A Problem That Can’t Be Solved

Customers often have a problem that can’t be solved by current suppliers. These situations can provide your company with a valuable business opportunity.

To be clear, we need to look deeper than customer service problems. For example, when shopping for a computer you may become frustrated if the retail store clerk is uninformed, rude, and disinterested in helping. If poor service is limited to that employee, it can be addressed through training and coaching.

But if poor service is systemic in the company or industry, this indicates structural problems that are likely ingrained in the business model. They are so severe that customers may assume their problem is not solvable and may not search for other options. To the customer, this frustrating situation is just something they have to live with.

This inherent frustration is exactly the situation that faced the personal computer industry when mainstream consumers were first adopting computers. People found it intimidating, confusing, expensive and inconvenient to purchase from a retail store. In the 1980s and 1990s, Dell Computer identified this problem and was successful with a revolutionary direct-to-consumer model. Dell was able to charge competitive prices, but also provide the impression of a ‘customized’ product delivered directly to your door.

You have options

Owner-managed companies capitalize on similar opportunities every day. Imagine a situation where a small business has designed a software product that allows parents to coach their young adult children on managing their personal finances.

Assume one customer finds it difficult to teach the principles of finance and often contacts the help desk for suggestions. Friendly employees coach the customer, but she remains frustrated and believes this is a problem that can’t be solved by the software program.

If this customer’s experience is typical of a portion of the broader user base, there is a business opportunity to increase perceived value of the software. For example, the help desk could develop videos that explain how to teach finance in a fun and interesting way.  

Another potential change to strategy may point to a product solution, where the software compliments a parent’s effort by coaching the child using interactive games. These changes have potential to be expensive and difficult to implement. But either of them may provide a meaningful competitive advantage in the marketplace.

As a business owner, you have options for how you address the situation. The first step is acknowledging the problem from the customer’s point of view. This is the seed of opportunity.  

Know your customer

Where do we start in our effort to identify customer problems? It’s not always easy. Customer problems are frequent in all industries, but not all relate to broader strategy decisions. The types of situations we’re looking for take true insight. What is structurally wrong with how suppliers are managing customer needs?

It all starts with the customer. Just knowing your customer’s name is not enough. You have to know what makes them tick. You have to know what motivates them and the series of steps they follow when making a purchase. Interview them. Ask them why they made the decisions they have, what they find frustrating, what they would like changed in how suppliers work with them.

I can’t overstate the value of this research. When I develop a marketing and sales plan for a client, the first step is usually for me to interview my client’s customers. The insight gained will provide a foundation for strategic decisions.

Designing your strategy

At some point, you will know enough about your customers to begin making strategic decisions. At first you may or may not have the epiphany you need to create structural change. Eventually you’ll see what needs to be done, and be excited about how to build your business around this opportunity.

Once you see the customer’s problem, think about new ways of approaching the situation. What can you do differently? Is it a pricing solution? A distribution solution? Maybe you need a new product design. Your strategy will fall into place as you consider how to provide value to the customer.

Making it happen

Most established entrepreneurs have a solid, well-run business, and they have become used to maintaining the same course. But this type of change may require a dramatic shift in direction with a different level of risk than historical day-to-day business. When implementing your strategy, keep the following tips in mind.

Understand what your company is capable of accomplishing and the risk of failure. If you see a market opportunity that your company has not been capitalizing on, chances are you won’t have all the skills in house that you need to do the job right. For example, if your company does not have expertise to design new customer-focused systems in your help center then consider who to hire that has that expertise. Usually, the gaps can easily be filled once you are aware of them.

Be patient. Major, structural change often happens over a long period of time by taking small, incremental steps. Instead of shutting down your help centre one morning and rolling out an entire new system, test these changes on a small group of customers. Learn what works and what does not work. Make adjustments. You will de-risk your strategy by building off your knowledge gained from each test experience and creating a way forward that you know has a high likelihood of success.

Your company’s growth opportunities stem from your customer’s situation. Design your strategy around the customer, and build off your existing competencies as you roll out these changes.