Our executive sponsor at a long-time client used to start off every Grassroots Strategy session by telling the teams to put a jar in the middle of their table and every time someone mentioned the word ‘product’ they had to put $5 in it. She told them that she was sure that every team would be able to throw a pretty good party by the end of the week with the money they collected. Her point was that they needed to focus on the customer and the problems that they could solve for customers rather than on their product. Professor Theodore Levitt said it best decades ago when he said, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.”
To a certain extent, the focus on products is understandable. We organize marketing around ‘product managers,’ we report revenue and profit by product line and we even report on the progress of innovation as ‘new product development.’ But good marketers understand that they must break this cycle of internal thinking – it is not what we want that matters, rather it is the customer who decides whether our product makes them better off. The success of our product line or new product launches is the result, not the cause.
Start with the Problems You Solve for Customers
The first step in understanding your market is to really evaluate what problem or problems you solve for your customer. What is the “hole” that you provide in Dr. Levitt’s analogy? Try to step back and think about what job your customer is hiring your company to do on their behalf with your offering? If you didn’t have a product and you were applying to your customer for a job, what would the job description say? (Clayton Christensen, et al. HBR, September 2016) This is often a surprisingly difficult thing for people to do. But it is amazing what you will find when you stop thinking that you are in the business of selling drill bits and get into the mode of thinking that you help people make holes. Sometimes this even requires you to step back even further and think about who your customer really is? Who are you solving the problem for? Is it a distributor, an installer, a consumer, or maybe even an end-user who is not involved in the buying decision? Done well, this simple shift in perspective can change the entire way you think about your business.
A very powerful example of thinking customer problem back rather than product forward is Apple’s launch of the iPod in 2000. If they were thinking product forward, they would have tried to introduce the best MP3 player on the market. It turns out that from a product perspective what they actually launched was a device that leveraged mostly 3-year old technology. The half-life of technology in consumer electronics is measured in months, not years, so from a technical standpoint their product was in the dark ages. How did they win? By recognizing that they were trying to get into the “mobile music” market. By coming at it from that perspective, they were able to realize that there were two limiting factors to adoption of MP3 players: ease of use and legality. They were able to address the two fundamental reasons that more people weren’t buying MP3 players by making it easier to use and legal through the iTunes eco-system as an alternative to Napster. Apple’s success had very little to do with the device (product) and everything to do with the limitations on the existing solutions to be able to solve that primary customer problem (mobile music).
Consider the Customer’s Alternatives
Another advantage of thinking about the problem you are solving from the customer’s perspective is that it allows you to consider all of the alternative ways to solve the problem. In the hole example, depending on the size and precisions of the hole, you could use a hammer and chisel, hire a contractor, use a CNC machine, or today build around the hole with 3D printing, in essence making a part with the hole already in it.
In the MP3 player example, the best alternative for most people was a Walkman, Discman, or portable radio. It wasn’t a competing MP3 player, because most people either couldn’t or weren’t willing to use them. If you can truly get to the place where you understand the problem the customer is trying to solve, then you can evaluate all ways the customer could solve that problem. These examples also highlight that there are benefits to this way of thinking both for offense and defense – these alternative solutions could either be threats to your current product or opportunities to dramatically expand your customer base.
Expand Your Thinking
Also, by thinking from the customer’s perspective you can start to think about what else you could do to help the customer solve the problem. Are there other services or ways of helping them that will provide a better solution to the problem. Remember, Apple was a failing computer company in 2000. They were not a consumer electronics company nor were they a content provider. But by solving a customer problem, they were able to transform not just the MP3 market, but the entire music industry. And as iTunes has evolved into the App store, they have created an entirely new business model that is not dependent on a hardware sale.
One of the fundamental things to understand is that customers don’t buy your product because they want your product, they buy it because of the problem that it solves for them. In fact in B2B, if your customers could make more money by buying nothing at all that would be preferable. Occasionally, they may buy from you because they like you, which is nice, but rarely sustainable in a B2B setting. B2B customers buy things that help them solve problems – i.e., they do a job that makes their business more money. So, stop thinking that the world revolves around your product. Instead, invest in understanding how you can help your customers improve their business first, and great product ideas will follow!