Episode 29: Customer Needs
See that? That’s an invisible bubble hanging over your target customer’s head – the cartoon kind of bubble that says what he or she’s really thinking about when you are trying to figure out his or her needs. And if you listen well and keep asking why (?) you might just find out what those needs are. And, if the customer you thought would love your business idea doesn’t – maybe he or she is the wrong customer – so keep looking. You never know who might be willing to pay you for packaging air.
Transcript
Glenn Suart 0:00
It just illustrates to me that as much as you can have a… a great idea or a great product, you really have to understand what customers want and how will they value the benefit that you’re going to provide them.
Doug Ross 0:24
Welcome to Conversations on Startups, a podcast brought to you by Douglas Ross, author of the book, Spark Click Go: How to Bring Your Creative Business Idea to Life, and Glenn Suart, of Today’s Great Idea, a radio series featuring over 300 origin stories of businesses, brands and inventions that have changed the culture. Welcome to today’s conversation.
Doug Ross 0:47
Hey, Glenn, how ya doing?
Glenn Suart 0:49
I’m doing great, Doug. You?
Doug Ross 0:50
Doing great. Welcome to another Conversations on Startups. Today, we are going to talk about customer needs. Let’s dive right in, Glenn.
Glenn Suart 1:00
All right. So we’ve all had great ideas. Typically, though, what happens is people forget about what the customer actually needs. Would you agree on that, sometimes?
Doug Ross 1:12
I think they forget it or they get it wrong. They make an assumption about it, or they get it partly right. Yes, I think a lot of things can go wrong. It seems like a pretty straightforward thing. It’s not.
Glenn Suart 1:27
No. So let me tell you a story. Al and Mark are inventors and they are absolutely convinced they’ve come up with the greatest idea of their life, which is textured wallpaper. And they created this wallpaper by sealing two shower curtains together. So it’s a little 3D effect, kind of thing, going… And the ridges are created by air between the sheets. It’s kind of fun. And they formed a company to sell and market it thinking this was going to be a big, big hit. Well, you know where I’m going? It… no one really wanted textured wallpaper. They couldn’t really do anything else with it. They thought, oh, maybe it could be used for greenhouse insulation. No, didn’t work there, again. So three years later, one of the people who worked for Al and Mark in their marketing department, Fred, he heard about IBM having this brand new computer – and which was a very sensitive piece of equipment – and he thought maybe the textured wallpaper could help ensure that computer arrived in, you know, pristine form. So Fred pitched IBM and IBM loved it. And pretty soon, every IBM product came wrapped in Al and Marks’ textured wallpaper. And then of course everybody else has done the same thing since then. So the original product intended for the wallpaper business – basically two shower curtains sealed together – is now, like, a billion dollar business. And, do you have any idea what I’m talking about? Any guess?
Doug Ross 2:52
Well, I think it’s the packing material. It’s those blister packs…
Glenn Suart 2:57
Bubble Wrap.
Doug Ross 2:57
…[ah] bubble wrap, not blister packs. Yeah.
Glenn Suart 2:59
So, the reason I think this story is so relevant is that, again, somebody creates… thinks it’s a great idea but they didn’t understand what the customer needed. And in that case, it was a novelty to have wallpaper that’s textured, but the product they had was extremely beneficial to another customer. And understanding of those customers’ needs really made the difference for them in making this corporation go – Sealed Air Corporation it’s called, no surprise. It just illustrates to me that as much as you can have a… great idea or a great product, you really have to understand what customers want and how will they value the benefit that you’re going to provide them. To me it’s hard because, you know, you get caught up in how great your thing is. It comes back to Who benefits from this, and how do they benefit? It’s really important for your business.
Glenn Suart 3:52
You’re listening to Conversations on Startups with Doug and Glenn, merci pour nous avoir joindre.
Doug Ross 3:57
And you can’t assume that someone’s going to have a particular need or desire for what you’re producing. In that case, textured wallpaper. Yeah, I think you’d mentioned that story before. I don’t remember which episode it was in, but definitely you covered it.
