This is a fabulous concept that is often missed by people who start out in business. It is alleged that this is what took Tesco from being number 5 food retailer in the UK to number 2 in the world! So, it might be worth our consideration!
For this article I will use the customer to be synonymous with the shopper [link]
It begins with the customer at its heart. Asking the question what does the customer want?
“What insight do we have to support our assumptions?”
Once we understand that – the next question is “Can we source the product or manufacture it and offer it to the customer at an acceptable price whilst making the profit we desire” – if we can… stock it – if we can’t – move on!
As we get more sophisticated, we might choose to try understanding not only what the customer wants now and the insight that suggests it – BUT we might also try to source insight to forecast how those needs might change in the future. This is riskier but, as you begin to trade there is some benefit to being ahead of the curve rather than following the market.
Higher risk = potential higher reward vs following the known needs which gives lower risk slightly lower reward
It all revolves around understanding what the customer wants and then making sure you can deliver that in a way that is acceptable to the customer at a price they can afford and making the profit you desire.
Now the hard work starts.
Do you have a deep understanding of the supply chain and how you might finesse it to make slightly more profit from supplying what the customer wants in the way they want it.
Now you simply need to ensure that your own staff understand all the process in the supply chain and has a means to continually assess and communicate ways to make this more efficient and in turn reducing the cost involved in getting the product or service “within arms reach of desire” for the customer.
A question for you:
Does your business follow this virtuous circle, or do you often hear “Here is a product that we make x margin from – now go and find a customer!”
This is potentially a “get rich quick” format which is extremely hard work, will lead to many false starts and failures, if you are in sales, a loss of your credibility with your buyers and the consumer and will cost you more in the long term as you try to convince the world to buy your product.
Consumer Centric Trading puts the customer at the heart of everything you do, itis not a ‘one off’ process but a continual improvement process [Kaizen] – see also marginal gains – you and your company need to address this way of working.
It fits absolutely into the 4 ways to make a business more profitable [link] and will drive credibility with your customers.