William Buist, CEO of Abelard and Founder of xTEN Club discusses why businesses are looking in the wrong places when it comes to problem solving.
If your business has a problem, where do you look? Some business owners will almost always look inward i.e. at the internal processes and systems, and others will almost always put their focus externally i.e. at the market and business environment. While both have merits neither is sufficient on its own.
In order to solve any problem, and ultimately to increase profits and growth, you first need clarity about what the business is there to do and what your customers want from you. In other words you need internal and external clarity.
So how can you get that clarity and then use it to improve your problem solving? Here are nine tips:
In order to solve your customers’ most meaningful, relevant problems, you need to know what problems they are facing and see these problems from their perspective. That starts with an in-depth understanding of the marketplace. What motivates your target customer? Are they concerned about high-quality products, spotless customer service, or finding the most budget-friendly solution? A solid foundation in market research makes good sense before moving forward, or you may back the wrong horse.
Effective problem solving is two-fold: it starts with an understanding of where your customers currently are, followed by where they want to go. This gap is, in essence, your customer’s problem. Once
you know these two end points, you can tailor a solution that bridges the gap and solves their problem.
Asking questions is especially important in the service industry. Let’s say your customer is dissatisfied with their current CRM (customer relationship management) provider. If you simply pitch your customer on your service, using what you think are the best selling points, you may completely miss the problem that’s affecting your customers.
Instead, start by asking questions to find out what part of the service is causing the customer dissatisfaction.
Asking the right questions is the key to understanding the problem so you can better sell your customer on the right solution.
What are the five most common customer complaints that products or services like yours currently receive across the market place? What are your customers saying about your competitors and about you? Keep in mind that these may not be complaints that are made directly, they could be criticisms posted on review sites.
Clarity around these concerns allows your business to proactively prevent problems from occurring in the first place.
Sometimes what you think is a customer’s problem is actually quite different from the reality. This is why it is so critical to understanding the actual problem that your customer is facing, or you risk making the problem bigger.
For example, let’s say a couple in their late 50’s comes to your financial services firm for retirement advice. It’s easy to assume that the problem they are facing is How can I maximize my pension? In reality, they may be more concerned about the type of legacy that they would leave for their children or other charities. By asking questions and taking the time to get to know your customers, you can help prevent assumptions from dictating your problem solving response.
Many entrepreneurs misunderstand the most fundamental question of what they do – what are you in business for? (Hint: it’s not making money). If all you want is to make money, then you don’t need to worry about creating a product. You can study the stock market or invest in precious metals; you can day trade on Forex or with cryptocurrencies. There are plenty of ways to cut out the middle man if all you want is to make money. Entrepreneurs create a product.
When we work with clients we are often amazed at how much of the design of the business is wrapped around activities that don’t add value, aren’t needed and which customers don’t want. Focusing on the key activities, the ones that matter and becoming exceptional at them is what drives a great experience.
Are you measuring the things that matter to your staff, suppliers, customers, distributors, or measuring the things that matter to you? The bad news (or good news) is that what you want to do well doesn’t matter, unless it’s also what customers want you to do well. Find ways to measure it through their eyes rather than yours and you’ll get better faster. That’s how entrepreneurs in competitive markets get ahead.
We all intuitively know that and we check the shelf life of things like milk when we buy it. We want to have good value by knowing it’s fresh. Do you know when you will replace your product, when you will next revisit the processes that deliver it, when you will need to make it fresh again? Why not (internally if you wish) have a refresh date in your business plan for that product.
Businesses with clarity make profits when others struggle, they grow whilst others stagnate and they outperform the market consistently.
Clarity gives us certainty and with it brings success not confusion, and enjoyment not frustration. Successful entrepreneurs know that, and that’s why they stop from time to time to take a hard look at their model, the products, activities, and markets.
William Buist is owner of Abelard Collaborative Consultancy, and founder of the exclusive xTEN Club – an annual programme of strategic activities for small, exclusive groups of business owners. xTEN helps accelerate growth, harness opportunity, build your business and develop ideas. William is also author of two books: At your fingertips and The little book of mentoring. Follow him on Twitter @Williambuist and @abelarduk.