What the heck is Customer Understanding anyway?

When we tell people that Panoptika is focused on Customer Understanding it sometimes seems to confuse them.  I guess that’s normal, as the current practice can be different depending on your organization.  When we talk a bit more a typical response is “Oh, you mean Business or Customer Intelligence?”, or even, “Market Research?”

curious kid

We’re not a big fan of the term Customer Intelligence…it kinda sounds like spying, doesn’t it? Your customer needs to know that you want to understand them so you can deliver products and services they want and need, as opposed to trying to seduce them into buying.

So let’s look at a few of the aspects of Customer Understanding that our clients have needed help with, and see if they resonate with you.

In the first example, do you understand where your product or service fits into your customers’ operations?  How and when they use it? If they use in in conjunction with other companies’ products?  What happens immediately before and after they use your product? If you don’t understand this, you may be missing out on opportunities for line extensions, improved pricing, or other value added services.

How can we help you get a better handle on all of this?  First, we help develop a roadmap you can use to walk the customer through their day, focusing on all their daily or weekly tasks, with them as the star of the story, rather than the product you sell.  The drawback to this is that often it tries to impose a linear sequence in jobs that are more convoluted.  It might be better to use an analogy, such as a Spider Web, to map out the interactions that occur in and around the problems they have to solve, and where your product fits in all of that. In either of these methods, the important part is listening to the story they tell, which will reveal not only the facts, but the emotions they experience.

Another fundamental aspect of Customer Understanding is the ability to deliver the right features for your key customers.  It seems everyone has their own way of trying to determine this, but we recommend getting your customers intimately involved in the discussion. Our friends at Conteneo have developed some great tools we often use, regardless of whether you are able to get your customers together in a room, or they are far away and you need to engage them remotely.

If you have the opportunity to get key customers in one place, at an industry conference or site visit, we can use Buy a Feature, a game where players work collaboratively to purchase the features they feel are most important to them. If your team is together, but neither you nor the customer can afford a face-to-face meeting, then the online version, called Decision Engine, may be a better choice. It’s a powerful graphic interface we use to accomplish the same goals, but using a cloud platform and a chat function. Working in teams of up to 8 people, each player has a limited amount of money to spend on the features they feel are most important.  The key is they don’t have enough to buy everything they want, so they have to negotiate with the other players to successfully get what’s important to them. This lets you hear the “why” – which is more important than the money when it comes to motivating action. It’s the heart-and-mind part of the story.

As in most Customer Understanding discovery work, the ultimate outcome is a clearer picture of why certain things are important to your customers. It helps reveal the pain they experience, they problem they’re encountering, or the need they can’t always articulate (or won’t, because the idea of a possible solution is beyond their imagination).

Last of all, let’s think about developing empathy, or improving your ability to see things from your customers’ perspective.  A tool we’ve found extremely helpful is called an Empathy Map. It’s not a new tool, and you may have seen it before. For our clients, it still always nets some real value. You can use the Empathy Map in a couple of different ways.  The most effective is to actually have your customer map out what they hear, what they say, and what they think in a particular situation.  Again, we can do this in person, or use an online visualization tool.  The second way, which can also be very powerful, is to have you team complete the same exercise, but put themselves in the customer’s shoes. Whether it’s engineering, sales, marketing, or finance, when they start to think about what’s in the customer’s head at the time of interaction – somehow that’s when the magic happens.

If you’d like to learn how to use some of these tools and techniques to strengthen your customer relationships, we’re here to help.

Always sharpening our tools,

Steve and Megann

 

 

 

R-E-S-P-E-C-T Find out what it means to me (your customer)

One of the underlying features of great relationships is respect.  True respect is when it is both given and received, mutual respect.

In commercial relationships we often measure the level of respect our customers provide to us through metrics such as repeat purchases, or survey-based systems such as Net Promoter Score.  But how often do we examine the level of respect we show to our customers?

It’s easy to show examples of our disrespect for our customers.  In Customer Understanding it’s evident in behaviours such as surveys which contain rating and ranking exercises that fill multiple pages, ask questions about our spending habits at 14 different stores, in 10 categories, over the past 12 months.  Who keeps that in their heads?  then we reward them with 25 points in the airline “loyalty” program of our choice. Or we herd them into focus group facilities, at a time convenient to us, where Category Managers deride them from behind a mirror while simultaneously checking their email.

