By Iqbal Thokan
Focus on the problem you are solving. Every business is about finding a solution to a
problem, need or want.
Every customer or client needs us for our problem-solving capabilities, whether it is a
product, or a service that we are delivering to them. If we are constantly solving problems
for our customers then we need to constantly be focused on the problems they experience
and how can our solutions be the ones they chose over our competitors.
Change brings about new problems, new needs or new wants and as businesses we have to
be in tune with these in order to stay relevant and to survive but to truly thrive we must be
able to truly understand what pains our customer and how we can improve on our solutions
in order to make their experience with us a positive one.
How many of us have been in business for a long time and have noticed that everything is
going smoothly, customers are happy and sales are coming in and then we find that
business is not as it was? We notice that our customers are now moving to new players in
the market as these new players have brought about something different or unusual or
new.
As human nature goes, our initial reaction is to take this as a sign of rejection and then we
realise that we either missed out on a new trend, or new idea, or our approach to solving
our customers problem was out-dated or not relevant anymore. Sometimes we find that we
are so internally focused, working in our business that we don’t seem to realise what is
happening outside and by the time we do stick our heads up to see what is happening, it’s
too late. For most businesses, this is because we tend to focus on the competitive
advantage rather than on having the competitive edge
While the product, price or service we are offering can give us a somewhat competitive
advantage it does not give us the edge to be ahead of our competitors. For this we need to
truly understand our customers purchasing decisions and what problem we are actually
solving for them and when we understand this we will be able to provide our customers
with a truly unique experience which will then give us the competitive edge. However, just
focusing on customer problems don’t give us an edge, we need to also be looking at the
market and trends happening around us, we need to be aware of our customers future
needs and wants to truly have the edge over our competitors.
COVID19 has shown us how quickly the landscape can change and how quickly our products,
processes and even systems can be outdated. If we are constantly focusing on the problems
our customers are experiencing then every aspect of what we do in the business should
revolve around solving this problem and creating the best possible solution. Focusing on the
customer problem requires our attention outside the business as well, and that is why as
business owners we need to find time to focus on the business rather than just working in it.
Some of the things as business owners we could be doing right now to become more
problem focused is to start with a simple SWOT analysis of our business so that we can
understand our strengths and weaknesses as well as be aware of the threats and
opportunities that are out there. This will allow us to be more intuitive of our customers
needs as well anticipate future needs. We have to engage with and collect feedback from
our customers and let them inform us of how we can improve and do things better for
them. This can be done in various ways, from using social media to even one on one
sessions.
Finding our strength and working on our weakness as well as knowing what threats and
opportunities are out there allows us to become more problem focused which in turn allows
us to constantly have the best solutions for our customers.
Here’s a story of a company that constantly strives to make customers happy by ensuring
they focus on the customers problem. The year is 1999 and the whole world is stressed and
worried that the internet would collapse and the Y2K bug would end civilisation as we knew
it. Sound familiar?
However, there was young team of brave souls who amidst all of this decided to start up an
online company selling shoes. This company is better known to us as Zappos, one of the
world’s leading online shoe retailers.
2008, 9 years later and the company is doing a turnover roughly reported at $1 billion and a
year later, in 2009 Zappos is acquired by Amazon for a whopping $1,2 billion. How did they
do it? How did an online shoe retailer buying from traditional retailers and selling online
become such a giant in just 10 years? The answer is that they made it part of their
organisational culture to focus on solving the customers problems and no matter what,
always made sure that the customer is happy. One of the interesting things to note is that
75% of Zappos sales came from returning customers, which can only show that their
method worked.
Some of the things done by Zappos, included being easily accessible to customers, always, in
fact 24/7. Call centre agents are empowered to make decisions and do what ever it takes to
ensure the customer is happy and of course the crazy 365day return policy.
Now while some of these might not apply to our businesses, the point is that we need to
find out what makes our customers tick, what are their problems and how we can best
position ourselves, using the resources available to us to ensure we are constantly providing
the best solution for our customers.
