Have you ever been surprised to learn that all of your customer discovery and validation has resulted in, no sale? I have, on too many occasions, and it still drives me nuts as I try to discern whether my own biases clouded my understanding of the customer input I was getting, or if I was overlooking something else.
I’ve been in a few discussions recently about the step from customer validation to customer development. (These concepts refer to Steve Blank’s Four Steps to Epiphany model where validation confirms that a customer wants the solution you have developed, best demonstrated by purchasing an MVP, and development tests scaling the customer engagement.) In these discussions I’ve related some of the training I received many years ago in the mining industry, selling proprietary innovations that were premium priced and required substantial conversion effort and cost by a customer. In the mining industry we were selling products that saved the customer money and we could prove it, if the customer would try it and collect the data to show it. Our challenge then and what I’ve faced recently is the fact that getting a customer to try something new is difficult, and actually adopting and using your solution is almost impossible, even if you give it away.
Why is that?
I’ve learned over time that the challenge in selling innovative new solutions is not in the value of the solution, its in the customer’s decision to stop using or doing something else. I find it helpful to start from the perspective that each of us already has 100% of our resources including time, energy and money, fully utilized. Doing anything new means giving up something, and there may be competing options for what we give up and the benefits we need or want. The “customer conversion” process or step requires careful discernment to know when and why a customer will be motivated to change.
A recent opportunity to sell a new system seemed too easy. The customer recognized a problem in their system’s performance and after solving the problems, we could also show a savings of almost $1000/week and a return on their investment of less than four weeks. But, no sale! Then I offered to give them the system with activation of a modest subscription with the same savings, still, no sale. Why? Two aspects of the situation finally surfaced. One was that the customer was just tired of spending money on the system and was busy with other projects. That is, they didn’t have the time or energy for a project that would solve the known problems or save them money. For them, it was easier to say no and not be bothered any more since their current system was working and the costs and problems were known and expected. Then I learned that there were intermediate parties that were benefiting from the current arrangement in terms of supplying the more expensive current system. This is a hard lesson I keep needing to learn – that a savings to the end user may mean a loss of revenue to the intermediate dealers and support contractors that are essential to a customer relationship. In the end, no sale. Why? The conversion cost was too high for the customer and the intermediate distribution channel partners.
The illustration above highlights two concepts. One is the geometric increase in difficulty between getting a customer’s support for your new idea, and eventual adoption. The second is that it is not sufficient to complete discovery and validation without thoroughly testing and understanding what a customer will have to give up (time, energy, money) to convert to using your new solution, and will they? What is your customers conversion cost to adopt using your new innovation and do your “valued added sales” approaches support the complete customer cost of conversation? More in a future post on value added sales and conversion techniques.