Start With Customer Value or Business Value?

Category: Creating Value
Published on: April 26, 2023

Someone sent me this video posted to LinkedIn where Teresa Torres explains why you should start with business value. Here’s a transcription:

“An opportunity solution tree starts with a business need, the outcome, at the top of the tree. Next, we map out the opportunity space by exploring unmet customer needs, pain points, and desires. Some people ask, ‘Why don’t we start with customer needs?’ A product team’s job is to create value for the customer while creating value for the business. If we ignore business value, our solutions won’t be viable over time. If our products aren’t viable over time, our products will be shut down. Or worse, our company will go out of business. When that happens, we don’t create any value for our customers. So to maximize customer value, we have to start with business value.”

Oh, put on your critical thinking hats! This one’s easy.

Are we customer-centric?

We can’t say we’re customer-centric or user-focused if users and customers aren’t considered first. Customer-centricity doesn’t mean we ignore or work against business value. Claims or implications of this type are straw men.

Companies are unlikely to work on projects that don’t create enough business value. But you can start by looking at what the customer needs and then tie that to business goals. Work to balance both of them to create more win-win scenarios in your products and services.

But “our solutions won’t be viable over time if we ignore business value!”

  1. Nobody said we should ignore business value. Straw man again. You always balance customer needs and business value. The better you understand customer needs and deliver value related to those unmet needs, the more business value you will likely create. Better word-of-mouth, more loyalty, higher spending, more frequent spending… so many wonderful business positives await teams and companies who are customer-centric.
  2. It’s true that your solutions won’t be viable over time without business value because the business is unlikely to put resources or budget behind something from which it doesn’t gain revenue or achieve goals. So that makes sense.
  3. But your solutions won’t be viable nearly immediately if you aren’t focusing on the real needs and tasks of potential and current customers.

Let me say that again.

Your solutions won’t be viable nearly immediately if you aren’t focusing on the real needs and tasks of potential and current customers.

I am worried less about “the solution won’t be viable over time” if the solution is partially or wholly wrong (for our customers) now.

Customers expect quality, value, solutions, help, efficiency, speed, and satisfaction. If this is secondary at your company, customers know it. You can tell. As a customer, you can tell when a product, service, website, app, or something else was really designed for you, what you need, and how you think. You can tell when a product, service, or something else was created to improve something in the business, but you are a pawn, an afterthought, or in unethical cases, a victim.

Since most companies right now pray at the altar of speed over quality, customer-centricity, quality, and value can be your differentiation. You can stand out from other companies by being the one that took the time to conduct qualitative research with current and potential customers, deeply understand them, and craft the right solutions to the root causes and real problems. And that’ll make you wild money because people love that. 🙂

Does starting with business value maximize customer value?

This sounds like, “We will put business goals and needs first. And then we’ll do whatever we think is best or good enough for customers within the box of what we pre-decide is best for the business.”

Starting with business goals doesn’t guarantee any customer value. We might be business-centric and product-led straight into our usual cycles of building the least we can and hoping that we fool customers into thinking it’s good enough. This fantasy should be replaced by the harsh reality of the costs and negative effects of Customer Support utilization, complaints, poor ratings or reviews, and Sales having trouble selling whatever it is that we offer. But we normally hold on to the fantasy, and look for the KPIs the business wanted to see.

I have not yet seen a company put business goals first and have that translate to “maximum” customer value. I think about crappy KPIs that leaders and execs are focused on, and how projects become the creation or optimization of product to push more business value.

Starting with business value is business-centric. We can hope that we will still create some or a lot of quality and value for the customer. But it sounds secondary because it is.

If the customer needs a car, the business sees more value in building the customer a bicycle, and we build a bicycle, did we maximize customer value? Did we care about customer needs or value? Can we say #empathy and, “We really empathized with our users”?

We know how often we didn’t deliver enough or any customer value.

We might pretend everything is just fine, but we know when our teams didn’t deliver customer value.

  • We are wondering how to get our NPS higher.
  • We are wondering how to reduce Customer Support utilization about our feature or the area of the product our team owns.
  • Salespeople report that customers are threatening to leave, leaving, or downgrading because of whatever we just released, or the lack of the features and fixes customers really needed.
  • We want to start optimizing and A/B testing changes and fixes in the hopes that things look better for somebody, usually the business.
  • We miss our own KPIs or OKRs for the project, and should be accountable to someone. But PMs and teams are rarely held accountable, which is another problem.
  • The Voice of the Customer says our product is broken. Tweets, posts, reviews, and complaints say that this doesn’t work how it should.

These and more are signs that you built for the business and not for the customer. They’re also signs that you didn’t have or didn’t work from great early generative qualitative research, which would have supplied the evidence on which you would base strategies and decisions.

Product Management should be strategic, not just taking orders from the business.

The best Product Managers will know how to create business strategies, goals, and decisions around customers’ unmet needs. If the business wants a customer to click Button X more, but the customer wants to click Button X less, a great PM needs to show the business the longer arc of how catering to the customer creates short- and long-term business wins.

This is part of the product and service strategy work that we do at Delta CX. We start with great qualitative research. We learn who target audiences are, what they need, how they do things, and what we have the opportunity to improve or innovate. We then tie those to goals the business already had. Or we advise companies on new goals or changing their strategies because of the opportunity for even greater gains when we truly deliver high quality and value to our customers.

Is there a tree or map that puts the customer first?

I created my Delta CX Impact Map to be the opposite of normal impact maps, opportunity trees, and other diagrams that only or mostly represent business value. My Impact Map starts with something the customer needs, maps the root causes (which we would know based on qualitative, preferably observational research), highlights the negative impacts on the business without this solution, and some of the KPIs and positive business impacts we’ll see if we create what the customer needs. Win-win.

You can learn more about the Delta CX Impact Map in my YouTube video or in chapter 18 of my book, “Customers Know You Suck.” Article coming in the future. 🙂

Be careful of logical fallacies and other tactics used to distract and confuse you.

It can be hard to separate good and bad ideas when claims escalate quickly to, “The company will go out of business and you will lose your job.” Your natural reaction is, “OMG! I don’t want to lose my job! I’d better put business value first!”

Stop, breathe, process what you heard, and think critically about it. Be careful of straw man arguments. You can (and should) be customer-centric while identifying and growing business value. These don’t have to be opposites, and shouldn’t be played as such.

I expect people who offer customer-peripheric (anti customer-centric) advice, training, books, etc. to double down, and possibly use more of these logical fallacies and fear tactics. If they switch to being customer-centric now, that would undo everything they’ve sold you so far, which would be bad for them; you’d have many questions about those books or training you paid for. Rather than have to explain why they now recommend the opposite of their book or training, I expect these authors to double down and use logical fallacies to try to make you think you must do it their way.

Keep that critical thinking hat on, and consider what authors and trainers (including me) suggest.