Iqbal Thokan is an experienced business management consultant and the founder and co-
owner of breedingpositivity.com
In fact, you notice some of your customers are using new players in the marketplace when they once used you, or they are not doing anything at all. You follow up and find out that your clients are keen to work with the new players because they bring something different, new or unusual. Or they are distracted by other things and don’t want to do anything.
Initially, you may take it as personal rejection – ‘they don’t like me’. Then you stop the self wallowing and realise that:
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You missed out on a new trend, or a new idea, that was gaining momentum in your market, so your approach is now out-of-date or not as attractive or relevant any more.
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What’s worse, you realise you have not kept pace with changes in your market. You were too internally focused and not focusing on the outside world. Your business is at risk of becoming obsolete. You lost your competitive edge.
With the commoditisation of many products and processes, the business landscape can change overnight and you lose your edge. What was once a high value, premium or customised product or service can be reduce to a ‘me 2′ very quickly.
We now need to be regularly looking at our markets and especially our competition and what they are up to. Often the old strenths, weaknesses, opportunities and threats analysis (SWOT) is done when the original business plan is put together and then maybe spasmodically after that.
Given the rate of change, new innovations and ideas in the market, how often do we need to assess our competitors and our competitive edge? I’m not sure, but I know that once a year is not enough these days. There is so much competition out there competing for people’s time, attention and money, it’s hard to keep up.
And your competition isn’t just your direct competitors. It can be anyone. Do you know who are your:
- Current competition?
- Peripheral competition?
- Emerging competition?
Being market aware, community aware and world aware, is part of our competitor analysis these days. Rather than sit back and think it is all too hard, I have found that regularly reviewing where you are at in relation to everyone else in your space, and checking the broader market is a good idea. This doesn’t mean you have to resort to investing in major market research campaigns.
You really need to be reseraching every day. Every contact you make or receive can give you market intelligence. Here are some ways we have found useful in keeping up to date with the competition:
| Internet | The internet is a powerful tool for finding information on a variety of topics. |
| Personal visits | If possible, visit your competitors’ locations. Observe how employees interact with customers. What do their premises look like? How are their products displayed and priced? |
| Talk to customers | Take careful note of what your customers and prospects are saying about your competitors. |
| Competitors’ ads / websites / etc. | Analyse competitors’ ads, websites, other marketing literature, etc. to learn about their target audience, market position, product features, benefits, prices, etc. |
| Speeches / Presentations | Attend speeches or presentations made by representatives of your competitors. |
| Trade show displays | View your competitor’s display from a potential customer’s point of view. What does their display say about the company? Observing which specific trade shows or industry events competitors attend provides information on their marketing strategy and target market. |
| Written sources |
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Understanding your competitors is an integral part of your sales planning process. By investing the time in researching your competitors you will be able to:
- Understand your competitor’s advantages and disadvantages relative to your own position
- Highlight key areas of focus based on your position within the market, compared to competitors
- Provide an informed basis to develop strategies to achieve competitive advantage in the future
- Be prepared to handle questions or challenges posed by potential customers in relation to competitors
Questions to ask
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Who are the key competitors in your market place?
- What is the profile of each of your key competitors (e.g. market position, size, distribution, reputation)?
- What are your competitors’ primary objectives (e.g. to be number one in the market, rapidly increase market share, specialise in a particular segment of the market)?
- What do they do well?
- What don’t they do well?
- What threats do your competitors pose?
- What is your primary competitive advantage over them?
Credit: iidmglobal.com
Customer-centric is an approach to doing business that focuses on providing a positive customer experience both at the point of sale and after the sale in order to drive profit and gain competitive advantage. The philosophies and operations of customer-centric businesses revolve around their most valuable customers and making sure they’re happy.
Dr. Peter Fader, in his book Customer Centricity: Focus on the Right Customers for Strategic Advantage, explains that because not all customers turn out to be profitable, businesses that seek to be customer-centric and gain strategic advantage should identify the best customers and focus on building their products and services around the needs of those specific individuals. This is achieved by gathering customer data from multiple channels and analyzing it to better understand and categorize customers.
