Digging Deep: Knowing What Customers Want and Giving it to them

The customer is always right (even when you don’t agree)

I have derided the statement myself, why should the customer always be right? Aren’t they humans and prone to infallibility? But the more I buried my head in the history of why some businesses fail and why some others succeed, I found myself gradually shifting my position. So, customers are probably always right (a bit of scepticism is not wrong).?

Meanwhile, when you apply that statement to innovation, it takes a new meaning.?

Let me explain.??

When Sony decided to introduce its lightweight portable cassette player. It did what most companies would do: do market research or survey and get to know what customers really want.? Well, it turned out that the result of the market research showed that customers didn't want the cassette player. Said differently, if introduced, the product would fail.?

Not minding the result of the extensive and elaborate market research, Sony introduced the product anyway. The product was very successful despite initial glitches. With that background, it is possible to say customers don’t really know what they want, after all. I don’t agree. The customers know what they want. The problem is usually how companies ask customers what they want.?

Asking customers what they want can be likened to asking a woman whether she wants a gift for her birthday or not. Of course, you know what I mean.??

Let me share a story with you.?

A few years ago, my friend travelled to South Africa for a course. Before leaving he asked his wife what she would like him to buy for her. If you know Women well enough, most would likely say ‘nothing’ or ask for something that is probably mundane like a ‘cook book’, ‘a steam hair roller’ or something that would make the man roll his eyes.

So, off my friend went to South Africa but while there, he shared the story with one of his colleagues who obviously was more experienced, and schooled him on what to do. My friend bought his wife a necklace - a $100s gold necklace. On his return, he presented the gift to his wife, she was super happy - the look on her face confirmed her joy.

Most customers are like my friend’s wife, they know they want something, but verbalizing that thing might seem a bit hard. This is why relying exclusively on traditional market research may not produce the kind of market insight that can lead to breakthrough products and services. So, what should startups or entrepreneurs do in this scenario??

To resolve this problem, I will walk you through three methods or techniques of getting under the skin of customers and truly uncovering what they want:

1. A hybrid of conventional market research and context-specific research 2. Context-specific market research 3. Jobs-to-be-done or outcome-driven product market research.

1. A hybrid of conventional research and context-specific research.?

Companies conduct research - from small boutique startups to Whale-sized conglomerates when they want to introduce a new product; gain an insight into the behaviour of the customer about certain features; gauge the response of current customers to the introduction of a new product line etc. Traditional techniques such as surveys, interviews, and administering questionnaires to a sample population, focus group discussions are part of the marketing team’s toolbox.?

But more often than not, these techniques don’t work.?

For example, had Sony relied solely on the feedback from its extensive market research, it wouldn’t have introduced the Sony cassette player, one of the most revolutionary products of the nineteenth century. The problem with these techniques or methods is that they hardly take into the context - the circumstances or setting under which the product is used. This makes it almost impossible for customers to give an accurate description of what features or benefits they would rather want to be added or removed from the product.?

Context-specific research, therefore, involves getting feedback from channel members - distributors, wholesalers, and retailers who know and understand the customers and then infusing their feedback with the quantitative (surveys, questionnaires) and qualitative (interviews, focus group discussions)? research results. The core benefit of this hybrid is that the strengths of the two techniques are leveraged while cancelling out their weaknesses.

For instance, the traditional extensive market research may help companies unlock new market opportunities such as unmet needs of a cohort while the context-specific method can indicate that the current product on the market requires improvements in terms of product features, the need to introduce new market positioning, including the promotional campaigns that should accompany the introduction.?

2. Context-specific market research?

If you want to introduce a new hand trowel, your best bet is to talk to bricklayers. And if you are considering replacing the Suzuki and Hijet/ Daihatsu minibuses or “korope” on Lagos roads, the best people you would likely talk to are the dealers - those who import the product, the drivers, and maybe passengers. (This might be food for thought for the opposition party if there is any). Talking to the dealers and drivers would likely give you deeper insights about your market as well as that of those of the competitors than just talking to passengers who have never sold or driven the cars.??

Here is what I mean.

In 1970, Canon was hurting badly. And its pain refused to heal. Why? Other product lines were doing fantastic in the US market, but its camera was losing the competitive tiff to its archcompetitor, Minolta. It’s like watching my son being trounced by a peer. Canon knew it needed to forge an iron-clad distribution strategy that would differentiate it from Minolta and hence win back lost territories.? Consequently, the company sent three managers to the US.?

