Why Do Customers Choose You?

Two marketing professors asked this question of more than 2000 senior executives from around the world over a four-year period, surveying business leaders in industries that ranged from packaged goods, retailing, and airlines, to construction, chemicals, and packaging. Specifically, they wanted to know what factors accounted for each company’s competitive success. For what reasons do customers choose them over their immediate competitors?

Before reading further, take a few seconds to think about how you would answer this question, with respect to your own company. Why do customers choose you?

What these two marketing professors discovered in their fairly comprehensive survey was that nearly everyone answered this open-ended question in similar terms, providing a remarkable level of agreement across all different industries. Almost all the executives polled reported that the primary factor behind customers choosing their company over their competitors had to do with the individual relationships and interactions that their customers had with them – in short, the researchers suggest, what mattered most were things like “trust, confidence and strength of relationships, as well as…convenience, ease of doing business and support...”

Perhaps you, too, named similar factors.

It should be obvious from this that trust and customer relationships are by far the most powerful drivers of any company’s competitive triumph over other its immediate competitors -- that is, other companies offering similar products and services. At least in the opinions of the vast majority of senior business executives, customers choose to do business with their company, in preference to their competitors, not usually on account of price, or even product quality, but usually as a result of their relationship with and trust of the organization, or of some people within the organization.

Part of the professors’ survey, however, also polled these executives to ask them which kinds of tasks they spent most of their time and energy on. Again, before you read further, ask yourself this additional question: Over just the last couple of weeks, what tasks at your own business have consumed most of your time and effort?

What the researchers found in their survey was that a majority of executives spent far more time and energy trying to improve and perfect their products and technologies, rather than their customer relationships. The tasks that commanded their attention and consumed most of their time, in short, had much less to do with competitive success.

They concluded that customer-based innovations and customer-focused processes would be a far better subject for executive attention, because these activities can create results that “are less easily replicated by competitors, and thus offer a more certain basis of sustainable competitive advantage.”

So in your own work, if in fact you do face a similar situation, one strategy for raising your level of competitive success in your own business category would be to make a conscious effort now to allocate just a bit more work, each week, to strengthening the relationships you have with your customers. At least once or twice a week, try to think of some service, or product feature, or convenience, that you could deliver to some or all of your customers to make their own customer experiences more attractive to them.

Usually, what will please a customer the most are features and services that make the customer experience more and more frictionless. They want an experience, in other words, that is reliable, relevant, valuable and trustable. So take some time this week to think about how you can increase the reliability of your product or service, or the relevance of your communication or offer to individual customers, or your value-for-money equation, or your trustability.

From a competitive standpoint, this will definitely be time well spent.