Don't suck up to your customers that much...

OR - 7 reasons why customer-centricity will kill your business

First, an admission: I have been known to say: ‘find out what your customer wants, and give it to them.’ Please forgive me; I was wrong. It sounded so good and it just rolled off the tongue…

The reality is a great deal more complicated. This is a chicken-and-egg problem:

[Chicken] Approach the market with a great product and attempt to find customers who have that need – then pitch your product.

[Egg] Research the market and find a gap and then attempt to fulfil that need by creating a suitable solution.

Which of these two approaches apply to your business?

The answer is: it depends.

Most people reading this will be either existing businesses or businesses operating in a mature segment/market, and this is the group of businesses that may be hurt by being customer-centricity.

These businesses must follow the chicken strategy and not the egg strategy.

The chicken strategy puts the customer second. (Because the chicken came first, right?)

Why should focus on your product/ proposition and not the customer?

Simple customer needs have already been met and meeting the needs of smart customers in mature markets is expensive and difficult.

The much smarter strategy is to do it like Steve Jobs. (I apologise for using Apple as an example – I don’t use their products, don’t like the brand and I predicted 2 years ago that they will fail 5-10 years after Jobs. But, under Jobs, they have done a lot of smart things and done them well and they deserve credit.

Consider the following four quotations by Steve Jobs to explain his approach of the ‘place’ of the customer:

  • ‘You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new.’
  • ‘It's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them.’
  • ‘You‘ve got to start with the customer experience and work back toward the technology - not the other way around.’
  • ‘When you're young, you look at television and think, there’s a conspiracy. The networks have conspired to dumb us down. But when you get a little older, you realize that's not true. The networks are in business to give people exactly what they want. That's a far more depressing thought. () But the networks are really in business to give people what they want. It's the truth.’

The customer is an important consideration - the starting point even - when it comes to designing the solution or product, but the customer is not at the centre of Apple’s universe is; their brand values are.

The focus is internal not external. And that is the way it should be for existing businesses in mature markets.

Good customer service is a given. Relevant customer experiences are paramount. But it starts with having a great product and a viable business model. In short, fix your retail proposition, and then worry about the customer. In fact, then you should obsess about the customer. (Unless you win them over, your great product is worth nothing.)

Find yourself a great chicken and it will probably lay many eggs.

NOTE:

Companies don’t actually technically satisfy needs, they satisfy wants. Pop culture definitions like: ‘A need is something that you have to have. A want is something you would like to have’ – is rubbish. The following has been excerpted from Kotler’s Marketing text books.

Needs: these are states of felt deprivation. Drawing from Maslow’s hierarchy, these needs are summarised as being physical, social or individual. The type of society in which people live will influence how these needs are specifically satisfied.

Wants: these are the objects that satisfy the needs. The form these objects take depends upon culture and individual personality. As society becomes more sophisticated, people are exposed to a range of need-satisfying objects and as such have greater choice about how to satisfy their needs. Producers compete to satisfy these needs.

Demands: Producers are concerned with wants that are backed by buying power. When people have the money to purchase the need-satisfying object there is then demand for that object.

AND FINALLY... 

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One for managers & entrepreneurs and for trainers & educators.

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