In: Categories » Business » Customer services » DATA CUSTOMERS
| What Are Data Customers? Business owners (large or small) must understand to whom financial results will be communicated. The parties to whom this information is provided are referred to as data customers. The most important data customers at the early stage of a small and emerging business are the owners. Being responsible for all decision making and strategy makes those managing the business the number-one customer. The base of data customers will expand as the company matures and takes on thirdparty financing, whether it is bank debt or equity financing from a public offering or private placement. Data customer requirements will grow from the need to see the rudimentary aspects of operations to the more complicated statutory needs of banks or the Securities and Exchange Commission. The small and emerging business owner’s needs for data are easy to define. Managers of small organizations usually are focused on customer needs and the important metrics that drive the business. What about the needs of other potential data customers? Will the finance function be positioned to serve these needs? Who are those customers and what do they want? Is there anything that can be done now to lay the groundwork for meeting their needs? It may help to ask these questions: - What are the owners’ requirements as data customer? - What is the turn-around time for a typical data request? - Which data customers need summary data? - Which data customers need detail data? - Are the internal data customers (those within the organization) financial or nonfinancial personnel? - Do internal data customers have ready access to company data? - Can the company’s top five external data customers be named? - Does the company have a standard suite of reports or formulas that management references regularly? Tying in to Life-cycle ConsiderationsAt this stage of strategy development, a rough time line or expected sequence of events should be in place outlining identifiable company milestones from inception to exit. The time line will identify all significant events in the planned life cycle of the business and their expected time of occurrence. If any of these significant events entail financing, business combinations, or a public offering, due diligence must be performed on company financial statements. The company may be forced to produce complex, legally defined financial statements. These financial statements and related disclosures will be reviewed, questioned, and adjusted throughout the due diligence process that will precede most relevant milestone events. This means the company will be subject to a new, perhaps unprecedented level of scrutiny. Understanding the characteristics and level of sophistication of data customers is crucial at this stage of finance strategy development. Understanding the different types of data customers and their motives will be crucial as the company matures. An important consideration is to understand the distinction between sophisticated and unsophisticated data customers. More often than not, a particular data customer is standing between the business and a particular milestone objective. Giving the data customer what is wanted in a timely manner may mean the difference between success and failure when encountering a life cycle event. The finance function must recognize this and be poised at all times to deliver timely and accurate information for all financial data requests. Ensuring this aspect of data delivery involves planning all infrastructure and financial statement presentation policies in advance of need. Waiting until the need is imminent is too late to begin conceptualizing follow-through. Palmer Products’ high-level growth goals for the next 10 years: Are Mark and Andrew aware of what is required to achieve these goals? Doubling revenue in Year 2 may not be difficult, but doubling revenue in Years 3 and 4 may require an infusion of cash to fund the storage of product while they wait for customer payments. How much will they need? What about their website and advertising campaigns—how much will they need to finance these endeavors? If they need less than $1 million, chances are a local bank loan will cover it. Producing the volume to break the $1 million mark in Year 6 will require Palmer Products to hire help to handle order processing, shipping, and inventory management. The company will need more funds to finance the burgeoning business. At some point Mark and Andrew will have to go beyond what a bank is willing to lend. Doing this may mean taking on equity partners or making some sort of advanced debt arrangement. Eventually they will want to take the company public and surrender control of the business. Somewhere along the way, a level of examination (audit or formal review) will be required for Palmer Products’ financial statements. If the company takes on financing from outside the company, whether it is bank debt or equity financing from the capital markets, some sort of limited review procedures will need to be performed periodically on their financial statements. Securing bank financing at this early stage of the business may require a local or regional audit firm to perform this service, with the financier (bank or financial institution) seeking comfort in compliance with debt covenants and review procedures. If the brothers choose to go public, a comprehensive audit is required and a host of detailed filings will need to be made with the SEC. If Palmer Products goes public, its future will depend on its ability to present itself to the world via financial statements. Is the company prepared to generate financial statements that conform to generally accepted accounting principles? Do proper controls exist in the finance organization to ensure the proper handling of cash receipts and cash payments? Are processes and information systems strong enough to generate the proper analysis schedules required by examiners (auditors)? Can they be generated in a timely manner? These issues will be addressed in detail farther up the finance strategy pyramid. At this stage it is essential to evaluate the analysis and determine: - The need for generating financial data (statements) - For whom the financial data (statements) will be generated - The level of sophistication of the financial statement audience (data customers)
|
legal disclaimer
1) Our website is not responsible for the information contained by this article as well for any and all copyright infringements by authors and writers. E-articles is a free information resource. If you suspect this article for any copyright infringements, please read the Terms of service and contact us to investigate the problem.
