Delivering value to customers
Delivering value to customers
How do you do??
Trust you are enjoying the holidays. I bet.?
‘Customer is king’ is no platitude or cliché, it’s a hard fact every company, especially startups, should hold up very dearly. A while back, I wanted to move houses, so I hired an agent. The agent took me to a couple of apartments; the state of the apartments ranged from absolutely unlivable (at least for me) to those barely habitable.?
Now, apart from the apartment itself, I had two major concerns – the proximity of the house to my children’s schools and how easy it would be for my wife to get to her workplace from the location.? Then, there are other factors such as cost of doing up the place, interior decoration, safety of the environment for my children, accessibility of the roads etc. But trust the agents, they cared less about my fears nor bothered about my worries, what seemed important to them was their commissions. Long story short, when I didn’t find any of the apartments valuable, I ended up renting none. Does that mean, I don’t know what I want? On the contrary. I know.?
Let’s be clear, customers know what they want. They know what they define as value which many times is different from what companies think it is. That is, they have a sense of what they want and what they don’t fancy. The problem for many organizations, especially startups, is to nail down what the customer defines as value, which is why the rate of fatality of startup organizations is high. About 4 out of 10 startups fail because they don’t have a sense of what the customers want before going into the product ‘factory’. Helping companies to find a market-product fit is the real motivation behind Alex Osterwalder’s book, Value Proposition Design. I will get to the book in a bit.?
But in the meantime, discerning and discovering what customer value is no rocket science. One surefire way to ‘enter’ into the minds of the customers is to know what annoys them about the current product on the market, or the risk they are trying to minimize in their current situations. If anything, customers are looking for solutions that will save them time, money, and cut their risks. Without saying too much, they want to live a happier, easier and more fulfilled life with less hassles and headaches, so if your product helps them achieve any of these, they would be sold.
Behold, Kanyamata and Prosperity preachers
If you doubt, there is a new phenomenon in Nigeria? known as Kanyamata. Kayanmata originated from the Northern part of Nigeria and literally means ‘women things’. It’s well documented that the product helps young women to attract rich and successful men as well as rejuvenate sexual relations between couples. The product is now top-mind with many young women who want to make it in the fast lane to a comfortable life without lifting a finger.?
Sorry, I digressed. Well, it’s not really a digression, I am only trying to drive home my point. The corollary is, when companies know how customers define value, they can build those metrics into their products and services. Which is what the Kanyamata merchants are cashing on, they know that Nigeria’s economic situation has made many women so vulnerable (Customer Pain) and therefore would do whatever to survive. So, if an aphrodisiac can get the job done, so be it. While I wouldn’t approve of Kanyamata, the women buying them want to aspire to better lives (Customer Gains) which the product is speaking to. Therefore, Kanyamata is helping customers (especially young women) to get a job done -’ achieve a comfortable life through sexual pleasure’
But if you ask me, many prosperity preachers are no different. Many years ago, the promise of a better life once people gave their lives to Jesus was commonplace, even if they don’t have a job or do any productive work. Of course, we know that’s a sham.Nevertheless, it’s that promise that led to a deluge in the church attendance. Even though many of the preachings were hogwashes and plain nonsense, the vulnerable could not tell the difference. They ate the preachings of the preachers? hook, line and sinker. Needless to say, the pastors rode on their covetous hearts and deceived them. The result was that many of them became poorer than when they joined the churches and eventually dumped their pastors. And just recently, many of the prosperity proponents are asking the Church to forgive them, saying they were wrong.?
I hope you are still reading on.?
Well, hope you know I am still writing about how companies can deliver customer value, right? In any case,? companies have no business being in business if they can’t deliver solutions that speak to the pains of the customers. When and if they do, the product would be an instant hit. Even if it’s Kanyamata.?
