What Keeps You Up at Night?
The Shift from Competitor Obsession to Customer Obsession
“We’re not competitor obsessed, we’re customer obsessed. We start with what the customer needs and we work backwards.”
— Jeff Bezos, Founder of Amazon
When I first started working with the business model canvas, I often wondered myself, “where is the competition in the model?” I still get that question from different corporate groups that we work with — “don’t we need to think about the competition?”
I think this type of thinking stems from traditional management training, straight out of the pages of Porter’s 5 Forces. As much as we give lip service to focusing on the customer, when a perceived competitor launches a shiny new product or comes up with a new marketing campaign, everyone panics and rushes to figure out how to catch up. It is classic FOMO (fear of missing out), fueled by the belief that the competitor knows better than we do and that all of their new initiatives and innovation programs are the beginning of our downfall, even if no one quite expresses it as such.
I believe the new economy is no longer defined by who is bigger, who possesses more money/resources, or who has wider geographical coverage. Strong brand names and brand value in itself only carry a passing weight. Rather, the new economy will be defined by who sits closer to customer, who really “gets” them, and who anticipates the required solutions before customers can even visualize or express it themselves. Strong brands are customer obsessed brands.
“You have to start with the customer experience and work backwards to the technology.”
— Steve Jobs
The business model canvas is designed with this in mind, keeping the customer segment and the value proposition at the heart of the business while giving only a cursory nod to the competition. The “key activities” and “key resources”, the technology/magic behind the company is all designed to support that key connection.
“If we can keep our competitors focused on us while we stay focused on the customer, ultimately we’ll turn out alright.”
— Jeff Bezos
Amazon, and more specifically Jeff Bezos, has been a leading light for this customer-obsessed approach. Unlike other tech giants like Apple, Google, and Microsoft, Amazon is not obsessed with creating an inward-focused ecosystem of interlocking apps and services that lock in customers for the long-term. Rather, the company emphasizes free platforms that each serves its own customers in the best and fastest possible way.
“Our customers are loyal to us right up until the second somebody offers them a better service,” says Jeff Bezos, “And I love that. It’s super-motivating for us.”
What does deep customer obsession look like?
1) Start with the Jobs-to-be-Done and Identify the Alternatives
When Netflix CEO Reed Hastings was once asked who the company’s biggest competitor was, he said “sleep.”
Yes, Amazon Prime Video had made inroads into the on-demand movie streaming space and now even Disney is pulling out of its agreement with Netflix to start its own direct-to-consumer streaming service, but to maintain it’s hold on the category, Netflix has focused relentlessly on the customer job and alternative solutions. This is why Netflix endeavors to push out new content onto the platform each and every day, so that there is always something new, always something to watch for everyone from casual to power users… sleep can wait.
Companies must understand the customer even better than they understand themselves, which will then enable them to deliver new, exciting, surprising features that create real value and solve real problems.
2) Stay in touch with your Customers and Avoid Proxies
Jeff Bezos calls out “focus groups” and “surveys” as proxies to watch out for. Naturally outsourced, either to a marketing team or an external market research company, focus groups and surveys are great for getting a surface perspective of customer feedback. However, deep market insights into what people like, love, and dream, the core of any truly powerful innovation, can’t be answered with standard questions and rating scales. Moreover, to formulate game-changing innovation, every member of the company needs to be in regular contact with customers, not just the marketing or sales team. Get Everyone Out of the Building!
Emily Weiss, the founder of the Glossier, an Instagram-fame beauty and skincare company, stated in a Wired interview that at the time,“beauty companies had no idea what their customers were up to.” Customers weren’t going to department stores to try on makeup, but were watching YouTube makeup tutorials, cross-checking product reviews, and finding their beauty inspiration on Instagram. In launching Glossier, Weiss rejected traditional marketing/sales channels of celebrity ads or high-profile department store placements. Rather, she trained all her employees to engage and talk with customers directly — via email, social media, the company’s site — in a casual voice that young people understand and can relate to.
By simply changing the style and approach of conversation with its customers, Glossier has now accumulated over 675k followers on Instagram and over 100k images hashtagged with the brand name.
3) Integrate Customers into your Value Chain
Every company claim they listen to customers, but only a handful work with and empower customers to build features and products for them.
Monzo, a UK-based bank, touts itself as the bank of the future. However, their version of new-age banking goes beyond a slick mobile app and AI-driven popup notifications. New feature requests are collected directly from customers via the Community Forum (see the “Drunk Mode” idea below) and are added to the dynamic platform’s change request list. They do in-person Customer Meetups in cities across the UK to debate and collect new improvement ideas from early adopters and influencers. Furthermore, they have opened up their platform via an API to third party vendors and customers alike, allowing them to build their own apps using the data available. Imagine an App Store centered around financial services with the bank serving as the platform… daring.
The customer is not the last step in the value chain; the customer is integrated throughout the value chain and is an integral part of creating that value itself.
Customer obsession is about getting real, close and personal with your customers, constantly, and is the only way to thrive in today’s competitive environment. In summary, to become customer obsessed:
- Start with the jobs-to-be-done and identify the alternatives
- Stay in touch with your customers and avoid proxies
- Integrate customers into your value chain
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