Delivering Profitable Value to Customers

Searching for a profound understanding of how to make customers’ real-life experiences more valuable for them leads ultimately to a good place for any business — making money.

Companies that look inwards

With too much inward focus a company tends to do what it likes doing, or what it thinks it can do better than its competitors.

It knows its products, services, technologies and operational capabilities. It knows its position and strength in the market. It usually knows what its existing customers are asking for and what they expect. But it rarely asks what experiences potential customers value most.

A company like this tends to repeat what worked before. It might change its products, services or processes but without a proven understanding of what its customers value, it struggles to find the real key success factors.

Companies that look in the mirror

A company looking inwards tends to design solutions that leverage resident know-how to increase its competitive differentiation or to achieve lower costs than competitors. Solutions are often implemented without the problem being clearly defined or understood.

When a company like this decides to become driven by its customers rather than by its product, services, and processes, the notion of being in touch with customers often proves to be an illusion — go ask the customer, listen to them, do as they say and all will be well — seldom works out that way.

What they actually become is customer-compelled. Solutions simply respond to customer demands or expectations. These solutions rarely solve the right problem.


Because the same wrong question gets asked — what products or services should we develop and how?

While looking inwards a company answers this wrong question based on its own biases. When it’s compelled by customers, a company asks the customer to answer it. Basically, the company asks the customer to hold up a mirror so it can continue to gaze at itself. There might be an intensity of interest as they ask customers what they want but then the company does exactly what it would’ve done anyway.

Companies that look go back and forth

Flitting between doing what it wants and responding to every customer whim causes indecision and confusion — ill-informed decisions are made, any reorganisation is misguided, and more operational waste is introduced. All this contributes to a lower probability of success. This isn’t a setup that delivers winning value propositions.

Weak innovations barely enhance the delivery of existing value. Technology and product development operate without intimate knowledge of customers and their experiences.

Support staff are bombarded with customer suggestions and retaliate with satisfaction surveys; they do little to enhance or even transform customer experiences.

Operations and billing staff rarely get a glimpse of the real life of customers.

Marketing staff don’t try to convince potential customers of superior experiences. They judge their success by the popularity or creativity of their advertising campaigns rather than by their ability to communicate the right value proposition, while the sales force are preoccupied with the numbers in their sales plans.

Delivering profitable value

Figuring out the right questions to ask and how to answer them profitably is the very essence of doing good business, as opposed to making bad profits. It’s easier to get the right answers when you can ask the right questions regularly.

In that sense, conducting business is about the exploration and improvement of customer experiences. Matching what customers demand or supposedly want against the characteristics of a company’s products and services, or identifying generic customer needs or benefits that are unspecific and ambiguous, provides no actionable business direction. Put the mirror down long enough to understand deeply and act decisively on the specific experiences customers most value.

The place to be is with the customers

Value resides in the customer experiences. That’s where the action is at. Delving into potential customers’ past and current experiences, and other experiences they haven’t had yet is the most effective way to discover which experiences deliver more value for them. Focusing internally or being compelled to do what customers want doesn’t help. One must become a customer rather than just listen to them.

Honda knows this to be true:

A team of Honda employees staked out in a grocery store’s car park videotaping people loading groceries into the boot of their cars. Different cars, different consumers, different grocery bags.

Back in Tokyo, Honda engineers and other managers, designing the next model watched these videos. Some people struggled to get their bags into the boot. Some arranged their plastic carrier bags to keep them from tipping over. At night, some people peered into the boot as they tried to arrange bags at the back. A few paused, rested a bag on the back bumper to lift the boot lid again after it partially closes. For a few others the shopping trolley rolled a few feet away as they loaded their car. These motorists aren’t telling Honda their car boot needs or their desired benefits in a car boot. They’re simply living part of their car experience.

Watching these videos, the Honda engineers and other managers vicariously lived the experience as well, by putting themselves in the customers’ shoes. They could see and feel what’s imperfect in the experiences. Then they could envision how a superior boot-loading experience would look for these motorists.

The right question to ask is what would customers perceive to be the most valuable outcomes from their experiences?


Author: Digital Outlaw. Business Innovator. Change Maker. Making Life Brighter | Beer Snob. Foodsmith | Welshman in London and Vienna ? Simon Baker