SaaS 102 #10 How to Build First-rate Products?
Let’s start this article with a sales-related story:
There were three salespeople who wanted to sell combs to Buddhist monks (Buddhist monks are almost always required to keep their heads shaven).
The first salesperson went to the Buddhist temple. This person tried everything they could think of to talk the monks into buying a comb.
Eventually, and only out of kindness, one of the monks bought a single comb.
The second salesperson went to the temple. This time the monks said, “we really don’t need any combs.”
The second salesperson walked around the temple, and then said to a monk, “Devoted men and women make tough journeys to reach this temple. When they arrive they’re quite scruffy, and worshiping with an unkempt appearance isn’t respectful to the Buddha. If the temple provided some combs to help pilgrims tidy themselves up, wouldn’t that be a good idea?”
The monk thought this argument made some sense, and bought 10 combs.
The third salesperson first looked at the examples of the first two salespeople. They also visited the temple and observed the order in which people performed their rites of worship. And then, after talking to the monks, they somehow managed to sell 10,000 combs.
The third salesperson had told a monk, “If you bestow your blessing on these combs, they can serve as protective amulets to the visitors of this temple. In this way you can help preserve peacefulness, practice kindness, and accrue good karma. Many pilgrims will also give a comb to relatives and friends as a gift. This will help spread the message of Buddhism and the name of this temple. How can any of this not be beneficial?”
The monk joined his palms together in a prayer gesture and happily agreed to buy the combs.
As Buddhist monks keep their heads clean-shaven, they don’t need to comb their hair. You wouldn’t have a chance of selling them combs with hard sales techniques. When consumers don’t have needs to be met, how can we sell to them?
The answer is: we can create needs.
There’s a very well-known Steve Jobs quote: “People don’t know what they want until you show it to them.”
People involved in making products all know the importance of satisfying customer needs. But there are three levels at which customer needs can be satisfied:
- Finding and resolving customer pain points
- Finding the needs that customers don’t vocalize, and meeting those needs
- Creating needs, and helping customers create even more value
Level One: Finding and resolving customer pain points
In business, “pain points” refers to problems that arise when trying to satisfy customer needs or reach goals. Pain points are areas that are difficult for businesses to deal with.
There are many pain points in business. Some are related to efficiency, some are related to security, and of course there are many other kinds of pain points too.
But for most business scenarios, the majority of pain points are related to one thing: efficiency.
For example, for CRM systems, the challenge is helping users quickly find relevant customer information. For email marketing, the challenge is quickly sending emails to large numbers of target customers. For AfterShip, the challenge is quickly tracking large quantities of packages.
Across the board, many companies and individuals are all trying to solve efficiency problems.
To find your customer’s pain points, the best method is to try doing the same work as your customer (just watching your customer work isn’t enough). By doing that, you can gain firsthand experience of the difficulties your customer faces.
For example, back when I was an eCommerce seller myself, I often needed to help my customers check information about their packages. If you only need to check logistics information once in a day, then checking manually isn’t much trouble. But what if you have 1,000 logistics information requests to get through in a day?
This was a major difficulty for me. Checking package information took up a lot of my time, but it wasn’t something I could avoid doing.
So, I developed a program to automatically check package logistics information. This helped free me from the hard work of repeatedly checking and checking where packages were. It was that initial program which later evolved into AfterShip. AfterShip became a product that helped merchants around the world escape from the same problem that I had faced myself.
But at that time I was only satisfying customer needs at the first level: finding and resolving customer pain points.
Level Two: Finding the needs that customers don’t vocalize, and meeting those needs
When we’d just started AfterShip our homepage looked like this:
At that time, customers were emailing every day, asking: “Where is my package? Has it been sent yet?”
So we started directly telling customers their package location information: “Your package has been dispatched. It is currently in (package location).”
About six months later, I realized that we had been approaching the problem from the wrong angle. Customers wanted to know when they would receive their package. They didn’t actually care that much where their package was.
So we removed the map from our SaaS system, so that it looked like this:
I can share two methods that can help you find the needs that customers don’t vocalize:
Method One: Continually ask why until you find a root cause
For example, in the same scenario we’ve just described, where merchants need to solve the problem of needing to track packages, we can ask ourselves:
“Why do merchants need to track packages every day?”
“Because they have customers who have made purchases but haven’t received their deliveries.”
“Why do customers keep asking where their package is?”
“Because they want to know if their package is near their home.”
“Why do they want their package to be near their home?”
“Because if it is near to their home they are likely to receive it soon.”