One way to figure out if a customer is high-quality, according to Fader, is to calculate their customer lifetime value (CLV), which predicts the net profit a business will acquire from its entire future relationship with a customer. High-quality customers are those who stay loyal to the company and don’t leave unless given a very strong incentive to do so. These customers have a high CLV and collectively have a low attrition rate. Customer-centric organizations strive to acquire, retain and develop this type of customer by enhancing their experience.
Credit: searchcustomerexperience.techtarget.com
When it comes down to it, problem solving is the foundation of all business. There is a problem or a need, and you provide a product or service that solves or fulfills it. And when it comes to building your business, it is basically a never ending string of problem-solution troubleshooting. How to structure your business, source funding, manage operations and foster growth: all of these things tie back to problem solving, which is why having solid problem-solving skills is a must for all business owners.
Problem solving is defined by Merriam-Webster as “the process or act of finding a solution to a problem”. We engage in this process every day of our lives, from basic problem solving like deciding what to wear in the morning or what to eat for lunch to more complex scenarios like figuring out a marketing strategy or how to lower operating costs. It’s a critical function that not only gets us through life, but can also determine our success – or failure – at our chosen endeavors.
When we talk about problem-solving skills as it relates to business, we’re essentially discussing how we identify, assess and resolve problems, whether they are sudden, unexpected crises or day-to-day business challenges. The skills we employ to problem solve include analysis, research, creativity and decision making, and depending on the situation at hand, risk management and communication.
But skill alone won’t optimize your outcomes if you don’t apply any process to how you approach problems. Although the method does not have to be rigid, there is a best practice when it comes to problem solving. It is called the problem-solving cycle and it includes the following steps:
- Identifying the problem
- Defining it
- Developing a strategy
- Organizing information and allocating resources
- Progress monitoring
- Outcome evaluation
A lot of this may seem obvious, but when we’re faced with a big problem, many of us get flustered, frustrated, and end up in a try-fail loop rather than a problem-solution cycle. Or we get off on the wrong foot entirely by not digging deep enough into the true source of the problem. Taking a step back and applying the problem-solution technique allows us to think through the problem in a logical manner. Of course, not every problem will necessarily require all of the above steps, but when it comes to more complicated situations or long-term planning to overcome barriers to your business success, this structure can be incredibly useful.
In addition to developing a solid problem-solving strategy, there are a number of things you can do to improve your problem-solving skills.
- Build Your Knowledge Base: When you know more, you have more information to work with when problems arise. Learn everything you can about your business, competitors, customers, and the market in general. The more knowledge you have, the better your problem-solving skills will be, not to mention all of the other advantages to your business life.
- Ask The Right Questions: Sometimes instead of asking why, you have to ask how. Asking solution-oriented questions can be a very effective approach to problem solving because rather than asking why something is happening, especially if there’s no clear cut answer, you can go straight to formulating solutions. “Why are sales down?” becomes “What can I do to increase sales?” and “Why do I never reach my fitness goals?” becomes “How can I change my schedule to make sure I make it to the gym three times a week?”
- Make A List: Sometimes the best way to tackle a problem is to simply list out as many solutions as you can think of. Whether you brainstorm solo or in a group, write down every idea no matter how crazy it might seem. Get creative. The more solutions you have, the more opportunities you have for coming up with the right answer.
- Use Your Subconscious Mind: Haveyou ever noticed how a solution to a problem you have seems to come out of nowhere when you’re not even thinking about it? That’s the work of your subconscious mind. Sometimes we need to step away from a problem we’re facing and let our subconscious do the heavy lifting. This article offers some practical ways to access your subconscious for better problem solving.
- Practice Makes Perfect: Make sure you’re regularly flexing your problem-solving muscles. Whether it’s helping other team members, working through theoretical problems or regularly playing problem-solving games (think anything from video games to chess), there are a number of ways you can develop your strategic thinking with practice.
Credit: daviddisiere.com
Doomsayers warned that the Y2K bug would end civilization as we know it. And although people were afraid their computers would fail them, a young team of entrepreneurs doubled down on the internet’s potential to sell — of all things — shoes.
