How to kickstart growth in mature markets
Some time ago, HILTI was facing a challenge that could potentially put them out of business. They asked themselves: “We make great drills, but they are so good that customers never replace them. How can we continue to exist, not even to grow, but to sell enough to pay the wages?”
Should the drills be faster? More reliable?
HILTI had to kickstart growth and realised they needed to understand their customers to do so. By mobilising their direct sales force, HILTI was able to perform customer discovery and find out.
They discovered that the main job-to-be-done wasn’t to buy a drill and not even to make a hole. The construction workers and their companies’ main job was “to manage, maintain and replace the tools”, meaning having the right tool at the right construction site at the right time. The reason why this is such an important job is that if one tool stops functioning, the whole construction site might be put on hold and it becomes very expensive for the construction company as they will be fined.
Simply developing better and more reliable tools would not solve the problem; HILTI needed to re-think their business model.
It was therefore important for HILTI to know “what does the customer profile look like?” and therefore they started mapping not only the construction workers profile but the profile of the construction company and the profile of the CEO’s in particular.
Who you target is very important as their job-to-be-done, pains and gains might vary.
HILTI mapped the jobs, pains and gains of the CEO’s in small and medium construction companies. The examples mapped below is relatively high-level. If you were to map it for real you would go a lot more in detail.
The CEO’s jobs are to find and execute contracts, respect deadlines and planning the fleet. Some of the pains related to these jobs are; they want the newest tools, but they don’t want to invest in the them. They don’t want broken tools, stolen tools and they don’t want delays, which might be caused by the other pain-points. Delays lead to fines, stress and financial problems.
It is important to emphasize that pain-points aren’t just things that doesn’t work. It is also often fears and anxieties that people might have, which is often very important to address.
Some of the gains for the CEO’s are access to the newest tools as it leads to safety and most importantly, they want 100% uptime and predictable cost. There is a conflict between the pains and gains, as the CEO’s want the newest tools, but they are not willing to invest in them.
Mapping these jobs, pains and gains made HILTI consider what they could do in terms of product and service design to create value. They started to prioritize the jobs, pains and gains and focused on the value proposition to help their customers and to create more growth to their own business.
HILTI came up with a new service design. They would take care of the tool fleet management, so their customers could solely focus on their job. HILTI would supply the workers with the best tools and if a tool breaks down, HILTI would repair or replace it quickly with no additional cost. HILTI would furthermore update the tools on a regular basis with the latest generation models and all of this would be on a single monthly invoice.
The service HILTI came up with will only be a succes if it addresses the customer’s jobs, pains and gains. This new model gave the customer access to the latest tools and they didn’t have to pay an upfront investment, which relived some of the customer’s headaches. At the same time the customer’s got the newest tools, which leads to increased safety.
As HILTI would also take care of the broken tools and replace them, the companies didn’t have to ship them around. HILTI took care of the entire logistics aspect which is a pain reliever and gain creator at the same time. It all lead to cost management.
You need the same kind of thinking at the strategic as well as the tactical level. You need to understand the real motivation of your customers before you make the service design and online fleet management system etc.
This might sound like common sense, but it is not common practice.
Alexander Osterwalder argue that you have to map the jobs, pains and gains to get it right. If you don’t, you won’t truly understand your customers, and consequently, your team won’t either. The Value Proposition Design-framework will allow technology-, business- and design people to share the same understanding of customers and speak the same language.
The HILTI case is a great example of how you can prioritize what create most value for the customers by staying committed to the problem before jumping into the solution.