“Buyer Needs” Drive Execution
The KGA blog has been discussing the nature of a fintech’s struggle to execute its growth strategies; the struggle happens because they usually know what they want to accomplish to achieve significant growth, but know less about how.
This post is the first in the series that defines “Too little focus on the Buyer” and provides best practices. This post describes why understanding buyer needs is of critical importance. A subsequent post will talk about how to document buyer needs.
Strategic Growth Means New Buyers
Strategic growth differs from organic growth in that the former entails entering new markets, providing new solutions, partnering, or acquiring another provider.
In short, the fintech is selling to new buyers and often mistakenly assumes that the new buyers have the same needs as the existing customers. Rarely is that true; otherwise, the new buyers would already be customers.
Don’t We Already Know the Buyers’ Needs?
Often during strategy formulation, a fintech (whether incumbent or emerging) will have done a market analysis to define who the new buyers are, the potential revenue, and the competitive landscape. In the process it will define high-level “Care-Abouts” in the target market. This is not nearly enough detail to design a compelling solution.
On the other hand, the fintech will also usually have defined Buyer Personas as part of a go-to-market exercise. But the Buyer Personas are too much of the wrong detail since they will specify what the people in the buying group care-about when we sell to them.
Buyer Needs tells us what the company cares about in resolving an urgent barrier in its business. We’ll have more to say in a subsequent post about the right level of detail in understanding buyer needs.
Not All Needs Are Created Equal
When we talk about buyer needs, we need to also define how much the client values having each need met. We can describe this by using, for instance, the Kano Model. It says that there are 3 categories of need:
- Basic – features that are assumed to be in the product, without question; when they are absent, the product is insufficient – the “table stakes”
- Performance – features that deliver a value, and the more they deliver, the greater the value – the “fundamentals”
- Delighters – features that buyer is not expecting but is delighted to receive – the “competitive differentiators”
One last point about these categories of needs: over time, the needs become Basic. So, what is yesterday’s Delighter becomes tomorrow’s Basic need, as more vendors have the feature, and it becomes table-stakes. It often helps the fintech to think about how long a specific need will stay “elevated” so it knows (1) how to protect the value, and (2) the amount to invest in meeting the need.
In our next post to this KGA Blog, we’ll cover how to do a Buyer Needs Analysis.