From the Streets, Silicon Valley,Madison Avenue, Wall Street, and Hollywood are all major hubs around the world that people flock to, to make millions and sometimes billions and all carry timeless lessons in how to achieve customer success in your given marketplace. They are not hot spots by accident and they are all affected by your activity during the holidays.
In the persuasion masterpiece Influence by Robert Cialdini, he illustrates in short on how companies manipulate the customer’s behavior without them even knowing it with a simple change in operational activity. In the situation, he describes meeting his neighbor at a toy store as he is purchasing a highly sought after present for his son. Something strikes him, that the last time he saw his neighbor was at the exact same store, at around the exact same time… last year! He goes what gives? They mark it as coincidence and move on. But with Robert’s curiosity piqued, he asks a friend who was in the toy marketing business. His friend laughs and explains that it isn’t a coincidence, that toy companies’ bottom line lagged in January after everyone bought up the hallmark toy during the holiday season in December, so they came up with a tactic you may not know as scarcity.
The toy companies deliberately under stock the stores that carry the hallmark toy and overstock their complementary toys. Parents who cannot withstand the mauling and mob mentality settle for the complementary toy and leave their child disappointed. But in January, when all craze has gone away, the companies store the hallmark toy to keep the momentum of their cornerstone product.
Smart tactic, but what is even more impressive is the company’s understanding of their customer’s nature. Which was discussed in last week’s post.
Understanding the human condition is a prerequisite of successful customer discovery, and lasting enterprise success. Everyone knows that a company cannot exist without customers.
That’s why I don’t have a company. Yet. If it is a business. I’m in the customer development business and I recommend you be in the same biz.
Many entrepreneurs have ideas, or even better, their own products. Inventory full of their product. Believing if they build it customers will automatically come. Maybe the primary reason of business failure is the chicken before the egg thinking that puts you and your business behind the 8 ball, or in a rear naked chokehold before the match even started. Talk about screwing yourself over.
Customer Development is rarely talked about, I even have to come at Dan Kennedy as his writing assumes you have a service or product already in the marketplace. But what if you’re smart and think like a business person and study customer profiling before you invest capital into a product.
Here’s Steve Blank’s Customer Dev Funnel.
From now on, because it makes sense, I’m going to assume you don’t have an idea or a product/service yet and good for you. Find your customer first then tailor the idea of a product/service to that customer. It will save you hella time and money and you will gain valuable people skills by gaining the hustler’s eye and ear in the process.
Observance: Michael Bloomberg, billionaire and philanthropist credits working in the financial markets by finding that his customer/occupation didn’t have a life, because of the old school and time-consuming method of analyzing markets digitally. He developed an idea after finding customer and created the Bloomberg Terminal and software that provided massive value for financial analysts’ careers and free time for a social life with more efficient digital analytic products. In turn, made Bloomberg one of the richest people in the world. I’m not saying the same result will happen with you or I, (hopefully)… But success is much smoother than creating a product, borrowing money (that you have to pay back), market the product, find out the market doesn’t like some things, alter it, spend more money, and hope that it works out, which 9 times out of 10 doesn’t work.
Businesses fail because they follow the failing businesses protocol without even knowing it, because it worked for the 1 out 10 business. A lot of businesses would succeed if they learned this easy marketing play. It could save your job that you don’t have to quit that you may find a struggling and out dated way the business is doing things and Bloomberg your way to the bank!
Most of you reading this may be like there are plenty of businesses that start with a product before the customer! Look at Bill Bowerman, co-founder of Nike created the innovative waffle grip for runners that added tremendous value to their times. Product before customer right? Nope, do you think Mr. Bowerman ever spent a day away from the track? He understood the runner’s ambitions: Faster track times, comfort, grip to the track. Customer or occupation before the product leads to more experimentation and chance of accidental breakthroughs that led to the waffle grip trainer. Action: Conceptual playing with two or more unrelated ideas and combining them.
Eminem – Patiently Waiting – 50 Cent, Get Rich Or Die Tryin’
That’s the feeling of Customer Development, it may suck in the beginning. But all the hard work and persistence will give you better options and mitigate the risk that you take. You may be able to fund the idea yourself. win/win!
50th Law: Know Your Environment – Wherever your market is, there are the outsiders and the insiders. The insiders not only understand the inside, but the outsiders as well. In short form it’s empathy for all humans in your market. Because they are customers. Hawk’s do not see more, they see more detail. The closer you are to your market, the better you get to know their needs, ignore your primal need for superiority and become a man of the people, camouflage/chameleon. Then you iterate your product around their needs…
I just listened to this.
I guess hustlers think alike.
Books to read: The Startup Owner’s Manual by Steve Blank
The 50th Law by 50 Cent and Robert Greene
Crossing the Chasm by Geoffrey Moore
Put it On the Net 