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While studies such as CB Insight's report on the top 13 reasons startups fail indicate that cash flow, no market need and internal dissent amongst founders are what leads to corporate closure, I argue that customer apathy is actually the root cause; those are simply the symptoms. Apathy is defined as a "lack of responsiveness to something that might normally excite interest or emotion."
In a fickle world stymied by a melee of advertising from deep-pocketed corporations and a plethora of products auditioning for our limited and desensitized attention span, it's more than differentiation (that our business schools used to implore us to follow) that will unlock customers' wallets. We need to be firing on all cylinders in order to build what our customers are begging for quietly and focus our attention solely on them more than our competition does.
Related: 5 Ways to Dominate Your Competition
Customer proximity is a competitive advantage
Attentive, unbiased listening, feedback-driven product development and empathetic relationship-building are paramount in a transactionally driven, utilitarian and apathetic world.
The crux of this design-thinking approach can credit its notoriety to the leading design and innovation firm, Ideo (Palo Alto, Calif.). Tim Brown, Executive Chair of Ideo, offers a simplified definition for us, "Design thinking is a human-centered approach to innovation that draws from the designer's toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success."
A key piece of the design-thinking model includes empathy — which, by definition, requires the designer (entrepreneur) to get as close to the user as possible to fully understand (empathize) their problems, identify their shared goals and design viable solutions that hit the mark (all within the limits of the business' predefined constraints).
Ideo's design-thinking framework unpacks the technique further, "Thinking like a designer can transform the way organizations develop products, services, processes, and strategy. This approach, which is known as design thinking, brings together what is desirable from a human point of view with what is technologically feasible and economically viable. It also allows people who aren't trained as designers to use creative tools to address a vast range of challenges."
Related: How Design Thinking Can Help You Ask the Right Questions (And Get the Right Answers)
Knowing your customer's fears, goals and challenges helps you design experiences that delight and spark joy
The small restaurant owner that spends considerable time sitting down with clients to revise the menu and optimize for specific personas (groups of customers that hold shared beliefs — e.g., vegan, plant-based options, Kosher items, etc.) makes a lasting impression that builds transactional empathy which counters de facto market apathy. The coffee shop owner that launches a valued customer punch card that rewards patrons with a free cup of coffee every ten cups instills reciprocal goodwill that spurs future repeat business. The ecommerce shop that overnights that gift just in time for the party and waves the fee gets an A+ in the shopper's mind and fills up their hearts with lasting, intangible goodwill.
Related: 3 Super Simple Ways to Understand What Your Customer Wants
Design thinking uncovers which emotions founders must build products and services around
Great products and services connect on a deep, emotional level with their users. By focusing on your customer more than your competition does, you can win faster and far easier — and spend less time staring at your competition. This may sound trite, but I have seen it over and over in my consulting with small business owners and founders, whereby they spend the first few months focusing on understanding the market needs and then (post-launch) pivot completely away from a user-driven (design thinking) model and later shift into a market-driven model where they focus on beating the competition. This often leads to service mimicry, discounting (which erodes gross margins) and eventually downsizing or dissolution.
While understanding where your competition is currently playing on a market matrix is helpful, it's actually quite distracting for most entrepreneurs and pulls them further away from serving their customer base. In my opinion, the primary goal isn't to beat the competition on market share — it's to win customer loyalty, and you can only do that by paying more attention to them than your competition is willing to do. Market share is a byproduct of winning hearts and minds first.
For the next 30 days, instead of worrying about what your competition is up to, try focusing intently on your own market leveraging a design thinking approach. Innovation, customer service and customer retention get supremely easier once you begin to listen more and design from your customer's point of view.
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