Glenn Suart 4:16
I’m gonna get… take some memory pills, then.
Doug Ross 4:18
The other thing about that story, though, that I like is… it shows that you can – in the right way – you can sell something to anybody. In this case, selling air [Ha ha] if you step back and think about it. And also who would think you could sell water to people. So for example, you live by a lake and you still buy water if somebody packages it for you and purifies it for you and everything else. The customer will always decide the need. The other thing I like about that is that needs evolve over time. And from an entrepreneur’s perspective, this creates opportunities. So in the example you just brought up, Glenn, it was IBM, that maybe didn’t exist before, at least with, was it their personal computers, did you say?
Glenn Suart 5:08
Yeah, it was their personal computers at that point.
Doug Ross 5:10
Okay, so when they made that shift. So before that time, they didn’t necessarily have the need for an inexpensive material that they could use to protect this consumer good. So this need arose and somebody had to think, Aha, there’s something new here on the horizon and I can fill that need, perhaps. And I think this is highly relevant to our world now. Everything is changing. Therefore, this dynamic nature of things creates all sorts of needs that just did not exist before.
Glenn Suart 5:43
Very much. So what you’re saying is that needs are not static, they change over time and therefore, you have to be conscious of that because a client tomorrow may not be there today – but they may be there tomorrow, that makes some sense. It comes back to what are you selling to customers? They’re not buying features. They’re buying benefits. Benefits, like saving time, saving money, convenience. That’s what you’re really selling to them. And that’s what they’re after, with their solutions. If you’re selling airplanes to an airline, what are they looking for? Well, low fuel planes that can turn around fast at the gate, so save labor time, and things like that. Understanding what the need is of the customer, and what benefits you can bring to them is absolutely crucial. Can’t say it enough.
Doug Ross 6:35
Yeah, in that example that you just brought up, that business to business example, it really is understanding the complete business of whomever it is that you’re trying to sell to. So yeah, we can all get hung up on the things that are easily identifiable, like features, certain things like that. But you really have to think of the costs, the efficiency, everything that that… that potential client is trying to get done. The job they’re trying to get done. How does your solution tie into that(?) – and you’ll attract these customers a lot better. So I like those sorts of general ones you mentioned, save money, save time, convenience, maybe a certain level of performance, these are sort of common things, [durability,] different areas… durability, all of that. And then there’s a whole other array of needs beyond even that. So think about it. Nobody needs to have Mercedes Benz’ latest model to get from their home to the grocery store. Nobody needs that. So there are other needs such as, maybe it’s a security need – they feel safer. Maybe it’s a prestige need -it’s something about their image. Maybe it’s a comfort need – something like… that people are looking for. It’s multi layered typically. There would be few businesses, certain commodity businesses where it doesn’t matter, let’s talk about oil, for example, given that you’re from Alberta, and I was born there [yeah] and have lots of friends and family there. It’s a commodity. So generally speaking, people just look at price. And maybe there are quality differentiators there. How much processing time does it take? There are grades of it. But there aren’t too many grades, at least to my knowledge of crude oil. That’s not the case with a lot of other products. Do you agree?
Glenn Suart 8:32
Yep, that makes sense. One thing you just sort of tweaked in my mind was that we talked about the customer. And typically we’re talking about a business and what their needs are. But we forget sometimes also… is that… the person who represents the business also [have] personal needs. So, understanding what their motivations are, what their needs are, and how you can benefit them. And I’m not talking about bribes and giving them anything. That’s not what I’m talking about.
Doug Ross 9:03
Right.
Glenn Suart 9:04
It’s like reputation. There’s a great story about Joe Eszterhas who was a screenwriter – and I guess he still is a screenwriter. He wrote Basic Instinct, the movie with Michael Douglas and Sharon Stone – really successful unexpectedly so. The studios came right after him to write another movie right after that. At that point, he was the highest paid writer in Hollywood getting… he got [a] $5 million advance from the studio for his next movie. That’s like unheard of for a writer in Hollywood, even today, almost. The thing was, the next movie he wrote was a movie called Showgirls, which was not very good but the reason he got the money and the reason the studio paid him was because he had had a success. And so the person who hired him at the studio and paid him the $5 million, yeah, it wasn’t a great decision, but it wasn’t his fault – or her fault – whoever hired him. It was Joe Eszterhas’s fault for not writing… They protected their personal reputation within the company by hiring the best writer there was, if you know what I mean. Do you understand…. the need issue there? [Sure.] The need certainly from the… personal…person within the company was to protect their reputation. And that’s what they did.
