Focus on the Problem First. Not the Solution.
From Problem to Profit: Why a customer-centric Approach is key to business success.
Sara owns a small brick-and-mortar store that sells handmade candles. Sara’s sales are 70% online and 30% through her store today. She had been running the store for a few years and the business is decent, but she wants to attract more customers and grow her sales.
One day, Sara decided to ask her customers what they liked and disliked about her candles. She thought that by implementing a feedback loop strategy with her recurrent customers she would be able to identify opportunities and gaps to resolve to unlock new sales.
Initially, customers started to ask for new scents. More fruity, more masculine, cinnamon, etc., and as enthusiastic as she is, she released a few new candles every month based on specific customer feedback.
Unfortunately, she suddenly realized that while the new scents were selling, they were also cannibalizing the others, so the numbers were the same, and the inventory was growing.
Alarmed, she recruited a business consultant on Fiverr to help her understand what was the blocker. What was she doing wrong? Shortly after the first analysis, the issue was evident. Sara was gathering great customer feedback, but she was asking the wrong questions and misinterpreting the information.
The business consultant discovered by analyzing the data that what customers were actually saying was that the scent of the candles wasn’t strong enough, which the customers interpreted as a lack of quality. How the consultant arrived at such a conclusion? Primarily, for two reasons:
Recurrent customers were a small percentage of total sales. Sara had the ability to bring people to her store and sell online, however, only a few customers were recurrent.
They realized that none of the customers were saying: “they don’t smell strong enough”. What they asked for was a more pungent scent, hence, the requests for cinnamon, masculine scents, fruits, etc.
Can you see the difference? The scent was not the real issue. The real issue was the concentration of the ingredients on each candle.
Were they 100% certain of the issue? No. However, it was worth a try. So here is what they did. For the next 30 days, they offered all of the store customers a 25% discount if they agreed to answer a survey via SurveyMonkey 15 days after the purchase.
This time, they asked the right questions:
What scent did you purchase?
Why do you like that scent?
Where do you light your candles the most while at home?
For how long do you light your candles?
Do you think the scent of the candle is:
Too strong
Strong enough
Not strong enough
Can’t even smell it
Not surprisingly, the survey showed that over 77% of the respondents that lighted candles to cover strong kitchen or bathroom odors said the scent was not strong enough, and as such, they had to keep it on for too long.
In contrast, the customers that lit the candles in their bedrooms said the scent was strong enough. Guess which were the recurrent customers?
Focus on the problem first, not the solution.
Focusing on the customer's problem first is crucial because it ensures that the product or service being developed is aligned with the customer's needs and pain points. By starting with the problem, businesses can create solutions that truly address the customer's pain points and provide value, rather than creating solutions that may be irrelevant or unnecessary.
It also helps businesses to avoid investing time and resources in developing a product or service that no one wants or needs. Ultimately, focusing on the problem first can increase the chances of success for the business and lead to better customer satisfaction and loyalty.
Before creating a product or service, it's crucial to identify the problem that your customers are facing. This requires research and an understanding of your target market. By talking to potential customers and gathering data, you can pinpoint the most pressing issues that they need to solve. Once you have a clear understanding of their problems, you can start thinking about how your business can provide the best solution.
It's natural to want to jump straight into designing a solution to your customer's problem. However, it's important to resist this urge and spend more time focused on the problem itself. This allows you to gain a deeper understanding of the issue and come up with innovative solutions that address the root cause, rather than just the symptoms. By focusing on the problem first, you can avoid creating a product or service that doesn't truly meet your customer's needs.
Additional benefits come from being focussed on the customer problems. Once your business DNA is adjusted and learns how to focus on real customer problems, magical things start happening.
You will create a customer-centric business:
By focusing on your customer's problem, you can create a customer-centric business. This means that your business revolves around your customers' needs and desires, and not your own. I know well that if you are in the business you are, is because you are passionate about it. This approach will help you create products and services that are tailored to your customers, which will result in happier customers and more business success.
You will build a competitive advantage:
Focusing on your customer's problem can also help you build a competitive advantage. By creating products and services that address your customers' problems in a unique way, you can differentiate yourself from competitors. This can lead to increased customer loyalty, higher customer retention rates, and a larger market share.
You will increase customer satisfaction:
By focusing on your customer's problems, you can create products and services that truly solve their issues. This will result in higher customer satisfaction rates, which can lead to positive reviews, word-of-mouth referrals, and repeat business. It is OK to narrow your focus to a specific niche if that will differentiate you from competitors.
You will stay relevant in a changing market:
By staying focused on your customer's problem, you can stay relevant in a changing market. As customer needs and desires change, you can adjust your products and services to address these new issues. This will allow you to remain competitive and adapt to changing market conditions, ensuring the long-term success of your business.
The secret word that makes it all happen: Why?
Asking "why" is a powerful way to uncover the root causes of a customer's problems. One methodology that is often used is called the "5 Whys." This approach involves asking "why" five times in order to get to the root of the problem.
Here's an example:
Customer Problem: "I'm having trouble using your product."
Why are you having trouble using the product?
Because the instructions are unclear.Why are the instructions unclear?
Because they are poorly written.Why are the instructions poorly written?
Because they were written by someone who doesn't understand how the product is really used by its customers.Why was someone who doesn't understand how the product is really used by our customers responsible for writing the instructions?
Because we outsourced the task to a company in a foreign country.Why did we outsource the task to a company in a foreign country?
Because it was cheaper than hiring someone locally.
In this overly simplified example, I just made up, we can see that the root cause of the customer's problem is that the instructions were poorly written because they were outsourced to a company in a foreign country with no knowledge of customer behavior in the US.
By asking "why" five times, we were able to uncover this root cause and identify a potential solution.
When asking "why," it's important to keep an open mind and not jump to conclusions too quickly. It's also important to listen carefully to the customer's responses and follow up with additional questions as needed. Additionally, it's important to involve multiple stakeholders in the process, such as other employees or in their absence, maybe some friends or family, in order to get a holistic view of the problem and potential solutions.
If you like what you read, please subscribe!
I don’t ask anything in return.