2) The E-articles directory team is not responsible for inaccuracies, falsehoods, or any other types of misinformation this tutorial may contain and will not be liable for any loss or damage suffered by a user through the user's reliance on the information gained here. Please read the Terms of service
Useful tools and features
If you like this article (tutorial), please link to it from your web page using the information above. Linking to this page, this is the only way to help us improve our service, the same time providing your visitors with a way to improve their online experience.
related articles
Selling is about solving customer problems, whether those are problems they are currently facing or problems they will face as their marketplace evolves and their needs change. When I asked a top sales professional about what he did that allowed him to stand out in his field, he responded very simply, “I solve problems.” Simple, but not easy. If you can’t put your finger on your customer’s problem, you won’t solve it. Worse, you will waste time and lose credibility. You must describe the problem clearly, and do it from th...
2. How to Help the Customer Make a Decision ~ 5 Dos and 5 Don`ts of Selling
If you have a product or service that provides worthwhile benefits, you have an obligation to present it to customers and help them decide whether it is the right solution for them. If you don’t bring the product or service to the attention of a customer who could use it, he or she will have to tolerate problems they could solve. Have you ever been approached by a salesperson with a product you liked, and then not been asked to buy? One survey found that only one in five customers would offer to buy when they wer...
3. Attainment Measurement
For both customers and you, this filter is the single most important piece of information you need to have. It is how you and customers know how they measure the attainment of their goals. You have discussed with customers many details concerning the previous eight filters. You combine and summarize the decision makers' prerequisites of dates and funds with their SOEs and measurable benefits. This summary forms the attainment measurement (often referred to in sales vernacular by using the more general term critical success fac...
4. Why Do The Customers Buy ~ The Seven Keys for Customer Relationships
Typically, customers buy from two perspectives: Value/quality/solutions: These customers tend to make rational decisions and are concerned about budget, durability, and return on investment for their organizations. Reliability/convenience/image: These customers tend to make emotional decisions and are concerned about low buying risk, trust, and prestige for themselves. The relative importance of each of these factors depends on the i...
5. The Verbal Structure and Tactics of Explaining to Customers
The structure of explaining highlights the difference between the benefits of goals and the benefits of features. Start your explanations with customers' goals and they will value them more as they listen to how you connect features to them. Avoid leading with the features of products and making customers wait as you work your way back to their goals. It takes a little practice becoming comfortable starting explanations with customers' goals—not product's features. It is like visiting a country where they drive on the wro...
6. Account Management
In account management, you protect and grow your base of positive customers. You count on their untapped opportunities to grow your sales production at a faster rate than their market segments (or, at least, your sales quotas) grow. You concentrate on ensuring that their goals, filters, and systems of evaluations still favor your company. You want to be at the joint planning level (where you progress from vendor to supplier to partner) and help customers set and achieve their long-term goals. Your sphere of influen...
7. Business questions Not product statements Demonstrate expertise
You let customers know how well you understand their business by the questions you ask. When you recite large amounts of technical facts about your products, you reflect only how well you understand your products. Nevertheless, a common myth prevails among salespeople that product experts are customer experts. It is easy to understand the roots of this myth. If your sales training was typical, it mainly involved learning features and benefits. There is one slight problem: Your customers do not have features and benefits; ...