As an example of the power in understanding the customer-buying process and developing a repeatable sales model, consider the case of SuperMac. Early in its history, SuperMac was an innovative Apple computer peripherals company that sold one of the first external disk drives, the first color paint programs, the first color graphics boards, and the first color monitors for the Macintosh computer. Despite SuperMac’s many inventions, the company still went out of business and slipped into Chapter 11 bankruptcy. But before selling off the assets, two venture capital firms invested $8 million on the gamble that SuperMac could be revived.
At the time, SuperMac’s competitors had over 90% market share, and the company had been operating at a significant loss. The team believed they could be successful if they could just out-market or out-innovate their competitors. But when the new VP of marketing, Steve Blank, arrived and asked who the customers were, the SuperMac team’s response matched the official segmentation chart - SuperMac customers were “professionals and computer users.” Blank recognized that the SuperMac team, like most entrepreneurs, seemed to be acting on unexamined assumptions about their customers. For example, when he asked whether anyone had examined all the product registration cards that customers filled out when they purchased the product, there was only a stony silence. So Blank pulled 10,000 unexamined product registration cards and started personally calling customers to understand who they were, what their pain was, and the buying process by which they purchased products. Remember, this was the vice president of marketing, not an undergraduate summer intern or even the director of marketing, making the calls.
At the end of three months, Blank emerged with facts that completely shattered the company’s prior assumptions and changed the course of the company. First, he discovered that the customers weren’t “professionals” but desktop-publishing professionals. Second, these professionals purchased graphics cards solely for the purpose of running four desktop publishing applications: Quark, Adobe, and their competitors. Finally, desktop publishing professionals cared much more about performance than price. These simple facts shed new light on the “solution” that SuperMac should focus on developing. In addition to this radical information, Blank’s customer interviews revealed a great deal about the customer-buying process. Previously, SuperMac had spent a great deal of money advertising in various magazines, attending conferences, and paying an award-winning graphics company to design the SuperMac box (which had a non-descript picture of a light beam on the front of the box). He found out that the target customers didn’t pay much attention to advertising but instead relied on product reviews to guide their purchases. Furthermore, although SuperMac tried to exhibit at many different conferences, customers cared only about the MacWorld conference. Last, when customers made an in-store purchase decision, they were looking for specific data to guide purchase decisions, not fancy graphics. After a few months of work, SuperMac discovered they didn’t understand their customer and that they were wasting their marketing budget.
With a deeper understanding of the customer-buying process, SuperMac set about creating a repeatable sales model. One problem for SuperMac was that the company’s products generally performed poorly in product reviews. However, with a deeper understanding of the “job” the customer was trying to accomplish, the team noticed something interesting: most product reviews were based on highly technical details, such as bit-rate, which desktop publishing professionals didn’t care about. So the team set about creating a set of objective benchmarks that measured how a graphics card performed on the four publishing applications that the customers did care about. To give the benchmarks an added air of objectivity, they called them the Portrero benchmarks (after the street address for SuperMac in San Francisco). To be fair, the benchmarks were objective in relation to the core software applications customers cared about, and at first, SuperMac products performed well on only a few dimensions. But with measurable benchmarks, the engineers found it easy to tweak and optimize their graphics cards so they performed well on all dimensions.
Next, Blank approached the different magazine editors one-by-one and in a friendly conversation pointed out that most of their reviews were based on technical dimensions that were irrelevant to desktop-publishing professionals. Not only did the editors agree, but they asked if SuperMac had discovered a better solution. Enter the Portrero benchmarks! Soon SuperMac was being reviewed in the magazines their customers read, citing the benchmarks SuperMac had designed and for which their products had been optimized. In addition, the SuperMac team quit attending other conferences and focused all their efforts on MacWorld.
Last, SuperMac redesigned their box with a sticker that emphasized the competitive advantage over competitors on desktop publishing software. SuperMac nailed their customer pain and the solution, and then, by discovering the customer-buying process, created a powerful sales model. The results speak for themselves: with a marketing budget a tenth the size of that of their competitors, SuperMac turned the company around on a dime and in three and a half years catapulted from 11% market share to 68% market share, and from bankruptcy to $150 million in sales.