Identify the Problem, Then Develop the Product, a Panel Agrees

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Towards the end of a takeaway-stuffed session at our BIMS conference in November titled Bringing Customers Into Your Marketing, Fulfillment & Product Development, Jim Sinkinson of Fired Up! Marketing asked his fellow panelists this: "Do you ever get to the point of asking customers or prospects, 'Would you buy it [if we built it]'? How do you get as close as possible to the answer in your interactions with customers?"

The question obviously hit a chord, because within a couple seconds, Elizabeth Petersen (pictured right), chief people and strategy officer, Simplify Compliance, said, "I've stopped asking it because I learned the hard way. I'm very open talking about my failures"—mind you, at another point she alluded to her team of "close to 200," so her successes stand far taller. "About nine years ago I had a great product idea, and I did a ton of customer research, and everybody said they would buy it. In fact I went down and asked how much they would pay for it. [Customers said] '$5,000! $10,000!' And guess what? That wasn't even close. When push came to shove, and we put sales reps on the phone, they said, 'I might pay $99 a year for it.'

"So we don't ask that question very often any more. We ask, 'What budget to do you have available? How are you spending it right now? How are decisions made?' And also, when I'm talking to partners and vendors, I try to slide this in there: 'How are purchasing decisions made for your product?' I was talking with one potential partner, and he said that a consulting firm he was working with said they paid $20,000 a month for consultants. I asked, 'How did they make that decision?' He felt that for every error they uncovered, they were saving an additional $30,000. So instead of asking if people would buy that, I'm more interested in what have [her emphasis] they spent money on, and what drove that decision."

The publishing conference equivalents of "amen" sounded from the other panelists—Sinkinson, Victoria Mellor, CEO and co-founder, Novatum Group, and moderator Ed Coburn, CEO of Coburn Media. Listen here to this session. It's one of the most substantive I've ever heard. Consider this article Part 1.

Responding from the audience to Petersen's comments, Kelly Parsons, CEO of OpsCat—Mellor and Parsons worked together guiding Melcrum and presented a keynote the previous day about that—said: "You have to force tradeoffs" to get the best information from customers because "people are too nice. They'll lie on surveys. And they'll tell you that's a great product idea even if [it isn't]."

She suggested the 100 pennies exercise, where customers get to choose from a group of ideas where they would put their pennies. "Most Americans will tell you directions to somewhere even if they don't know," Parsons said. "'Here's all the things we can do for you'" she would tell them. "You want to know the problems they're going through—pennies against problems. 'What problems would you put your money towards?' Then it was up to us to ask ourselves, 'How do we address those problems with products?'"

"Identify the problem," Sinkinson agreed. "Customers aren't going to tell you what kind of product to develop. They're only going to tell you what their habits are and what the problems are. It's up to you to determine [the solution]."

A question came from the audience, "How do you solicit this information?"

"Remember, you've already got information flowing into you," Coburn said. He pointed to an example Sinkinson gave of his team meetings where he would encourage the people dealing with customers to share any type of story they had. "What did you learn from a customer in the last 30 days?" Sinkinson would ask. "A guy who processed orders said that people seemed to not understand [how a certain product worked]. They always do it wrong," he said.

Coburn said that he saw a non-listening example in hotels where fire alarms were always being set off by people hanging clothes on sprinkler heads. That led to signs saying, "Don't hang things here." "The customer is speaking: 'We want hooks!'" he said. "That would be listening to the voice of the customer. Give me a hook!"

On that same note of listening to customers, Mellor said, "I believe in [paying attention to] weak signals—hearing little pieces of feedback. The way you pursue questions from customers is extremely important. We would get a question from somebody [that might finish with], 'Do you have a competency model that does this?'" Because we had a smart person working on this, [we might say], 'Why don't we develop one for you?'" But Mellor added that an easy—and wrong—way out might be to say, "No we don't have one but we can give you this." You have to "look at that question in a bigger way."

More next week.

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Ronn Levine began his career as a reporter for The Washington Post and has won numerous writing and publications awards since. Most recently, he spent 12 years at the Newspaper Association of America covering a variety of topics before joining SIPA in 2009 and SIIA in 2013 as editorial director…