One of the biggest challenges for today’s entrepreneurs is navigating the paradox of choice confronting millions of potential customers. That paradox – the idea that adding too many options actually reduces the likelihood that people will choose any one option – is playing out on marketplaces such as Amazon, Apple and Etsy, where virtually every imaginable niche service and artisan product is instantly available.
Of course, these very marketplaces also hold the key to breakthrough entrepreneurial success. That’s because they have dramatically lowered the barrier to entry, making a world of customers available to anyone with a good idea and the determination to bring it to market.
So, how can entrepreneurs rise above the competition, cut through the paradox of choice, and deliver the products and services that customers crave most?
The key is to deliver unexpected delight to customers through a delicate balance of customization and personalization. Customers need to feel like their unique needs are being served with differentiated, engaging and unique experiences. They need to feel like their needs are being met – even before they realize the need exists.
Here are five tips for achieving the right mix of customization and personalization, and building crave-worthy products:
1. Understand that customization and personalization serve different needs. When it comes to pizza toppings, your iTunes collection or even high-end purses, providing customers with broad latitude for customization makes a lot of sense. In other situations – say your iPhone’s operating system or your Netflix subscription– customization wouldn’t make much sense at the outset. Instead, these products depend on personalization, which requires little action on the customer’s part to get to something that is right for the individual, such as a customized home screen in the case of the iPhone and tailored recommendations for what to watch next in the case of Netflix.
2. Become obsessed with your customer’s real problems. Too many entrepreneurs focus on the products they’ve already built, or the customer benefits they think they are delivering. It’s much more important to focus on the real problems customers are trying to solve. For example, during a few years at Intuit®, we noticed that customers were using our personal finance app, Mint, to untangle their co-mingled business and personal expenses. This was a problem that Mint was never built to solve. After talking to customers and watching their behaviors, we realized many were independent contractors and people working in the on-demand economy. We knew that simply offering these customers the option to customize the way they used our existing products would never adequately meet their needs. Instead, we built a brand new product, QuickBooks® Self-Employed, designed to meet their specific use case.
3. Chart the simplest path forward. Remember that the paradox of choice is fundamentally about the fact that customers don’t respond well to an endless array of choices. Instead, they want products and service that deliver benefits tailored to their unique set of needs. For example, at Intuit, we recently reimagined what our new customers experience when they first sign up for QuickBooks. Instead of overloading them with the thousands of individual features that the software is capable of delivering, we ask them a few simple questions, and make it dead simple for them to complete the one task they care most about – whether it’s sending an invoice, generating a profit and loss statement, or setting up payroll.
4. Decide on the right mix for the job. There will be times when it makes sense to offer both customization and personalization in the same product. Consider Instagram. You can customize your Instagram feed based on the people you want to follow. But, the app also personalizes what you see based on what you’ve liked and who you follow. Customization puts customers in the driver’s seat, but requires concerted effort. Personalization delivers a benefit by taking steps for the customer, leading to simplicity. If you decide to do a combination of personalization and customization, remember to carefully consider the specific customer benefit you are trying to deliver.
5. Use customer data intelligently and responsibly. There’s a gold mine of data available from your customers that can be leveraged to make products better. Harnessing anonymized personal data responsibly can help you direct customers to the right feature for them. For example, at Intuit, we saw that nearly 60 percent of our customers were getting turned down for business loans because they had trouble demonstrating their credit to banks. We realized that QuickBooks data could be the key to overcoming this problem. That’s why we built the QuickBooks Financing platform, which gives small businesses the ability to use their QuickBooks data to apply for loans from within the product at the moment of need.
This is an amazing time to be an entrepreneur. The ability to access a world of customers exists in a way that was unimaginable a generation ago. And, yet, with this new opportunity comes a whole set of new challenges, such as standing out in the crowd, meeting increasingly high customer expectations and sustaining a rapid pace of innovation to remain relevant. Customization and personalization are two indispensable levers every product builder needs to consider. Just remember, it’s all about making the right choice to do what’s best for your customer.
Originally posted on Entrepreneur on July 13, 2017.
Source: QuickBooks Blog