Once upon a time, there was a company. A company that really understood its customers and sold products that the customer wanted. The company started to grow. Managers joined, processes were set up and systems were put in place.
The company continued to do well for a while. Customers bought the products and the value proposition remained relevant. But then came years when sales shot down. None of the managers understood why. It was strange too: forecasts had never predicted this would happen. According to the managers’ data, customers should still buy the product. Only they didn’t. The company had become complacent and had completely lost touch with its customers.
It happens every day. Books are riddled with stories of once-famous companies that went bankrupt because they could not grow with the needs of their customers.
If you don’t know what you mean to the customer, you can’t stay relevant to them.
Companies spend too little time understanding their customers. This can be due to the fact that they think ‘experts’ know everything. They trust that managers who specialise in something know everything and therefore do not dare to ask questions. But questions like “why?” and “what-if” are the foundation of innovation.
Moreover, there is a natural tendency to codify what you know about customers so that that knowledge can be scaled up and decision making simplified. Not bad in itself, as long as they continue to be tuned to today’s reality. And that alignment should be done by people talking to the outside world, not by systems.
Example 1
A startup spent hours thinking of the right problem and coming up with the perfect solution for it. They thought that students found it difficult to combine school with work and therefore need a more flexible side job. For this reason, the app that they built allowed students to decide where and when they wanted to work. After the app was developed, they went on the streets and conducted interviews with students. After their first interviews, it turned out that their value proposition was incorrect. Students didn’t find it difficult to combine school with work after all.
Example 2
At a well-known home care company for the elderly, reducing the hourly rate for cleaning was the core strategy. However, after visiting several grannies, it became clear that the value was in the attention the grannies received, not in a clean house. In response, they adjusted their business model and gave all grannies a free iPad so they could keep in touch with their grandchildren.
Example 3
A hospital had decided to see for themselves how people experience a visit to the hospital. They followed the path of their patients. Not only did they discover that the car park was incredibly dark, and difficult to find their way around; they also saw that the first thing patients see when they park was a billboard for a fast-food restaurant. They had not expected this at all beforehand.
Example 4
A team from a large baby product manufacturing company took to the streets to interview people. They found out that parents plan their purchase of products much earlier than expected. Not just at birth, but the moment they discover they are pregnant – or even before. By mapping this out on paper, the team was able to much better tailor marketing and sales to their customers.
Example 5
A large manufacturer of plastic pipes, had a strong position in the market for many years. Its market share went down in 2013. The sales team came up with a solution: building a new factory. The managing director had decided to be stubborn and send a team to the construction site. When they went to visit construction site, they found out that many plumbers were using equipment and materials incorrectly. They then built an online academy instead of a factory. Here there are professional how-to videos, product manuals and direct contact with experts. By offering this community, they became competitive in the market again. In the end, only a few hundred thousand euros were invested in the online academy, instead of the tens of millions the factory would have cost.
Moral of the story? Get out into the outside world more often and spend less time in your office on business as usual. By meeting your own customers more often and asking questions – questions that are not aimed at closing the sale, but rather genuinely designed to understand the customer better – you will improve your customer relationships and arrive at new valuable information.
Observing the customer and asking questions should become a practice habit for this reason. By occasionally entering the outside world, your intuition develops and you start seeing patterns that others miss. You start seeing things your clients need, even before they see them.
