Lesson: Creating Customer Personas with Julie Hamwood

Step #9 Value Exchange: Know what you can give

The one thing that I come back to over and over is my business model, because that's why I'm here is to have a viable business. If I was to ask a customer what they would need from me, they would say, "I need you to meet as many needs as possible for as low a price point for me as possible all the time." And as much as I might want to do that, from a benevolent perspective, I viably can't do that.

So, I'm talking with my customers to understand their needs. It's my job as the entrepreneur to understand what do I have to give? What do I have to offer? What is worth my time and money and attention to make to then offer to them, and what do I need from them in the transaction? This is a value exchange. This is not a gift.

So, when I'm looking at my customer feedback, what I really care about is that I want my customers to really want what I'm offering. So I'm listening for "How important is this need to them?" "How crucial is it that this gets filled?" "Where are their priorities on this?" "What resources do they bring to being able to fill this?" How much can they afford to spend? How much time do they have? What sort of attention do they have? Where does this fit for them?

So when I'm getting all of this feedback and then relating it back to the product, I'm looking for what needs they're trying to fulfill, what gains they're trying to achieve, what pains they're trying to avoid, and what does my offering match to that? And, if it doesn't match to that, then either they're not my customer, or I need to evolve my product materially. If I really want them to be my customer, I'll evolve my product.

I mean, if we go and look at any like high-end shopping street, Fifth Avenue, something like that, or Bond Street in London, or something like that. Those stores have really evolved to meet the needs of high net worth people. To some extent they don't really care what the needs are of the high net worth people. They're basically saying, "What do these people need?" Like high end type hotel chains. "What do these people need, because they've got the capacity to spend and how do I meet it?" And they'll basically just change what they're offering in order to continue to have that revenue stream.

So, when I'm getting feedback from my customers, I'm looking for what can I offer that meets their need so that we get a meaningful value exchange? That's what determines the feedback that I bring in. What makes my business model work?

Well, the main kinds of impacts that we're going to get from the data is we're going to find out that we are on the right track with the customers and we're going to be able to finesse how we approach the customers. Or we find out that actually the thing that we're wanting to offer we're approaching the wrong people and we're having to change around the customer group that we're going for. Or we find out that the need that we thought we were satisfying was just not a valuable enough need. Sure, we could meet it, but they weren't hungry enough to have that need met. But they may well have related needs or different needs that we are actually able to meet and they are really hungry for that.

So, in one example, I was working with a company and they wanted to look at, "How do we shorten the time if we're doing a drink order at Starbucks?" And the assumption was that we needed to be able to pay more quickly, while we note the Starbucks queue. So we did all this research on how can we make it easier for people to pay so that they could get their Starbucks and exit more quickly. It turns out that Starbucks totally had that dialed. They totally know how to take the money.

What Starbucks or any of the coffee companies aren't so good at, is having all the staff behind the counter. It's actually really, really hard for them to have the right skillsets at the right quantities to fulfill the demand. They're very good at predicting their amount of demand. Their problems in fulfilling that demand is having the right staff in place, and it's when the staff aren't available or they don't have the right mix of staff. So we ended up pivoting to creating application which was all about supporting all the people who were behind the counter to be able to swap shifts, move in and out, get the balance right for every single store relative to the demand that was going to come through that store.

So, we completely changed who the customer was. It wasn't the people who were paying, who have the app to get a faster cup of coffee. It was the people behind the counter and making sure that the supply was there. And that resulted in customers getting a faster cup of coffee. But that's a very different customer group.

That's one of the great things about doing this work, is you have to look under a lot of rocks, and you get a lot of nos, and sometimes interviewees are rude or unpleasant, you have to have a bit of a tough skin from time to time. There's a lot of, "Oh we went down this and it was a dead end, we went down this and it was a dead end, we went down this and it was a dead end." But then you'll come across this thing and you're like, "Oh, this is it, and nobody else has found this yet, and we're doing this. And everybody's hungry for it and it works." And we've made something that actually works.