Let’s unpack the basics in post Starting a business – The Basics and learn the foundational concepts to starting a business.

Basic 1: You need a complete solution to a potential Customer’s job to be done or problem to be solved.

Identifying the problem to be solved, also known as, the job to be done is critical. For example, in research performed by Clayton Christensen, why do people buy milkshakes at different times of the day? What is the “job” that the respective customers are “hiring” a milkshake to do?

It turns out that the customers for milkshakes early in the morning were commuters with a long drive to work with one hand free. They also knew that if they didn’t eat something now, they would get hungry by 10am, and wanted something that would make them feel full until lunchtime. So the job to be done was, obtain a food item that could be held with one hand, was not messy to consume (e.g., a pie), was thick and lasted the length of the journey (entertainment), and held their hunger at bay until lunchtime.

Is the milkshake that is sold to caregivers’ children after school finishes performing the same job? The answer is no. In this case, the caregivers were looking to provide a treat and brief period of entertainment to their children, while not upsetting their appetites for dinner. To perform this job, the milkshakes are thinner and come in smaller cups.

This means that we need to tailor our products, services, and experiences to the specific needs of each respective customer segment; putting large lumps of fruit in the early morning milkshakes would likely block the straws whereas thick milkshakes for the afterschool crowd would take too long to consume and frustrate already busy caregivers while their children struggle to finish their drinks in a short time.

See Product in the Product (or Service), Place, Price, and Promotion in the 4Ps marketing model.

Basic 2: You need customers in sufficient numbers, who recognise that they have a job to be done, who agree that your solution is the best alternative,  and who are prepared to overcome their inertia against change (doing nothing is their prerogative and a valid alternative).

Ok, so let’s assume you have a complete solution for a job to be done.

How many customers do you need to break even, and how many do you need to make your target profit? Are there that many potential customers available on a regular basis? Are you sure? How do you know? If you need 100 customers a day and you are unlikely to even get 80 on a regular basis, then there are several potential challenges:

  1. You have identified a valid job to be done and have a valuable solution, but regardless of how wide you cast your marketing net, there still won’t be enough customers.
  2. There are plenty of customers, but not concentrated in the geographic area you have chosen. See Place in the Product (or Service), Place, Price, and Promotion in the 4Ps marketing model.
  3. Or maybe the number of potential customers is about right, but they don’t know that you exist. In that case, they may as well not exist either. See Promotion in the Product (or Service), Place, Price, and Promotion in the 4Ps marketing model.

It’s fine to have a solution for a job to be done, but what if no one, or not enough people, agree that they have a job to be done. Maybe whatever they do has become invisible to them, it’s “just what you do when doing that.”

When washing dishes by hand for example, some people may have gotten used to the detergent becoming quite ineffective towards the end of the pile, and the items harder to get and stay clean. It’s just what happens. Just get over it. There is no job to be done. If however, the dishes and cutlery are pre-rinsed (the solution), then the detergent lasts at least till then end of the pile and the dishes and cutlery are easier to get clean, keep clean, and remain streak free.

After recognising that they have a job to be done, prospective customers also need to be dissatisfied with their status quo and recognise that there are alternative solutions available. Having identified these alternative solutions, these prospects then need to discover and believe that your solution is the best alternative to doing nothing about it (inertia, lethargy, apathy etc.) or buying a competitor’s solution.

Basic 3: You need customers who are prepared to pay the price that you need to both ensure your business’s success and to achieve your goals.

You need to put a price on the solution that you are providing. The price needs to at least cover all the costs of providing the solution, this is the break-even value, but you also need to ask for more to create profit. Profit is important for reinvestment, research and development, as a reward for all the hard work, and to make the business attractive for eventual sale.

Assuming you’re not greedy and are not asking a ridiculous price, it’s possible that the price for your solution is too high for the market to accept. This means that the price, the value that you have put on the solution is higher than the value that customers have put on the job to be done. There needs to be an incentive for customers to buy your solution. For example, maybe customers are prepared to pay $10 for a solution. If your solution is priced at $10 or less, then maybe customers will buy.

See Price in the Product (or Service), Place, Price, and Promotion in the 4Ps marketing model.

Basic 4: You need customers who are so pleased with your solutions, that is, the bundle of products, services, and inevitable experiences, that they are prepared to advocate on your behalf, to in effect, sell your solution for you – satisfied customers are not loyal or sufficient, you need advocates.

It wasn’t that long ago that I often heard statements about satisfying one’s customers. It certainly made sense, especially as compared to aggravating them. But research has shown that satisfying your customers is not nearly enough, any vendor can do that.

One might think that the degree to which you should satisfy customers depends on the solution that you are providing, and that it may not apply to a mainly transactional solution such as providing fuel and food at a highway rest area, where most customers will never visit again. This may have been the case before the advent of social media, but now with social media such as Tripadvisor and Facebook, almost every vendor is or at least can be judged and reported on. The result can be like a magnet; if the reviews are great, the vendor can experience an attractive force with the reviews building his business in a cascade effect. If on the other hand the reviews are neutral or bad, the vendor will create a repulsive (perhaps literally) force and business will suffer, perhaps terminally.

To create loyal customers, you not only need to provide products and services that meet or exceed your customer’s expectations, but you need to create a customer experience that is consistent, intentional, differentiated, and valuable; please see Customer Experience in the Glossary.