Never before has the world felt so uncertain. In some cases, and businesses, the past year has brought the future to the here and now. Remote working, which was in many industries frowned upon, is now a given. Government services that presumably just weren’t possible online have gone online. Delivery services have multiplied like mushrooms after the rain and everything that can be packaged is now available online, if it is available at all anymore.
On the other hand, competition online is more like an oriental bazaar, with everyone shouting out their sales pitches at the same time, instead of the orderly communication and traditional advertising that we used to get offline. On the first glance, many products and services seem incredibly alike and being able to tell the good ones apart from the bad ones is a real challenge. Furthermore, in an era of accelerating technological innovation and information flow, it is a real challenge to ensure that your product or service is actually fundamentally different from your competitor’s. Especially since most companies are keenly aware of what their competitors are doing, presuming also that they must know something more, and then copy whatever it is that the others are doing.
More and more we fall back on an adage that we’ve used since Brand Manual’s founding in 2009: most companies are saying the same thing about the same thing at the same time. Quality is not unique anymore and more features just make choosing harder. However, talking about and delivering quality is easy and adding features seems logical and therefore that is, what is done. However, for customers who are literally bombarded with information (most of which is irrelevant) more choice is debilitating, not liberating.
What does your customer actually value, from what he or she buys from you? Surprisingly, many companies and organisations simply do not know. The presumption is – quite logically actually – that since whatever they are making is also currently selling it must be what people value. And, again quite logically, since the sales are growing, making more of the same or similar stuff, must be a good idea. And since competitors are also doing it, then what could possibly go wrong?
Where is value created for your customer? Professor Noriaki Kano way back in the 1980s defined that every product or service competes on three levels. The first level is the hygiene factor. This is the level where the product or service does what it says it does. A car drives. Planes fly. Winter jackets keep you warm. Grocery stores have a wide variety of groceries. Hygiene factors are the basics, without which you would not be considered at all.
The second level includes linear factors. Cars drive faster, are more efficient, cheaper, have more features. Flights are cheaper or connect faster. Winter clothes are warmer or lighter or better made. Groceries are fresher, more organic or cheaper. Linear factors are understandable in the sense that more is more, or less in the case of price. You know what you pay for. They are rational.
The third level includes delightful factors. These are the reason people come back. What they really value above and beyond what they actually pay for.
The hygiene, linear and delightful factors beautifully correlate to Simon Sinek’s Golden Circle theory of what, how and why. According to Simon, all companies know what they are doing. Making cars. Flying people. They also know how they are doing it. The processes, the machinery, the production. However, the question of WHY they are doing it, is often undefined and after a longer time in business, unclear. WHY is related to the delightful factor, which is one of the key reasons for customer loyalty. This requires a different outlook. Why do you come to work on Monday? What is the purpose of your existence?
What will the future look like? Who knows. But as long as companies and organisations follow each other instead of looking to understand what the customers actually value about them, the future will always be a fog. As professor Theodore Levitt famously posited, “people don’t want to buy a quarter inch drill. They want a quarter-inch hole.” Similarly, in most cases, they don’t want what you make but rather what they get from it. To acquire this knowledge requires a focus on where the value is actually created for customers, not where the company makes its money. This shift of focus from what you deliver to what customers actually hire your product or service to do for them is something that requires companies to rid themselves of their most basic presumptions and step outside their internal echo chambers.
While we have all heard and read a lot about political and social echo chambers in past tumultuous years, we have often failed to recognise the biggest echo chamber of them all: our own organisation. After all, people working together towards a common goal will inevitably start thinking alike at some point. Furthermore, our own confirmation bias naturally makes us look for data to back up our own conjectures. The only way to challenge our own biases is by going to the source and finding out what actually matters, and is of value, to our customers.
The only way to stop saying the same thing about the same thing at the same time as your competitors is to find out what do your customers actually value about your product or service. This means going outside the echo chamber and your own confirmation biases to talk to customers in-depth. You will find out a lot of what you already knew, but haven’t acted upon or didn’t consider relevant. You will also find some things you never thought about, that if you start acting upon them, you can clear up the fog of your future. You will also find out, that in most cases you are not as important to your customer as you thought you were. Which is actually a very good starting point to answer the “why” question and start delivering on the delightful factor, which keeps your customers coming back to you. Best of all, you’ll stop following your competitors and start following your customers, which is as Jeff Bezos pointed out, the reason for Amazon’s success.
Learn how your organisation can harness design thinking and service design. We train a lot of companies. Either through SD4X, the Design Masterclass, or directly. Drop us a line.