It may be hard to believe that an upstart company purchasing shoes from brick and mortar stores, and then turning around to sell them online, has become a mainstay in online retail. But that’s exactly what Zappos has done.
When early investors turned away, money was borrowed from friends and family. Always believing in the vision, Tony Hsieh used millions of his own dollars to keep the company afloat.
Layoffs eventually occurred, and the remaining employees took innovative steps to save money, including taking pay cuts and living in dorm-like conditions. Zappos even opened up its very own storefront. These austerity measures courted potential investors (who didn’t quite believe the internet was going to be as big as it has become) to take a risk on the fledgling company.
Let’s look back at some milestones that helped mold Zappos into the company it is today.
1. Shoes online became a thing – 1999
Nick Swinmurn wanted a pair of Airwalk Desert Chuka boots. Unable to find them at his local San Francisco mall, he had the idea to sell a wide variety of footwear online, under the name shoesite.com.
Swinmurn met with Fred Mossler, a men’s shoe buyer at Nordstrom, and asked him to join his start-up. Mossler, however, wanted Nick to have more capital before he committed. Nick then met with Venture Frogs, Tony Hsieh’s investment company. Seeing the vision and potential, Hsieh bought into the idea and eventually became co-CEO with Swinmurn.
Searching for a more unique name soon thereafter, Shoesite became Zappos, an adaptation of zapatos, the Spanish word for shoes.
2. The opening of a fulfillment center – 2002
Zappos formed a partnership with UPS to expedite the delivery of footwear. The 825,000-square-foot warehouse was located 17 miles from the UPS Worldport, their global air-freight hub at the Louisville, Kentucky airport.
At the time, approximately 40,000 units were processed per shift using the largest carousel system in the United States. It held a staggering 1.5 million pieces of merchandise.
3. 365-day returns – 2003
Zappos turned four years old and WOWed its customers by implementing a free 60-day returns policy. This no-hassle approach gave customers the opportunity to purchase several pairs of shoes in various sizes, returning those that didn’t fit at no cost.
“Buying shoes online can initially be a scary process for people,” Hsieh says. “But Zappos has withstood when other dot-coms have failed because we provide the best customer experience, such as free shipping both ways. Even though free shipping of both orders and returns has cost us more, it has enabled us to keep our customers longer.”
By year’s end, Zappos decided to give customers 365 days to return the shoes, as long as they were in “like new” condition and in the original box.
4. From San Francisco to Henderson – 2004
It became increasingly difficult to hire customer service personnel in San Francisco; many locals viewed customer service as a temporary job. However, Hsieh knew quality customer service was of great importance, and would eventually become the company’s differentiator.
After brainstorming with several other employees over lunch, Hsieh decided relocating to Nevada would be the best move forward. Although the choice to take the company out of San Francisco came as a big shock to most employees, 70 of the original 90 employees picked up their lives and moved to the desert.
Being in an unfamiliar town with unfamiliar people, Zapponians would hang out with each other outside the office. Culture in the workplace becomes a top priority — even more important than customer service.
“We thought that if we got the culture right, then building our brand to be about the very best customer service would happen naturally on its own,” said Hsieh.
5. Customer loyalty 24/7 – 2004
Shortly after moving to Henderson, Zappos’ Customer Loyalty Team (CLT) broadened their services to 24 hours a day, seven days a week, 365 days a year. Five to ten new agents were hired every two weeks. Due to this rapid growth, there were 100 customer service employees among the 400 employees.
Customer service was unique from the beginning. There are no scripts and no time limits on phone calls. One customer interaction lasted almost six hours. Did they talk about shoes the entire time? Probably not; but the opportunity to create deep and emotional connections with customers, whatever the topic of conversation, was smiled upon.
6. Dual job interviews – 2005
Having one job interview is tough enough; having two job interviews at the same company can be downright stressful. But that’s what Zappos did—and still does. In 2005, two different types of interviews were instituted: one for business and one for company culture.
The business interview ensures that the candidate has enough talent and proficiency to do the job. The culture interview ensures they’ll fit in with the rest of the Zappos family. Being identified as a culture fit holds significant value since employees spend a lot of time together both on and off the clock. Hiring people that become good coworkers and good friends is of utmost importance.
