Product-customer fit: Snog Marry Avoid?

In my recent article “Productising is raising the stakes”, I described how the product approach to value delivery - selling pre-built value rather than bespoke service - can generate superior returns. Then in the following article “Sell the future, not work”, I wrote about how you can sell outcomes instead of work, and thereby avoid being drawn into committing to deliver whatever ill-conceived solution your customer may have designed. The product approach - done well - is inherently strategic, because it requires you to choose trade-offs. You must omit, remove or reduce capabilities in order to create competitive advantage in others.

“The essence of strategy is choosing what not to do.”

(Michael E. Porter, What Is Strategy, Harvard Business Review 1996)

Not only must you make painful choices about your offerings, you also have to be selective about your clients. You must be prepared to say “No” to potential revenue, because inevitably you will encounter prospects who believe they need a bespoke solution either because they’re unique, or because they consider themselves to be ahead of the curve (“All of your customers will want this, just wait and see”). Doing their bidding eats up your time and attention, servicing one client without generating revenue opportunities with others.

Worse still, it’s often true that clients that believe they have unique needs are themselves mistaken, and in fact their demands are shaped more by their own unreliable attempts to design solutions to their problems, or by their unwillingness to challenge their own ways of working. If you’re unwise enough to end up pandering to these, then you’ll probably find that you can’t deliver sustainable value to them, and the relationship may be doomed from the outset anyway.

If your company regularly does things for single clients, then you’re not behaving strategically, and if it dominates your activities then you’re actually a services company. Being a product company is hard, not only because it requires tough choices but also because there’s no way to know in advance if your strategy is going to work. It can even be difficult to know if you are in fact holding to your strategy - can we meet this prospect’s needs? Is it a company we want to do business with? During the initial selling phase, it’s all too easy for your judgement to become clouded, especially when the sales target hasn’t been met. To help with this, I’ve created the model below.

The Fitness-Attractiveness matrix

Or course it’s a matrix, because consultancy involves reducing every aspect of reality to two dimensions. In this case the dimensions are “Fitness” and “Attractiveness”. The allusion to sexual chemistry isn’t accidental - after all, landing a new client is very much like dating someone with a view to a long-term relationship. The question is whether you snog, marry or avoid, to borrow from the title of a noughties UK TV show in which participants underwent a ‘makeunder’. They were stripped of their external fa?ade (fashion-victim apparel, excessive makeup etc.) to reveal their underlying true appearance before then being critiqued by ‘man in the street’ passers-by. I wouldn’t recommend a sales qualification process using such trivial criteria, but it is important that your judgement is based on critical thinking rather than superficial glamour or primaeval impulses.

The vertical Fitness axis should be self-explanatory: your products are a good match for the needs of customers in the top row, less so for those in the middle row, and not all for those in the bottom. To judge this, look for these signs:

• Good fit: short period of negotiation, concentrating on augmentations such as price, delivery timescale, preferential terms. Mutual desire for PR.
• Acceptable fit: negotiation focuses on additional features or integrations, requiring support from the development team. Downward pressure on price.
• Poor fit: demands for substantial customisation, tension or even conflict between Sales and other teams. Development not consulted.

The horizontal Attractiveness axis needs more justification. Why wouldn’t you want a customer if you can meet their needs? Well, because it could be that they want to impose unacceptable commercial terms, or they exhibit unethical behaviour, or they have a reputation for being difficult to work with. On the other hand, attractive customers might be rich, famous, cool, or have a great culture.

Now let’s look at each of these ‘nonants’ (apparently there’s no equivalent of “quadrant” for a cell in three-by-three matrix so I invented one):

Top row: very fit

• Stalkers want your product, but for some reason you don’t want their custom. It’s not you, it’s them. Leopards don’t change their spots, so don’t fall for it. Set a ridiculously high price to discourage them. If they agree to pay it, consult your morals (and lawyer).
• The relationship with a Satisfied customer is steady but unexciting. They keep paying your bills, so don’t take them for granted, but you may need to remind yourself to make a fuss of them, or they could wander off.
• Soulmates bring a win-win relationship. You’re madly in love with them, and they with your product. They provide for you, and you can brag publicly about your trophy partner.

Middle row: not so fit

• Transactionals can seem like a no-risk fling, when in fact there’s no such thing. If you’re going to do business then keep it strictly commercial, and make sure you know where the exit is.
• Acquaintances are on the fringe of your circle. It might seem like an awkward match, but it’s always worth networking because you don’t know how things may change in the future. Not in the pipeline right now, but keep nurturing.
• Driver customers aren’t a perfect match, but just possibly might be pushing you in the right direction. They might be just what you need to up your game.

Bottom row: unfit

• You might wonder why I’d mention Phantoms - clients you don’t want and whose needs your product doesn’t meet. However it’s all too easy to be distracted by these quasi-customers. Don’t waste time on them.
• Vampires are dangerous, because they’re strangely attractive but drain your energy. Fend off their seductive charms using your trusty strategy, which vampires cannot tolerate.
• Sirens are irresistibly attractive, but watch out - they could lure you in the wrong direction. If you really can’t resist them, you could make a strategic pivot, but it’s important you know that this will close down other options.

This is version one of the matrix, and perhaps you could improve it. Let me know your thoughts!