Do your products fit the market?

How do you know if you have the right mix of products and services for your market? How can you decide what changes to make? The way to answer these questions has changed.

Some organisations start with a product idea. Someone thinks it would be great to have a product that does X. So, they build that product, then try to find a market for it. There’s an underlying hope that if they build the product, customers will come.

Other organisations identify a specific problem and build a solution for that problem. It’s the most common approach. If they can solve a problem, and customers will pay to have that problem solved, they can achieve success.

In the technology sector, there’s an emerging view that these approaches are no longer adequate. The pace of change in business has been an important factor. Solving current problems takes time. Customers are realising that by the time they solve their current problems, a whole new set of problems will have emerged. They’ll always be in catch-up mode. They want to find a way to get ahead.

A new generation

A new generation of technology vendors has responded. And everyone can learn from what they’re doing. They’re not focused on current problems. They’re focused on an outcome the customer needs. They then help the customer achieve that outcome.

They don’t ignore the customer problems. But the solution of those problems is a by-product of achieving the outcome. Solving current problems stops being the primary focus of the customer or vendor. But the problems are solved.

The vendor must first decide the outcome they can help create for their customers. A useful way of thinking about this is to identify an ongoing business result that top management of the customers would regard as success.The vendor must also be the primary external provider in enabling that business result.

To illustrate, let’s look at a marketing-automation software vendor. The problems they solve for customers include a lack of structured campaigns, poor email marketing and unhelpful analytics. In the past, the vendor would have shown how they could solve those problems. The new generation of vendor have a different approach. They identify the ongoing business result the customer needs to achieve. It’s likely to be a pipeline of a certain value. It may even be the value of sales from marketing-created leads.

Once the vendor has agreed the ongoing business result needed, they work with the customer to enable that business result.

Concentrating on ensuring the customers achieve success will increase their own success.

Vendor’s products and services

The vendor now has a new lens through which to examine their current products and services. They know the ongoing business result the customer needs to achieve. They can now analyse how well they help the customer achieve those business results.

For example, let’s stay with the marketing-automation software vendor. Assume the business result they help customers achieve is a pipeline of a certain value. The customers know they need effective content marketing to achieve this pipeline. In the past, the marketing-automation vendor has provided the tools for publishing content.

But they know that if the content isn’t good, the customer won’t get the needed pipeline. So, they think about how they can help improve content quality. They decide to include an analyser of the quality of headlines. They also introduce tools to assess readability of articles and the emotional connection of the content. The decision to include these new tools came from realising their job was to ensure the customer achieved a pipeline of a certain value.

It’s also possible some features of their current offering aren’t important to enabling the success outcome. Removing unnecessary features may simplify implementation and reduce costs.

The following diagram illustrates the concept.

The vendor had a set of products and services (on the left). When they considered the business results needed by their customers, they realised their products and services weren’t a great fit. They could drop some products and services and add others. They ended up with a set of products and services well-shaped for the business result they enable.

Products and services must fit the needed business result for the customerThey could then concentrate on ensuring the customers achieve success. And that increases their own success.

What to do?

Define the business result you help enable for your customers. Don’t make it too big. You need to be the most significant external provider affecting the business result. For the marketing-automation software vendor, for example, they should not focus on the total value of sales. They aren’t the most significant supplier for that outcome. But, they can be the most significant supplier for ‘a pipeline of a certain value’.

Once you’ve decided the business result you enable, you can look at your current products and services. You can decide how well they enable that business result for customers.

If your customers are successful, there’s a great chance you’ll be successful. But are you clear about what your customers consider success to be? How do you work that out? And how can you use that knowledge to grow revenue, particularly recurring revenue? In this podcast, you’ll learn a simple way of defining what success looks like for your customers. And you’ll then learn how to use that knowledge to grow your business. You can learn more about outcomes at outcomeleaders.com and customer success at gen3cs.com. Get in touch with Paul at pjh@outcomeleaders.com.