The first step to recovery and prosperity: know your customer

Businesses everywhere are experiencing major disruption. While disruption is nothing new, for it to happen on this global scale and to every aspect of your business is unprecedented:

• Customers are buying less and cancelling orders,
• Distribution channels are being impacted or altogether shut down,
• Suppliers are facing their own challenges, with flow-on effects to their customers (ie, you!)
• We are being forced to work in dramatically different ways

The bad news is that we are not going to go back to normal any time soon – probably never. The good news is that disruption creates many new opportunities to those who know where to find them. This is particularly the case for businesses in highly competitive industries where price is often the dominating factor for customer decision making. It is also the case when dealing with conservative customers, particularly in business-to-business (B2B) transactions. We are creatures of habit, and often resistant to change, even at the expense of efficiency. Disruption can force conservative customers to experiment with a better way to get things done.

Attempting to return to how you previously operated under these circumstances would be a mistake for most businesses. The reason for this is that the world has changed, and your customers have changed too.

A great starting point as you plan the path forward for your business is the process of customer discovery. Your customers pay for your products or services because they help them to complete a “job”. Depending on your business, this job may be alleviating their hunger (a burger), providing a sense of worth or fulfilment (a luxury car), or it could be helping a business complete one of their critical operations (a business critical software system or equipment). A great business helps a lot of people complete a job (eg, mass-market consumer goods), or helps a few customers complete a job that they are willing to pay a lot for (eg, niche B2B). Your customers’ jobs may be quite different than before COVID-19. You may find that you have new potential customers too, who have a new job to be done that can be completed with your product or service. Don’t restrict yourself to traditional industries and sectors as you find the path forward for your business.

The next step is to identify your customers’ greatest pains. These are the potentially bad outcomes and obstacles to completing their job that your customers wish to avoid. The more severe the pain, the more valuable your solution will be. Pains often include excessive costs of time and money, frustrations and annoyance, risk that outcomes won’t be achieved and negative social consequences such as loss of face.

Identifying your customers’ greatest pains should then be followed by identifying their gains. These are the positive outcomes and benefits that they desire. Gains often include savings of time and money, creating customer delight and making your customers look good to their peers, bosses and their customers.

Not all jobs, pains and gains are equal, and no business can (or should) resolve them all. If you make the effort to suspend your own assumptions about your clients, and validate what their most important jobs, pains and gains are you can take your business to a new level.

 Focus on resolving your customer’s most important jobs, pains and gains to maximise the value you create for them, and as result the profit your business can retain. Eliminate anything that is low importance to your customers to reduce your operating costs. This is not an either-or situation – if you really understand your customers, you can increase your revenues AND reduce your costs at the same time AND carve out a position for your business that is difficult for your competitors to challenge.

Yes, these are difficult times that we are passing through and no, it’s not going away any time soon. However, there has never been a better time than right now to change the game and remove the barriers that had previously limited your business’ potential.

This is an article for Business Blindspots Tasmania. To ensure you receive our regular updates from expert business advisers across a range of areas follow our LinkedIn group.