Imagine trying to solve a puzzle without seeing the whole picture. You might connect a few pieces, but you’ll never see the final image. Business is a lot like that. To solve your customers' problems, you must first understand them. Without this foundational knowledge, you're essentially guessing, and that's a risky game to play.
Knowing your customer helps you move beyond a transactional relationship and become a trusted partner. It allows you to anticipate their needs, offer solutions before they even ask, and help them achieve their goals. This is the essence of being a true "Key Account Manager."
You're not just managing an account; you're building a partnership based on mutual value.
Three suggested steps
So, how do we get this deep understanding? We can break it down into three simple, yet powerful, steps.:
- Get some background information. This involves asking a series of fundamental questions to build a solid picture of your customer's business
- Conduct an external analysis. Look at the world your customer operates in, including the industry and broader market forces.
- Analyse internal capability. Examine your customer's own strengths and weaknesses to understand how they compete and succeed.
These three steps are expanded here:
Step 1 - 10 background information questions
Understanding your customer isn't just about collecting data. It's about developing genuine insight into the forces that shape their world and the people who drive their decisions. Here's a systematic approach to building that understanding:
Step 1: Map the Industry Ecosystem Start with the big picture. What markets does your customer serve? Who are their competitors, key suppliers, and regulatory bodies? These external forces create the context for every decision your customer makes. When you understand their ecosystem, you can anticipate the pressures they face and the opportunities they're chasing.
Step 2: Decode the Business Model Get clear on how your customer creates and captures value. What's their core purpose? How do they make money? Are they growing or struggling? If they're publicly traded, their financial reports contain a goldmine of strategic insights you can access in minutes. Understanding their business model helps you see where your solution fits into their value creation story.
Step 3: Know Their Customers Your customer's customers are the ultimate judges of success. Who are they? What do they need? If you're dealing with a B2C company, consider the consumer trends that might affect demand. For B2B companies, understand the specific challenges their customers face. When you know what drives their customer relationships, you can better support those efforts.
Step 4: Challenge Stated Needs Don't just accept what customers say they want. Dig deeper into what they actually need. The gap between wants and needs often reveals the richest opportunities for value creation. As the expert in your field, you have the responsibility to guide customers toward solutions that truly serve their interests.
Step 5: Understand the Human Element Behind every business decision are real people with personal objectives, concerns, and aspirations. Who are the key decision makers? What does success look like for each individual? How can you help them achieve their goals and look good in the process? Remember that people buy from people, not companies.
Step 6: Assess Your Standing Where do you rank in their supplier hierarchy? Are you strategically important or just another vendor? Understanding your current position helps you develop realistic strategies for strengthening your relationship and expanding your influence within their organization.
Step 7: Review Your Track Record History matters. What's the story of your relationship with this customer? Are there past successes to build on or challenges to overcome? Honest assessment of your track record helps you navigate sensitive areas and leverage your strongest advantages.
Step 8: Analyze the Competition Know who you're up against and how you compare. But don't stop at your own assessment. Try to understand how your customer views your competitive position. This outside perspective often reveals blind spots in your approach.
Step 9: Grasp the Strategic View Connect all the pieces into a comprehensive understanding of your customer's strategic challenges and opportunities. This big picture perspective enables conversations that focus on their business success rather than just your products.
Step 10: Focus on Your Impact Zone While understanding the big picture is crucial, be realistic about where you can make a difference. Identify the specific touch points where your solution creates value, then connect that impact back to their larger strategic objectives.
This framework transforms customer research from a data collection exercise into a strategic advantage that drives meaningful conversations and stronger relationships.
Step 2 - Review the customer's external environment
A well-crafted AI prompt for an external analysis of a company like Jaguar Land Rover (JLR) should be structured and highly specific to yield valid, detailed results.
Instead of just asking, "Do a STEEP and Porter's analysis for JLR," you should guide the AI through each step of the analysis and ask it to provide actionable insights.
The goal is to make the AI an analytical partner, not just a data regurgitator.
STEEP is used to assess the big macro forces that affect all business
Porter's 5 Forces assesses the industry that the customer operates within
An example STEPP AI prompt for Jagual Land Rover:
The Foundation Start by giving the AI context and setting the stage.
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Prompt: "Act as a market analyst specialising in the luxury automotive sector. Your task is to perform a detailed STEEP analysis for Jaguar Land Rover (JLR). The final output should be a structured report, with each section providing a brief summary, key factors, and their potential impact on JLR's business strategy and future profitability."
Then.. The Breakdown. Now, break down each element of the STEEP framework and ask for specific details.
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Social Factors: "Analyse the key social and demographic trends influencing the luxury car market. Consider shifts in consumer preferences towards sustainability and eco-conscious products, as well as changes in lifestyle trends that impact vehicle choice."
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Follow-up: "For JLR, identify how brand perception and cultural attitudes towards luxury might affect their target audience, particularly in emerging markets. Highlight any opportunities or threats."
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Technological Factors: "Examine the technological advancements impacting the automotive industry. Focus on the rise of electric vehicles (EVs), autonomous driving technology, and in-car connectivity features. For each, describe its current state and future trends."
