Why Understanding the Customer Leads to Business Growth
- August 26, 2019
- Posted by: Nkem Mpamah
- Category: Business Strategy
The assumption that every business understands their customer is one big mistake most entrepreneurs make in a hurry. My target customers are accountants, doctors, and SMEs, and we create value for the customer, they say. Unfortunately, only a handful of entrepreneurs understand the jobs their customers are trying to accomplish. Nevertheless, understanding customer jobs is more important than identifying the industries that customers operate in. Why not? I will tell you in a minute.
In my previous article, where I discussed how to enhance value propositions, I made it clear that focusing on value propositions is central to creating sustainable business growth. As a matter of fact, I advised that continuously improving the value of products or services is the single most important activity entrepreneurs can focus on to grow. Not only will doing so create more value for the customer; but, it could lead to a competitive advantage for the growth of the business also.
The trouble is; you cannot enhance value propositions in isolation of understanding your customer jobs. Regardless of how beautiful you package your products or services, they are worthless if they do not address the customers’ pains. This is one reason why understanding Customer Jobs is crucial. For example, you cannot create a meaningful value or achieve sustainable growth if you do not first understand your customer jobs. Customer jobs are activities that cause pains to individuals in a specific target market when they try doing them. Understanding such activities is paramount for creating solutions that could eliminate the pains and add better value to the customer.
Understanding the customer
The process of creating value for the customer can be broken down into two important steps. Firstly, understanding Customer Pains, problems, or obstacles; and secondly, carefully articulating Customer Gains. Let me briefly explain each step in turn…
Customer jobs: Pains
Customer pains refer to everything that annoys the customer before, during, and after he or she completes a job. They limit the customers’ ability to achieving goals, or growing and enjoying what they want. Customer pains could relate to wasting of time, paying exorbitant prices for a product or service, or a lack of trust. For example; replacing customer agents with machines could result in wasting of time for customers who prefer communicating with humans. On the other hand, a company could feel pain if her sales team fails to achieve its revenue target. Similarly, inefficient leadership, lack of execution, or having the wrong people on the job could also be a source of customer pains for some people. But, regardless of the source or degree of customer pains, the impact often limits growth.
In dealing with customer pains, it is imperative to describe the specific pain with clarity. For example; assuming that a customer feels frustrated for using telephone answering machines, effort should be made to identify the factors that trigger the customer’s frustration. If it relates to wasting time, there is also a need to ascertain the stage in the communication process when the customer feels frustrated the most. You need to do that in order to understand the specific pains; for example, lack of time, in order to articulate a better customer gain.
Customer jobs: Gains
As the name implies, customer gains describe the benefits, solutions, or outcomes that customers seek in a product or service. Customer gains provide relief to customer pains and there are four types: required gains, expected gains, desired gains, and unexpected gains.
Required gains are the fundamental requirements, without which, a product or service is not acceptable. For example, the ability to make calls is a basic requirement from a smartphone. On the other hand, expected gains are capabilities that a product or service is expected to have. However, the product or service will still function in the absence of expected gains. For example, the inclusion of a camera in smartphones is an expected gain. Desired gains are benefits that are beyond what customers expect from a product or service. For example, desired gains are tailored to specific customer requirements and include the ability of smartphones to integrate with other devices. Lastly, unexpected gains are extras beyond customers’ expectations or desires. An example is the Apple store; customers did not ask for it and did not know it exists; but, they got it.
Similar to customer pains, entrepreneurs need to define the exact outcomes that customers are seeking in customer gains. For example; if a company says; “We need a better performance from our sales team,” you need to clarify what “Better performance” means to the company. In that case, you might ask; “What specific selling capability is missing that is required for your sales team to perform better?” Such a question might lead to; “We need to develop the capability to follow up on our prospects or close deals more effectively.” Once the customer pains are clarified as in this above example, it becomes easy for the entrepreneur to articulate appropriate solutions to improve the value propositions.
Understanding the customer is a prerequisite for creating value and sustaining growth. Also, knowing the exact jobs that customers are trying to accomplish is crucial for creating better value for the customer. While focusing on this key activity is the entrepreneur’s primary task, it creates win-win situations for the business and its customers also.
If you want to get beyond talking about growing your business, and start taking the exact actions that could create the results you seek, why not schedule a “Growth Strategy Session” with me, right now? Don’t worry, the fee will be on me.