STORY INLINE POST
In our previous article, we described why customer obsession is a company-wide effort that doesn’t rely purely on the digital area. A successful customer-obsessed approach can bring in more revenue and digital innovation.
Amazon’s former CEO, Jeff Bezos, has stated that being customer-centric is the major reason behind the company’s success. In order to embrace this approach you need to understand who the customer is and what their problems are. Solving these questions is a hard task if you want to be truly specific and impactful. But by using Amazon’s Working Backwards framework, you can achieve powerful and helpful insights regarding these queries.
The Working Backwards Framework
Since Amazon’s early days, the company has followed a Customer Obsession Principle. Indeed, it’s the first of the Leadership Principles of this company. This rule has helped Amazon identify the key levers for their business. Their flywheel relies on Price, Selection & Convenience because they understood that customers loved low prices, a vast selection and the best user experience for shopping and product delivery. Even more, they noticed they could bet on this long term because those levers remain unaltered over time.
With this approach, Amazon created its Working Backwards framework to develop new products by focusing on the client’s needs. As an example, the Kindle quickly delivered a book to clients. With Amazon Go, customers forget about the time-consuming checkout lines by paying through new technology.
By using this framework, companies can deliver products that users actually want and decrease the risk of failure. Also, companies can evaluate the business impact and feasibility of what they are building. They go together.
The Working Backwards framework has the following structure:
The explanation goes as follows:
Understand the problem: Gather quantitative and qualitative data through client feedback to identify problems or opportunities. With this information, teams can think about a Product Vision: how the world looks with the problem solved?
Answer the 5 key questions:
Who is the customer?
What is the customer's problem?
What is the most important customer benefit?
How do you know what customers need?
What does the customer experience look like?
Important Note: The first three questions seem easy. But if you really want to impact customers and your business, you need to be specific. Consider addressing decision-makers, final users, segments, among others. Usually, it’s the same, but for B2B companies it can be different people.
Write the PRFAQ: The PRFAQ captures the vision of a world with the problem solved, the current scenario, the visualization of the potential solution, and what customers might say about the product. It pushes the team to think from the customer's perspective to craft a potential approach to the solution.
FAQs can be internal (questions from stakeholders regarding the challenges, risks, and others.), and external (queries from customers or press about how the product works, price, future features, among others.).
An example of PRFAQ should look like this:
PRFAQ feedback: In large companies like Amazon, coworkers and leaders provide relevant feedback for guidance and clarity. Use the given feedback to rewrite the document until it communicates the vision.
Create appendixes: Because of the six-page length limit of the PRFAQ, any research or documents that support the vision and the answers to the five key questions must be included as an appendix.
Present the document: Before showcasing the file to leaders and stakeholders, you must know which resources (time, staff, money, tools, among others) are required to move forward.
Finally, remember that the WB framework is based on four principles:
Start from the client's needs
Obsess over data
Look for constant feedback
And what about the business? Is customer obsession in dispute with company strategy and business goals?
The company’s vision and strategy aren’t counter to being customer-centric. As a matter of fact, these three elements can work together so the organization can reach greater business results. A well-built strategy must serve both parties by balancing what matters to the customers with what’s better for the business.
With a customer-centric approach, companies can impact their business by delivering better solutions for customers. If my previous phone company had fixed my problem, I wouldn’t have left them and they wouldn’t have lost revenue from my departure. In the end, these scenarios show how organizations can miss thousands of dollars due to digital products with customer experiences that don’t solve customer pain.
Customer-centricity can help the company achieve its goals. If an organization has a 20% retention rate, but there’s a 40% difference compared to the industry’s benchmark, then the company has to understand the reason behind that limited retention.
Through the WB framework, the business can understand the pain points of their consumers. And with the problem acknowledged, then it’s time for the PRFAQ that summarizes the team’s vision and strategy to improve retention.
If there are multiple solutions for the client’s issues, it’s necessary to conduct a business case so the final decision can be made after learning the cost of development versus the potential revenue of those solutions.
Back to my phone provider example: if clients leave due to a slow response from the customer service team, then a solution is required. The company could hire more customer service representatives, buy automation software to solve common queries, among other actions. Through the business case, leaders can make a decision that serves clients — and the business — while providing guidance for the Product Team. Just as in the image below.
Do I have to replicate the exact process in my company?
Writing is not the main point of the WB framework; it’s just a mechanism. The fundamental piece of the framework is the principle, which in this case is to identify who your customer is and work backward from them and their necessities so you can deliver a product that solves their problems and that has a higher chance of success, both for the customer and the business.
A PRFAQ is a mechanism to give clarity to the team about the job to be done. You can write a document, create a presentation, or any other means that fit the company’s culture. The lesson of the document is the contents of it. If the contents are clear and intelligible about how you see the world with the problem solved, then you got it right. Detach the principle from the mechanism. Keep the former and dismiss the latter.
Being customer-centric enables you to solve any problem that might affect the user experience, and as a result, impact your revenue. This approach isn’t about leaving your goals and the company’s vision behind. On the contrary, it’s a very potent way to achieve them.
If you’re interested in the Working Backwards framework and how it would benefit your organization, review our Customer-Centricity program at Kurios. You’ll learn more about the approach, the Amazon Framework, and how to apply it to your business.