Do you really understand your customer?
Loading ...The 2nd day of the Product Conclave started with CEOs Breakfast Meeting at 7:45 AM in the Boardroom at Grand Ashok Hotel. The meeting was led by Sanjay Anandram of Jumpstartup and was attended by 12 CEOs (invited by NASSCOM) of some of India’s young and leading Software Product companies.
In a highly interactive and intriguing format, Sanjay empowered the entrepreneurs so that they could acquire their customers faster and serve them better. The central point of the discussion was ‘understanding the customer’, which according to Sanjay is the most important (and least understood) parameter behind the success of any business and Software Product business is not an exception. Rather, the risk of the initial investments in the product development is even higher compared to the minimal initial investment demanded by a typical services business.
While stressing on the importance of ‘understanding the customer’, Sanjay raised the following questions to the CEOs:
- Who is your target customer? More important, who is NOT your target customer?
- Which market segment does your business serve? Is it an SMB or a large organization? What are the most amenable verticals?
- Who is the decision maker? Is he the CEO, CFO or a Product Manager or someone else?
- What is your value proposition?
- What is your business model? Most of the people are confused between the pricing model (which is one of the elements) and the business model.
He mentioned the importance of ability to communicate the value proposition in 30 seconds. Everyone also acknowledged that ‘reducing the price to win the customer – without really talking about the value of the product in discussion’ is a big mistake and made very often.
While discussing on the ‘Go to market’ strategy, he discussed in depth the importance of knowing ‘how your product is contributing to your customer?” – unless you can qualify the benefits in either ‘decreasing the cost’ or ‘improving the profits’, your chances of winning the customer will be very low. ‘SaaS is a great platform and our product is on SaaS model’ for example doesn’t communicate any value to the customer.
There was also a discussion on the opportunity of capitalizing on the partnerships for customer acquisition. He gave the example of SAP – it took them over 20 years to build the first 100m US$ and then using partnership route, SAP made 3b US$ in only few years.
CEOs openly and happily shared their experiences and learnt from each other’s successes and failures. In the end, everyone thanked Sanjay and left the meeting with much higher confidence (and with smiles on their faces) in their ability to take their business to the next level. The success of the meeting validated that Sanjay really understands ‘knowing the customer (in this case – the CEOs who participated), the central theme of the whole discussion.
Some of the key take-aways from the session were:
- Segmentation – Customers
- Understanding customers business
- Networking across
- Ability to articulate your story in 30 seconds
- Value to customer’s business
- CEO is the Best Salesman
- Making a partner sucessful
- Working with Partners
- Articulate the relevant segment.
For today, we have the Keynote session by Mr. Karnik which would start in the next 15 minutes.
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Hi Saba, I got a response from Sanjay Anandram from Jumpstartup who led the workshop.
>>1. The real question to ask is whether partnerships are the right channel for delivering your product to the customer. Choice of channel is a function of the kind of product, customer access, and support requirements.
Choosing a channel to deliver the solution requires some initial customer traction as well. Startups should consider partnerships after thinking through the issues of customer access, support, and economics.
>>2. Why should you be worried about the professional services offered by them? If your core expertise lies in developing a platform, partners can offer the professional services. If you also offer professional services, will you be competing against your partners?
>>3. It is a function of one’s ability to manage partners and the vision of the company. Partners too need to make money and see value in the partnership.
Very interesting discussion. In fact, I have a couple of questions that come to my mind after having read through this post.
1. The partnership route that is spoken about, is it valid for even startups as opposed to the giants. The reason why I am asking this question is this, assume I am a one-product startup with a clearly defined vision for my market, would I be able articulate the values to my customers better or would my partner be able to articulate the values better.
2. Is it worth the time that I spend in enlisting the partners and training them on my product and still be worried about the professional services offerred by them. This again is from the point of view of start-ups.
These have remained big challenges with companies that went the partnership route and to this day, we have been hearing companies stating that they are moving back their product promotions and professional services to their internal team from the partner model.
In fact, sometime back I wrote a post on Customer Insights – Prisoners of what we know and what we believe!. This can be accessed by clicking on the link provided. http://sdaas.wordpress.com/2008/01/13/customer-insights-prisoners-of-what-we-know-and-what-we-believe/