Doug Ross 10:18
Hey podcast listeners, we’re gonna take a short break now. If you’re enjoying the show, feel free to invite your friends, remember to subscribe, and if you want to help spread the word leave us a review on Apple Podcasts or your favorite podcast app. Each episode of Conversations on Startups focuses on a single topic. If you want to comment on something you’ve heard on the podcast, or suggest a topic for us to cover in a future episode, send an email to: go@todaysgreatidea.com or douglas@sparkclickgo.com. Glenn and I appreciate you and hope you find our uncut and unrehearsed stories, perspectives, and tips helpful. Speaking of helpful stuff-let’s pick up where we left off.
Doug Ross 11:04
Yeah, and I think that’s going to apply across the board. So things like: Can you be a trusted supplier? That kind of thing, especially if you’re starting out, people can’t go to as many of your other clients necessarily, How do you get the first one to trust you and stick their neck out in that case? [These people] put their reputation on the line.
Glenn Suart 11:24
It’s hard.
Doug Ross 11:25
Yeah, yeah, it’s hard. You’ve got to be creative there… maybe you do a small pilot with them something like that, where you can prove you can deliver to the quality standard that you said you could, your customer service handles problems when they arise, that kind of thing. Not too sure. But that’s a great thing to bring up. Businesses are never without this person component inside and you need to think of those needs. Thinking about other customers, Glenn, how do you figure out what their needs are? I got this great idea…
Glenn Suart 12:01
I was gonna ask you the same thing. It’s the answer, I’m sure you were gonna say too and it’s so obvious. But sometimes it’s not as obvious you think. Easiest way is to ask them what their issues are. You can make assumptions about things. If you’re, for example, like I’m thinking about reaching out to newspapers with my Today’s Great Idea feature – do a print version of it. I know, from understanding the newspaper industry, that they have real problems getting good content, and that they’re having revenue challenges. So I’m making an assumption that they would like a feature that they can easily, you know, it’s well written and would be attractive to their readers, and can generate revenue, I’m making that assumption. My next step is to go and ask them to make sure that, in fact, that is the case. Maybe they care, maybe they’ve got a whole other need that I haven’t thought about yet and so by me asking them I will get a sense of whether I’m on the right track and my product gives them the benefits they need. Or maybe my product is not of interest at all because it doesn’t give them the real benefit that they’re looking for.
Doug Ross 13:10
Love that you are aware that it’s an assumption. And then you’ve articulated that and you’ve said, Hey, this is an assumption. We should all do that a lot more. Identify what these assumptions are because then you can go and test it. And I think there’s just a lot of times where that assumption is carried forward. We try on our discussions here, Glenn to encourage people to not build too much before they’ve tested, we all fall into that trap. [Yep]. And there’s lots of reasons for doing it. But you’re gonna go out and test your hypothesis. So that’s great. I’ve got a little story I can share along those lines with you.
Glenn Suart 13:48
Great.
Doug Ross 13:48
So I mentioned to you Startup Weekend before and I have participated in these and run them as well in California before. So one I was at – I was participating in – and I was in San Francisco and what people did there is they came up with their idea for their business and one of the steps that we did – this is all within a weekend – so this is fairly early on [Wow], we… we tested our… our concepts, as it were, with other people that were there that weekend. So just imagine all these people running around trying to do a very quick interview with each other, essentially. And these two young ladies came up to me and said, Hey, we’ve got an idea. We’d like to tell you about it. Okay, sure [I said]. So they told me about this idea. And they said, What do you think of an at home haircutting service? [And] you would have an app and you would just call up… make an appointment there, somebody would come right away or when it’s mutually convenient – whatever – come to your house, you’d pay on the app – all of the things we’re somewhat familiar with now in terms of these… these [P2P] services, we can call up. What do you think of that idea? And what I said was, well, No, I don’t think it’s for me.