For six months, the head of the team combed camera stores in the US talking to store owners and observing how customers behaved, and how salespeople interacted with the customers. He also visited chains of drugstores where Milnota was being sold and realised Canon won’t be a good fit.? Then he made an important discovery: Canon’s camera had poor sales runs because dealers did not give it the required support because its sales teams were too small.?

On the strength of his findings, the company created its distribution strategy: sell canon cameras exclusively through specialty dealers that attend to an upscale, high-quality niche just below Nikon’s targeted segment. The fruit of its context-specific research was the successful introduction of Canon’s AE-1 camera in 1976.?

3. Jobs-to-be-done or outcome-driven product market research

In HR parlance, for example, companies employ talents or individuals with prerequisite skills to fill some positions to achieve the business goals of the organizations. Absent favouritism, nepotism, ‘sex for positions’, and the like, companies are always looking for the best talent or the most qualified candidate to fill such roles in their organizations. For instance, Satya Nadella, an Indian is the CEO of Microsoft, a US-owned company. He‘s been at the helms since 2000 and might eventually end up as the chairman since the founder, Bill Gates has retired from the board. I hope you are not losing me, my point is that companies look for the best talent -whether she’s an African, American or Caucasian, or Chinese - as long she can deliver results, it’s game up.?

In like vein, customers ‘hire’ products to get a job done. I have written about this in previous editions of this newsletter. The central idea of the jobs-to-be-done theory (or outcome-driven innovation methodology) is that the product is not of primary significance to the customer, just like the gender, or nationality, of Satya Nadella, didn’t mean much to Microsoft, all it wanted was someone who could get the job done; run the company profitably. So, the emphasis is on what can help the customers achieve their tasks better, faster, and cheaper.?

For example, parents can engage a home teacher to help their children get better at Mathematics. To know what jobs the parents want to get done, one could ask, “Why do you need a home teacher for your children?”. This is a very wrong way to get to the bottom of the real reason why the parents need a home teacher. Because the emphasis is on the teacher, and not on the need of the parents.

Remember, the jobs-to-be-done concept does not focus on the product (which is the teacher in this scenario, rather the focus is on the need of the parents). If anything, the parents could buy Mathematics software tutorials for their children, and they could decide to teach their children by themselves (I did this for a bit but I ended up beating more than teaching so I quit), they can also get a relation to teach their children.?

That said, the meat of this research technique is a clear definition and agreement on what the need of the customers are. To get to the bottom of this, the best place to start is to knead down the functional need - this is the core job or needs of the parent.??

The right question to ask the parents would then be: Why do you need a home teacher for your children, what job are you ultimately trying to achieve??

An answer such as “improve grades in Mathematics”, is good but may not express the ultimate job the parents are trying to achieve. The ultimate job or the functional job the parents want to achieve might be “prepare students to meet med school requirements”.

Now, this is the ultimate job the parents are trying to get done since they know their children ain't going nowhere - a attend med school and become a doctor if they can’t get good grades in Mathematics.

The process to unravel the customer needs to create breakthrough products involves ten vital steps:?

1. Define the customer(s) 2. Define the jobs to be done 3. Uncover customer needs 4. Find segments of opportunity 5. Define the value proposition 6. Conduct competitive analysis 7. Formulate innovation strategy 8. Target hidden growth opportunities? 9. Formulate market strategy 10. Formulate product strategy.

Needless to mention, there are different job dimensions - functional jobs, social jobs, emotional jobs, related jobs, supporting jobs etc.

To sum up, knowing what customers really want is a big deal. If it’s not, then companies should be launching products successfully. But that's not the case. Only 5% of products launched will likely make their way into the buying consideration of consumers.

So, the true starting point for companies especially startups is to know what customers really want. And since there is no magic wand for uncovering the unmet needs of customers, startups have to be prepared to do the hard work of finding out:

Use a hybrid of conventional market research and context-specific method, context-specific research and Jobs-to-be-done research techniques.

Riding on these three methods for unravelling the needs of customers is a good starting point for both newbie and old enterprises to introduce breakthrough products perhaps cut in the fabric of the Sony portable cassette player.???

I will take it from here next time when I double down on the Job-to-be-done and Outcome-Driven Innovation for developing new product concepts.?

Meanwhile, as I mentioned in the opening paragraphs that when you apply the concept, “the customer is always right”... to innovation, it shifts your attention from your product to a solution that would meet the needs of the customer - the very platform for creating breakthrough products and services.

Until next time, keep winning and learning.

My name is Oyeniyi Faleye?

Reference:

https://hbr.org/1987/05/market-research-the-japanese-way