Determine real customer needs that result in a compelling product or service.
Today's economic climate requires laser-focused execution. Profit margins have slimmed. A few missteps (or even one) can mean the difference between success and failure, and between profit and loss.
One of the most unforgiving errors is not understanding your customers' needs. This most basic, but surprisingly elusive, information is essential to the success of any product or service offering. Many companies mistakenly believe they have an adequate understanding of the needs of their customers. But these same organizations often experience product or solution offerings that don't reach their potential.
Unfortunately, determining the real needs of a potential customer is not as simple as asking them what they want. Many people are unable to clearly articulate their most pressing and compelling product or service requirements because determining how products could or should be improved is not forefront in their mind.
To learn what your customer really needs, you must watch them and talk with them. You must be sure you understand their concerns and overall business issues. Only by thoroughly understanding the broad environment your customer lives in on a day-to-day basis, as well as their specific and detailed issues and concerns, can you apply the creative efforts necessary to design a compelling solution that will be successful.
Most companies think of themselves as customer-focused. Or at least they want to. But what does it really mean to be customer-focused? To many, it means asking customers what they want in a product or service. They've heard reports of organizations developing products in a vacuum and they strive to be sure their firm doesn't make the same mistake. These organizations seek out current and prospective customers and ask them what they need. 'What features would you like in a new FAX machine?' 'What would you like the next version of our software to do?' ?What features would you like your cell phone to include?'
With the best of intentions, most product managers and developers ask these questions and open-mindedly listen to the responses. Then they go off and define requirements the new product must address. It's all downhill from there: translate the requirements into features and capabilities, implement the new product or service, bring it to market, then watch the sales roll in.
This approach is fundamentally flawed for two reasons. First, customers don't always know what they want. They don't spend much time thinking about what they want or need. There may be some things they wish a product could do. Some of these things may be easy for users to articulate, while others may take more thought and reflection before they can clearly formulate and articulate them. Just because I use my cell phone a great deal doesn't mean I spend much or any time thinking about how it could better meet my needs. When was the last time you thought about how any frequently used product (microwave, washing machine, lawn mower, etc.) could be improved?
Second, customers rarely know our products as well as we do. Most don't know what is possible given the fast pace at which technologies evolve. This limits their thinking, and therefore their ideas. More broadly and most importantly, the customer makes a number of assumptions when they articulate what their needs are. They might want a cell phone that is half the size of their hand, but the technology of the day may make that an impossibility. On the other hand, a customer might assume it's impossible to have such a small cell phone, and as a result, they don't even mention the appeal when asked, even though it would result in a clearly compelling product.
The ramifications of this limited but common methodology can be quite dramatic. Businesses can eagerly and enthusiastically enable new offerings based on stated requirements but experience product failure. Offering what the customer asks for is no guarantee that the resulting product will succeed, especially if a competitor more completely meets the customer needs or the customer realizes there are requirements they forgot to mention.
Learning to glean real customer needs and requirements is critical to the success of any business. But how do you do this? How do you objectively and without bias (by either you or your customer) determine real needs that, when addressed, result in a compelling product or service?
The simple answer is: Get to know your customers and their businesses extremely well. You must move beyond simple conversations. You must do more than just asking them what they want in a new product or service. The simplest and most efficient method is to simply watch them as they do their day-to-day tasks. Try to find customers that will let you 'shadow? them. Notice where and how they spend their time. What do they do? How do they work? What things prevent them from making huge contribution increases to their businesses? Based on these observations you are likely to see (literally) some interesting things, which will lead to thought-provoking questions such as:--Why don't you take your cell phone to your meetings?--Do you normally spend so much of your time reconfiguring the network router? Why?--Why do you use graphics software to create text documents?--Why do you spend so much time talking to that department?--What one thing, if changed, would enable you to significantly improve your results?
While physically watching a customer may be ideal, it's not always essential. These techniques can be applied in an interview or meeting format as well. The key is to recognize the customer requirement ?blind spots? that are often overlooked.
A furniture manufacturer's wood supplier made a visit to the plant. During a facility tour the supplier noticed part of the manufacturing process included the lamination of two pieces of particle board. When asked about this step, the manufacturer stated that the supplier didn't offer particle board in the required thickness.
The supplier didn't understand the need for this product until they saw the manufacturing line. Business discussions between the two firms had never resulted in the identification of this need. The manufacturer had assumed, since they couldn't get exactly what they needed, they had to fabricate it themselves. The supplier assumed the manufacturer was completely satisfied with their offerings. Interestingly, neither the manufacturer nor the supplier preferred to have the manufacturer laminating particle board.
Jim Haselmaier is the owner of Accelerated Insight Consulting. Accelerated Insight delivers consulting services to businesses of all sizes in the areas of business planning, strategic planning, value proposition development, and customer research. Jim can be contacted at firstname.lastname@example.org.