In a previous post I discussed the mistake of trying to be too many things to too many people. American business, by and large, is about standardization and scale – think McDonalds or Walmart. Business trends towards customization and personalization are never allowed to get in the way of scale and the powerful leverage that scale can bring.
Kiwi business people don’t generally think about scale, because most business in New Zealand is not done at large scale (by global yardsticks).
As a result of this, we often customize our product or service in our home market to meet customer needs. When you begin to sell globally, customization of services or products for specific customers is likely to be a significant mistake (unless your business is in fact building custom products to order of course).
We make this mistake because we like to think that we are generally nice people – and we think that we can turn this flexibility into a business asset. You are right: agreeing to flexibility and customization will help to win business in the short term. American businesses love that Kiwis are flexible, easy to work with and able to customize our service or product to their specific needs. They will likely offer to pay for the services, giving you a quick cash shot in the arm.
The problem is that by agreeing to do the customization (whether its paid for or not) you will suck up resources that would otherwise go to more sales and marketing. You will divert management, probably take up key personnel time and open up the risks that changes you make destabilize the product, or change its key USP’s in a way that you didn’t intend (by adding complexity).
This applies to services as well. For instance, a major customer might ask that you extend support hours for them to 24/7/365. But this will put enormous strain on your systems, and you need to know whether other customers will also pay for this platinum service.
At its core, strategy is about deciding what NOT to do (Michael Porter, “What is strategy?.” In: Harvard Business Review, November (1996)), and saying no to customers in the right way is the skill that will allow you to scale your business in the US.
Closing doors has the wonderful effect of making the decision making process easier. The more choices you take off the table, the clearer and easier the resulting decisions get.
There is a test that you can apply to help you make the decision:
Is this feature or service extension something that I want to provide to all my customers immediately (and preferably for additional revenue)? If the answer is yes, then go ahead. If the answer is that this is really just a specific benefit for this one customer, then say no. Be honest!
| Sounds like a good thing? | But has real costs… |
| Win a customer | Slow down market rollout and uptake with other customers |
| Positive cashflow with customization services | Take up key personnel time and focus, leading to fewer new sales |
| Add new features to the product that may be attractive to the market | Destabilize the product with additional complexity, and add features that the market didn’t really ask for |
| Get a great logo on your sales deck | Become beholden to a single customer, who then dictates your product roadmap |
| Money for expanding service for all customers | But do other customers really want to pay for 24/7/365. |
Apply the ‘All customers immediately’ rule to help you decide whether this is something that you should do.
The moral of the story here: If your product-market fit is right, then you don’t have to say yes to the customer, they will say yes to you.
Hoboken Consulting 