Discovering What Customers Really Want

08/25/2010

I’ve been fielding a lot of questions from startups about how you figure out what customers really want vs. the “nice to have” stuff.  This process of “Customer Discovery” as Steve Blank calls it is something that a lot of founders I’ve spoken with don’t have a lot of experience with.  I had an email exchange recently with Tim Johnson talking about my favorite question: “So What?” I like to have marketers use it on themselves but Tim related an example of how he uses it in customer engagements.  It was a great example and I asked him to write it up in the post below.  Although his examples are around trying to close deals, I think they apply equally well to an early stage startup that is trying to get at the root of what’s really important in a solution vs. the nice to have stuff.  What I also like about this story is how it illustrates how customers may talk about “brand” characteristics as being important (we like company X because they are “fun”) when what they really mean is something much more tangible (company X’s products work with what I’ve already invested in). Read on…

If you want to cut to the chase or destroy all the hubris around a conversation with a customer, the absolutely most effective question you can ask is, “So what?” A softer version is “Why is that important?” The customer will either tell you why it’s a key decision criteria or they will admit that it just sounded nice to have or they didn’t need it in the first place.

The company I was at in the late 90’s had software in the PeopleSoft box and I was managing the relationship with them as well as the business around it. At my first meeting with PeopleSoft they introduced me to the VP of Supply Chain for Dow Corning – their first customer in the manufacturing segment. The room was lined with those iconic fun, homey PeopleSoft posters claiming, “We work in your world.” I was new to the segment and asked the Dow VP why he had chosen PeopleSoft when SAP cut their teeth in the manufacturing space. He said, “Because they’re fun.” My immediate reply was, “So what?” He told me that the SAP guys were arrogant and immediately told him his processes were broken and they were going to implement best practices to fix his business. He asked the SAP rep, Tell me, how many miles of fibre optic cable SAP manufactured last month?” The PeopleSoft guys, he went on, were friendly and asked him what they needed to do to their software to complement his existing processes and ensure his success.

In one question, I got a clear explanation of the value of the relationship he had with his key vendor. PeopleSoft may have been fun to work with but the real value was a company willing to adapt to his needs and treat him with the respect he was due. My relationship with him and with PeopleSoft going forward was predicated on that knowledge.

More recently, I was interviewing a customer for a success story. He told me that in one pass of my software, he was able to reduce his annual storage costs by 20%. I was ecstatic until I did a little math to find that translated to less than a thousand dollars. Suspecting something deeper, I asked, “So what?” He went into a core dump of how his bonus was mostly based on service levels, which he hadn’t been meeting lately. Because my product cleared out so much junk from his network, he was able to hit his backup and restore windows with ease AND lower their cost of storage. He didn’t really care about saving the company 300 bucks, he cared about getting his bonus back. My case study changed from saving money to business continuity planning and meeting service levels – a much more compelling message than the meaningless and monotonous “lowering TCO.”

Your goal in any customer conversation is to get the real heart of the matter: to separate the fly specks from the black pepper, as my Dad often says.  ”So what?”, ” Who cares?” or “Why is that important?” will get you to the honest answers that you need to create effective messaging and sales tools.

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