Enter banking in Nigeria. Before the 90’s, customers would wait in banking halls for hours,? till their legs and feet ached. Just because they wanted to withdraw or deposit money. It got so bad that one of the banks had to make a TVC, ‘My Tally No’ which was actually a mockery of the moribund state of customer service in the banking industry at the time. Then, in the twilight of the 90’s, banks like Guaranty Trust Bank, Intercontinental Bank Plc, Standard Trust Bank (before merging with UBA), came and dismantled the old business model and introduced a new value proposition. In no time, the long queues disappeared. Unfortunately, they are returning, hopefully financial technology brands like Kuda, Paystack, Flutterwave, Alat would help shrink the queues.??
Meanwhile, delivering value to customers requires that a company has a sense of what customers want.?
Companies must know that customers know what they want.
Don’t ever slip into that mode… thinking customers are some dull-brained minions who don’t know what they want. That kind of mindset would only produce products and services that would fail in the market. Because customers don’t want them. Overzealous startups including big corporations make that error time and time again. Although, Steve Jobs was believed to have said that customers don’t know what they want until you give it to them. But I bet Apple makes best- in-class products because its designers are geniuses from another planet.?
Rather, I would argue that Apple is successful because of its empathy, which is a major component of design thinking. Needless to say, that empathy is at the heart of creating exceptional product designs – products that customers would love and pay for. The corollary is that they know the metrics customers use to measure the effectiveness of a product.
Empathy is not just wearing customers’ shoes but also includes walking in them. Therefore, in order to know what customers want, ‘wear their shoes and walk in them’.? Which would stimulate asking the right questions. For instance, if the current product wastes time, you need to know ‘how much time the product actually wastes’. That would help you to create a solution that can save them time by X minutes or hours.?
My point is, customers know exactly what they want. The rubber hits the road for many organizations during the ‘customer discovery stage’ when they fail to ask the right questions. In any case, to be able to knead down what customers want, you need to have a clear understanding of the customer value proposition.?
Customer value proposition
The value proposition is a description of the benefits customers expect from your product or service. In actual sense, it is the reason why customers choose your product or service and forgo potential alternatives.?
In their book, Alex Osterwalder and Yves Pigneur et al, ‘Value Proposition Design, introduced the value proposition canvas (I have written about this in previous issues of The Game Plan). The value proposition canvas comprises the customer profile and the value map. Needless to say, that the value proposition canvas is linked (or should be linked) to the business model canvas, which by the way is centred around the value proposition.?
The customer profile comprises three sections: customer job to be done, the pains and gains. While the product features and services, gain creators and pain relievers make up the value map. The concept of the jobs to be done is built around certain underlying principles -? one, that customers don’t buy products but “employ” or “hire” products to get a job done, or a task they are trying to achieve. Two, jobs are stable over time, that is, customers whether in ancient times or now have always wanted to get the same done no matter what the solution with which they get it done may differ.?
For instance, people have always needed to move from one place to another. In ancient times, they rode on horses and used carts. But modern times saw the creation of trains, motor vehicles, aircrafts, jets and whatnot. The jobs which are the tasks people try to get done, which is in this case ‘move goods and people from one place to another’ remain the same but the means have changed overtime.???
Third, jobs are the basic unit of analysis for the unravelling of what the customer values. The corollary is that all the job dimensions such as functional jobs, emotional jobs, social jobs, and supporting jobs must be in the same ‘job bucket’ for analysis. Which is another way of saying, the company needs to understand all the various components of the jobs to be done? in order to have a sense of what constitute value to the customers.? This would then lead us to the different dimensions of jobs.
Types of jobs
In order to deliver value effectively, you need to have a sense of all the job dimensions the customer wants to get done. These include functional jobs, social jobs, emotional jobs, supporting jobs.?
In the final analysis, all these jobs should be captured in the design of a formidable value proposition for the customers. Delivering value to customers is not a walk in the park, it is oftentimes a rigorous process that usually takes the company out of its comfort zone. This requires talking, engaging, observing, reflecting, analyzing the customer jobs – the task they are trying to get done.
I will continue in my next installment of The Game Plan.
Until then, keep winning.
My name is Oyeniyi Faleye,