Do not sell a product. Offer a solution
My new Home Printer has taught me some serious stuff
A couple of months ago I got a home printer as a gift. It is a quite humble home HP printer, but… it is not. Because my home printer is no longer a printer, but an at-home printing station. It comes with an optional — and quite smart — service through which there is no need to pay for the ink, nor the replacements, nor the additional colour ink, but only for the number of copies printed per month. Oh, and additionally, you can finally forget about running out of ink. It is provided at ‘no cost’. This ressembles the famous slogan Zipcar used to have: Gas is on us! Well, ink is on them.
The service is called HP Instant Ink, it started on mid 2015, and though I’m still unsure of how well it works, it really looks interesting because it solves some of the pains a home consumer usually faces, and at the same time it also has a positive impact on the company. For sure HP might not be the first company offering this (professional printers have been doing it for decades) but probably the market, technologies and logistics are now perfectly suited for offering it to the home segment.
Well conceived services must solve consumers’ pains
When designing a service, one must not think about what would be profitable for the company, but rather focus on what would be best for customers, and then work to make it profitable. Prices are teachable, but pains are not.
Going back to our example, there are some pains frequently experienced by the at-home printing customer:
- “I just ran out of ink. And I obviously don’t have another cartridge”
- “I’m NOT printing in full colour mode because it’s crazy expensive”
- “I bought this unicorn-bloodish ink for tons of dollars and the cartridge just dried out because I didn’t use it… because it was very expensive. Well played”
But it happens that at the same time the company is also experiencing its own pains:
- “I’m supposed to get money by selling cartridges but people are buying “compatible” ones. I really hate it.”
- “I sell cartridges through channels over which I have no real control”
- “People that could be printing stuff (that’d be good for me) are not doing it because they ran out of ink and are not replacing so(that’s bad for me)”
There is a very famous quote from Theodore Levitt about customer needs that reads: “People don’t want to buy a quarter-inch drill, they want a quarter-inch hole”. In the same way, we could say:
“People don’t want a printer at home. People don’t want to buy cartridges. People just want to get their stuff printed”
Design services to get things done
You can develop a great app with an astonishing layout. And you can build a wonderful and stylish product. But in the end, if you fail to solve a problem your customer has, your enterprise will most likely fail.
“Executives should be asking: What job would consumers want to hire a product to do?” — Clayton Christensen —
For many years, Clayton Christensen has developed the “Theory of the Job to be done”. In a few words, it presumes that customers don’t just buy products, they “hire” them because they want something to get solved. What makes this especially interesting is the fact that the exact same product may actually be solving quite different things for two different customers. And the other way around: in the mind of the customer, your solution might be competing against something you never thought about. (You can find here the famous milkshakes’ case explained by Christensen)
Should I sell a product or a service?
Over the last years we have been observing a strong “servitization” trend in many markets. We no longer buy songs, but subscribe to Spotify; we don’t buy movies but hire one of the Netflix-HBO-Hulu plans. We don’t buy printers, we buy printing licenses. And this makes total sense from the business perspective.
It is interesting to observe how used-to-be product companies – such as printers – have evolved into a service-based offer and how this evolution has happened. In the following diagram we can see as another example the evolution of a well known light bulbs company:
Services better, as long as it makes sense
It isn’t always possible to offer a service, and consumers hate the feeling of being cheated by weird insurance policies or fake maintenance wages. But when it really makes sense, companies, by providing a continuous service, can evolve with their customers, learn with them and keep offering a permanently increasing value so that they won’t forget about them.
This is specially attractive nowadays, as we are in an era where everything changes at an accelerated pace, and a continuated relation with customers is a smart strategy to keep on the race by getting first-hand information.
Back to my printer
HP has apparently thought about this, and the service they are offering ensures their customers can get their job done. And by doing this, they are able to establish a long-term continuous relationship with their customters, while at the same time gaining a lot of insights on how and when consumers use their products.
In a few years it might even become more efficient and convenient for the customer to send the printed copies he wants within an established time-frame; avoiding the current needs of buying printer, cartridges and replacements. But for doing so, it is of vital importance to never forget what the customer really needs. Companies must provide their customers with the best solution they can design, and not be shy in adapting their solution whenever technologies and new paradigms make it possible.
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