7. New hire boot camp – 2005
This year brought the creation of something fondly called “customer service boot camp,” which is still a part of new-employee orientation.
During the first three weeks of the program, new employees absorb the company culture, customer service program, inventory management system, and work with an experienced employee in the customer contact center. During the final week of the program, employees went to Zappos’ fulfillment center where they picked, packed and shipped orders and perform other inventory management tasks.
At the end of boot camp, each employee was offered $100 to quit. According to Hsieh, the boot camp and extra money helped Zappos weed out employees who won’t be a long-term cultural fit. As of 2019, new hires are offered one month’s salary to quit.
8. The creation of core values – 2006
In San Francisco, Hsieh, Swinmurn and Mossler interviewed each candidate that came through the door to ensure the proper fit for the company. As the company continued to grow in Henderson, this became too time-consuming. Someone from the Legal Department suggested creating a list of core values to serve as a guide when making hiring decisions.
Tony reached out to all Zappos employees, asking for their input on core values. Thirty-seven beliefs were refined, and on February 14, 2006, Zappos’ 10 core values were born.
9. Free overnight shipping – 2007
The holidays are stressful at the best of times, so Zappos took a little pain away from their customers. On January 20, CLT Supervisor Chris Sciotto sent out this message:
“Beginning tonight at midnight, every order will be shipped OVERNIGHT for FREE!! That is right folks, any order placed by 1PM PST Monday-Thursday will be delivered the next business day and overnight orders placed anytime Friday or Saturday will be delivered on Monday. Orders placed Sunday before 4PM PST will also be delivered on Tuesday.”
Because the warehouse was located so close to the UPS Worldport, this guarantee was a promise Zappos could make, but few other online retailers could.
10. More than shoes – 2007
Now that the core values were established, what better way to pursue growth and learning than to add to the inventory? 2007 saw three big additions to the Zappos line.
New Balance
New Balance became the first apparel line within Zappos’ arsenal, along with various styles of eyewear and watches. In total, Zappos stocked over 3.5 million shoes, handbags, apparel items and accessories from over 1,200 brands.
6pm.com
Zappos acquired 6pm.com from ebags.com to provide an online shopping experience that reflected customers’ needs, including matching shoes to handbags.
Nike
2,000 emails; 1,900 phone calls; 15 bi-yearly meetings. Zappos had tried to get Nike since Mossler joined the company. Every connection within Nike was tapped, yet efforts yielded no results. Merchandise Buyer Chris Peake said he saw Mossler moments before he sent out the email announcing that we got Nike on March 21, 2007. “He was nerve-wracked, not himself at all,” recalls Peake.
11. Zappos Insights – 2008
Business was in full swing, and the company’s focus had expanded beyond footwear and clothing. Zappos decided to share its understanding of culture and customer service to the world by creating a company within the company, aptly naming it Zappos Insights.
Insights teaches other companies what Zappos has learned up to this point. Topics range from helping start-ups grow their business, how to attract and keep great people, how to deliver exceptional customer service, and of course, ways to improve company culture.
12. “Zappos and Amazon sitting in a tree” – 2009
On July 22, Tony Hsieh sent this email to all employees. He began his letter like this:
Over the next few days, you will probably read headlines that say, ‘Amazon acquires Zappos’ or ‘Zappos sells to Amazon.’ While those headlines are technically correct, they don’t really properly convey the spirit of the transaction. (I personally would prefer the headline ‘Zappos and Amazon sitting in a tree.’)
Amazon, a powerhouse in the retail industry, enabled Zappos to diversify further into apparel and accessories and help grow its brands. Amazon maintains a hands-off approach, and Zappos runs the way we always have: with a little fun and weirdness.
13. Calling all holiday helpers – 2009
Zappos turned 10 years old in 2009. Still “Powered by Service,” Hsieh asks employees from other departments to volunteer to help the Customer Loyalty Team answer phones during holiday peak times.