Fortunately not everyone works this way, but these are behaviours which are still too common.

So, how do we do it better? R-E-S-P=E-C-T

R – Remember that your customers pay your salary.  This is very important!

E – Engage your customers in interesting ways.  Make it convenient for them to talk to you using the appropriate tools and techniques.

S – Spend more time with your customers.  Go where they go, see what they see, hear what they hear.

P – Protect their personal information at all costs. Ask for explicit permission and keep asking.

E – Educate everyone in your organization to balance their selling with their listening so you are hearing more about your customers’ needs on an everyday basis.

C- Communicate in both directions.  Don’t be afraid of what you might hear.

T – Thank them often for the respect they show you by continuing to do business with you.  Find little ways to reward your most respectful customers, especially the ones who take the time to tell you how you could do better.

Respectfully yours,

Steve and Megann

Lalalalalalalala! I Can’t Hear You!

This week has been an interesting study in concept validation for us. We’ve observed several teams in action, and their reactions in the face of customer and stakeholder advice are reminiscent of your average four year old, covering her ears and chanting “Lalalalalalalala” when confronted with an unpopular topic such as bedtime.

One team had the advantage of meeting with a roomful of advisors and mentors. They were convinced that their new concept was sound. How? Well, they had validated it with a handful of potential customers. That was a step in the right direction, most certainly. However their customer discovery pool was incredibly shallow. The number of business advisors in the room was greater than the number of prospects the team had approached with their idea, and they didn’t think the concept would hold water. The collective wisdom was that more validation was required, but this idea was met with resistance.

Organization two gathered their A team together to fine-tune their latest development product. Constraints and challenges were clearly identified at the outset, the team came up with a prototype that met all the user requirements. It seemed to be “just right”. Yet their presentation to their CEO was rejected – he had his own idea as to what the solution should be, and sent them back to the drawing board.

In the last case, the product developer took an idea out to the customers, and was greeted with a positive response. But an advisor with deep domain knowledge suggested the customers’ stated intent might not play out in reality. In other words, that what they said they would do, and what they would actually do, might be different, based on her experience. Presenting the customers with a prototype seemed like the only way forward. But that could be costly. Was there another way?

In each case, changing the research may have given a better outcome. Team one needed to expand the pool of respondents – rejection from no one (or everyone) usually signals that something is amiss. Group two needed to insist their CEO be at the table, if he was determined to have the last word, so his concerns or constraints could be considered at the time, not after the fact. And in case three, observed behaviour, or asking about what the customers actually do currently to solve the problem, might be a less costly approach. Making sure the research approach is right can keep us from looking like we’re just not willing to hear the answer.

Always listening,

Megann and Steve

 

Stop Pushing your Customer Around!

Push marketing is such hard work. The problem is, many entrepreneurs start off as inventors. They want to create something, and they’re convinced that if they create the right something, the world will beat a path to their door. But more often than not, when we work with our clients to try out inventions that have been developed in a workshop or a lab, with little customer consultation, customers just aren’t interested.

“Explain it to them!” say the inventors. But in the wise words of a former colleague, sometimes, “Someone’s gotta tell them the baby’s ugly.” We’re very much in favour of inventors getting up close and personal with prospective customers from the very start of the process. Leading entrepreneurship thinkers like Steve Blank have shown repeatedly that this is the most reliable way to come up with a product or solution that is both needed, and wanted. So what’s our role? Shouldn’t the inventors just “get out of the building” (Blank’s words) and talk to these prospective customers?

The truth is, this works very well for some entrepreneurs or inventors. It’s the most direct, useful method for individuals or teams who are open to hearing both positive and negative feedback about their ideas. In our experience, there are two places where the process usually breaks down. The first is that the inventors need someone to help them hear the bad news because it is such a game-changer that it seems their idea won’t work at all. This is a tough yet defining moment. They can give up, or they can find another idea that is more creative or interesting. At this point, having a facilitator, thought-leader, or ideation mentor can help them come up with options that avoid the pitfalls of the original invention. The second break-point is that they receive the message about what part of their idea doesn’t work, but just can’t seem to figure out how to get there. In that case, taking a new approach from traditional brainstorming, such as using an Innovation Game to answer their question, can help them get back on track and re-energize their commitment to their invention. Because really, who doesn’t like to throw a little fun in with their work?

