There are many possible customers; buyers, users, influencers, administrators, and distributors. So who is your customer? When looking through a jobs-to-be-done lens, we see that they are all trying to get a job done, but not the same job. Of course, companies want to help any and all potential customers get their unique jobs done better, earning their loyalty. The key to success, however, is knowing who the primary customer is and the hierarchy to follow to optimize value creation and profits.
When asked who is your customer, companies often tell us that they serve many customers. This customer selection includes internal and external customers, distributors, buyers, influencers, employees, and so on. Calling them all “customers” is common, even acceptable. But it perpetuates a myth that misleads. They are not all customers in the true sense of the word. Companies are making a mistake when they give all these constituents an equal or greater priority than they give their primary customer. This leads to focusing time and energy in the wrong places, inhibiting a company’s ability to create value and grow.
Concluding that the distributor, the purchasing department, or the buyer is the primary customer is almost always a mistake. Products and services exist to help someone get a job done, not so someone can distribute, buy, or install them. Of course, companies have to make sure its distributors, buyers, contractors, sales team, and employees are all happy, but they are not the reason the company exists. When deciding who is the customer, the focus should always be on the people using the product. They are the ones for whom value is being created and the reason why the market and the product exists.
This can be a little tricky when a company sells its product as a component in another company’s product. In this case, the primary customer is the designer of that product. The designer is hiring the product to help deliver a specific function. It should be noted, however, that more value could potentially be created for these designers if the company knew more about their customer. Knowing more about the end users’ job reveals an avenue for growth that is often worth pursuing when it comes to customer selection.
It’s hard to conceive that the people you sell to, collect revenue from, and talk to every day of the week are not your primary customers. IBM thought ComputerLand was its primary customer, not the computer user. But then Dell and Apple created offerings that took the distributor out of the equation. The result? ComputerLand went the way of the dinosaur, and IBM eventually got out of the PC business. But computer users didn’t disappear. They were, and are still today, the primary customer.
The first step in profiting from the customer is knowing who they are. We work through the confusion and the resistance to make the right choices, so value can be created. This is part of our innovation process, Outcome-Driven Innovation (ODI). Learn more about our growth strategy consulting services.