What To Do When Customers Aren’t Really Sure What They Want
Two Approaches To Uncover Hidden Customer Needs
You don’t need to be told that business is tough. You already know that. You don’t need reminding that your competitors, with their siren call of better, faster, cheaper, are relentlessly pursuing your best customers. “Nature, red in tooth and claw” was how Alfred Lord Tennyson described the struggles for survival in the natural world and it stands as an appropriate metaphor for the persistent and exhausting fight to hold on to your customers.
So, what to do? You can’t simply opt out of the fight. In fact, much of our work is helping our clients to sharpen their teeth and claws. You still need the capability to fight and the determination to win. That’s a given. What you can do, though, is change the rules. Shift the location of the fight onto territory that is easier to defend and redefine the terms of the contest.
In our work with our global clients we have developed two methods that help to redefine the competitive arena. We call them ‘contextual enquiry’ and ‘emerging needs’ and while the concepts aren’t completely new, our process focused methodology has turned them from theoretical ideas into actionable tools.
Contextual Enquiry Uncovers Needs You Didn’t Know Customers Had
Contextual enquiry is illustrated in a simple chart below:
The circles overlap to represent the current situation where your customer knows something about you (the products and services you currently supply) and you know something about them (what they need your products and services for). This intersection is the arena where the perpetual fights with your direct competitors take place. The remainder of the circles represents what they don’t know about you and what you don’t know about them. Contextual enquiry helps to push these circles together to expand the intersection, leading to a deeper relationship, greater understanding and increased opportunity.
Let’s take a real example. One of our clients was a division of a major bank whose business was to finance car dealers, providing money for leases and credit agreements as well as for financing inventory. Money is as close as a commodity as you can get so banks compete on the one principal variable of interest rates.
A new aggressive competitor had targeted our client’s customer with very low interest rates and their customer was threatening to leave unless our client could match the rates of the new bank. Through contextual enquiry, we helped our client discover that the dealer needed to significantly increase new car sales next year to maintain their ‘premier dealer’ status (which carried lots of prestige and real tangible benefits) and the dealer discovered that our client not only had records of all current finance agreements the dealer had placed over the last five years but also the estimated value of each car (which they had to keep as part of an asset impairment process).
Our client had pushed the circles closer together and, because of that, was able to create a joint marketing campaign. Previous car buyers where contacted and given an estimate of how much their current vehicle was worth as a down payment on a new car and how much per month that new car would cost. The idea was to keep the payments at a level close to what they knew the customer was already happy paying. This led to a huge response and the client’s customer achieved their sales goals and maintained premier status. The newcomer’s low interest rates couldn’t compete with that.
Emerging Needs Uncovers Needs Customers Didn’t Know They Had
While contextual enquiry is a powerful tool in understanding the customers known needs, a different approach is needed to find needs the customer doesn’t know they have. Educating customers on future needs can be powerful if done correctly. We call this approach “emerging needs.”
Forecasting the future is, of course, very difficult, but the extent you can follow a rigorous process will give you a good probabilistic basis for challenging the customer.
Here is another example from our work. One of our European clients rented commercial vehicles to industry, ranging from large semi trucks to smaller ‘light commercial vehicles’. The drivers of the large vehicles were subject to Europe wide regulations on maximum driving hours per day and employers where required to keep accurate records.
The smaller vehicles had no such rules. Using our tools, we helped our client study the market in a very focused way. They became convinced that similar rules would soon apply to smaller vehicles, maybe not through direct legislation but through interpreting existing general rules of duty of care or health and safety. Our client developed a simple tracking tool that would inform their customers of the total hours driven for each rental vehicle which allowed their customers to match with their records who was driving. This gave our client’s customers control in managing driver hours.
Several of our client’s customers saw the value in this despite not really thinking of the problem initially. Then, in 2006, the first successful prosecution of a company for breaching their duty of care by not monitoring light commercial vehicle driver hours happened. Our client’s reputation for being ahead of the curve was enhanced with their existing customers and, once the need became very real, other customers came to them as they had a working solution.
Push The Circles Together and Look Over the Horizon to Change the Rules of Competition
In summary, competing on the ‘overlap’ will not go away, most commercial activity still happens here and you need to be up for the fight. However, you can change the terms of engagement by pushing those circles together to understand your customers known needs in the context of your ability to help solve them. You should also spend time looking over the horizon for emerging needs. Your customers may need help figuring out the future and the extent that you can help them is the extent to which you can win.