The power of you having first hand customer experiences
In B2B, market and customer data are not always easy to gather or access. Still, it’s key to innovation, growth, and renewal. Let’s take a look at a project where we solved the issue by engaging in first-hand customer experiences, and what we learned on the way…
After quite a few months of work, we had finally finalized the setup of a fact-base helping us to size and segment a particular market and identify opportunity across all of Europe from a geographical perspective. Now we were working on a strategy project with the challenge to renew the same company’s largest and most profitable category.
The category had worked as a typical cash cow over the last five years period and had every year decreased just slightly in volume. Since the company hadn’t focused on volume, but value, the remedy to solve the problem had been to just increase prices on a yearly basis, protecting the margins. Actually, it was not until rather recently that management got alerted that the factories started getting problems with declining volumes and that it had started a ripple effect with increasing COGS of many other items manufactured in the same factories.
The strategy project team got the task to dig deeper to understand both challenges and future opportunities.
We started out by identifying and understanding relevant trends and working out a few different future scenarios, which came to paint a rather gloomy picture if continuing down the same path.
We also very soon discovered that the continuous price increases had put the company in a situation where the price had become too high in relation to the perceived value to the customer. New competitors had entered the market with cheaper and seemingly inferior products that were now becoming good enough and causing customers to shift suppliers. This had actually gone on over several years while our company had protected its margins, slowly out-prized itself and not really paid any attention to the new competition at the bottom end of the market. A case of what Clayton Christensen would probably call low market disruption. At that point, with the fact-based showing us that the overall category only had five percent market penetration, we decided to try to understand the large group of non-users in the targeted customer segments. Especially because one of our key hypothesis was that expanding the user base would be the best way forward – and a comparably low-hanging fruit.
Hence, the strategy team of nine people, including two representatives from the executive management team, all agreed to spend two days each in a European capital or major city over the next month. The task at hand was to spend one-day observing different types of noncustomers while acting as their prospective clients and then to follow up with a second day of co-riding with the company’s own sales representatives mainly focusing on visiting even more non-customers. The latter to get the view of front end staff, as well as to get a chance to ask questions as a follow-up of the first day of observations.
Within a month we had visited 120 non-customers in 11 countries and 14 major cities in Europe.
Before the field trip (here called a ‘Customer Safari’), we had a one-day workshop based on the Value Proposition Design methodology to frame our product-market fit hypothesis and help everyone feel more comfortable with the challenge. The team was by design diverse and came from very different positions across the organization. A few had no experiences with customer interactions what so ever.
After the Customer Safari, we had a one-day follow-up workshop for everyone to report back on findings and discuss its implications.
All in all, we spent four working days per strategy team member on the Customer Safari. One day for preparation, two days in the field and one day for follow-up. As project leader, I spent another four full days in preparation, coordination, and follow-up. In total, we spent 40 man-days on this part of the project. If it was worthwhile? Absolutely. It probably didn’t save us much money vs. using a market research agency, but it gave us a few deep personal insights we would not have had otherwise.
First-hand experiences are more valuable than second-hand knowledge
Small children are known to learn best from first-hand experiences. They are involved in touching, taking apart, tasting, and smelling things in their here-and-now world. By doing so, they are the ones who are receiving information directly and making sense of it. My experience – after many years in business – is that the same thing seems to work for adults, including business people. The experience, however, needs to be framed, reflected upon and understood in order to bring value. We are talking about experience-based learning, where some essential components seem to be:
- That you are personally engaged, and that the goal of experience-based learning involves something personally significant or meaningful for you.
- That you have an opportunity for reflection, as well as writing down and discussing your experiences ongoingly throughout the process.
- That “the whole” you are involved, meaning not just your intellect, but also your senses, your feelings, and your personality.
No matter what we call the phenomenon, Richard Branson is a well-known business leader that seems to agree: -“The ideas for the best businesses tend to come from personal experience. There are many great ideas that have arisen by other means… but when you are generating ideas for a business, first-hand experience is essential.” One of the reasons from his perspective is that personal connection equals commitment: ”-A close connection to the problem will keep you focused on finding a solution.”
The Customer Safari experience
Going back to the Customer Safari experience, it certainly helped us learn, form personal connections as well as a commitment to find a solution to the problems we discovered. It actually created several important insights for us. A signed NDA and proper business ethics, however, hinders me to share our results. What I can say is that the personal observations of the every day of the non-customer effectively opened up the eyes of the entire strategy team. It immediately also created clarity in that our hypothesis wasn’t the low hanging fruit that we all hoped for. Instead, we came to realize that the product-market fit was rather poor with the majority of the non-user group. Our product just didn’t contribute to solving a relevant problem important enough for them to care about.
It also opened up for a discussion about a few very important, fundamental business questions, such as: -”Are we focusing on the right customer segments?”, and: -”Who’s problems should we focus on solving?”, and: -”How might we help new potential users get their jobs done in a better way in order to become more relevant?”. Actually, an even more crucial question that came out of this discussion was:
–“Why are our current customers buying our solutions at all?”.
Now you may think that the same results would have been reached through traditional market research or through sending out a few researchers in the field. Maybe. But we would probably miss out on the deep individual insights that the direct observations and encounters gave us all.
Getting a first-hand exposure to customers, without middle hands, is in my experience the best way to get both clarity and insight. And, with some guidance from a facilitator, anyone can do it in a structured fashion.
Are you ready?
With the hand on your heart, how many times have you and your team stepped into the shoes of your customer, or spent time observing them getting their jobs done over the past year? If you have, you probably found valuable insights for innovation, growth and future successes for both you and your company. Therein lies the power of first-hand customer experiences and a well-structured Customer Safari. Why not give it a try?