Consider more than just customer needs

If you want to be a bad product manager, listen only to your customer needs when defining your product. You want to be customer-focused, right — so why would you take anything else into consideration? The customer is always right, after all. Everyone always says that you should focus on the customer and everything else will follow.

If you want to be a good product manager, make customer needs the central but not the sole voice in product definition. While you need to create a product that meets customer needs, you also do not want to jeopardize the success of the product by ignoring all of the other important stakeholders.

Some potential downfalls of listening only to your customers include:

  1. Customers might use your product but not want to pay for it.
  2. Your product could cannibalize sales of other products your company produces.
  3. Focusing only on current customer needs ignores the larger potential in new customers and new markets.
  4. Distributors and retailers may refuse to carry it because of the impact it could have on other products they sell.

An example of the fourth problem: When digital video recorders first were available, there were two main competitors — TiVo and ReplayTV. ReplayTV did a great job understanding the needs of customers and realized that people buying DVRs did not want to watch commercials. They came up with ingenious ways for users to be able to skip commercials. Their earlier models had a button that, when pressed, would automatically skip the show forward 30 seconds. Later models came with software that could automatically detect when a TV show ended and the commercials began and skip through the commercials without any user intervention.

TiVo, meanwhile, stuck with features that allowed customers to fast forward through commercials, but not skip them entirely. Did the TiVo team not understand the desires of customers? Of course not — but they did understand the desires of other stakeholders in this market, like television stations, cable and satellite TV providers, TV networks, and advertisers. While users would be happy skipping commercials entirely, these other important players would not, but their support would be necessary for TiVo to succeed. Meanwhile, ReplayTV drew the ire of many of these constituencies, causing them significant problems despite their customer-focused features.

This one situation alone does not explain the situation that each business finds itself in today. However, TiVo’s ability to work with the other stakeholders and ReplayTV’s reluctance to do so has certainly contributed significantly. ReplayTV still exists, but they have gone through several bankruptcies and have had to change their business model and product offerings many times to attempt to remain competitive. While TiVo is not necessarily thriving, they have prevailed in comparison and are certainly the leader in the DVR market.

Successful product management comes from understanding the market, which includes current customers as well as potential customers, competitors, suppliers, intermediaries, and others who have an interest or stake in the market. Make sure to keep customer needs central to your product strategy while also taking into account all of the other appropriate aspects that contribute to your product definition.

3 thoughts on “Consider more than just customer needs

  1. What is required is the broader definition of customer to include product users, purchasers, decision makers, those effected by product as well as all other stake holders (both internal & external). An opportunity should be viewed for its causes & effects in totality.

    Add all above good points with what is required to make customer delighted, that much extra that gives a competitive advantage. I argue ( that as needs get satisfied by more than one company (& hence commoditized), companies tend to serve that extra to gain an upper hand. The challenge for all product managers is to be as much close to needs & at the same time keep that competitive advantage.

  2. Acting on customers requested enhancements is the artform of integrating functionality while protecting the customer from any near sighted interest within their immediate request. Said a different way, enhancements to existing products provide product managers the opportunity to deliver solutions that not only work for customers, but “competitors, suppliers, intermediaries, and others who have an interest or stake in the market” alike.
    It is not enough to implement enhancements from customers in a manner consistent with current demands. Rather, it is the responsibility of product management to provide solutions that balance the needs of stakeholders in totality and thereby realize the competitive advantage that comes from this more robust solution. Protecting the customer from their own request is a vital step in realizing products that stand the test of time.

  3. Great article – and I would like to extend the comment that Narendra made about requiring a broader definition of what ‘customer’ actually means. I agree that you shouldn’t just focus on the user, and in the field I work in, there are several other key players that need to be considered. However, a broad definition can only be made and applied depending on the target market you are looking at – and that includes geography too. For example, selling into government run insitutions in Spain may be very different to selling into the UK. I have found that it is a very useful excercise mapping out all of the players and stakeholders for your market (segment and country), and brainstorming around each of these roles and how they interact – e.g. the purchaser may be the decision maker, or they may be separate, or the user may have lobbying power over the decision maker, or may not. Along with this – put thought to what the motivators are for each of the key roles in your map – saving time, increasing efficiency etc.

    With this information mapped out, you can firstly confirm your assumptions by talking to these people – and secondly, you can focus your energies in the right direction for developing a product that users love, and either they, or someone else, purchase…

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