- In March 2012, Sara Blakely become the world's youngest
self-made female billionaire.
Let me tell you how.
In 1998, Sara was getting ready for a party
when she realized she didn't have the right undergarment
to get a smooth look with her white pants.
Blessed with a knack for the unconventional,
she cut the feet off from her control top pantyhose.
Voila, Spanx,
the creator of footless body shaping pantyhose was born.
Now, let's go back to the early 1990s
when the dominant word-processing software
was Word Perfect,
the dominant spreadsheet, Lotus 1-2-3,
the dominant presentation tool, Harvard Graphics.
Within a few years,
all would be pushed aside by Microsoft Office.
Microsoft Word, Excel, and PowerPoint
were not particularly better, if at all,
than these leading products.
So what was Microsoft's secret sauce?
Developing and marketing them as an integrated bundle.
The integration made it easier for the user
to copy and paste content
from one application to another, a huge advantage.
On top of that, the customer had to pay less
for the bundle than for the separate applications.
The incumbents didn't stand a chance.
And in 1999, Marc Benioff left Oracle
to launch Salesforce.com.
At that time, customer relationship management software,
or CRM, was already a rapidly growing product.
What was Benioff's innovation?
Offer CRM as a web-delivered solution
rather than as a packaged software.
Customers would not need to purchase, deploy,
or maintain the software.
They could just pay a monthly subscription fee
and access an application from any device.
Salesforce.com is now a global giant
with a market value exceeding $60 billion.
As the Spanx, Microsoft Office,
and Salesforce stories illustrate,
a dramatic rethinking of customer value can allow companies
to discover massive new opportunities
or permanently change the rules of competition
in a industry.
So how might you be able to uncover similar possibilities
with your current or potentially new business.
Start by looking at the industry
from the lens of the customers.
In the case of consumer products,
focus particularly on the end consumers.
The goal should be to uncover their hidden needs
even before they realize them.
This cannot be done by asking them,
doing focus groups, or customer surveys.
You have to observe them up close
by immersing yourself in their lives,
if possible, incognito.
Why not live and work with consumers
for a few days every quarter?
You may be amazed at what you learn.
Think also about whether there is an opportunity
to embed emotional value in your products and services
in addition to the functional value.
Steve Jobs did this brilliantly
in the case of every Apple product
from a desktop computer to the iPhone.
Even in the case of products sold to businesses,
it may be possible to add emotional value
by, for example, developing a reputation
as the most trusted supplier in a industry.
Also, explore whether there is an opportunity
to offer a more complete solution to the customers
rather than simply discrete products and services.
This is the approach Microsoft took
when developing the Office Suite.
Finally, consider how you might be able
to tailor your products and services
to each customers unique needs at scale.
The growing power of technology
is making this increasingly feasible.
Most companies try to learn about what customers need
by asking them.
This is fine,
but will never lead to breakthrough innovations.
For that, you need to discover their needs
before even they become aware of them.
This requires immersion in the customer's world
and looking at the industry from their eyes.