How to Identify Problems that Customers Will Pay You to Solve
At it’s core, the way to find market problems is straightforward: you go out and talk to people.
But finding the right people to talk with is another matter.
- Do they have problems in the same space you’re in?
- How do you find these people?
- How do you get them to talk?
- And when you do get them to talk, how do you not lead them on or pitch an idea to them?
Finding the Right People
At Formstack, we’ve made the determination to pivot from being solely a form-building tool to helping digital marketers attribute their leads to their paid advertising spends.
Fortunately, there are a lot of digital marketers out there to talk with, but “digital marketing” encompasses many more channels than paid ads online. There’s also SEO, content creation, and social media — just to name a few.
So how do we find the “right” people?
At Formstack, we sent our customers a simple email that gets straight to the point:
Hi there,
I’m writing to ask if you use paid advertising via services like Google AdWords, Bing, or Facebook Ad Exchange to drive leads to your website and if so, would you be up for a 15-minute call to discuss your process? If so, can you let me know when might be a good time to call?
Happy to provide a gift card to Starbucks as a thank-you for you time.
Cheers,
Christian
We’ve found that the shorter the email, the more likely it is to get a response.
Notice that we state the use case we want to ask about, and even go so far as to mention specific examples of which tools our target customer might use for this purpose.
Finally, we indicate the amount of time we’d like to chat (the shorter the better, but not too short), and a small bribe for a Starbucks gift card.
Even though the message is designed to select for only those users with our specific use case, we get a lot of responses from customers who don’t do digital marketing at all, let alone paid search for the purposes of lead generation.
Maybe it’s the free Starbucks card?
Sometimes customers agree to the call in order to ask how to do something with Formstack. Other times the user has no idea why I’m calling, even though they scheduled the call with me. Oh well…
A Script, Really?
Although I’m not a big fan of scripts, I do want to be consistent and ensure I’ve asked the key questions.
At the same time, there is potentially a lot of information to be gleaned by going “off script,” so it’s certainly OK to deviate as needed. For the moment, let’s walk through an example script.
- Clarifying the reason for the call
At the start, I want to clarify the purpose of the call and ensure there is a clear understanding of what I want to talk about and — just as importantly — what I do not want to talk about. My introduction goes something like this:
Me: Thanks so much for speaking with me today. Just to quickly recap my email, this call is not about the Formstack product itself, but rather about the specific use case of lead generation and how you go about doing it. The reason for this is that as a product manager, I’m responsible for ensuring our developers are working on real-world problems. To that end, I’ll be asking some probing questions, cool?
Customer: Cool.
Me: Awesome. Let me also mention that I’m not trying to design a solution on this call, or even sell you on an idea for a possible solution. Instead, I really want to understand the pain points you might be facing when it comes to lead generation. Finally, if you have any questions about Formstack itself, I’ll be happy to discuss them with you at the end. Does that sound OK?
Many of the people I talk with assume the call is about our existing form builder product, or are worried that this might be some kind of a sales call, so I want to address those potential concerns up front.
I also want to address a common misconception that I’m calling to talk about the customer’s experience with Formstack. In this particular case, however, I’m more interested in a set of problems that don’t have anything to do with building forms!
Many of the people who accept my invitation for a phone call are well-meaning, but don’t actually have the use case I need to learn about.
The following questions allow me to make sure I’m talking with the right person.
Identifying Job Responsibility
So the main reason I’m calling is because I’m trying to learn from digital marketers who drive leads to their website using paid search — Google AdWords, in particular. May I ask what your current job title is, and if you are responsible for driving leads to your website?
Notice that I ask a two-part question. It’s important that you get answers to both parts.
For example, someone with the title of Director of Digital Marketing might seem like the ideal person to talk with, but if she isn’t responsible for lead generation, then the conversation is not going to be very beneficial.
If the person doesn’t have the right job responsibility, I’ll ask if there is someone else in the organization I should be talking with:
No worries. I’m actually trying to understand the challenges faced with lead generation. Is there anyone else in your organization that handles that?
At this point, I’ll thank them for the call and hang up. There’s no need to waste any more of the customer’s time.
Understanding Their Key Metric
Next, I try to assess what they’re on the hook for:
I’ve noticed that most digital marketers in your situation are often held to a particular metric, and I was wondering if that was the same for you? How do you measure success for lead generation? Is it the number of leads, quality of leads, or some other metric?
The reason for this question is that customers with our particular use case are almost always being held accountable against a particular metric.
If they’re not being held to or paying attention to a particular metric, that’s an indication that they may not be really worried or concerned with lead generation.
Finding the Pain
Next, I like to discuss the process customers follow with this particular use case, describing a typical outline with the following steps:
Is your process for collecting leads something like this?
- Strategy: Where am I going to get these people
- Campaign: Some type of campaign to drive traffic (AdWords)
- Website: Then they go to a website or a landing page with a persuasive CTA
- Form + CRM: Traffic response to CTA (e.g., a form)
- Analytics review: Such as Google analytics, you figure out what you’re doing well to do more of it
- Does this sound like the process you follow?
If the customer doesn’t feel that the process I’ve outlined describes their use case, I ask what they think is different about their process from the one I described.
This may lead to a new problem area we can investigate, or it may be we’re simply not talking to the right person.
