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How to Identify Your Critical Success Factors

© Bert Markgraf

Identify Your Critical Success Factors

When a customer gives you business, he does so for many reasons but there are usually a few critical ones. Without those factors, he would not order from you. The rest of the reasons don't make a lot of difference.

When you run your business and market it, you give customers many reasons why they should buy from you. You'll say that you give good value, you're reliable, your products are good quality and you have a high level of customer service. Your customers hear the same thing from all their suppliers but they chose you - you need to know exactly why.

The reason you need to know this is because you're doing all these different things, many of them quite expensive, and many of them have no effect at all on whether you get that order. You want to concentrate on those activities which your customers find critical and which make them order from you.

Your best bet is to periodically discuss your business with your best customers. They will give you feedback and tell you what they would like to see. Is quick delivery important or would they rather see a lower price? Is it important that you keep items in stock? Would they like to see you more often to discuss their orders or is a quick check by telephone enough? What about particular characteristics of your products - should they be lighter, heavier, more shiny, different colours etc?

Once you have discussed your business with a number of your best customers you will notice a pattern - groups of customers will value the same things. Now it is time for you to do the selecting and decide which of the things your customers value are going to be priorities for you.

What you are looking for are things you can do more of and better without increasing your costs and things which you can do better than your competition. If some of your customers value a quick response time and you're the only business of that type in the area, you've got one of your critical success factors. At the same time, this identifies a good target market for you - other businesses similar to those customers in the same area.

Now your business strategy is streamlined: for this group of customers you use your proximity to them to give fast service and you tell similar prospects that fast service is one of your strong points. If that is the critical success factor for this group of customers you will be able to concentrate on it and stop doing some of the other things they don't value. You may even be able to charge more.

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