Sunday, September 23, 2012

How to Understand Customer Needs

If you don't ask the right questions, you won't get the best answers--and you can't position your solution properly.

Selling business-to-business means selling a solution.  However, you can't sell a solution if you don't first discover what the customer really needs.  To accomplish this, you must ask the right kind of questions, according to Nancy Martini, CEO of the sales performance firm PI Worldwide.

She notes that, when having a conversation with a customer, you have the opportunity to ask three types of questions:

1. Closed-ended Questions

These question have short, definite answers like "yes" or "no" or a specific bit of information. They can be useful if you really need to know that specific data point, but they tend to create lulls in the conversation, forcing you to segue, often awkwardly, into the next line of inquiry.  Example:
  • You: "How many widgets do you use every year?"
  • Customer: "A thousand."
  • You: "OK.  Who is your current supplier?"
  • Customer: "Acme."
  • You: "OK. Are you happy with them?"
  • Customer: "Are we done yet?"
2. Open-ended Questions
These questions solicit a detailed response from the customer. Unfortunately, most open-ended questions often lead the customer toward considering the product you're selling. As such, you may be missing potentially useful information. Example:
  • You: "What are your needs when it comes to widgets?"
  • Customer: "We need about 1,000 high-quality widgets a year."
  • You: "What do you consider high quality?"
  • Customer: "They have to test within .0001 milimeters."
  • You: "We may be able to supply them at a lower cost." (Which, it turns out, may not address the Customer's real problem. Keep reading.)
3. Strategic Questions

These questions invite the customer to expound upon a situation. They treat the customer as the expert and naturally lead into a deeper conversation that gradually reveals the full scope of how you can help the customer. Example:
  • You: "Tell me about how your company uses widgets."
  • Customer: "We build them into our framistats at the beginning of the manufacturing cycle because then we can test them prior to adding the veeblefetzers."
  • You: "Help me out here. Describe how you currently order them and how you stock them for the assembly line."
  • Customer: "We get a shipment every few months and store them in a corner of the facility until they're needed."
As you can see, the strategic questions tend reveal the kind of details that might help you position your product as a better alternative (e.g. providing just-in-time shipments.)

How to Ask
Strategic questions usually begin with one of the following phrases: tell, share, describe, explain, explore, or help me understand.

Of course, not every every question needs to be strategic.  What's most effective is a combination of all three: closed-ended questions to discover specific data points, open-ended questions to uncover more detailed information, and strategic questions to provide a higher-level context.

Also, remember: you're not conducting an interview, but having a conversation.  Rather than just asking questions, add value by providing your observations and perspective.
  • Customer: "We get a shipment every few months and store them in a corner of the facility until they're needed."
  • You: In my experience, that kind of inventory storage results in a gradual degrading of quality due to dust and so forth.  Have you been experiencing something like that?
  • Customer: "I'm not sure. I'd have to check."
  • You: "If you can get me that figure, I can run some numbers to see whether there's a significant amount of savings by implementing a just-in-time inventory system."