However, if we’ve gotten this far in the conversation, chances are they’re going to say “Yes, that’s me!” in which case I’ll ask:
As you look at this 5-step process of collecting more leads, from the beginning of the process with the strategy to the end with the analytics review, with all that’s going well, which part of the process concerns you the most, if any?
If they can identify a part of the process that keeps them up at night, I’ll ask them to elaborate (while I take notes!).
If they can’t think of anything, I’ll lead them with something like this:
If you want to double your leads, what part of your process is most likely to break down?
By this point, there should be a pain point that can be identified.
If not, chances are, your customer may not have enough experience with this particular use case.
The idea here is that we want to know what’s preventing them from collecting more leads, so restate and discuss the question as needed, in order to identify a problem.
If a problem is identified, now is a good time to probe a little more to find the root cause:
What do you think is the contributing cause of this problem?
Next, we want to establish the level of severity of the problem in order to understand its root cause, so I’ll ask something like:
How does this problem negatively impact your business?
This may seem like an obvious question, but if the customer can’t come up with an answer, then it isn’t a real problem.
If there is an impact to the business, the next step is to understand how the problem affects the user personally:
How does this problem impact you personally?
This question serves two purposes. First, it helps me to understand what personal consequences the customer experiences from the problem.
In this case, are they unable to get more money for increased AdWords buys? Are they evaluated poorly?
The second reason for this question is that it allows us to share the voice of the customer back internally.
It helps our developers and designers understand what’s at stake for the customer, and how the eventual solution will make a positive impact. This same voice of customer information can be used by marketing for messaging and by the sales team to identify with the pain of the customer.
Sometimes the customer will say this doesn’t affect them personally — that makes it a false positive. Chances are, we’re not dealing with a real problem, so we’ll need to go back to see if there is anything else.
How Bad is the Pain?
Now I want to understand the overall priority of the problem for this customer:
You have a lot on your plate right now. Where does this rank? High, Medium, or Low?
If they say it’s not a high priority, ask what’s in front of it.
There may be a bigger problem opportunity here, or the problem that’s in front of it may be beyond our use case (for example, if the customer is trying to hire an assistant, that may be at the top of her list).
Now we want to find out if the problem is really, really real:
How have you tried to solve this problem in the past?
I can’t stress the importance of this question enough.
If the customer hasn’t made any effort to solve the problem, then the problem isn’t worth solving.
If the customer states the tools they’ve tried, we now have an idea of where we can steal customers from. If the customer tried to solve the problem with a DIY solution, we can learn a lot about the behavior of our target customer here.
It is only now when I even begin to hint at the inklings of a suggestion of a possible solution:
If there was a solution that would solve the problem of [state the problem], what would you expect of it?
Chances are, by now, an idea for a solution is already forming in my mind.
Even so, it’s important to avoid the temptation to suggest how the solution would work. Allow the customer to talk about it, instead.
But isn’t the purpose of the call all about the problem and not the solution?
By discussing solutions in general terms, the customer can indulge in their wish-list. This allows me to ask clarifying questions and uncover any additional or new problems.
It’s important to remember that we’re not expecting the customer to come up with a list of features, and certainly not expecting the customer to dictate product requirements.
But the customer should be able to come up with something. Otherwise we probably don’t have a real problem to address.
If the customer identifies a feature or capability you don’t understand, be sure to ask why they would want that in the solution. Chances are, that “why” question might lead to — you guessed it — other problems!
Will They Pay Us to Solve this Problem?
Finally, I’d like to make sure that this is a problem that is actually worth solving.
In plain terms, I want to know how much the user is willing to pay to have this problem solved for them, so I’ll ask the question while restating the problem:
If we could come up with a solution that would allow you to verify that email addresses were real, how much would you pay?
Before they answer, explain that this is not a sales pitch, but a way to gauge the potential value of the solution, and that this is not a commitment to purchase anything.
Then I start with very high number and adjust down to an acceptable value. For example, I might ask “Would you pay $2,000/month?” knowing that it will get a “no,” then cut that number in half and ask again. I continue to cut the number in half until they say “maybe.” Then I’ll go up a bit until I get the “no” answer. Here’s an example of a typical exchange:
Me: So let me throw out some numbers and we’ll see where you think it’s a reasonable value.
Customer: OK.
Me: Would you pay $2,000 a month?
Customer: No.
Me: How about $1,000 a month?
Customer: No.
Me: $500 a month?
Customer: Hmm….maybe…
Me: What about $750?
Customer: I’m not sure that high, but maybe around $600?
And just like that, we know this problem is worth about $600 per month.
It’s not scientific, but it’s a good gut check that tells me that this may indeed be a problem worth solving after all.
If that’s the case, then we’re going to want to see if we can get the customer to be a reference customer for us. At Formstack, we won’t ship anything until we can be sure that we’ve solved a real problem and that our customers are getting value from the solution. So I’ll ask:
If we build something like this, would you do a pilot with us? You’d pay the amount, we’d help you with implementing the solution. If it works and you’re getting value from the solution, we’d like you to be a reference customer for us. If it didn’t, we’d credit that amount back to you. Whaddya think?
It’s hard to imagine a customer turning down this offer, because there’s no formal commitment being made here to build anything. Rather, it’s just a way for the customer to express their interest in the problem getting fixed.
Summing Up
The important think to keep in mind is that the “script” I use is not a verbatim script, per se, but rather a set of discussion areas I want to make sure we cover. What is being asked isn’t nearly as important as understanding why it’s being asked.
