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Why Relying on Customers to Tell You What They Want Won’t Work

Digital Products – Why Relying on Customers to Tell You What They Want Won’t Work

July 21, 2019

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What’s the big deal with digital products? Why are so many people creating online products to sell? What are digital products anyway, and how do you create a digital product that sells?

Digital products are intangible assets, meaning they can’t be held, tasted, or touched.  What makes them especially appealing is that digital products can be created once and sold repeatedly to different customers without having to replenish your inventory.

Using digital media intellectual property assets such as downloadable or streamable files, MP3s, PDFs, videos, plug-ins, and templates – it’s possible to make products ranging from music to videos, ebooks to online courses, and more.  Be sure to check that you will own the IP rights as I’ve discussed in previous posts.


Low Overhead Costs

Digital products appeal to people because they involve low overhead costs to create and sell. 

You don’t have to hold inventory or incur any shipping costs. Once you have something that sells you benefit from extremely high-profit margins: There’s no recurring cost of goods, so you retain the majority of your sales in profits. You could even automate everything so orders are delivered instantly, letting you be relatively hands-off with fulfilment.

Digital products are ideal for creatives, artists, educators, and freelancers looking for new income streams that require less effort to maintain. The income can supplement the income that has to be earned on a traditional “time for money” consultancy basis. As such it should enable you to cover your regular running costs so you’re not on a roller coaster every month, constantly reliant on new business to cover your overheads.

An added benefit of creating digital products is that you can offer products for free to build your email list, or use them as part of your offerings. You could bestow a bonus or licence your digital products for use under a monthly paid subscription plan.  There are lots of options as to how to incorporate digital products into your business.

Due to their ease of distribution, many entrepreneurs build entire businesses around such intangible goods or launch digital product lines to complement the physical products or services they offer.


Some Challenges With Digital Products

Digital products come with specific challenges you’ll need to watch out for, particularly the fact that you’re competing with free content: 

With digital goods, consumers can probably find free alternatives to what you’re selling. You’ll have to think carefully about the niche you target, offer premium value with your products and build your brand in order to compete.

Selling digital products does involve having an online presence and being out there on social media platforms. If you run a business, that would be an appropriate activity in any event.

Digital products are susceptible to piracy and theft so take precautions to reduce these risks by making sure you’re using the right tools to protect your products and that your terms of business incorporate the right provisions.

Making sure your product offering is good is of paramount importance, so how do you go about making a great product?


The Journey to Product Creation.

It’s not uncommon for people to have little success initially when they launch their digital products, even if they hire mentors to help them through the process.

Some people gradually get there and achieve success with their online offerings.  Many don’t even achieve sales of £1000 after years of trying.

People tend to invest quite a lot of time and energy into creating their courses, using a trial and error approach, sometimes relying on surveying consumers to find out what they want.

But as Ford famously put it “If I had asked my customers what they wanted, they would have told me a faster horse” So, while it’s fair enough to ask people what they want, you are the one who will ultimately need to decide what to create. Take people’s responses into account by all means, but some of them need to be taken with a large pinch of salt.

Certainly, during my own journey of creating a digital course on the intellectual property, I have discovered that most people don’t even know what intellectual property is, let alone being able to tell me what they want from a course on the intellectual property!

I was also quite surprised to find that having any sales at all on your first attempt is considered a success!

People are pouring their heart and souls into creating their courses, some spending thousands of pounds on coaching and other support, only to have no sales or only a few sales and they are being congratulated on their “success” because they created something and achieved a handful of sales!

There must be a better way I think.


Ideas First Approach

The notion that you need to keep trying till you achieve success with new product creation generally probably lies at the heart of the prevailing attitude to digital product creation – that you need to just keep trying to make incremental improvements until suddenly something clicks into place and works.

The concept was developed by Tom Peters in his book, Thriving on Chaos  Peters said companies should, “test fast, fail fast, adjust fast—pursue new business ideas on a small scale and in a way that generates quick feedback about whether an idea is viable.”

IBM founder Thomas Watson also reportedly said: “If you want to succeed, double your failure rate,”. He supported this thinking and adopted a management style that did not punish failure.

As a result of such “ideas-first” thinking, which is still in widespread use in many organisations, innovation cannot be counted on for predictable growth and is inherently doomed to failure.  Companies using this approach to innovation struggle to achieve success rates greater than 10 to 20 percent.


A New Approach to Innovation

According to Anthony W. Ulwick in his book  Jobs to Be Done companies struggle to predictably create winning products because they fail to define their customers’ needs with the rigor, precision, and discipline that is required to discover, prioritize and capitalize on opportunities for growth.

So, extrapolating from his message, to avoid this trial and error approach to digital product creation involves looking at customer needs in a totally new way.

This involves gaining a deep understanding of what a customer is trying to accomplish. What “job” is your customer looking to get done? Understanding what they’re trying to achieve is the key to creating products that are likely to meet their needs.

Having delved into this Jobs to Be Done Theory which was developed by Clayton Christianson, Harvard Business Professor in his book Competing Against Luck I’m committed to using the approach to get to the bottom of what outcome people desire when they look to “protect their IP”. What job are they really trying to get done?

If one can uncover related jobs that they’re trying to accomplish, particularly the emotional and social aspects of them, it’s much more likely you would create a product that customers want to use.

However, it’s worth noting that wants, needs, requirements, benefits, problems, tasks that the customer is trying to accomplish, and jobs which the customer is trying to get done are all terms that people use. These are not conceptually the same. The trick is to understand the nuanced differences between these terms and use Jobs-to-be-Done Theory to work out what your customers want.

I feel that the Jobs to Be Done Theory represents a breakthrough in innovation which I want to fully introduce into my own business, and then help my clients with.

I will discuss it in future pieces. For now, the important message I want to convey is that the current approach of trial and error when creating digital products is wasteful of time and resources. You would do better to focus on understanding what outcomes your customers are trying to achieve before attempting to create any digital products.