Solve customer needs, not business ones

If you want to be a bad product manager, create new products based on business desires and existing assets. If your organization is missing one key part of a product line, it needs to be filled. If a competitor has a product with which you can’t compete directly, you need to make sure you create a product to go head-to-head. If there’s a market that you would like to go in to, figure out a way to take existing assets and competencies and use those to create a product, even if it’s not a perfect fit for that market — it’s better than nothing, right?

If you want to be a good product manager, create new products that fill customer needs that are not currently being met. Too often, organizations define products based on the company’s existing intellectual capital, competencies, and physical or virtual assets. While there might be great ideas for products that solve a market need, by constraining the product to what the company currently has, it prevents them from really coming up with a good solution. Other times, organizations change their strategy or create products based on markets they want to capture, even though it does not make sense for them to do so.

The best products focus on customer needs and find a way to solve them, regardless of whether it is a perfect fit with how the company sees itself at the time. Apple was regarded as a personal computer company before introducing the iPod, which they never would have created if they constrained their thinking to computing. There are several other current examples:

  • WalMart recently announced to abandon attempts to sell more upscale goods and instead return to focus even more than ever on their low price strategy. Their decision to move upmarket was based on their desire to capture higher-end customers, not an existing market need. There are plenty of other choices in upscale shopping, starting most closely with Target and moving up from there. From the customer’s point of view, there was no compelling reason to go to WalMart for higher-end goods, and in fact it turned off their core low-price customer base because they lost focus on the main market need they were solving — everything a customer needs, in one place, at the lowest price.
  • Sony’s strength in high-powered platform gaming technology led them to position their Playstation3 to compete head-to-head with Microsoft’s XBox 360. While the PS3 has a small group of avid supporters, but overall has been a flop. Why? From the customer’s point of view, it either is not superior enough to the PS2 to warrant the additional expense, or it addresses a need that is already served by the XBox 360. Nintendo, however, focused their product development on unmet customer needs — customers who are interested in some sort of interactive gaming but find traditional platform gaming too challenging, inappropriate, or irrelevant — rather than on their own existing assets. They leveraged new technology to solve those needs, rather than leveraging technology for technology’s sake as was done with the PS3. As a result, the Wii has been an enormous hit while the PS3 has been a major disappointment.

To put it in another way, in the words of Al Ries and Jack Trout:

9 out of 10 products are introduced to fill a void in the company’s product line, not to fill a void in the market.

(Pragmatic Marketing attributes this quote to Ries and Trout, so I’m assuming it’s from their fantastic and classic book Positioning: The Battle for Your Mind.)

It is difficult to not focus on internal competencies when creating product concepts. Eventually, the best idea will inevitably face the scrutiny of whether the company has the technology, infrastructure, assets, and overall capiabilities to produce a product that really does address an unmet need. Line extensions and product variations are safe and easy, though they rarely capture attention like a truly breakthrough product can. Ultimately, developing new products that really fill gaps in the market may requre stepping out of your comfort zone and moving your company into new areas. It will be potentially challenging and expensive but it should pay dividends over time, not only in the improved product but the new competencies in new areas.

Translations available:

6 thoughts on “Solve customer needs, not business ones

  1. Hi Jeff,

    I cannot agree with you more on this. The crux of what you mention is “what is short term and easy to do” vs. “what is risky, adventurous, expensive and long term”. Unfortunately, many product managers tend to do the former because that is what the management rewards. Taking risk and thinking long term is sometimes not rewarded. But that is what successful companies do.

  2. I’ve seen and experienced both sides of this coin – in general I agree with your statements, but at some point one has to have some competency in convincing product stakeholders (aka executive management) that innovation is needed. I think an approach that introduces new concepts while at the same time solving real issues and effectively using existing resourses is the right balance. Once you gain stakeholder confidence, you build trust across the company and client base, and you gain more leeway in getting innovative proposals introduced and implimented. Once still needs to take care that something new isn’t being over-engineered purely for the delight of building something interesting. I’ve seen that happen with disasterous results.

    — John

  3. hi ..i am a product manager of mutual funds in Bank..pls give me some good advises

  4. Jeff,

    Great point and one that lots of businesses get caught up in, particularly more mature businesses. Your thoughts are very Clue-Train-like and in line with demands Web 2.0 will likely have on online product development.

  5. Welcome to my world… this is exactly what I’ve been trying to push in our company, however it is an uphill battle. Any advice on ways to convince management on these sorts of things? Also, how does one do this in an expense-constrained environment where bottom-line is examined on a daily basis?

Comments are closed.