“Why do customers want to know if their package will arrive soon?”
“Because then customers can arrange time to be at home to receive their package.”
By continuing to ask questions like this, we can find that the customer actually doesn’t care where their package is. Even though many customers ask “where is my package?”, what they actually want to know is when they will receive their package.
So, the method we followed when we had just launched AfterShip, of using a map to show customers where their package was, was actually not the right method.
Once we’d realized our mistake, we quickly made changes to AfterShip. We started using the most prominent position on the page to tell customers when we expected their package would be delivered.
Method Two: Use first principles thinking to find the core of the problem
First principles thinking come from the ancient Greek philosopher Aristotle, who said:
“In every systematic inquiry (methodos) where there are first principles, or causes, or elements, knowledge and science result from acquiring knowledge of these.”
First principles are widely well-known because of Tesla CEO Elon Musk. In an interview, he once said he really respects first principles thinking.
“First principles is kind of a physics way of looking at the world, and what that really means is, you … boil things down to the most fundamental truths and say, “okay, what are we sure is true?” … and then reason up from there,’ Musk said.
So when we create SaaS eCommerce tools, we need to ask: “What do eCommerce merchants actually want?”
Do they only want to automate package tracking?
No, what eCommerce merchants really want is to improve the overall experience for their customer, and to increase their own income.
When we look at it from that perspective, we realize that automatically tracking packages is just one way to improve customer experience.
As well as a better package tracking experience, merchants would also like to provide their customers with a smoother returns experience. That’s why we created the AfterShip Returns Center. Merchants also would like to market to new customers. That’s why we created Automizely Marketing. Merchants also want to display positive reviews. That’s why we created Automizely Reviews. There is a similar reasoning behind other AfterShip products and services.
We are not in the SaaS business just for its own sake. When we make SaaS tools, our end goal is to help merchants create value.
Level 3: Creating needs, and helping customers create even more value
In the story about selling combs to monks, the monks initially thought they didn’t need combs. They thought the only thing they could use combs for was combing hair.
But the third salesperson very skilfully created a need for the monks. “Bestow a blessing on the combs, let them serve as protective amulets to the visitors of this temple, and promote your temple at the same time.”
In the same way, when we create products, apart from the needs that the customer says they have, we also need to think about how to create higher level needs, to help the customer create value.
For example, our AfterShip product at first only satisfied the need to track packages.
But we found that many people who had bought items would check package tracking details multiple times after completing payment.
There was actually a good opportunity here for AfterShip to provide more value to our eCommerce retailer customers. The point in time that consumers are checking package tracking details could be used to give retailers second-time sales opportunities.
We thought we could use the traffic the tracking page received to help merchants create their brand. So we developed a branded tracking page. This way, when the retailers’ customers use the page to track their packages, they would also increase their brand awareness.
The branded tracking page also shows other products promoted by the brand retailer, which helps the retailer make second-time sales.
Before we provided this feature, no retailers thought they had a need to use the AfterShip package tracking page to help create their brand.
But once we had created this feature, merchants discovered that they could increase awareness of their brand and bring traffic back to their web page. This then, was new value we had created for our customers. We’re not limited to just improving efficiency and saving costs for our customers, we can even help them to make more second-time sales.
So when we create products, we shouldn’t be limited by only the needs the customers tell us about. We should start from the most fundamental customer needs, and think about what we can do to create value for our customers.
Summary
The first step of making products is to find customer pain points. To find our customer pain points, we should try to do the same things that our customers are doing. That way, we can gain firsthand experience of the difficulties they face. We can then create tools and automate tasks to help our customers increase efficiency and save time.
But to help our customers resolve problems on a higher level, we need to find our real customer needs, and then create products that create real value for our customers.
Learning to act with the goal of creating value for our customers, and creating new needs for our customers that even they haven’t thought of, is the easiest way to succeed. That’s because most of our competitors won’t even have realized that the needs we have found exist, let alone started work on satisfying those needs for their customers.
Afterword
When I write articles I usually check online to see if anyone has expressed similar viewpoints. From searching online I found that Jack Ma has quite a lot to say about the story of selling combs to monks. I’ll paraphrase his opinion for readers here:
When you create needs, they must definitely be needs that will provide real value to customers.
In the story about selling combs to monks, the key point is not whether the monks need combs, but whether buying the combs can benefit the monks.
About author:
I'm Teddy, Co-Founder & CEO of AfterShip, SaaS 102 is a series of articles where I share my experience in SaaS startups.
We are looking for great SaaS sales talent and welcome you to join us at careers.aftership.com.