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Follow-up: "Specifically for JLR's brand strategy (Jaguar aiming to be all-electric by 2025 and Land Rover introducing electric variants), evaluate the technological challenges and opportunities they face. What are the key risks if they fail to innovate quickly?"
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Economic Factors: "Assess the economic environment in JLR's key markets, including the UK, China, and the US. Consider factors such as economic growth, inflation rates, consumer spending habits, and currency fluctuations."
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Follow-up: "Given JLR's position in the premium segment, how do economic downturns or recessions affect their sales and pricing strategy? What economic threats and opportunities should they be most aware of?"
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Environmental Factors: "Analyze the environmental pressures and regulations affecting the global automotive industry. This includes stricter emission standards, sustainability initiatives, and the public's growing concern for climate change."
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Follow-up: "For JLR, what are the specific environmental regulations they must adhere to? How does their shift towards electrification address these factors, and what are the risks of not meeting compliance?"
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Political Factors: "Examine the political and legal landscape relevant to JLR's operations. This includes government policies, trade regulations, tariffs, and political stability in their key markets."
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Follow-up: "How has Brexit impacted JLR's supply chain and export strategy? What political decisions, such as government incentives for EV adoption or trade tariffs, could either help or harm their business?"
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AI prompting to understand the Industry (Porter's 5 forces)
Walk the AI through each of the five forces.
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Competitive Rivalry: "Analyze the rivalry among existing competitors. Who are JLR's primary competitors (e.g., BMW, Mercedes-Benz, Audi)? Consider factors like the number and diversity of competitors, industry growth, and high exit barriers."
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Follow-up: "Explain the intensity of this rivalry in the luxury segment. What strategies (e.g., product innovation, marketing campaigns) do competitors use to gain market share, and how should JLR respond?"
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Threat of New Entrants: "Evaluate the threat of new companies entering the luxury automotive market. What are the key barriers to entry, such as high capital requirements, brand loyalty, and complex distribution channels?"
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Follow-up: "Is this threat high or low? Explain why, and consider the impact of new, tech-focused entrants like Tesla and emerging Chinese EV manufacturers on JLR's market."
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Bargaining Power of Buyers: "Assess the power of JLR's customers. Consider their price sensitivity, the availability of substitutes, and the concentration of buyers."
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Follow-up: "How much power do individual luxury car buyers have in a market where brand image and product differentiation are so important? What can JLR do to reduce buyer power?"
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Bargaining Power of Suppliers: "Analyze the power of suppliers to the automotive industry. This includes component manufacturers, raw material providers, and labor unions."
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Follow-up: "Evaluate the power of these suppliers in the context of JLR's complex global supply chain. How do issues like the semiconductor shortage affect JLR? What strategies can JLR use to manage supplier relationships and mitigate risk?"
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Threat of Substitutes: "Consider the threat of substitute products or services. This goes beyond direct competitors. What are the alternatives to owning a luxury car?"
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Follow-up: "Discuss the threat from car-sharing services, improved public transportation, and the used car market. How does the increasing availability of new technologies like ride-sharing affect JLR's long-term strategy?"
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Completing a STEEP and Industry analysis of your customer by adopting the above prompts will provide you with a great starting point.
The final prompt should be:
Look at both of these analysis reports. Prioritise the top 5 external opportunities and the top 5 external threats for (your customer).
Step 3 - Analysing the Internal Customer Capability
(A New Way of Thinking...)
This is perhaps the most challenging, yet critical, step. It requires you to look inside your customer's organisation and assess their internal strengths and weaknesses as they serve their own customers and compete in the market. This is a vital skill for any successful Key Account Manager. You need to ask questions, use your judgment, and evaluate your customer's actions and their effectiveness.
A traditional model for this is Porter's Value Chain Analysis. While excellent, it has its limitations, especially for modern, non-manufacturing companies. It tends to focus on tangible, functional aspects, and less on the intangible assets that are crucial for many businesses today. Many companies, especially in technology or professional services, gain strength from their ideas and concepts, often before they even make a profit or a sale.
That's why we've developed a new model to assess Organizational Capability that's more comprehensive and better suited for today's businesses. It focuses on five key areas:
Tangible Resources: These are the physical and financial assets, like buildings and cash.
Intangible Resources: This is often where the real value lies. It includes their brand, reputation, technology, and culture. These are difficult to copy and give a business a true competitive edge.
Human Resources:
This includes the leadership, skills, talent, and labour of the team.
Functions
These are the core business activities, such as Sales & Marketing and Procurement
Other aspects:
We've also included aspects that are particularly important in today's world, such as ownership, geographical coverage, sustainability, and resilience
This model helps you assess a company's internal strengths and weaknesses more holistically, particularly focusing on what makes a firm resilient and sustainable in a rapidly changing world. It has proven especially useful for professional service, financial, technology, and pharmaceutical organisations, which rely on high-value, high-intellectual-property assets.
Final thoughts
This overview should give you a clear roadmap for better understanding your customers.
All good customer strategies and customer value propositions start with strong customer insights and understanding.
These 3 techniques will help you!
Next steps
If you liked this article or would like to make comments, please get in touch with me.
[email protected]
And if you would like to work with me for coaching and training around Value-Based KAM and Offer Development & Innovation for you/your team, visit the website and get in touch!
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