Innovation.
The focus of last week’s Coffee and Jam was customers and how to keep them close which is always relevant but even more so right now as we make our way through the COVID storm. Almost every business claims to provide an exceptional service experience to every customer. It’s a bold claim on a tall order, but what does it look like in practice and how can your business achieve this ideal? Here to walk us through these essential questions is Toni Knowlson, Digital Innovation Lead at AWS Australia & New Zealand and Chris Stevens, VP of Product & Engineering at one of NZ’s up and coming young startups, Ask Nicely.
The lifeblood of any company is its customers. Sounds obvious, but it’s surprising how many ventures from startups to large enterprises, completely forget this truism as they seek to develop and grow their organisations..
Prioritising customers isn’t enough anymore. According to Toni Knowlson, you may want to be truly customer-centric at any cost if you wish to succeed greatly.
So, how do you build a truly customer-centric organisation that consistently leads with innovation?
Being customer-centric means your priority will be to prioritise customer discovery before embarking on any product innovation. It also means your organisation develops a process that will consistently provide exceptional customer experience.
Any startup knows that following a product-centric process may easily lead to disaster. When a venture creates a product and then tries to find customers for it, it is a lot harder, and that along the process of sale. In contrast to product-centric, where people create a product and then try to find customers. Here, the idea is to look and listen to your customers.
The goal of this process is to find customer’s pain points and then look for a solution rather than the inverse – to build a solution and then find a customer with the problem for which you have built for. By putting the customer at the heart of every decision, you will probably see an increase in your customer lifetime value and a reduction in churn.
Expectations of customers are always changing. Jeff Bezos, founder of Amazon, is famous for saying, “Customers are always beautifully, wonderfully dissatisfied.” What this means is that, even if you are delivering an excellent product and excellent service, there is always room for innovation because that excellence, for a customer, has already become their new normal.
A truly customer-centric company is always in the business of change and has a methodology, process, and culture built around innovation.
Don’t wait for customers to tell you the solution to their problems. Talk to them directly and find out exactly what problems they might want to have solved. Speaking (and listening) to customers may not seem like an immediate priority when you’re already so heavily invested in business-as-usual activities. Yet, understanding the issues and needs of your customers is one of the most important things you can do right now.
After all, your service might be “nice to have” in the COVID environment. But what services are “need to haves” for your customer? Your priority is to find out now before your budget line is deleted. You may be returning to a cooled sales pipeline and wondering what you can do to activate it. The first thing to do is to talk with those customers and listen for their problems, not try to sell them on a product that may no longer fit.
How can you be more customer-centric?
It’s easy to get lost when there are hundreds of comments and recommendations from your customers. You could try your own version of AWS’s process which Toni shared with us. The following is a very simplified version of well-known product management and innovation framework – Amazon’s ‘Working Backwards’.
The “Working backwards” framework.
Any innovation at AWS begins with customer insight. Once a potential innovation is found, the development process begins with an assembled team preparing a ‘Press Release’. According to Toni, a press release is a futuristic, speculative document on what you intend to launch with the tone that you already built it and have had customer feedback on it… In other words, the press release is a vital mechanism to focus the team on the goals of innovation and its impact on customers. If the ‘press release’ is successful it unlocks funding and a team immediately forms around the project. A press release will help you validate when developing new products or features.
Here’s a possible outline for your press release:
Heading – Name the product in a way the reader (i.e. your target customers) will understand.
Sub-Heading – Describe who the market for the product is and what benefit they get. One sentence only underneath the title.
Summary – Give a summary of the product and the benefit. Assume the reader will not read anything else so make this paragraph good.
Problem – Describe the problem your product solves.
Solution – Describe how your product elegantly solves the problem.
Quote from You – A quote from a spokesperson in your company.
How to Get Started – Describe how easy it is to get started.
Customer Quote – Provide a quote from a hypothetical customer that describes how they experienced the benefit.
Closing and Call to Action – Wrap it up and give pointers where the reader should go next.
Cut out the fat, make it simple, and remember that your press release shouldn’t be more than a page and half. It has to be portable and clear. It must be right about the customer’s values and highlight possible pain-points for customers.
