/ INTEGRATION

Obsess Over One Customer at a Time

Identifying your core customer is counterintuitively difficult. You would think that knowing your customer would be easy. You’re an expert, after all. But companies that get this wrong won’t make it very far.

At Convictional, we’ve spent a considerable amount of time thinking about our customer and the barriers they face to growing their businesses. This is what we’ve learned so far about why you should find and obsess over just one customer.

Convictional’s one customer

Wholesalers are Convictional’s customers — not retailers or consumers. Wholesalers.   That’s why we obsess over the wholesaler’s experience. At a fundamental level, they exist to sell their products to other businesses, typically retailers who source products from them.

Right now, the online wholesale industry is fragmented. If you want to do business with a retailer, where do you begin? Despite the complexity, trillions of dollars will flow between wholesalers and retailers over the next few years. The size of the market doesn’t change the number of headaches involved just to integrate two systems (between the wholesaler and their retailer) together.

In a world where fax machines, CSVs, and million dollar systems integration projects are the norm, wholesale today is a lot like accepting payment pre-Stripe. It’s broken today, but that won’t be the case forever. If we thought of retailers and consumers as our customers, we’d isolate the people who need our platform the most. Then, we’d deliver a solution that doesn’t help our real customer.

Why to pick one customer

Your business could also serve a multitude of stakeholders. But it probably shouldn’t.

Instead, just pick one customer and serve them with laser focus precision. Make decisions and build products with them in mind and don’t waver. If you try and make everyone happy, you’ll make none of them happy. Determining your customer can be tough initially — especially if you think you could sell your product to a variety of people in unique functions across a multitude of industries. The confusion compounds when you try to combine low-touch sales and high-touch sales processes because you haven’t narrowed down who your customer is and how they preferred to be reached. Pick one customer and align your product, strategy, pricing, and go-to-market with them.

Do this, even if it hurts.

We apply this rigorous process to our customer — the supplier.

Jobs to be done theory

Throw out focus groups and personas. They are just made up.

How do we make product decisions with the customer’s true need in mind? It helps to start with the first principles of what job your customer (for us, that’s the wholesaler) needs to do.

Wholesalers want to keep existing customers happy (a second order consequence) and get more retailers without friction (a third order consequence). How can they achieve both of these? The wholesaler gets paid only when they receive orders from their retail trading partners.

So we need to get wholesalers their orders so they can get paid.

Clayton Christensen, the Harvard Business School Professor that invented disruption theory and jobs-to-be-done theory, states, “When we buy a product, we essentially ‘hire’ it to help us do a job. If it does the job well, the next time we’re confronted with the same job, we tend to hire that product again. And if it does a crummy job, we ‘fire’ it and look for an alternative.” [1] Here’s a simple way to frame it:

Jobs to be done = what YOUR customer needs to do

Every customer is striving to accomplish something. If you build something they want, they will hire your product to accomplish what they need to get done.

The article I just referenced contains five questions to help any business identify what a customer’s job to be done is. There are a few interesting questions, such as “What workarounds have customers invented for themselves?” and “What tasks do people want to avoid?”.

Those questions offer entrepreneurs and executives great starting points.

Zooming in on the supplier

For Convictional at a platform level, this ultimately means creating a frictionless integration experience, without undue pressure on wholesalers or their retailers. If wholesalers can do that, they will win long-term. That’s the goal.

We’ve learned that many wholesalers sell directly to consumers, in addition to other businesses. It’s no different than AliExpress. As a consumer, you could easily purchase a single SKU of a cheap Chinese-made product. Businesses also buy and resell products from AliExpress. Wholesalers are becoming more like AliExpress, offering products to both consumers and businesses in effort to service both buyers. And if you’re not AliExpress, you are probably using a platform like Shopify to run your business. So to us, integration means getting all of these systems to communicate with one another.   So why not build a marketplace like AliExpress?

Many people ask us about this because consumers are trained to get the best prices via Amazon. Amazon is so successful - why not copy them? We believe that marketplaces are at odds with what’s best for the wholesaler. Marketplaces incite price decreases through competition. They give retailers and consumers optionality of the wholesaler’s expense. Most wholesale happens directly with the buyer and seller, not in a marketplace. Wholesalers should control the customer relationship, terms, and the products they offer. If we weren’t obsessing over the wholesaler’s experience, we could build a marketplace. The retailer would be happy, but the wholesaler wouldn’t.

Make integration dead-simple and let wholesalers own the customer relationship. For our customers, that’s the key to their success and why they choose us.

Pick one customer and get their job done

Companies should relentlessly define their customer (pick just one), obsess over them, and constantly communicate their job to be done to teams that serve customers. In the end, you’ll be able to triple down on the customer and make better product strategy decisions, even when those decisions are against conventional wisdom.

Want to talk about B2B commerce, dropshipping, or enterprise software? Reach out to me directly at chris@convictional.com.

[1] source