• Written by Tom Lauck, Creative-Ops

If sales are sluggish, perhaps your marketing communications messaging and positioning provide too few reasons for customers to switch to your products. You need to build a reputation, give competitors' customers multiple reasons to switch, and connect past performance with present purchase decisions. Here's how.

1: Build a Reputation

If your company's products are highly technical products that are used as an integral part of a larger process, product failure, can be costly in many situations. This potential for failure represents a risk, particularly for the person who places the order. Customers need to be provided with reasons to justify the risks they are taking by switching vendors. This is where reputation is critical. They want to know about the experiences of other users. What is the mean time between failures? In what applications do the products excel? Where do the products not work so well? In short, clearly establish the case for switching.

Building a reputation happens over time but managers can speed up the process by doing the following:

• Have customer-use stories and/or testimonials
  In many markets such stories can legitimize a new product or reinvigorate an old one.If the product is being used as an integral part of a customer’s process (e.g., electric motor used to power a textile machine), develop application performance information. For example, how long can a product be used before maintenance? What is the life expectancy of a product under certain operating conditions?
• Get the product in use
  Too often, companies are in catch-22 situations when trying to break into a market. They need to get it in use and prove its reputation but customers are reluctant to be the first to buy. Get creative and offer products to initial customers on very attractive financial terms. Make sure the customer understands that a story or testimonial is expected. Building a reputation matters even more now than in the past because of the Internet. Good (and bad) news travels very quickly over the Internet. Perhaps more important are the findings from a recent research study. When researchers from Bain & Company, a large strategy consulting firm, asked web shoppers what attribute was most important in earning their business, the number one answer was ’a Web site I know and trust.’ Creating trust, and the reputation that goes with it, does matter.

2: Give Competitors’ Customers Multiple Reasons to Switch

Our client, though a good number two in the market, was facing a strong competitor, one with a large installed base of equipment. To get customers to begin using a new product when they already had a lot of the competitor’s equipment in place was a struggle. The initial strategy focused on providing a product that offered equivalent quality at a similar or slightly lower price but with clearly superior service. This strategy did not provide enough reasons to change. While superior service mattered to customers, superior service was not enough to overcome the natural reluctance of customers to switch from what they saw as a proven and reliable product.

The typical strategy used to get customers to switch is to lower price. This is necessary in some markets and with some customers. But it should not be the first strategy as the price reduction may not be needed and such a move can trigger a price war. Instead, we have found it helpful to ask customers to think about one thing they are not getting from their present suppliers or one change they would like to see made. Most of the time, responses to such questions will generate more than enough options for customers to switch.

3: Connect Past Performance with the Present Purchase Decision

Many times, we hear managers say, in frustration, that customers make purchase decisions only on price. According to a recent national study, 20 to 25% of customers in any market do purchase solely on price. This still leaves 75 to 80% of customers who do not. These customers are looking for reasons to justify their decision. Often, a supplier’s past good performance can be that justification.

Most customers, excepting those with a formal supplier evaluation process in place, do not actually know how well a supplier is performing. If the last delivery was late or there was a quality problem with it, these negative experiences often define how well the supplier is performing. When it comes time to make a purchase decision, the customer usually receives a proposal outlining product features and benefits and the price of the product. There is little or no information about how the supplier has performed.

One solution is to develop a performance report card outlining specific ways an individual customer has benefited, over time, by buying from your company. Include quantitative performance measures (e.g., on-time deliveries, quality performance, etc.) as well as those ’retrieving the ox from the ditch’ episodes. This takes effort and time but will help customers take a broader view when making purchasing decisions. Assuming your performance is good, this can help tip the balance in your favor when choosing one supplier over another. Most importantly, it can begin to establish criteria in the minds of your customers by which they evaluate other competitors.

Customers Don’t Lie!

Customers are not lying! If they say your products are good but they are not buying them, what they are really saying is ’your products are good but I perceive them as not quite as good as the competition.’ In today’s hyper-competitive business world, there are few ’slam-dunk’ products that leave all the others in the dust. The differences between products are often small and, therefore, the decision to purchase one product or another is that much more complicated. From a marketing perspective, it is critical to have more than a single arrow in your strategy quiver. It is also critical to focus on ways to build the reputation of individual products as well as the reputation of your company. Finally, reminding your customers of what you do for them is an ongoing process. If you don’t remind them, no one will.