Glenn Suart 15:05
Ha ha.
Doug Ross 15:05
Okay, and I maybe mentioned one or two reasons. One, for example, could be that I like my current hair cutter. And by the way, speaking of needs, I go there for more than just a haircut. Hey, I get a chance to have a chat. It’s almost like these hairstylists are half time psychoanalysts as well, you know! At any rate, I’ve said maybe one thing as to why I didn’t think it would work for me, I [also] said, I’m not currently living in the city, I might not be your client. And they were shocked that I didn’t have this need. And so the lesson I took away from this is that, yeah, put your idea out in front of prospective clients – customers – and then, listen.
Glenn Suart 15:05
Great idea.
Doug Ross 15:06
Stop talking. Listen. Ask why, ask why. Uncover. So what you’re trying to do I think in that situation, when you’re talking with a potential client, is figure out what that bubble is above their head, you know, the little cartoon bubble? [Yep.] What are they really thinking? So in my case, one of the things I was thinking was, oh, sure, I’m going to have a young lady come to my house when nobody else is home there and give me a haircut. Yeah, sure. That’s the kind of thing that every married person should do. So I thought, no, that’s not a good idea. And I also thought, yeah, where I go now… it’s [a] great price and I’m happy with that. So, the point is, you need to listen, and you can’t assume… you’re not being a salesperson at that time, which is different. To be a good salesperson, you do have to kind of keep talking when the client says no, to a certain degree. But when you’re coming up with your idea and figuring out what those customer needs are, you need to be in listening mode.
Glenn Suart 16:47
I think it’s really a great thing – understand the need of the customer by listening. Excellent point, Doug.
Bridget 16:47
You’re listening to Conversations on Startups with Doug and Glenn. Thanks for joining us. Let’s get back to the show.
Doug Ross 16:54
Yeah, thank you… and pushing on the why, why – just digging under. Because people don’t necessarily know what their needs are. They might say one thing, but it might actually be just partially real. They don’t know. It goes back to the… when they came up with the telephone. And you [they] went… down the street, Hey, would you use one of these telephones? No. Well, why not? Who would I call? I just go next door and talk to… talk to Joe Smith or Mary. Clients don’t always know, but if you push them, you can find out a lot. So talk to customers and potential customers and have a hypothesis what that need is… [and] be willing to change it a little bit. [Yeah.] Anything else on needs, Glenn that we have not uncovered?
Glenn Suart 17:50
I think we’ve covered it all. I think what we said is really understand what the customer needs are – what their pain points are, and what benefits you can offer them with your product or service to help facilitate – that is what you’re after, understanding their needs. And, the way to do that, in many cases is to ask. Make some assumptions, but go in there and ask them to clarify. And really listen, as you said, listen, listen, listen to what they’re saying. So if they tell you, Yeah, they don’t like it – figure out then… Okay, maybe they’re not the right audience, or maybe they are, or maybe your product or service is wrong. I think it’s a great… it’s a great point. What should we talk about next time?
Doug Ross 18:30
Well, I think next time we could talk about customer value. So related topic, but of importance is the fact that the customer always determines value. So it’s important to know how they measure that. So why don’t we dive into a topic on customer value next time?
Glenn Suart 18:52
I think that sounds great. Well, great conversation as usual, Doug, I’m Glenn in Calgary.
Doug Ross 18:58
And, I’m Doug in the USA. We’ll see you next time. Take care.
Doug Ross 19:11
Conversations on Startups is a production of Glenn Suart and Douglas Ross. We hope you’re having fun listening but mostly that you take action on your business idea. For more inspiration visit our websites: todaysgreatidea.com and sparkclickgo.com. Another episode of Conversations on Startups will drop soon, or is already available to binge. Thanks for joining us, and remember to subscribe and invite your friends. See ya next time!
Transcribed by https://otter.ai