From the February 20, 1995 issue of Smart

Know Your Changing Customer

By David English

In any business, it pays to know your customer. In the retail business, it's essential -- especially if your customer base is changing. The customer base for computer and software sales is undergoing a radical shift, so it's vital that you understand the nature of this change and adapt your store to meet the challenge. Otherwise, you'll be selling yesterday's goods to today's customers.

The main shift in computer and software sales is from large businesses to homes and small businesses. Shipments of PCs to the business-focused channels are expected to grow slower than shipments to the retail channels, according to a recent study by International Data. The retail channels will have tripled their unit shipments of personal computers from 3.1 million units in 1992 to a projected 9.1 million units in 1998. The business-focused channels are expected to grow more moderately from 5.8 million units in 1992 to 9.3 million units in 1998. The study attributes this shift to the "increasing purchase of PCs by households, continued growth of small businesses and their servicing by retailers, growth of specialty retailers, and tepid replacement in corporate accounts."

The best place to see the implications of this shift in computer retailing is "The 1994 Desktop PC Customer Satisfaction Study" from J.D. Power and Associates. This study should be required reading for anyone involved with selling computers. According to the study, the seven determining factors of customer satisfaction are reliability (27 percent), price and value (18 percent), setup and configuration (16 percent), technical fit (13 percent), ease of use (11 percent), user support (10 percent), and operating system compatibility (5 percent). You can use these findings as a virtual blueprint for buying and selling computers at retail.

Especially interesting is the change from the year before. In 1993 user support was measured at 26 percent, as opposed to just 10 percent in 1994, while reliability, 1994's top factor at 27 percent, measured only 18 percent in 1993. As defined by the questionnaire, user support is support from the manufacturer, so we've seen a shift from buyers expecting strong after-sale manufacturer support to their wanting their computers to be made right in the first place. Consumers are becoming increasingly more conscious of name brands as they try to get the best value they can. How does this affect your sales pitch? If last year you sold longer warranties as a guarantee of support from the manufacturer, this year you should push them as proof that the computer and manufacturer are reliable and well-established.

While large corporations expect strong and continuous support from manufacturers, families and small-business owners want to choose the best machine up front because they're less confident that they'll be able to fix it if something goes wrong.

You already know how your product mix has changed in the great shift to the home and small business buyer. Now is the time to be sure your selling strategy reflects this changeand to keep your eyes and ears open for the next big change in computer and software retailing.

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