The Amazon customerJeff Bezos, Amazon's founder and CEO, famously said the balance of power is shifting away from companies and towards the customer.
He did not mean to say that all the customer wants is a large selection of cheaply priced books. What he meant is that you should not compete on what you produce. You should compete on what you help your customers achieve.
One thing Amazon helps its customers achieve is reading books. It helps its customers read books with as little friction as possible. To do so, Amazon has built and integrated assets such as the Kindle e-reader, Audible audio-books, the Goodreads website and of course the online bookstore.
Amazon has surprised e-reader manufacturers, publishers and bookstore chains. But this "unexpected competition" was entirely predictable. The incumbents had neglected the age-old marketing adage that "people do not want a quarter-inch drill, they want a quarter-inch hole".
Amazon is not in the e-reader, publishing or book business, it's in the reading business. It's selling the hole in the wall, not the drill.
Align your business with what your customer wants to achieve, or else...The surefire way to being disrupted is focusing on what you do, instead of on what you help your customers achieve.
The archetypical example of a company that lost sight of its customers is Kodak.
All a Kodak customer wanted was to capture and share visual experiences. When digital photography emerged, Kodak clung to its analogue business. It lost sight of what its customers wanted to achieve. It mistook its technology for its purpose.The consequences of forgetting what the customer wants to achieve can be very dire. Kodak's demise cost tens of thousands of jobs and billions of dollars.
Becoming resilient to change
To build a business that is resilient to change, you must:
- Understand the true needs and desires of your customers;
- Map these with your company's core strengths;
- Redefine the market you're in and act on it.
It sounds easy - and in fact it is. It only takes time, honesty with yourself and guts.
Step 1: Talk to your customers
Knowing the underlying motivations of your customers is key. Don't ask them why they would choose you, but ask them what it is they do, what they struggle with and what they dream of.
Recently, we worked with a global manufacturer of high-value building materials. We helped them redefine their digital value propositon. We started with interviews and focus groups with architects, engineers, contractors and investors.
A recurring theme of our interviews was lack of time and knowledge. People who build long-lasting constructions have less and less time for research. They are dependent of outside help to be confident about their projects. This is a true customer need: gain more confidence in large building projects.
Step 2: Build on your strengths
Customer interviews also give you with an honest appraisal of your real strengths.
Customers of the building materials manufacturer praised its very experienced sales engineers workforce. Every customer we talked to cherished the engineers' real-life advice and in-depth expertise.
These interviews helped us uncover real strengths.
Based on what customers tell you, you can
- outline your core strengths (and not the ones you think you have);
- compare these to competitors;
- select the true differentiators and value generators.
Once you know what your customers really want to achieve and you know your own real strengths, it's time to bring them together.
Step 3: Bringing it all together
A (digital) strategy comes from combining real customer needs with core company strengths.
"What underlying motivations and needs can we fulfill using our core assets?" is the question you need to answer.
Our client, the building materials manufacturer, is using its expertise to help customers build with more confidence. It is integrating education, expertise and advice into its total offering. The roadmap to do so is ready, and the first digital initiatives are being rolled out.
Our client has moved from the building materials market to the total building market. The complete building decision chain, from investor to contractor, is now its market. The company is now helping people build durable constructions with confidence. It is no longer selling a product, it is helping its customers achieve their goals.
Always start with the customer
Today, it's the customer, not you, who defines your market.
So start talking to your customers now. Then decide what (actual, not perceived!) core strengths are most impactful. Leverage your strengths by using the right technology and designing the right processes to help your customers achieve their goals like no-one else can.
Weathering change is not a matter of being clever. It's a matter of building resilience by being very attentive to your customers' real needs. And then have the guts to design your company around answering those deeper needs.
Want to know more about digital change? At the More Than Digital Day, 14 Belgian and international experts shed their light on business success in a digital age.