11 November, 2010

What does your Customer want?

Product Conclave 2010
I had the privilege of attending Product Conclave 2010 conference organized by Nasscom recently thanks to my organization’s sponsorship. Apart from the fact that I was nominated to learn about Cloud based services, all that the agenda said was that it was targeted towards entrepreneurs. And it feels good to think that you are an entrepreneur, isn’t it? At least, an entrepreneur in the future?

One really nice thing about this conference was the wide array of panel discussions and workshops spread over two days.  I happened to attend one such workshop on “Building Great Products with Inspiration and Rigor”. What struck me at the end of the workshop was how stupidly we as engineers build products by thinking less about the customer and more about the profits we need to make.

Goal of the Workshop
You need to design and build the best pet possible in a competitive market. Your goal is to make more net revenue in units than your competitors. The team that has made the most units, not necessarily sold the most animals, will win the competition. Legos will be provided to build the pets.

Our team was a complete set of strangers including a senior manager, two entrepreneurs, one marketing person, two directors of a startup, a developer and a tester (Me!).   For a moment, I felt like the worst nerd in the team and being the worst helped me as you’ll find out in a while.

The senior manager and the developer suggested that we break into two teams: Core pet building team and the revenue team. Pet building team started building the pet based on the specifications given to them while the revenue strategy team started working out the pricing detail. We would have 3 iterations to build the pet. At the end of each iteration, a record number of 24 customers would walk by for a demo after which they would decide to buy or reject the pet.

Lost Once, Lost Forever               
At the end of first iteration, we were ready with a sexy pet we called ‘Pet-O-Smart’ – an alien dog which is not just a caring pet, but also acts as a robot to entertain the pet owner [This is just a simulation, remember?].  When the customers came by, our team collectively decided that we would not sell the pet yet as we thought it wasn’t fully ready. Our pet needed some more development while the revenue team was busy working out the pricing based on the market research we bought during first iteration. Some customers found our partially developed pet very attractive to buy, but were disappointed with our decision not to sell the pet yet.

Lesson: Customers who visited us at the end of 1st iteration were not only interested in our pet, but were cash rich. There was a high possibility that they would have bought many pets at the price we quoted. We didn’t intend to sell at this point and we prided in that decision as we heard cheers from other teams as they made their sales. It was a pretty bad decision for a reason. Even if we did not want to sell it, we could have demoed our pet to many customers (Campaign Management) and develop some leads (potential customers) for subsequent iterations. We lost some customers some of whom never came back because they were offended that we drove them away.

Conservative – May Buy
At the end of second iteration, Pet-O-Smart was fully ready for demo and sale. We priced it at 61 units per pet. First customer came in and all that we did as a team was surround like ants around a sugar cube and confuse him with all sorts of data of what it doesn’t do. We highlighted how our pet does bite now and then, but it’s harmless. Customer got angry. Another customer was driven away knowing our pet barked.
After a little retrospection, I informed the team how we were talking less about the positives and more about the negatives of the pet which forced the customer not to buy our pet. I took the lead in demoing to the customers henceforth. The approach I used was simple: Focus and highlight all the features and advantages in the pet. Don’t even mention the negatives. It went well. Some customers were smart. They asked ‘Does your pet bite?’, ‘Does it bark?’, ‘How aggressive is your pet?’ In addition to answering these direct questions, I also highlighted how our pet was harmless and could be child friendly for kids to play with. Impressive. We sold about 5 pets after 2nd iteration.

Lesson: We thought we were smart. Some customers ended up asking key questions like ‘How many legs does your pet have?’ When our answer did not meet their requirement, they simply walked away yelling ‘Oh! This is not what I am looking for’.  For some customers, their requirements did not match ours.

I wish it was a little Cheaper
To spice up the whole workshop, we were not told about what the customers expected from the pet. All we were told was we had to answer customer’s questions and based on that we had to build/re-build our pet. How insane? We don’t get to talk to our customer about a product they want? Sounded foolish. But what about customers whom you don’t even get to know about in your lifetime, but still may be potential users of the product.

In spite of being warned that we are not supposed to ask questions, our team started drilling information from customers based on their reactions, their body language and sometimes even their comments. Some of them provided valuable information for us based on which we changed our design a bit and repriced our product at 57 units. And our sales increased by another 3 pets.

Lesson: At the end of third iteration, we met up with many customers who were interested to buy our pet, but were falling short of money. This is when we realized that we shouldn’t have driven away customers after first iteration when they had the most money. We did not adapt quickly. We took time not just to build the product, but to market it as well. It cost us a few more sales deals.

Our team stood 4th in the total number of sales made, but that’s not the point. The point is where we faltered. The whole idea of the workshop was to identify those failure points and learn from them. And we did.

What does a Customer want anyway?
Customers are of prime importance.  Engineers have talent, Customers have money. Engineers build products; Customers are ready to pay for them. Some customers have rich cash flow, some are conservative in spending, but they don’t mind investing once in a while on products which will profit them and some customers are desperate to buy your product, but they just don’t have the money. There are all types of customers and it's important to study them and the markets they cater to in order to build products that are suitable for them.

Customers doesn’t need an infinite number of features in the product to make them look super cool in a room of a hundred people at a conference. They’ll be happy with a single feature that can touch lakhs of people’s lives and make a difference and of course, fetches a reasonable profit in turn for their hard work. Is that so hard?

Parimala Shankaraiah