So stop pushing your customer around, and look for ways to give them what they want. It might not be easy, but it is most definitely easier than making them take something they never really wanted in the first place.

Creatively yours,

Megann and Steve

Why Customer Development is important to your business

There’s a tremendous amount of positive energy in start-up communities around the globe regarding the Lean Canvas. ..for good reason.  When executed properly it’s a very powerful approach to developing and documenting your Business Model.

We can’t explain it any better than Ash Maurya or Steve Blank or many others, so won’t even try.  What we want to talk about is why Customer Development, as espoused by Blank is important to your development.  The practice of creating hypotheses regarding your business model, then getting out of the building to talk with those you think might be your customers, potential partners, and other who could THEORETICALLY play a role in you developing a successful business model.

The reason we feel this is an important part of developing your business model has both a short-term and, hopefully, a long-term influence on your business success.

In the short-term, if you do Customer Development properly, you get out and ask people about their situations, their businesses, and their pain.  You are not going out pitching or selling!  You are starting with their broad perspective, then focusing down to where you  can ask them “Given what you’ve told me, if you had This Thing™, how would that change your life/business/way of doing things?”

The discipline it takes to sit down and really listen to people is a life skill that not enough of us get to develop.  So the more you do it, the more natural it will become

Where will all tomorrow leaders come from?

To read the popular press, you’d think the future of our young people is pretty bleak…layoffs, part-time jobs, off-shore competition.  Horrible!

But there’s another aspect that doesn’t make the front pages:

Last night I had the privilege of attending the final presentations for a course at the Dalhousie University Faculty of Management called Starting Lean.  Peter Moreira of Entravestor.com has described it better than I can, so please read his article.

Mary Kilfoil and Ed Leach took a group of diverse students, including engineers, programmers, business students, arts students, PhDs…and in less than 3 months had them go through the entire process from idea to, in some case, commercialization, along the way doing real-world evaluation with true potential customers and stakeholders (ahem…market research was instrumental).

Not everyone ended up traveling the road on which they started, there were a number of significant pivots along the way, revamping, re-tooling, and generally navigating the messy process many entrepreneurs go through along the way.  But that all part of the learning, a big part of the learning!

In addition to some amazing product/service/ventures, these real-world entrepreneurs blossomed right before their colleagues’ eyes.  Students who were petrified to stand in front of 2 people on September 6th, presented in front of an almost packed auditorium in the Faculty’s Rowe Building.  And they presented professional pitches, complete with live displays, skateboarders and amazing video.

All I can say is, if these are the people who are going to be funding my public healthcare system in the years to come through their tax dollars…I’m going to do everything I can to keep them here and have them develop their dreams in Nova Scotia.  Even if this particular dream doesn’t make it through the brutal process that is real life business development, their next one, or the one after that will be a success.

There’s no quitting when you’ve been schooled by Doctors Kilfoil and Leach!

Brainstorming Gone Wild!

Recently we’ve been observing a company we know, trying to find a solution to a problem. They have been looking in every direction, but the end doesn’t seem to be in sight. They’ve come up with several possibilities, and tried different approaches, but nothing seems to be working. They’ve put their heads together. So what’s going wrong?

What our friends are experiencing is brainstorming gone wild. We often hear criticism of brainstorming – and it generally takes the form of “We looked at every possible option, but we still didn’t come up with an answer. Brainstorming just doesn’t work.” However what usually doesn’t work is that the team involved has tried to shortcut or short-circuit the process.

Effective problem solving requires a two-phased approach. First, discovery. Getting all the ideas on the table. Exploring every possible avenue. Then, assessment and development. What do the solutions have in common? What are the best elements? Can they be combined? What isn’t implementable or affordable? Most brainstorming failures we have seen have occurred when ideas are rejected, adapted, or assessed during the discovery phase, or when the brainstormers have satisficed – settling for the first, obvious solution. There’s a fine line between stopping too soon, and keeping on looking long after the solution has been revealed, in the hope of eliminating all possible risk.

How can this be avoided? Seek help from an unbiased source – a professional facilitator, or even a successful colleague from a completely different domain. Someone who can hold up the magnifying glass for you, and help you know when it’s time to cross the line.

Throwing ideas at the wall…and helping you choose one that works,

Megann and Steve