For a positive reaction from your press release, consider these 2 key questions:
Does this raise the bar of the customer experience?
Does this idea really solve a pain point?
More information about AWS’s “working backwards” here.
Being wrong isn’t a problem, stubbornness is.
A common startup ecosystem mantra is ; ‘Learn from your mistakes.’
Each mistake you make takes you one step closer to finding a solution. At AWS, you don’t necessarily get ahead because your projects are always successful. There is a built-in expectation of strategic risk-taking around innovation. For any startup to succeed, this attitude must be baked into the culture. No one on your team should be scared to fail. Startup teams need to worry less about failure and more about the human tendency to fall in love with an idea and stay in love even when metrics and feedback indicate the idea is not landing with the intended customer.
In startup land, recognising when an idea is a mistake is proof of bravery, not cowardice. In a healthy startup, no one should be judged for slip-ups, this is a natural part of innovation and business. Judgement should instead fall on whether or not teams can bounce back from failure quickly, iterate, and continuously learn from the process.
Nothing beats a one-to-one discussion
According to Chris, just like in every relationship, one-to-one conversation is the easiest way to learn about a person’s wants, needs, and problems. It’s relatively new to ask a customer for an individual interview, but keep in mind that the goal is to get as much insight as possible.
What both quantitative and qualitative surveys have in common is the need for honesty from customers. The key to honesty is trust. To elicit trust, you need to remove the social barriers that often prevent customers from speaking their minds.
For example, customers will feel more comfortable if they are alone. Because they won’t feel judged by others about their answer, they will generally not filter their response. This allows you to ask a variety of useful questions. You are not looking for compliments, you are seeking relevant feedback and comments.
You can use a general script that will help develop trust between you and the customer. But, don’t follow this script word-for-word. Use some questions to start the conversation and set the tone, but be sure to remain genuine and show initiative.
Forget a disconnect with customers for a moment, what about disconnections within a team? How do you remedy this?
Empathy. If the customer point of view is all a business focuses on, start-up’s teams may experience a disconnect between the tech and sales/marketing (customer-facing) team.
It’s common to have friction between teams/departments which can misdirect energy and ultimately end in poor outcomes. You need to draw a bridge between these different facets of your company. That can be done by asking them to translate their world and their needs so that everyone can understand where the others stand. This will help find a middle ground that works for every member of your team.
Challenge your assumptions.
Let’s talk about flea circuses.
For fleas to be “trained”, they are placed inside a sealed jar. Time and again the flightless bloodsuckers would attempt to leap out of the jar thereby hitting the lid with such force that it will damage their fragile bodies. Over time, in an act of self-preservation, the fleas will learn to limit how high they jump – and here’s where it gets interesting.
When the lid is removed, the fleas continue to self-limit. No flea considers that their situation has changed. To them, the lid is still there and will forever be.
If you hadn’t already guessed, the moral of the story is this: challenge your assumptions.
From customer needs to technology, supply, and demand, business ecosystems are in a constant state of flux. The barriers currently in your way may be removed without your knowing. Ask rather than assume. Shift from expectation to shared understanding. In short, always be willing to change your mindset and to put yourself in the shoes of others, be they your customers, employees, or industry leaders.
Your intuition, network, and initiative are the best tools for ensuring you don’t end up like those fleas: forever trapped by barriers of your own making.
Here’s this lesson in action. For decades, we assumed that most people would rarely consider hitching a ride with a complete stranger after a night on the town. Yet, almost overnight, Uber’s innovative rating system made the prospect of hopping into a car with a complete unknown totally acceptable. With the right mix of incentives, a seemingly fundamental aspect of human behaviour was turned on its head, and few of us saw it coming.
This example shows that no one aspect of customer behaviour should be taken as given. Expectations and mindsets are constantly changing. It’s up to you, as a business, to routinely challenge assumptions and thus keep up with this pace of change.
Here’s the key takeaway: if you want your business to be a success story, make the customer the hero of it. Step into their shoes, ask questions, and challenge your assumptions.
Thanks again to our Coffee and Jam speakers, Toni and Chris, as well as to the amazing South Island startup community who made the time to join us at Coffee & Jam.
Aroha Nui.