How deep is deep enough in understanding your customers

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The ability to understand customers, is now the number one sales job in many industries. Representing a moving target with growing complexity. And an increased need to go deeper than in the past. This blog-post outline five possible ambition levels. As a base to select what is the right level for your customer understanding.

Transform your thinking around customer understanding

In slow to moderate pace markets you can assume customers to always be on top of their own business. But as markets accelerates, staying on top become a real challenge. To a point where advice from your vendors about how to improve business can be game changing. A task vendors only can do if your understand your buyer’s business better than you do. Sales professionals need to understand more than customers can tell them.

The conundrum to address is how to find the right ambition level. And understand how deep is deep enough when it comes to customer insights. And then start digging until you understand your customers deep enough.

Product/Service requirements

Basic customer understanding related to desired or required product or service improvements. Where customers provide you with input on how to improve an offering. To expand or improve how your offering can support their business.

Improvements are small and evolutionary for an existing offering. Your customer understands why to improve. But focus the sharing with vendors on what to change or improve. This type of customer understanding can help you improve an existing offering. And to win a deal if the request is deal altering in nature. What your customer want is often labeled a customer need.

This level of understanding is fundamental but not enough in the future. An area where needs and desires get mixed. And where lasting differentiation on offering level is difficult to maintain.

Price levels & business models

The second level of customer understanding allow you to close deals. Where your understanding is about commercial price levels to reach. Combined with business models. Either well established or improved to better fit your customers’ business. By understanding these two you are in a good position to win the business.

This type of customer understanding is multi-faceted. Coming from a combination of customer, market and competitor intelligence. With the customer component centered around allocated investment budgets. And how the investment will support the buyer’s business. Budgets set upper thresholds for price levels. And model preferences evolve to support new business realities.

This level of understanding can help you close deals in late stages of a pursuit. But is declining in importance. The introduction of professional procurement organizations change the game on several fronts. Allocated budgets no longer define winning price levels. The number of steps in a B2B procurement journey is growing and unpredictable. And buyers seek larger shifts in business models to take out risk and improve outcomes.

Existing pain points / issues

The third level of customer understanding allow you to develop new opportunities. Starting from customers’ existing pain points or issues. Based on the prediction funds are scarce. And allocated first to areas requiring immediate attention.

This understanding allows for a mapping of value propositions towards pain points. Without telling how much of the value created, you can capture. Your understanding focus on negative issues of your customers’ business. Where satisfying “needs” become synonymous with eliminating issues and pain points.

Common traps here is to articulate pain points on a too high and generic level. Resulting in generic and not sharp enough value propositions. Not taking you far enough from value proposition to a winning proposition. And to miss out on addressing the gains a business target. Eliminating pains is not the same thing as creating gains.

Understand your customers’ business

The fourth level allow you to build long term customer relationships. Relations built on a solid understanding of your customers’ business. And understanding your customers’ business better than your customers. This level enable you to support customers going through their digital transformation. where most of the business complexities emerge.

This level of understanding requires exceptional listening skills. Capturing nuances in customer conversations. Together with own creative thinking in combining insights from your whole customer base. Aggregated and articulated into specific business insights. An art requiring a concerted global collaboration effort. Orchestrated by the ones appointed as “Global champions for customer understanding”.

There trap here is to balance between generic and specific insights. It is the latter giving you an edge in the market. The insights that matter is the ones applied to your customers’ specific situation. And where the specifics differ between markets and customers in the same market.

Jobs to be done for your customer and customer’s customers.

The fifth level serve as the basis for strategic innovation initiatives. At this level, you understand which jobs your customers’ hire your solutions to do. With clear business outcome improvements for their business. And which jobs your customers’ customers get done when your solution does the job. You shift focus from what you sell, and the associated benefits. To which business outcomes your solution should provide.

This level of customer understanding come from a structured approach for information gathering. What do customers need to increase in their business? What do they need to decrease? And how do many small increases and decreases fit under the core job to be done. This input is used to guide all innovation efforts across your company. Some insights come from innovators engaged with customers. Others where innovators get the insights second hand.

The trap here come from creating solutions before you have nailed the jobs to be done. A great job to be done articulation doesn’t have any solution ties. A well-defined job to be done does not change over time. With different solutions in play over time. And solutions varying with your objectives. Depending on if your strategy is to disrupt, or protect against disruption. And if you address an over-, under- or on-served market.

Questions for you and your team

  1. How deep do you reach in our understanding today – articulate your starting point.
  2. How far do we need to go for the task at hand – set a clear ambition level for each mission.
  3. Which framework do we operate for each level – best structures vary across the five level.
  4. How do we secure a daily build of customer insights – leveraged in different part of the business.
  5. How do we maximize our ability – in turning gained insights into provided offerings.

Additional reading suggestions

One thought on “How deep is deep enough in understanding your customers

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