperer, your role is to help businesses answer and address three fundamental questions:
- How do I think about the business? This topic will be explored in Part 2 of the series.
- How do I manage the business? We will delve into this in Part 3 of the series.
- How do I grow the business? This will be our focus in Part 4 of the series.
In our view, these three fundamental questions must be asked and answered by every business aiming to build a sustainable competitive advantage and outperform their competition.
Part 2: How do I think about the business?
Here is a fun thought experiment. Why are you, your firm or your company in business? In other words, why does the business exist? While making money, providing a useful product or service, offering a return on investment, and contributing to the community are valid responses, they only scratch the surface.
Peter Drucker, the renowned management consultant, once said, "The sole reason a business exists is to create a customer." And not just any customer—a profitable customer. A company exists to create a customer. Profitable customers allow a customer to exist.
Understanding this principle—profitable customers allow a business to exist—is key to preventing business failures and differentiating from the competition.
A company’s strategy, therefore, begins with consciously deciding which customers they want to create, and by default, which customers they do not want to serve. Different customers buy different kinds of value.
A cost-conscious customer needing a new car is less likely to shop at the local Mercedes dealership, regardless of how convenient it is or how extensive their selection of fine automobiles is. And a safety-conscious customer is unlikely to be concerned with or impressed by the 0–60 rate of acceleration.
Thinking from the Customer's Perspective: CEO Whisperers guide business owners and leaders in adopting a customer-centric mindset. They encourage thought-provoking questions such as:
- What problems are the ideal customers looking to solve or what wants are they looking to satisfy?
- What are the limitations or constraints of the ideal customer that must be considered?
- How are the customers solving the problem or satisfying the want today?
- Do the target customers perceive these problems or wants as important or “must haves”?
- Who is the customer (e.g., the end user, the person with the budget, the person making the decision)?
- How is the customer reached (e.g., online, instore, pickup, delivery, etc.)?
As you may have guessed, the answers to the above questions form the basis of a customer segmentation exercise. Because different customers buy different kinds of value, it is imperative that a company understand which customers most value their product or service offering and narrow their focus to reach and serve those customers.
Join the "Catalyst For Growth: Offering Differentiated Advisory Services" webinar, June 14, 4 p.m.-5 p.m. (EST). CLICK HERE to sign up.
Customer segmentation has many benefits, including allowing a business to:
- Understand which customers are the most and least profitable.
- Cater to specific customer problems and wants. One size rarely fits all.
- Build meaningful relationships with customers.
- Avoid sinking precious and limited time, energy and money into customer segments that cannot be profitably served.
And when a company has identified the target customers they are looking to serve, they must answer how the company uniquely solves the problem or satisfies the want. This is usually referred to as their unique selling proposition of value proposition.
Customer segmentation and value proposition are the two sides of the same coin. Value propositions are a direct and natural extension of customer segmentation. A company’s value proposition clearly and succinctly describes why a customer should buy its’ product or service rather than a competitor’s product or service.
Ultimately, a company’s performance reverts to the value it provides to customers relative to the competition and alternatives. Remember, good marketing can sell a product once, but only good value can sell it twice.
Different dimensions of value resonate with different customers. Some examples include:
- Discount prices – Walmart, Kay Jewelers, Motel 6
- Luxurious – Bergdorf Goodman, Tiffanys, Ritz Carlton
- Performance – Ferrari, Duracell batteries
- Design – Nike, Coach Bags
- Brand/Status – Rolex, Gucci
- Convenience – UberEats, Instacart
- Experience – fantasy camps, escape rooms
Consider the differences between a Honda and a Lamborghini. Both automobiles provide a means to get from point A to point B. However, one has dramatic disadvantages compared to the other.
To name a few:
- Horrible gas mileage
- Uses premium gas, not regular
- Moderately comfortable seating for two
- Non-existent trunk space
- Maintenance and repairs are exorbitant
And yet, the Lamborghini is 10x the cost of the Honda. Why? Lamborghini has figured out exactly who their customers are, what they want, and how Lamborghini brings it to them. CEO Whisperers help businesses achieve similar clarity by identifying target customers, understanding their problems and wants, and articulating a compelling value proposition that sets them apart from competitors.
Incorporating a customer-centric approach and understanding the value proposition are essential in becoming a CEO Whisperer. By helping your clients think about their business from the customer's perspective, you can contribute significantly to their growth and success.
In Part 3 of this series, we will explore how CEO Whisperers help their clients manage the business more effectively.
Peter Mares co-founded G76 in 2021, at the height of the pandemic, to help middle market companies not just survive, but to thrive. G76 brings Fortune 500 “big data” analytic capabilities tailored specifically to the middle market to help companies grow profits and sales from their existing customers. His career highlights include founding two practices as a partner at the global accounting firm KPMG, and holding executive and C-level positions in global, mid-market and small businesses. He is a CPA with an accounting degree from James Madison University and received his MBA from George Washington University. Peter and his wife, Kimberley, live in Pennsylvania and stay connected with their seven (yes, seven) children spread out across the country. Peter is also an advisor to businesses and start-ups through the Executive Leaders for Advisory Boards.
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