The trial was proven to be a wild success, so Hsieh sends out the following message companywide:
“For next year’s holiday season, we are going to follow UPS’s example and no longer ask for volunteers. Just like UPS has all of their managers out in the field delivering packages during the holidays, here at Zappos, helping out on the phones will become an annual requirement for everyone in Las Vegas starting next year. I’m excited about this because it’ll make us even more customer-service focused than before.”
14. “Delivering Happiness” – 2010
Hsieh is an entrepreneur at heart. He wanted to share his story with the world and hopefully prevent others from making the same mistakes he did when it came to building a company. His bestselling book, “Delivering Happiness,” was published in March 2010.
In it, Hsieh shared the business lessons he learned throughout life. These included starting a worm farm, creating his own newspaper, holding garage sales (complete with a lemonade stand) and running a pizza business in college. He also created and sold LinkExchange to Microsoft for $265 million. He discussed the highs and lows of Zappos’ infancy when he let employees live in his personal lofts rent-free so they could keep the fledgling company afloat.
Ultimately, he has showed how using happiness as a framework can produce profits, passion and purpose, both in business and in life.
15. “Wouldn’t it be cool if we could move Zappos there?” – 2013
Years earlier, Hsieh was referring to the monolithic façade of the old city hall building in downtown Las Vegas. City hall had moved to a brand-new glass building several blocks away, leaving the old building ripe for a makeover.
Zappos would eventually move into the building, but not before it was completely gutted and retrofitted to fit the company’s needs and long-term vision. Thus, on September 9, 2013, more than 1,200 employees grabbed scissors and took part in breaking the world record for the most people cutting a grand opening ribbon at once.
16. Implementing Holacracy – 2014
Zappos prides itself on its innovative and quirky culture. Hsieh believed Holacracy, a complete system of self-organization, to be the correct course of action because of a nagging feeling that Zappos’ growing size was threatening what made it exceptional.
Leading the Holacracy transition at Zappos, John Bunch said, “In its highest-functioning form, the system is politics-free, quickly evolving to define and operate the purpose of the organization, responding to market and real-world conditions in real time. It’s creating a structure in which people have the flexibility to pursue what they’re passionate about.”
17. The first female C-suiter – 2016
Anne Mehlman joined the Zappos family from 2016 to 2018 as chief financial officer. She was the first-ever female executive in Zappos history. Anne came to Zappos after five years as the vice-president of finance at Crocs.
Like all Zapponians, Mehlman went through new hire training. Mehlman said that her constant curiosity to learn new things and her willingness to uproot her family from city to city led her to become the chief numbers guru at Zappos. “Be true to yourself,” said Mehlman. “Remember, you don’t have to have all the answers.”
18. Zappos for Good – 2017
Zappos had always been generous to the local community, holding Thanksgiving feasts for the less fortunate and donating shoes to charitable organizations such as Soles4Souls and Goodie Two Shoes.
In 2017, Zappos for Good was created to intensify that focus. Over 230,000 items were donated, impacting people locally and nationally, which included a partnership with Spread the Word Nevada and the Kids in Need Foundation.
As of 2019, over one million items have been donated to various causes … and counting.
19. Adaptive shoes and clothing – 2017
Spurred on by a grandmother who couldn’t find appropriate footwear for her grandson with autism, a grassroots team was created with one mission: to provide functional and fashionable clothing and shoes to make life easier for those who have trouble getting dressed.
Following several months of immersive research, education, and talking with families and people with disabilities, Zappos Adaptive continuously looks for brands and products that meet all types of needs.
20. Zappos Theater – 2018
Zappos takes a first step in disrupting the entertainment industry with world-class customer service. In collaboration with Caesars Entertainment, Planet Hollywood’s Axis Theatre on the Las Vegas Strip was rebranded as the Zappos Theater.
Under the multiyear partnership, the venue is aimed to surprise and delight concertgoers in new and unexpected ways.
“We want to mix what we know about service with what Caesars Entertainment knows about putting on an amazing show. Zappos Theater will let us create fun, a little weirdness, and an opportunity to WOW people through rocking out,” says Tyler Williams, Zappos’ director of brand experience.
Credit: zappos.com
