What Is An Urgent And Expensive Customer Problem?

I was explaining to a client the other day that the biggest mistake I see companies make when developing new products is developing a product that does not solve an urgent and expensive customer problem. Turns out he’d heard me say that before. Many times.

This time, though, he asked: “But, Eisha, what exactly is an urgent and expensive customer problem?”

I paused. I speak or write those words so frequently that I forgot other people aren’t as steeped in them as I am. It was an “aha” moment for me. 

My answer?  

An urgent problem is a problem a customer needs to solve within this calendar year.

An expensive problem is a problem that a customer is willing to allocate resources (human and financial) towards solving. 

Urgent = Customer needs to solve within this calendar year

Expensive = Customer would allocate resources towards solving the problem

Is It Urgent? Is it Expensive? 

Here are a couple of scenarios to help illustrate the urgent and expensive customer problem concept. Ask yourself, is this scenario an example of an urgent problem? Is it an expensive problem? 

Scenario 1: I need reporting data this week for a Board meeting. I need to get a data visualization tool or I could pull it manually and give it to them in Excel. 

Answer: Urgent, not expensive. Excel is a perfectly good free alternative. It might be slow, but it works. Now, this could become expensive if every customer needed this multiple times a week but in this situation, this problem is not expensive. 

Scenario 2: My CRM provider is really expensive and I’d like to switch, but our executive team is dragging their feet on making a decision. 

Answer: Expensive, not urgent. This could become urgent if we needed to cut expenses to keep covering the cost, but for now, we have time. 

Scenario 3: My company was just hit with a lawsuit and my in-house attorney just quit. I need outside counsel.

Answer:  Both! Legal help is costly, but we need it now because we can’t ignore a lawsuit. 

Hopefully, those scenarios were pretty straightforward. But, the real world isn’t always that black and white. There are several traps we can fall into when it comes to identifying urgent and expensive customer problems. 

Beware of the Customer Problem Traps

If I’ve said “urgent and expensive customer problem” a million times, I’ve probably advised  “talking directly to your customers” two million times. We are constantly encouraging our clients to go directly to their customers and prospects before spending significant development dollars. While collecting voice of the customer is incredibly important, there are a few traps to avoid when trying to uncover urgent and expensive customer problems. 

1. Frequently cited problem: Sometimes a product team thinks they have identified an urgent and expensive customer problem, but it’s really only a frequently cited problem. 

For example, my team recently completed a new product development project for a client whose business was placing professionals in out-of-town assignments. We started the project with a series of Voice of the Customer interviews. Many of the professionals we interviewed talked about the loneliness they felt while on out-of-town work assignments. In digging deeper we realized that the problem of loneliness was not as painful as other problems, such as job assignment uncertainty or access to better temporary housing options. Loneliness was a frequently cited problem, but not an urgent and expensive problem. We recommended to our client that they focus innovation efforts on solving the problems of job assignment uncertainty and better temporary housing options and think about addressing loneliness later. 

2. Too Small to Be Profitable: Sometimes an organization identifies an urgent and expensive problem, but for a market segment that is too small, too price-sensitive, and/or not a good fit with their core services.

For example, one copywriting services company decided to use their existing internal writing training program for new employees and develop it into a new product that clients could buy to train their staff. Unfortunately, after spending more than $100,000 developing the new external-facing program they found that the only companies interested in the training were the small handful of very large companies who had teams of in-house copywriters to train. The Total Addressable Market (TAM) for this product was too small.

3. Problem of One but not Many: Other times, we mistake one customer’s request for the need of many customers. 

For example, the customer of a training and development company asked for virtual delivery of the nine class training series to help reduce travel costs (this was pre-COVID-19). Without validating whether other clients had the same need, the company spent well into six figures building an online platform that only one company wanted.

Not starting with an urgent and expensive customer problem isn’t the only mistake we see in product innovation. Read our white paper on the Top 7 Product Innovation Mistakes to Avoid in 2021.