“Utrecht man sells sand to the desert state of Qatar”. Ben Agterberg was front-page news on all the news sites and in the papers. Selling sand to someone who lives in the desert?
How? The answer is dead simple.
The Utrecht entrepreneur sells special sand for the paddocks of their valuable jumping horses. You cannot use desert sand for construction either. That is why they import sand from other countries. Including from The Netherlands.
Desert regions also need good sand. They don’t have the right material themselves and experience a certain level of pain. Without this pain, Ben Agterberg would have had to come up with another stratagem to sell his sand.
Do you sell a nice-to-have or a must-have?
No pain, no sale? Many organizations tend to forget that this is what it’s all about.
What about your company? Which pain do you solve? And how do you succeed in drawing attention to this?
Ask yourself whether your product or service is a must-have or a nice-to-have? A must-have is much easier to sell than a nice-to-have. Do you think that you have a must-have? Then the next question is what would happen is your product or service was not available for a month, a week, a day or an hour.
Would your customers start to feel the pain within the hour? In that case, your products of services should sell like hotcakes. Customers should be prepared to pay a high price for your product or service.
Pain in the primary process
Take the example of a company that develops warehouse management software. Production companies can’t survive without it.
Defects can stop the production or assembly line, hundreds of people are forced to sit around waiting, the trucks line up in front of the door, and the end customers won’t receive their products in time. Ouch! The product immediately has a direct impact on the primary process.
The pain is not the same for everyone
Thinking that warehouse management software solves the same pain for all your customers and is therefore equally important would be taking things too far. What is an issue for one customer might not be an issue for another. They may have workarounds or backup systems to be less dependent on your product.
It’s all about the risk, which is expressed as risk x impact.
One of the best examples of this is my mission at the Maastricht University Hospital (which goes by the name of MUMC+ nowadays) in 2008.
The hospital decided to incorporate all of its processes in SAP. I had the final responsibility for testing the implementation of this ERP software which cost millions of euros.
I decided to start with a risk inventory because you cannot test everything. The hospital regarded sub-elements such as Finance, HR, Purchasing and Sales, which are usually part of the primary process, as tertiary processes.
SAP topics such as Patient Registration, Planning Appointments, and Clinical Stay Registration (i.e., where are you in the hospital) were of secondary importance. Most of the testing concentrated on the Hospital Information System.
If this aspect did not function as it should, this would immediately result in negative headlines. The rest could be solved with a workaround, however. In short, solving pain is not of the same order for everyone. Think about this when elaborating your proposition.
Waste as a form of pain
And yet there are plenty of successful companies that do not solve any immediate pain or that are not indispensable in the primary process. They often offer a demonstrable way of avoiding waste. Their product or service enables customers to save time (and money).
A handy basic question you should ask yourself relates to the Return on Investment. Can a company be 10, 20, 30 percent or even more efficient thanks to your product? Good! Does this advantage offset the cost and can they recoup their investment within a reasonable time? Even better. The result is a win-win.
A handy method for determining where you can eliminate waste is to look at different forms of waste. Taiichi Ohno is the father of this principle. He came up with Toyota’s LEAN production system.
He identified seven forms of waste, and an eighth was later added to the list. In LeanSixSigma they came up with an acronym for these eight forms of waste, i.e., TIMWOODS. Check where your product or service adds value and avoids one of the types of waste in TIMWOODS. It’s a great way of defining your proposition even better.
One way of arriving at a good proposition is to think about unique selling points and develop your WHY. Another smart way is to organize a PAINstorm. The four letters of this acronym stand for:
- Persona; whom is your product or service intended for? Try to establish the most comprehensive description possible, defining the branch, scope (cash or human resources) and culture. If this is a person, then think about the use of colour segments, norms, values or other properties such as sex or age. The more detailed, the better. Often you have to deal with several different personas. That is why this detail is so important.
- Activities; which activities do these persons or this company perform? Draw up a detailed description of the most important end-to-end processes or sub-processes. Determine which processes your company can or wants to influence.
- Issues; where do you identify forms of waste or pain in these activities or processes? It’s worth involving your intended target group in the PAINstorm, just like with the activities. Because they know where they feel the pain.
- Needs; which solution is feasible? This is the most important aspect of your product or service. Don’t have a solution yet for all the components? No worries. Just include the most important points in your product roadmap.
After completing the PAINstorm, you should validate the results with a larger group. Think about the next step: pitching your proposition.
A solution (almost) sells itself
Do you offer your customers a good ROI, is your product/service nestled in the primary process or primary need? Then your solution should be able to sell itself. Obviously you need to ensure that a first group of customers successfully adopts it.
Once you have your first customers, you can make smart use of them. Growth Hacking is an example that enabled companies such as Hotmail, Salesforce and SurveyMonkey to experience explosive growth.
The growth hacks of SurveyMonkey and Hotmail
Take the former as an example. SurveyMonkey solves the pain of millions of students. You can easily compile a survey with just a few simple actions, using their online solution. You can analyse the results and your study is 80% complete.
By offering the service for free, SurveyMonkey was able to reach millions of people. Every survey comes with smart growth hacks. Anyone filling out a survey cannot ignore the company’s name. And because students often wrote to companies, this soon caused a snowball effect.
Thanks to smart calls to action and the many free surveys, the company generated a turnover of 254.3 million in 2018. Because companies do have to pay for the service.
That’s also how Hotmail grew. In the early years, every email came with a signature at the bottom: ‘PS: I love you. Get your free email at Hotmail.’ The result: Microsoft created a new channel to pitch its products and services. Hotmail grew to 12 million accounts in just 18 months’ time. Smart!
Back to the drawing board
Are you unable to acquire customers despite a good ROI or position in the primary process? Then return to the drawing board and take a look at my tips. Apparently you’re not going about it the right way. But don’t give up just yet.
If you have a nice solution to the pain that a specific target group experiences, you will substantially increase your business value.
Remember the story of George Bell! In 1999, when he was the CEO of a search engine called Excite, he was offered Google for 1 million USD. The Google founders wanted to focus on their studies, and hoped to walk away with a nice profit. But Bell wasn’t interested.
When the Google founders dropped their asking price to USD 750,000 Bell’s partners blocked the deal. The founders of Google must tell themselves at least once a day how lucky they were that this was such a setback. No pain, no sale, but in this case, something positive came of it!