Businesses Don’t Drive Growth; Customers Do

Peter Drucker said, “The purpose of a business is to create and keep a customer.” While companies also exist to build wealth for owners, provide jobs for employees, etc., a company cannot survive unless it first creates value for customers. For this reason, a business should take whatever measures are necessary to understand what its target customers regard as superior value and how to deliver it to them. Having a clear understanding of your customers’ needs is the foundation for every successful strategy and the “North Star” that provides direction for new value creation and growth.

This thinking isn’t new, but it isn’t implemented well in many companies today, either. Most companies don’t know what type of customer needs to capture to differentiate and grow or how to obtain them. Yet, if you don’t know which customer needs remain unmet by your own offerings and your competitors’ offerings, then it’s very difficult to differentiate and grow in a predictable manner. You will be forced to guess, which leads to high failure rates, a lot of frustration, financial loss, and reputation loss as well. None of this is necessary, but it’s all very common for companies today.

To key to success in understanding customer needs is to understand that people buy products and services to get their jobs done. For innovation and growth strategy, a customer “need” is the job they want to get done and the criteria they use to measure success. This is how customers measure value.

The old adage “garbage in, garbage out” applies well to organizations attempting to capture customer needs to guide value creation. When an organization has incorrect or incomplete information about its customers, it has a misleading view of what they want, which reduces the company’s ability to create and deliver value. With the right customer inputs, however, virtually all customer-facing activities are significantly more effective. This is because every important, but not-yet-satisfied customer need is an opportunity for your company to create new value and drive revenue growth. Unmet customer needs are targets of opportunity. It’s hard to hit a bull’s eye if you don’t have a clear view of the target.

Here are 10 customer-facing tasks that are vastly more effective when you know where your customers’ important unsatisfied needs lie:

1. 1. Establish competitive advantage
   2. Generate ideas for new and improved offerings
   3. Develop and commercialize new offerings
   4. Deliver exceptional customer experiences
   5. Create brand messages and positioning that connect
   6. Segment markets and create tailored offerings for each segment
   7. Increase sales effectiveness
   8. Improve R&D effectiveness
   9. Align internal functions with customer needs, e.g., operations, sales, etc.
   10. Engage employees in the noble purpose of business: helping customers get their jobs done

Informing these important tasks with a deep understanding of your target customers’ needs goes well beyond what satisfaction or Net Promoter Score surveys can do. The tools and skills now exist to capture a comprehensive and prioritized set of your target customers’ needs so that you can confidently create revenue growth strategies that work, that hit the bull’s eye, because you’ll know what it will take to be successful before spending a dime on development. That is, if you can help your target customers get an important unsatisfied job done better than current options — and you can — then you will be creating a unique position in the market that customers will value.

© Reveal Growth Consultants, Inc.