What Do Customers Buy?
By Matt Edison
Customers buy satisfaction, not product. This subtle difference, missed by most companies, can be a source of innovation and competitive advantage. Products are only the means by which a customer attains a desired satisfaction. Determining what satisfactions are delivered can help in the pursuit of profitable product innovations. Focusing on delivering satisfaction can bring to light internal operations in need of improvement and innovation.
The wrinkle-free shirt is a familiar example that demonstrates the concept of delivering a satisfaction. The first iron, a slab of cast iron with a handle, was a simple invention that enabled presentable clothing after home laundering, the customer's desired satisfaction. Iron manufacturers focused on and were successful at improving the features and performance of their products. Improvements included changing the heat source from a wood stove to electricity, adding built-in steam capability, and applying non-stick coatings to the soleplate.
In time, however, a chemical innovation enabled clothing manufacturers to build into the shirt the satisfaction of presentable clothing after home laundering. Not one iron manufacturer saw this innovation coming and thus none sell this wrinkle-free chemistry to clothing manufacturers. Although the statistics are hard to come by, it seems probable that sales and profits of wrinkle-free chemistry dwarf those derived from the sale of irons. Iron manufacturers missed out on this opportunity by focusing on improving ironing technology and not on alternate ways to deliver the satisfaction customers were actually buying.
Focusing on delivering satisfaction can also yield significant innovations that are easier to identify and implement than finding a non-iron solution for a wrinkle-free shirt. A small specialty chemical manufacturer enjoyed worldwide recognition for their niche chemical knowledge. A seemingly endless supply of customers engaged the company to develop chemicals to solve their problems. However, customers would routinely suffer fulfillment failures and product support failures as orders were lost or late and non-chemistry requests would go unanswered. Fulfillment, while recognized as critical for sales, was not chemistry and thus relegated to neglect save the routine emergency caused by the neglect.
Through a near crisis, the chemical company came to realize that it should be in the business of enabling customer technologies not simply solving chemistry problems. Customers wanted to buy the satisfaction of developing and launching their new products quickly and painlessly. These launches required all manner of activities be done competently by the chemical manufacturer, like shipping on time, generating needed documentation, and communicating problems in a timely manner. Nearly every business execution system -- from customer service to fulfillment to production scheduling to new product introduction -- was overhauled to better deliver the desired satisfaction. Sales tripled and net income increased nearly eight times as a result of focusing on delivering satisfaction and not focusing solely on solving chemistry problems.
A focus on delivering satisfaction can help drive successful product innovation and help make the existing business effective. Delivering satisfaction requires managers and employees to shift focus from inside the company to outside the company. Against an external yardstick like delivering satisfaction, every activity inside the company can be more easily seen as either contributing to or getting in the way of delivering that satisfaction to the customer. And it is only outside the walls of the company where a customer converts the manufacturer's efforts into satisfaction and creates the desire to pay their invoices. Focusing on delivering satisfaction can enable the right innovation and enable a company to better survive today and in the future.
Matt Edison works as the Reactive Silicones Business Manager for Gelest, a specialty chemical manufacturer. Since 1989, Matt has also worked for DuPont, General Chemical, and Inolex Chemical where his jobs included Plant Manager and Engineering Manager, among others. In his current role, Matt leads business development projects, manages the company's silicone technology group, and improves the company's business systems. These duties combine his special interest in aligning resources to realize customer opportunities. Matt lives in Woodbury, New Jersey with his wife Ellen and their four children. He can be reached at firstname.lastname@example.org.
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