How to identify which customer needs, if serviced, will provide value to your customer AND to your business         

Organisations striving to be customer centric, at some point in time, will be faced with the task of identifying customer needs that must be serviced in order for the business to grow and out do their competitors. If you have a long customer needs ‘wish list’, the biggest challenge is justifying which feature is worth implementing and will provide the highest value to your customer and your business.

The prioritisation framework need not be complex. In fact, the more complex the framework and algorithm to calculate ‘value’, the less consumable and acceptable it will be amongst the business audience. Three words that are imperative to guiding the design of your framework: Keep. It. Simple.

Here is a set of 6 simple questions that have been effectively used to scope transformational change in a large logistics organisation. The first 3 questions were designed to take a customer’s lens, identifying value to the customer. The last 3 questions were designed to take a business’ lens, identifying value to the business.

1) Value to the customer: Will the customer pay for the feature or service?

A service or a feature that the customer is not willing to pay for can mean one of two things: It is a basic functionality that is expected as part of the base product, or alternatively, it is not something highly valued by the customer. Identifying if the customer is willing to pay for it is a good indicator that it is a feature that should be implemented and will be embraced by the customer.

2) Value to the customer: Will the feature or service drive advocacy?

The best form of marketing any business can get is through customer advocacy. If a product feature or service offering has a direct impact on customer advocacy, the grapevine will sweep your store clean! In the words of Jeff Bezos, CEO Amazon.com, “If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.”  So, focus on developing service and features that will be the talk of the town.

3) Value to the customer: Will the customer switch providers if a feature or service is not fulfilled?

In a competitive market, customers are not only given choices but also the bargaining power to negotiate lower cost. In such a market, failure to service a customer need that results in customers leaving your business is reason enough to reconsider your initial assessments, and perhaps even include in the scope of implementation.

4) Value to the business: Will the feature or service ‘lock’ the customer to your business?

Relying on customer relationship management alone is not enough today to keep customers coming back to you. It is in the best interest of the business to design their product and service offerings in a manner that will encourage customers to willingly be ‘locked in’. Identify and focus on implementing features and service offerings that will result in them signing up for the long term.

5) Value to the business: Will the feature or service create cross sell opportunities?

The relationship building efforts you have invested from the start of the sales cycle will start to pay greater dividends when your customer is heavily embedded across your product portfolio. Selling a particular service or product feature at a cost is great. Enticing the customer to procure other services or features from your suite of offerings is brilliant. If you have started off small and dream of providing customers with a total solution offering one day, striving to create cross sell opportunities will be the much needed vehicle to support your product and service portfolio growth.

6) Value to the business: Will the feature or service increase profitability?

In sales, the key metric is revenue increment, and in operations it is cost reduction. Taking one or the other lens will not suffice in assessing the value of implementing a feature or a service offering. The goal should always be to increase profitability. Only then have you truly realised the value of your change or implementation.

“It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages.” – Henry Ford

Originally posted as '6 Essential Questions To Ask When Designing Products and Services' on the the Enterprise Architects website.

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