Assumptions are Presumptuous

Contributed by Hannah Beasley

We tend to make assumptions. Far too many assumptions.

Most of us make assumptions based on things we have known to be true in the past. For example, almost every business assumes that the things they have done to be successful in the past are the keys to future success. This assumption is based on experience and what you know to be true, or at least what was true in the past, yet it’s still a dangerous assumption. It assumes that markets today will be receptive to your same offer. It assumes that today’s competitive landscape won’t be vastly different than yesterday’s. It assumes that customers still want your product or offering.

And this is all with something that most of us would consider to be a safe assumption – do more of what works, and you’ll have more success.

It’s easy to see the dangers in making decisions based upon these types of assumptions. Let’s take a look at two key areas where we have the potential to make the greatest mistakes based on assumptions.

Assumption #1: Customers choose you based on a logical decision-making process.

If you are selling anything, it’s easy, (and fair), to make the assumption that you are selling something that people are willing to pay for. There is nothing wrong with assuming this most basic ideal, because if you have sold anything in the last month, it’s likely still true. The issue arises when we extrapolate this basic assumption to include our idealistic hopes about exactly why someone would want to spend money on our product/offering.

We make assumptions far too often regarding customers’ motives for buying our products. We assume that a sell or decision is based completely on principles of logic. We think that customers consciously weigh the costs and the benefits of our product to make their decisions, when in reality; no decisions are so black and white.

In Gerald Zaltman’s book How Customers Think, he proposes that very little in the consumer decision-making process has to do with logic. He references research studies showing that consumers cannot even accurately describe their own decision making processes, and he points out that consumer choices based on a logical evaluation of attributes are “the exception rather than the rule.” In any decision making process, both reason and emotion are always involved. We are foolish when we ignore the emotional aspect of buying and selling. In order to be effective then, we must acknowledge that no more than 5% of consumer thinking occurs in “high-order consciousness.” Then, we must act on this knowledge, and sell our culture, or our worldview as something that others can connect with on a deeper level.

A great example of this emotional selling can be found in the empire that is Harley Davidson. It might look like they’re selling motorcycles, but in reality, Harley Davidson is selling a lifestyle. Their website boasts a banner stating “This is your time. It’s your life – don’t just go along for the ride.” They are selling you the pursuit of leisure and luxury, feelings of liberation, and the joys of youthful adventure. So many consumers want to buy into this lifestyle that just the licensing of the Harley-Davidson brand and logo brought in $40 million in net revenue last year.

Assumption #2: Your customers know their needs and understand them fully.

It would seem logical that your customers or potential customers know their needs when they walk into a meeting. Sure, sometimes this is the case, but we make this assumption too frequently. More often than not your customers cannot fully articulate their needs; what they do understand are their problems. They know what battles they fight on a daily basis. They know which hurdles they must overcome weekly. And they have a clear picture of the obstacles blocking their efficiency. This does not mean that they know the best way to overcome or solve their problems. This is where we come in.

In problem solving, a fresh perspective is priceless. A third party can see beyond the problems and begin to accurately assess the need. Even if our customers think they have a clear picture of a solution, we try to have them  describe their needs at length before we begin a project. By doing this, we can accurately  evaluate the situation and propose solutions that our customers may not even have known were possible.

Problems live on the surface, but needs often live beyond the façade. It is crucial that you work harder to understand your customers’ needs better than they can articulate them on their own. I was recently involved in a web-based software build in which we solve for an immediate problem, yet we failed to address the underlying need because the client did not fully understand the true need. By asking intuitive questions and involving stakeholders with unique perspectives in the needs assessment, we can consistently strive for a deeper understanding of needs up front. This improves efficiency and effectiveness, and ultimately saves everyone time and money.

Moral of the story: avoid making assumptions.

Make clear, concise decisions based on what you know.

Advertisements

The Advantage of Being David

Contributed by Terry Gill

Picture the last major purchasing decision you made.  When it came down to the final vendors, what were the best predictors of those company’s reliability or capability?

Experience.  Reputation.  Years in operation.  Size.

What about size?  Does size matter?

To some degree, yes, size matters.  In some cases size is a legitimate consideration.  For example, imagine you are National Geographic Magazine.  If you’re trying to identify the ideal vendor to produce and distribute your publication – size matters.

On the other hand if you’re looking for a company to help you develop a software application, I believe size carries far less weight in making the right partner choice.  In fact, if the solution is web facing, size becomes less and less relevant.

Case In Point

Craigslist has redefined the on-line classified ad concept.  It has over 20 billion page views a month.  Yes, 20,000,000,000!  It features a simple interface, but provides users the option to create their own content.  Its listings are geographically oriented and it provides real-time data.  All of these features and achievements require a sophisticated infrastructure and smart people at the helm.

Now the punch line – guess how many employees?  I’ll give you a hint; your local coffee shop might be in the same range.

Craigslist has 32 employees.  32.

Size trumps all other predictors when you have good, clean execution of a concept.  Craigslist is a disruptor on many levels.  They clearly use size as a competitive advantage.  Imagine how nimble and flexible Craigslist can afford to be when decisions are made with 32 employees…and loads of cash.

David vs. Goliath

Smaller organizations can and will continue to compete successfully against larger competitors if the objective is focused on creativity, speed and flexibility.  Again, in the world of custom software application development, this is especially true.

Smaller companies often adopt an Agile development methodology, which as the name suggests, is well suited for assignments that need to be developed and deployed quickly.  Think SWAT team.

These applications are the types that take a few months to engineer and implement.  They often work alongside other larger applications of the enterprise variety.  Playing a supporting role to a CRM or DAM application is a common scenario.

But smaller companies developing these applications must be vigilant in their commitment to building out their infrastructure.  Proper bandwidth, security and redundancy cannot be overlooked.  Boutique size shops must commit to greater resources for hardware, software and network administrators who keep abreast of the latest security threats.    Nobody gets a hall pass on ensuring they have proper network design and oversight.  No one will tolerate relaxed security.

In the end, don’t discount the advantages of working with a smaller organization; just remember to take advantage of their strong suit.   Go ahead and open up that next project pitch to those quirky folks you’ve been hearing about.  If nothing else you’re bound to get some fresh perspective on how desire and creativity stack up against sheer size.