You may not have heard of The Lean Startup by Eric Ries. It’s a book that’s spoken of a lot in the startup world but less so in the mainstream business world. That’s a shame. Not only is it an interesting business book in its own right but it also has some important lessons for businesses that are beyond the startup stage.
Indeed, in the competitive world of business, unless you are consistently getting better, it’s only a matter of time before someone takes market share away from you. Which is to say, even established, successful businesses will benefit from the practices mentioned in The Lean Startup as they work to remain competitive in their market(s).
We think there are two particularly important practices that are relevant to post-startup businesses (from local to multinational). The first of these is “getting out of the building” to speak with customers about the pain/gain your product/service provides for them.
The details of how to do this are well beyond the scope of this short write-up but at the 30,000 foot level, it means gaining a better understanding of what your customers value and why they’re willing to part with cash to buy from you.
If you do this well, you may be surprised to find a variety of different reasons customers buy from you. Cataloging the different reasons why people buy will help you start to “archetype” your customers and, in turn, customize your interaction with them so as to maximize meeting their specific needs. If you can achieve even modest success at archetyping your customers accurately, you will take a huge step toward maximizing both your income and your customer loyalty.
The trick is that just asking your customers is probably not good enough to figure out what they really value. Which brings up the second practice: forming hypotheses about what they value and then rigorously testing each hypothesis.
For example, you may think your customers value your great service (your hypothesis) when some value your pricing alone, while others value the convenience of buying from you, while still others value the status of saying they bought from you or their relationship with a particular sales agent. You can test your hypothesis by altering the level of service, for example, and see if doing so changes buying behavior. While most customers have multiple factors influencing their buying decisions, buying behavior is the gold standard (no pun intended) for evaluating what value they hold above all others.
Testing hypotheses is the best way to really understand your customers better. It’s hard work to do it well. But it can take most of the guesswork out of your marketing efforts and will give you the best chance of staying competitive in your market(s).