Some of you are scratching your heads. What’s Dave getting into? Aren’t customers the people that buy our stuff? Aren’t they the prospects we go after to convince to buy our stuff?
It’s actually a tougher question than it appears to be. Answering the question requires deep insight into what it is we do better than anyone else in the world, and who needs what we do. Answering the question also demands that we identify who we shouldn’t be selling to. But clearly identifying the customer is critical in focusing our sales and marketing where we have the greatest insights, where we have the greatest impact, and where we get the greatest return on our investment in time and resources. Doing this focuses us on the customer where we create the greatest value. If we do this well, it produces amazing results. We become sought after by those customers, we become partners to those customers. our sales and marketing become very focused, very efficient and very effective.
So how do we answer the question?
First, we have to be very clear about the problems we solve–not just what problems we solve, but what problems are we the best in the world at solving. We can’t be general, we have to be very specific—We allow people to do this…… Eliminating this problem (or Addressing this opportunity)….Which produce these outcomes…… The process of defining these may be an iterative process. Lean start up concepts like developing the Minimal Viable Product are ways organizations do this. We may have a whole list of problems we solve. We need to prioritize these and we need to know that we do this better than anyone else in the world. We need to be very critical here, not fooling ourselves. We have to be honest about what we are really good at, where do we create the greatest value. In doing this, I always like to look at the contra-position—what problems do we exclude, what problems don’t we solve.
The next step is identifying who has the problems that we are the best in the world at solving. The answer can’t be “everyone.” That’s the answer lazy people will give you. But in reality it is never everyone. There may be certain types of companies—based on size, location, industry, performance, structure, organizational type (e.g. public, private, family owned, not for profit, governmental, etc.). There may be cultural or climate characteristics, attitudinal characteristics, behavioral or others. For example, Microsoft, Oracle, and SAP are huge enterprise software companies. They share a lot of similar business demographics, similar performance characteristics, and so forth. Culturally, behaviorally—they are very different. So the “fit” with what we do may be very different.
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Defining “who has these problems” goes even further. Some obvious ones might be functions—we solve problems for people in these functions but not in these functions. It goes further, it goes to specific functions or personas. “We solve problems for manufacturing quality engineers in process industries, but noy for manufacturing quality engineers in discrete manufacturing processes.” It goes further, “we solve problems for these personas, in these functions, in these types of companies, in these types of industries, in these circumstances or facing these issues, or wanting to achieve these things.” And we do it for those people better than everyone else!
What we are trying to do is, in essence, define a “box.” We tend to dislike doing this, but in defining who the customer is, we have to create these “boxes.” We may have several “boxes,” we may have different “boxes” for various product lines. We can’t have too many boxes–it’s very difficult to manage all these–they are different, require different skills, capabilities, and so forth.
Defining these “boxes” with precision is critical. It focuses us, these boxes are where we can provide the greatest insight. These boxes are where we create the greatest value–most profitably. It is where we win and where those customers want us to win.
If the “box” is too big, too general, you haven’t done enough work. If there are a lot of competitors in the same box, you haven’t done enough work (there can’t be a whole lot of people who are the best in the world at solving a problem).
We don’t define these boxes blindly. It requires product management, marketing, sales, customer service and others functions within the company to define and align everything around serving those boxes. It requires engaging “customers” in the process. In the process, we’ll find many that fit, probably far more that don’t fit.
The boxes can’t have “fuzzy boundaries.” We have to be very focused. “This customer fits, almost or kind of,” is the kiss of death. It starts defocusing us, we make more and more exceptions, we are no longer the best, we start chasing people who don’t have problems we solve, we fail.
The boxes will change over time–the customers will change (should we change with them, should we incite changes). What we do will change.
Now the tough part. Focus. We market to, sell to, service and support customers in the box. We aren’t distracted by others–even though they have money to spend. It’s not our business or it’s bad business. We are not the best in the world at solving their problems.
So can you define your customer? Are you focusing all your efforts on your customers?