A value proposition that is poorly crafted and evidenced is the biggest point of failure and leads to a waste of time, money, and effort, says Julia Shalet
I was profoundly influenced early on in my career by a commercial director who asked the simplest questions.
I would waltz into his office with proposals for new proposition ideas, schemes to reduce costs and ways to maximise on new technologies but he never looked at any of my paperwork. Instead, he asked some simple questions about the value being created and if you couldn’t answer concisely and with clarity, you were out!
I learned to ask the simple questions and that no question is a stupid question. However simple it might sound; I can guarantee that there will be someone else who will be so grateful you asked it because they didn’t have the courage to.
Fast forward 20 years and I am still asking the simple questions about value creation. A value proposition that is poorly crafted and evidenced is the biggest point of failure and leads to a terrible waste of time, money and effort. Fancy going to all the effort of building something just to find that people don’t want, need or desire it.
If you want to avoid wasting your time, be clear about the value that you think you are offering and put it to the test, before you invest.
1Accept that misunderstanding customer needs is the biggest time waster
I say this not only from my own experience, I have searched the internet to find some statistics around the reasons for product failure i.e why a launched product failed to reach its success metrics (customer numbers, or revenues and so on). Most stats given for overall product failure sit somewhere between 70–90 per cent. When delving into the reasons for failure, the most commonly cited reason is failure to understand value, customer and user needs, and failure to work out what they are worth. Neilson, the long-established global market research and data analytics company, describes this as ‘neglecting to address a broad consumer need’.
It is never too early, in fact, the earlier the better. You don’t need to know what your solution could look like, or how much budget you have, you just need to answer these simple and fundamental questions:
- Who are you creating value for?
- What problem, need or desire do they have?
- What are they already doing to solve that problem?
- How is that working out for them?
- Is there an opportunity for you to give them something better?
- Is the problem, need or desire big enough for them to take your required action?
Now ask yourself, are your answers to these questions based on gut feelings or do you have evidence to support what you say? If you feel that your evidence is light, then go do some primary research and hear it from the horse’s mouth. It is worth spending a little time now checking your assumptions rather than risking failure further down the line.
2Go talk with your potential customers to get evidence for your assumptions
Armed with a well-crafted set of questions to get you those answers, start with just five target customers and see how that goes. Once you have started to gather evidence from this first group, you will get a sense of whether your assumptions are correct or whether you need a re-think. The important thing is that you start to speak to customers as soon as you can!
Don’t get distracted by your own solution. It is so easy to get carried away with ideas that we think are really good, to design solutions to problems and desires that we think exist. But we must be disciplined and focus firstly on those core questions. If the problem, need or desire doesn’t exist then the solution is irrelevant.
Having these conversations face to face is super important – think about how much more you can gauge about how a person is feeling and thinking when you see their eyes and body language. We are so good at video now, so use it! Please avoid the trappings of running an online survey, at this early stage you are assessing the depth of problems and desires, if you cannot see facial expressions, hear intonation and read body language then you are researching blind.
By the way, I am talking to YOU! You and your teams should go and have these conversations yourselves. With guidance on how to stay neutral, how to get people talking about what you need them to and how to keep consistency across your sample, I have found that most people have it in them to be a good researcher. What’s more, they learn so much about their customer, it’s the best way to develop customer centricity and what organisation does not have that in their set of values? PS. Don’t worry about treading on the research department’s toes, this is very early, very low-cost idea research.
3Create a pot of money just for innovation
I have seen companies ring fence a small fund to support new idea testing and development. After all, if all development funding is in the same pot, then new idea investigations will always lose out to live product investments where the ROI will look far more positive.
I have seen companies set up innovation programs, incubators and competitions, paying expensive innovation consultants to help them along the way. But I believe that the best way forward is to make idea testing part of daily life. If all your teams are empowered and enabled, this becomes part of the fabric of your organisation. Having this ring fenced pot of money shows people with ideas that it is possible to move new ideas forward and that it is all worth the effort.
One final thought is for those of you who have that fear that something you are already working on might not stand up to what the customer needs and wants. Call it out now and go and test it. Don’t delay. Let’s not sink good money after bad. I have proudly worn the badge of ‘product killer’ a number of times – be brave enough to cut your losses and re-deploy the resources more wisely elsewhere.
Julia Shalet is author of new book, The Really Good Idea Test, published by Pearson, £16.99. She also offers highly commended practical hands-on workshops & training to help move ideas forward. Find out more at productdoctor.co.uk.