Customers only purchase products and services for one reason — to achieve their desired business outcomes (results). Whether we are talking about products or services, large or small, capital or expense, doesn’t matter. As long as they are spending money, customers demand an improvement in their desired business outcomes. And the value of the increased outcomes must be greater than what they are being asked to pay. No ifs, ands, or buts!
We first became aware of this idea in the late 1960s when Harvard Business School Professor Ted Levitt wrote, “People don’t want a ¼-inch drill; they want a ¼–inch hole.” The drill is the product, and the hole is the outcome.
What Is A Desired Business Outcome?
According to Forrester, a desired business outcome is:
- An achieved end state
- verified through measurable results
- tied to a funded top-level initiative
- defined through the lens of the person accountable for the end state
- colored by the interests of related stakeholders
- reached over time through a problem-solving lifecycle
- colored by the interests of related stakeholders
- defined through the lens of the person accountable for the end state
- tied to a funded top-level initiative
- verified through measurable results
Simply put, it is a verified business result supporting a high-level initiative defined by the accountable individual after careful conversations with the other stakeholders.
For example, in conjunction with the Board of Directors and the Senior Management team, the CEO usually establishes an annual profit target. The actual profit earned is tracked by the CFO and verified quarterly by the Audit firm.
Another example is when the Head of Service sets the annual service revenue budget with the CEO, CFO, and service leadership team. The progress against the budget is measured monthly by the CFO and probably discussed at the monthly management meeting. The Service Head will then create goals for the various operating departments of the Service organization, and the department heads may treat these goals as desirable business outcomes.
This is good because taking these goals seriously is necessary if the company meets its shareholder’s expectations. This means that everyone keeps his job for another year!
Categories of Desired Business Outcomes
It is essential to recognize that there are four different categories of desired business outcomes:
Pain in the present: They are experiencing a problem and need it fixed immediately.
Pain in the future: They anticipate a problem and want to start mitigating it now.
Pleasure in the present: They seek something to fulfill an immediate need or desire.
Pleasure in the future: They want to invest now to reap the rewards later.
Remember these four categories as you become sensitive to why someone may purchase your services or products.
Helping Customers Achieve Their Customer’s Desired Business Outcomes
In most cases, when a B2B customer buys a product, they also buy some service. The service is purchased because customers know that products inevitably fail and the desired business outcome is required steadily. This purchase could fall into either the pain or pleasure in the future categories.
You may find this table helpful when considering where service fits into satisfying a customer’s desired business outcome. The table shows where many standard services offered or discussed during the sale fit into the four categories of desired business outcomes. And, if you provide services that do not fit into this table, look at the service’s sales. These services may not improve a customer’s desired business outcome and should be changed or dropped entirely.
During the sales process, discussing the range of services you offer is always okay. If your services solve a present pain or provide a future pleasure, the buyers will feel secure about purchasing and may even purchase the service along with the product.
On the other hand, if the service(s) prevent future pain or provide future pleasure, the buyers will, at a minimum, include the item(s) in a future budget. Again, they will feel secure to purchase the product because they see a path to a less stressful future with your company than with any of the short-list.
You can learn more about our Customer Centered Market Discovery methodology here.
As you start talking about this subject with your peers in sales and marketing, you will probably run into some serious resistance. Many of these people are from the old school and are still afraid of bringing up the subject of equipment failures and the like. This attitude is insulting to many buyers. Customers know that products fail, problems arise, and end-users cause issues and require re-training. They are concerned about how the potential sellers will handle the situation and how much, if anything, the buyer’s company will have to pay (an example of future pain).
Always do the right thing and objectively discuss what can and should happen after the equipment is installed and how your service team will support the equipment and users. This is a respectful way to deal with the people trying to select a supplier they can work with during the equipment’s projected lifetime.
About Middlesex Consulting
Middlesex Consulting is an experienced team of professionals with the primary goal of helping capital equipment companies create more value for their clients and stakeholders. Middlesex Consulting continues to provide superior solutions to meet the needs of its clients by focusing on our strengths in Services, Manufacturing, Customer Experience, and Engineering. If you want to learn more about how we can help your organization determine and solve your customer’s desired business outcomes, please get in touch with us or check out some of our free articles and white papers here.
This post originally appeared on Field Technologies Online on September 20, 2018