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Customer Outcome Driven Thinking…
…and what it means for the way businesses need to start communicating with their markets
Products as a Service Revolution
Those of you who read my last article entitled ‘Servitization: How does it work and what benefits is it bringing to hardware and software businesses alike?’ or better still, read Tien Tzou’s seminal book on the Subscription Economy called ‘Subscribed’ or Professor Tim Baines’ ‘Made to Serve’, will know that this trend has far reaching consequences for the way businesses behave over the next 10 years. However, it also has big implications for how businesses, especially tech businesses, need to start communicating today.
Why, I hear you cry, surely all businesses have always put customers at the heart of everything they make and sell? The answer is that, especially for hardware-led businesses selling products rather than services and software, it’s far easier to focus on winning the tech innovation wars, to add the latest functionality that your competitor has just added, or to put it another way: ‘keep up with the Jones’’.
However, the Subscription Economy offers those companies an opportunity to be a great deal more targeted and strategic in what they build next. It allows them to reach out directly to the customers (sometimes for the first time) to find out how they are really using that new functionality – what they like and don’t like about the latest product. That insight can form the basis of a subscription-based ‘product as a service’ offering which effectively aligns your business and its products much more precisely with your target customer’s needs.
At the heart of this ‘servitization’ work is identifying streams of data which can deliver insights linked to how your customers are using your products, and how aspects of your product are working (or not working) in the field.
So, electromechanical components manufacturers could be able to gather ‘mean time to failure’ statistics from specific components, in specific usage settings – thereby helping their partners or customers to schedule preventive maintenance more accurately with a view to reducing downtime to negligible levels.
Insight = business value
The servitization revolution enables you to start creating value added services designed to support customers better. These services could be delivered via your SI partners or offered direct. Whatever your channel strategy, the key is to have access and control of customer usage data and an ability to crunch that data to reveal usage patterns.
It also makes it much easier to build future product enhancements which you now know will hit the spot with your customers. You know this because existing customers are telling you what they are using day in day out.
In the security camera world, one of the markets my PR agency works in a good deal, there is a massive opportunity in terms of observing which edge-based video analytics is actually being turned on and which are not. Each analytics channel could and should be a monthly subscription-based service in its own right. Service upgrade paths could be built for each of them over time.
Value = revenue
So, if you switch on ANPR (Automatic Number Plate Recognition) capability at the camera, you turn on a £5-10 per month software as a service (SaaS) offering perhaps. But wouldn’t it be great if you could find out more about how many unauthorised vehicles were stopped from going into your highly sensitive distribution depot as a result of fitting that ANPR?
And wouldn’t it be even better if you knew how many of those unauthorised vehicles were actually due to incorrect plate readings. Could you uncover and expose the top 5 reasons why ANPR analytics in your cameras is creating false alarms today?
If you can gather that intelligence, you can educate your partners or customers direct on how best to configure systems to avoid those common mistakes. If you get this right, you are not only delivering new software-driven analytics functionality but also a value added service for optimising the new channel – for getting more value from your cameras. You will get more subscriptions as a result and can charge more for them as accuracy increases.
What does that do for your relationship with your customers? Well, it’s safe to say if you are adding that sort of value you are saving your customer lots of time, effort, money and reducing operational risk considerably. It’s good business.
Insights are also marketing content gold
The insights that you are gleaning from studying usage data should also form the basis of your most powerful marketing content to spread the word. The specialist media love new market and product usage-based insights just as much as their readers, your customers, do. Pretty quickly, if you work out how to package that intelligence and share it more widely perhaps via your customer enewsletters, social media blog posts, articles in the trade media, news bulletins etc.; you will be seen as a thought leader and eventually a market leader. You will be perceived as THE vendor that is reading the market better than competitors and is anticipating their needs better than your competitors.
And what if you want to look a little further into the future – to anticipate which planned enhancements should be timetabled first? My advice is run some customer market research perhaps during user group events which also enable you to demo potential enhancements and gather on the spot feedback.
Market Research-led Thought Leadership ideal for breaking into new markets
Businesses which are growing really fast also want to break new ground, whether that be geographically by selling into new territories, or by adapting existing offerings to meet the needs of adjacent markets (i.e., sub-markets within larger markets you are already in). You may instead want to break into totally new vertical sectors where you have no real presence today.
The latter is the hardest of all to achieve arguably as you need to build brand awareness, recognition and authority in those markets before you can hope to sell into them. Prospects in those ‘green field’ markets need to know that you understand where they are coming from: what are the key pressures they are facing and what problems are they seeking solutions for right now, or in 12 and 24 months’ time.
It is in this scenario that market research-led PR campaigning has most to offer. This approach gives you the ability to get under the skin of what decision-makers in the new target market are wrestling with. You can start to pinpoint those key drivers and make sure you are offering insight, advice, guidance and customising products and services to address them.
Customer Outcome Driven Thinking Webinar – 9th September
That’s why my next webinar is focused on Customer Outcome Driven-Thinking and what it means for the way we communicate as a business. This next webinar goes ahead at 12PM on Thursday 9th September. Please sign up on my Zoom Meeting page here and I look forward to welcoming you into this exciting discussion linked to the future of your business.