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By Michael John Patterson – Chief Strategist at BETTROI
Success in business comes from making products and services that customers really connect with. This blog delves into the innovative backward approach, a strategy that starts with understanding and captivating your target audience from the very beginning. By prioritizing customer-defined quality and leveraging strategic principles like the 80/20 rule, businesses can not only meet but exceed customer expectations, ensuring sustained growth and success.
Creating a product or service that resonates with customers is crucial for business success. Traditional methods often follow a forward approach, where businesses develop a product and then craft advertisements to sell it. However, a more effective strategy is the backward approach. This method starts with the end in mind, focusing on what would make the product or service compelling to the target audience from the very beginning.
Understanding the Backward Approach
The backward approach begins by crafting an advertisement for your product or service before it even exists. This ad should be designed to captivate your ideal customer, compelling them to choose your product over competitors. To do this, you must deeply understand your customer avatar – their age, background, education, income, and position.
Harvey McKay, an envelope company owner and author of “How to Swim with the Sharks Without Being Eaten Alive,” developed the McKay 66, a list of 66 things he knows about his customers within 12 months of starting a business with them. This detailed understanding is key to creating an advertisement that stands out.
Crafting a Compelling Advertisement
Your advertisement should answer the question: What would grab your customer’s attention and put you ahead of competitors? This concept is known as preemptiveness or creating a “blue ocean” strategy. It involves thinking like a customer, not an engineer or product manager. Customers care about the results they will get from using your product or service, not its features.
Step-by-Step Guide
Case Study: Henry Ford and the Model T
Henry Ford is a prime example of the backward approach. In the early 1900s, car manufacturers were small shops producing expensive automobiles. Ford envisioned a car that could transform society and set a target price of $849, much lower than the $2,500 standard. He then designed the Model T and revolutionized production with the assembly line, borrowed from the meat processing industry, to meet this price point profitably. Moreover, Ford paid his employees well, ensuring they could afford the cars they built, promoting both employee satisfaction and sales.
The Unattainable Triangle
In product development, there is a concept known as the unattainable triangle: you can have it fast, cheap, or good – but not all three. This principle applies to marketing and advertising as well. Businesses that promise the best price, fastest delivery, and highest quality simultaneously are often not credible. Instead, offering two out of three and being transparent about the compromise is more honest and credible.
Practical Considerations
Motivating Employees
Motivation is internal and driven by personal goals. Show trust in your employees by giving them responsibility, which nurtures performance. Clear communication about project goals, responsibilities, and progress is vital for maintaining team motivation and focus.
Understanding Quality
Quality is defined by your customers, not by you. It is their perception of your product or service that determines your reputation and, ultimately, your success. Your business can achieve up to 90% of its success based on the quality your customers perceive. Each time a customer uses your product or service, they should be compelled to say, “This is absolutely wonderful.” This feedback is a true measure of quality.
Quality Rating
Quality rating is about how often your product or service delivers on its promises. The goal is a 100% success rate – every time you sell a product or service, it should perform exactly as advertised. Customers are not interested in features; they care about benefits. They want to know how your product will improve their lives, not what it is.
Avoiding Commoditization
If your product does not stand out, it becomes a commodity, like sugar or rice, where price is the only differentiator. The challenge is to ensure your product offers unique value, making price less of an issue. Understand what your customers consider valuable – do they want to be happier, wealthier, or more at ease? If you can provide that, they will be willing to pay for it.
The 80/20 Rule
Vilfredo Pareto’s principle states that 20% of your products will generate 80% of your sales. Similarly, 20% of your customers will account for 80% of your profits, while also causing 80% of your headaches. Identify these top customers and products, and focus on them to maximize profits and efficiency.
Customer Feedback and Quality
Collect and document the best compliments from your satisfied customers. Use these testimonials to promote your products. Understanding what your customers love about your products can help you improve and maintain high standards.
Superior Products and Services
Determine what makes your products or services superior. This could be ease of use, faster results, or better pricing. Assess where you excel and focus on enhancing those areas. A quality rating helps you compare your business with competitors and identify areas for improvement.
Core Competencies
Identify your core competencies – the skills and knowledge that allow you to produce excellent products and services. Consider future trends and start training your team now to meet upcoming demands.
Abandoning Ineffective Products
Evaluate which products or services are underperforming. If you cannot achieve excellence in a particular area, consider discontinuing it. Regularly update and upgrade 20% of your products each year to stay ahead.
Triggering Positive Customer Responses
Think of three things you can do today to make customers say, “This is a great product.” Implement changes that will have the most significant impact, not just the easiest ones. Set clear goals for these changes and measure their success.
Striving for Excellence
The market rewards businesses that offer superior products and services. Your goal should be to provide the best quality possible. As exemplified by the Ritz Carlton’s motto, “Ladies and gentlemen serving ladies and gentlemen,” aiming for excellence in every aspect of your business are crucial.
Setting Goals
Set goals to be the best in your industry. Without specific targets, you risk being average or mediocre. This applies to all areas of life – from professional endeavors to personal relationships. Aim high to achieve greatness.
By focusing on customer-defined quality, leveraging the 80/20 rule, and continuously improving your products and services, you can ensure your business stands out and thrives in a competitive market.
Creating customer-centric products through the backward approach ensures your offerings resonate deeply with your target audience. Quality, as defined by your customers, is the key to sustained business success. By leveraging the 80/20 rule, regularly updating your products, and continuously striving for excellence, your business can thrive and stand out in a competitive market. Aim high, focus on what truly matters to your customers, and success will follow.
About the Author:
Michael John Patterson – Chief Strategist at BETTROI
To market a product effectively, begin by understanding your target customer deeply, using tools like the McKay 66. Create an advertisement that focuses on the benefits and results the customer will achieve, not just the features of the product. Use customer feedback and testimonials to highlight the unique value your product offers, and ensure it consistently delivers on its promises. By adopting a customer-centric approach and emphasizing quality, you can stand out in a competitive market.
Product management can work effectively with sales by maintaining clear and continuous communication to align product goals, features, and customer feedback. Involve sales early in the product development process to gather insights and ensure the product meets market demands. Provide sales with thorough training and resources to understand the product’s benefits and how it addresses customer pain points. Regularly update sales teams on product changes and enhancements, and collaborate on strategies to highlight the product’s unique value proposition
Product managers engage with customers by actively seeking their feedback through surveys, interviews, and focus groups to understand their needs and preferences. They monitor customer interactions and reviews to gain insights into user experiences and pain points. Regularly attending industry events, trade shows, and customer meetings also helps product managers build relationships and gather direct input. Additionally, they use analytics tools to track customer behavior and satisfaction, ensuring that product developments align with customer expectations and market demands.
Product Manager can be more strategic by focusing on long-term goals and aligning product initiatives with the company’s overall vision and market trends. They should conduct thorough market research and competitive analysis to identify opportunities and threats. Prioritizing features that offer the highest value to customers and the business, setting clear objectives and key results (OKRs), and leveraging data-driven decision-making are essential. Building strong cross-functional relationships to ensure cohesive execution and staying agile to adapt to changing market conditions further enhance strategic impact.
