When companies develop a product or service do they really know how they match up against competition and how close their offer is to what customers actually want? In many cases they don’t. They build products and services that are based on what they think is required and any analysis is usually based on a feature comparison. That is not rigorous enough to create successful solutions; we need to do more.

Define the Outcomes

First of all we should develop a reliable basis for comparison that is based on value not just features. Features are a misleading way to evaluate the usefulness of a product or service as they may or may not relate to customer value. If we do not know the value of a feature it’s just a tick box exercise of “look at the features we have!”. What we really need to understand is the outcomes are we trying to achieve. Outcomes are more than simple functionality; they need to also consider the emotional and social responses that will motivate the customer to buy. The starting point then is for the company to define the emotional, social and functional elements for the outcomes they want to deliver

For example, a company that manufactures high performance sports cars. These companies are not building cars to get from A to B, any car can do that, they are trying to say something, to make a statement. Let’s break that down, what is it they think the customer is looking for? Well, emotionally it might be the thrill or adrenalin rush of driving a very fast car. Socially, what do they want others to know: look at me, I’m pretty cool, I’m financially successful. So when it comes to the functional elements: their car better be fast, it better look cool and it better cost a lot of money. That’s their high level specification but notice we haven’t said how to make it fast, that’s a feature, we just said it needs to be fast.

Problem/Solution fit

Now we have defined the outcomes we want to deliver in this way we have a reliable basis for comparison. The next step then is to put ourselves in the shoes of the customer and define the same things again only this time from their perspective. If I were buying a high performance sports car what would I look for? Now we can compare what we planned to deliver with what we think they want to see if they match. This we call Problem/Solution fit.

Once we have a fit we need to test it against actual customers. Do they agree with our emotional, social and functional assumptions about them? If we discover they don’t we’ll need to update the customer outcomes based on their feedback. If we still have a reasonable fit after this then we’re good to go otherwise, we have identified the wrong customer. The aim here is to find customers that want what we’ve got; there’s no point trying to sell to a customer that doesn’t want what we have.

We can also use the same exercise for our competitors to define their customer outcomes. A comparison of which with our solution will reveal our competitive advantage. Using this process surfaces real advantage rather than a list of features that customers find difficult to assess one against another.

Defining a product or service in this way helps companies to motivate customers to buy by focusing on outcomes that create value, solve real problems and have compelling competitive advantage.