Google Listening to customers: A no-brainer or maybe just unnecessary?

Listening to Customers: An Absolute No-Brainer or Just Unnecessary?

  • By Andreas
  • 13 December, 2018

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 “If you don’t listen to your customers you will fail. But if you only listen to your customers you will also fail.”

 – Amazon slogan

Should we listen to them?

I know. Some of you’d probably be thinking that’s a STUPID question!

After all, not listening to the people that would ultimately decide…

… whether ‘our thing’ worths (or not) their hard-earned cash sounds rather counter-intuitive.

However, here is the thing:

At least when it comes to creating a new product (especially, if it’s your first one) it seems that things are not as straightforward as you would imagine.

“Why?” I hear you ask.

Well, here are 3 reasons to get you started:

1. Consumers are pretty bad predicting their own future behaviour

That’s right.

Most people suck at predicting what they’re going to do tomorrow, let alone what they are going to do months down the road.

So, by putting them in a situation where they need to predict how they will act in a hypothetical future scenario, you risk getting UNRELIABLE input.

2. People don’t know what they want until you show it to them

Does this phrase sound familiar?

Of course – it’s Steve Jobs’ famous quote (in a 1998 interview with Business Week!)

Why did he say that?

Well, I am not psychic (b/c Steve Jobs didn’t really expand his thoughts on this) but…

… the fact of the matter is that Jobs is not alone thinking that way.

Take for example Lior Arussy a supporter of this worldview.

In a post of him on this topic he’s asking:

Was the iPod, IPad or iPhone developed from customer surveys? Did the Wii come about because of customer feedback cards? Were scooters the idea of a bunch of kids needing more exercise? Your answers should be a resounding NO! Customers cannot do your thinking for you; they like what they see, when they see it.

Quite compelling argument you may say so…

So what’s the moral of the story; according to the supporters of this line of thinking?

Here you go – it’s not customers’ job to know what they want!

3. It can act as a stumbling block to getting/staying ahead of the curve

And last but not the least comes the ‘innovation argument’.

Which suggests that…

… by listening to customers, you risk falling into the sameness trap.

Yep, you did read that correctly.

The logic? 

Gregory Ciotti thinks that’s the case because:

When you rely on consumer input, it is inevitable that they will tell you to do what other popular companies are doing.” [And he adds.] How can you get ahead of the curve if your customer feedback mostly consists of today’s popular ideas?

So, with all that said, is it time to admit that listening to customers comes at a hefty cost?

Or maybe that’s not the whole truth?

You guessed it – it is NOT.

As they say, there are two sides to every story and today we will explore both of them!

Listened and failed: 3 companies that have “been there, done that”

Before jumping on the other camp, allow me to first share with you some famous real-life examples of companies that listened to their customers and…

… succeeded big time FAILED miserably…

1.Walmart

The customers’ request: They wanted Walmart’s aisles decluttered, which used to be packed, big time, with products.

You Asked. We Listened: What was Walmart’s response? You guessed right… they listened and cleared out space by reducing the excess inventory that “lived” stacked in the aisles

The end result: The sales plummeted, according to Phil Terry’s estimate, by $1.85 billion. Why? Quite simply, because Walmart’s customers are drawn to the vast selection of cheap products. And by decluttering their aisles, they shoot themselves in the foot since it automatically meant less cheap products from which to choose.

2.American Airlines

The customers’ request: For years their passengers complained about the seats being too narrow, rows that are too close together, and non-existent leg room.

You Asked. We Listened: What was American Airlines response? They listened and redesigned their aircraft to offer more room, extra leg room, and bigger seats.

The end result: A few months down the road, they had to reverse course. Why? Simple! Their travellers valued cheaper tickets more than this kind of luxury (and in case you wonder the tickets prices had to be increased to compensate for the fewer aircraft seats resulted from giving people more space).

3.The New Coke (Coca-Cola)

The customers’ request: In the early 80s, Coca-Cola’s market share had been steadily declining. The company’s execs decided to investigate to find out the main reason for this fall. After spending months doing thousands of in-depth customers surveys, they had their answer: customers seemed to prefer the sweeter taste of Pepsi!

You Asked. We Listened: And yes, Coca-Cola listened, after countless sip tests, they introduced the solution! The New Coke, which was much sweeter and smoother than the original formula, was announced on April 23, 1985, as a replacement to its nearly century-old secret formula.

The end result: You already know what happened. It did NOT go down well! After a couple of years, and massive losses, they ended up discontinuing the New Coke* and reintroducing Coke’s original formula branded as “Coca-Cola Classic.”

* What went wrong? Many suggest that the taste, which was originally attributed as the root cause of that decline, was in fact NOT a deciding factor in consumer purchases. Even more, at a later stage, the execs came to realise that the original Coke had much more symbolic value to customers, who were “emotionally attached” to it.

Thinking of not listening to the customers? STOP!

Yep, you did read that correctly. Not listening to your target market and playing ‘the visionary’ rarely ends up pretty.

How come?

Simple – unless you’re Justin Bieber with a huge tribe of followers willing to buy whatever you throw at them, you have to play by the market rules.

Which are:

  1. Markets that don’t exist don’t care how smart you are
  2. Customers don’t buy products, they buy outcomes
  3. There is not enough space for everyone

Hence, that’s why that by just saying scr*w the market, we risk adding ourselves to the long catalogue of founders that failed due to lack of market need.

So, what’s the alternative?

Blindly following what the customers say to you?

HELL NO!

Instead, let the money do the talking…

Money speaks louder than words

What do I mean by that?

Simple, since the main driver behind pretty much any customer purchasing decision is nothing other than a problem that needs to get solved there is no better way…

… to find out which problems people care about than going out in the real world (aka market) and see where they spend their cash.

Exactly.

Doing surveys is fun…

Performing customer development interviews is important…

Observing customers’ day to day behaviours is great, BUT…

… unless you see people spend REAL money tackling a problem or need, you won’t know whether there is a market for your thing.

So, what I am saying is simple:

Even though I agree it’s NOT customers’ job to design our product, imo, the best way to find out what people want is by…

… analyzing their past and current purchasing behavior because time and time again has proven to be the best indicator of future behavior.

But to answer today’s question:

Is listening to customers an absolute no-brainer or maybe just unnecessary?

I’d probably say absolute no-brainer, but not in the traditional way because listening, must go above and beyond “words!

Today’s key takeaways

– Don’t rely on customers to build the product for you. That’s YOUR job.

– What customers really want and what customers say they want are not always the same thing.

– You’re not Steve Jobs (or for that matter a visionary); get used to it.

– Listen to the customers, but always keep in mind that money speaks louder than words.

***

Ok guys, that’s all from me for today.

If you enjoyed today’s post, check out my Kindle book, The Vertical Startup: A Practical Guide on How Today’s Bootstrapped Entrepreneurs Turn their Late Market Entry Into An Advantage By Going Vertical, that is now available at Amazon…

… and which as the title suggests will walk you through everything you need to know about ‘going vertical’ as a second mover.

I hope to see you soon.

Best,

Andreas

“What people do, what people say, and what people say they do are entirely different things.”

– Margaret Mead

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