Why Do They Buy?

Why Do They Buy?

By: D Kelly Dameron

A scene I have revisited many times and recently replayed with my 25-year-old son…

Years ago, during my first opportunity to lead a buy-side business acquisition, one of those inevitable negotiation dilemmas came about between ours and the seller’s team. It doesn’t matter the actual issue but it was so compelling that as the two teams went to their corners to review and confer, I remember questioning myself as to why on earth we thought this deal might have even been a good idea in the first place.

As I was rethinking my earlier breakfast buffet choices and the original lure of this “simple straightforward deal” … and coming up with very little benefit for both, I realized our experienced and respected contracts specialist we’ll call Frank, since that is his name, was whimsically watching me in my rookie deal leader angst. Mistaking his look for empathy and support I asked him seriously which way we should go on this one. He replied “depends on where you are heading.” Thanks Frank! I fell for it and said “I’m not sure where we are heading on this!” His happy reply, all together now…” Then any path will get you there.” Smirk…

The point I have taken away after that little “Through the Looking Glass” moment is that unless we as leaders really commit and know our business, our value propositions and where we want to go to grow these, we will more frequently be sitting at one of those decision crossroads listening to Yogi Berra say “When you come to a fork in the road, take it.” It really helps to keep a clear focus and conviction as to the essence of who you are as a business, your core strengths and capabilities and what you ultimately want to be in the market.

If you feel the least bit shaky on this I have a suggestion on where to start? What is the first thing to identify about the basics of any business hoping to profitably grow and provide benefits to customers and stakeholders alike? How about another Frank special question, “Why do they Buy?” What is it about our company that customers use as a reason to buy from us over the other guys – those competitors? This understanding is fundamental to knowing yourself and doing business in any marketplace. For this insight we need to look for and understand our real competitive advantages.

Why do they buy from us over the competition? It’s a very relative concept. In work with executives and leadership teams across many businesses types I find this quick question can show whether or not they are focused or conflicted. Whether they really have a handle on why they are better, faster, cheaper than their competitors… or why not.

As it turns out, usually the answers to that simple question vary based on who you ask and what they do in the company. The sales and business development team swear it’s their intimate customer relationships and sparkling product demos. The operations team will tell you it’s the strength and efficiency of their production process. The senior leaders will laud their vision, worthy brand and their active social awareness. The finance team will say it’s those damn low prices. This all sounds simple and I usually advocate purposely keeping it that way, but there are deeper factors here.

Actually, everyone’s answer on this why-buy question could be correct, but very likely not all at the same time. The simple answer though, is that there are most likely one or two major strategic reasons, broad competitive advantages, that define their enterprise and contribute to most of their relative success and prosperity versus marketspace competitors. Whether these characteristics are purposeful, understood and maximized in their company is a larger more complex question that must be addressed to 1. identify competitive advantages and 2. nurture and take full advantage of them.

Backed by over 30 years leading hi-tech, advertising, telecom and defense businesses, the partners at CEVOH are skilled at identifying, understanding and developing the initiatives that can help our clients maximize their competitive advantages, leading to profitable growth. We examine broadly where these advantages lie, either in the customer and market perception or within the client’s enterprise via their resources and capabilities. We look deeply, for instance, at a client’s cost-effective operations across the value chain, at a differentiated product or technology, or at highly aligned customer intimacy. There are also market dynamics and partner relationships that should be considered along with a full roster of other potential sources for a competitive edge.

We do this work in a disciplined, sequential way that involves all levels and disciplines of client teams and customer voices. This work can bring rapid benefit near term and can form the basis for a longer-term strategic redirection, all tailored to profitable growth for the enterprise. If you don’t have a quick and firm answer to “Why do They Buy” but see how this can move your business forward, call us. We can help you with the answers.

email: john.klein@cevoh.com or, dkdameron@cevoh.com

www.cevoh.com

John KleinJanuary 14, 20201 Comment