How To Take the Guesswork Out of Scaling
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Why did you buy your toaster? It‘s probably because you wanted toasted bread. You weren’t joining some perfect toast movement. As Harvard Business School professor?Clayton Christensen?said, “People don’t buy your product or service. They hire it to help them make progress in their life.” You were hiring a toaster to toast bread. That “job” came first; everything else came second.
Putting the customer’s progress as the central focus of what your business does is a critical component of scaling, but so is operational profitably. Businesses that are able to do both take the guesswork out of scaling and have more staying power than the competition. But how do you get there?
Correlation isn’t causation
Building a customer-centric business starts with throwing out most of what we know about market research. Traditional market research focuses on drawing inferences and correlations from massive amounts of numbers-based quantitative data. The data may be useful, but the problem is that correlation isn’t causation.
I’ll give you an example. I’m a male aged 25-54. I have a college degree and live in an urban area with a higher-than-US-average income. I’m the poster child for a motorcyclist. However, none of those attributes?caused?me to buy a motorcycle.
I ride a motorcycle because my wife thinks I look “hot” on mine. Numbers can’t convey that. Only conversation-based qualitative data can. You’ve got to talk to your customer to understand the circumstances of the pivotal moment that made them decide to change. (Change — not necessarily buy. That comes later.)
In those conversations, you’re building a picture of the circumstances that caused them to say, “I’ve had it. I’m ready for change.” And then you’re defining what change or progress looks like to them. That’s what is called the “customer’s job”. The goal is for your product to accomplish the customer’s job.
You’ll find that customers have similar jobs, and once you know what they are, they can guide our operations. And you can leverage two very powerful forms of innovation, sustaining innovation and efficiency innovation, to scale your business.
Sustaining innovation
Sustaining innovation grows a business’s share of an existing market. It uses the perspective gained from understanding the customer’s job to improve a base offering, helping customers make progress better or faster than ever before. It gives your offerings pull. They attract clients because they’re just so dang good.
In 2011, Irish SaaS firm?Intercom?had a churn problem and found the solution by understanding the customer’s job. According to Des Traynor, Intercom’s CEO, hundreds of in-depth customer interviews uncovered four “customer’s jobs to be done” that customers were hiring Intercom’s software to do:
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Operationally, Intercom then built four distinct services to support those “customer jobs”. When Intercom started innovating around customer jobs, they were valued at less than US$5 million. Intercom is currently estimated to be worth US$10.7 billion. Today, they have dedicated R&D teams going deeper into each of those four customer jobs to guide innovation.
Efficiency innovation
Efficiency innovation improves profitability or productivity. When run amok, efficiency innovation destroys the value a business gives to its customer, but when kept in check by the “customer’s job to be done,” it is a powerful tool.
In 2019, I worked with a team that understood their “customer’s jobs to be done” and built their business model around it. After they hit a 40 percent year-over-year growth rate for three years, they decided to focus on boosting profitability. That’s when we started leveraging efficiency innovations to boost productivity and profitability.
I created a plan that used simple process improvements to increase their bottom line by over US$1 million per year while improving the overall quality of the customer experience.
Remember: Your customer doesn’t buy your product or service. They hire it to help them make progress. When you understand your “customer’s job to be done”, you can innovate better products or services to help your customers make progress faster than ever. You can make your operations more efficient and profitable than ever. You can take the guesswork out of scaling and hijack innovation to take your business to the next level.
Contributed to EO by Zac Stucki, the founder of?Homeric Consulting. The company transforms?stalled businesses with quality, profitability, and scaling issues into major market players by using customer-centric operations to zero in on the real reasons a customer chooses to hire your product or service and then designs business strategy and operations around that.?
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